Five Points To Know Before You Buy Shares Of A Company

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#NRImoneyclinic #Stockmarketbasics #Investing

Five Points To Know Before You Buy Shares Of A Company
WILL THIS COMPANY SURVIVE OVER NEXT 10 YEARS ?

Technology Companies May Or May Not Survive
Is It Prone For Technology Related Disruption ?
Does The Company Have A Good ESG Score ?
Is It In A Stable Business ? FMCG, Engineering, Pharma, Banks Etc

IS IT A CUSTOMER FACING INDUSTRY ?

Easy To Understand Customer Facing Industry
Ex: FMCG , Banks , Retail , Automobiles

Difficult To Understand Non Customer Facing Companies
Ex; Industrial Chemicals, Engineering , Software

HOW MUCH DEBT IS ON BALANCE SHEET ?

High Debt Is A Reason For Companies To Close Down
Debt Free Companies Fare Better
Debt:Equity Ratio more than 1:1 Is Not Desirable

DOES THE COMPANY EMBRACE TECHNOLOGY CHANGES ?

Absolutely Essential To Quickly Adopt New Technology
Business Badly Suffers If Technology Changes Are Not Adopted

IS THE COMPANY A MARKET LEADER ?

Leaders In Business Survive And Thrive Better
Has It Branded Itself Well ? Ex Maruthi
Has It Built Power Brands ? Ex HUL
Does It Enjoy Customer Loyalty ? Ex LIC
Has It Built A Robust Network ? Ex SBI
Is It In A Monopoly Business ? Ex IRCTC

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