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How to Pick Stocks 
By: www.ProfitableInvestingTips.com
The financial pages are 
commonly full of success 
stories, stocks that have done 
well. 
http://www.profitableinvestingti...
But, how to pick stocks is not 
to invest in expensive stocks 
that have already gone up in 
price but in inexpensive stoc...
Before We Continue… 
Click the links below to get your 
FREE training materials. 
Free Weekly Investing Webinars 
Don’t mi...
We are talking about intrinsic 
stock value and the Benjamin 
Graham formula for deciding if 
a stock is over price or und...
We look at the numbers used 
to calculate the Graham 
formula but first of all the 
basics of fundamental 
analysis of sto...
How Does a Company 
Make Its Money? 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
It is said that the most famous 
investor in the world, Warren 
Buffett, likes easy to 
understand stocks with strong 
bal...
The point of investing is to 
make money and not lose it. 
http://www.profitableinvestingtips.com/stock-investing-tips/how...
People invest in the stock 
market because they do not 
want to settle for the interest 
rate on a CD at their local 
bank...
However, their CD is insured by 
federal deposit insurance and 
the stocks that they buy can 
just as easily go down inste...
How to pick stocks starts with 
picking a company that does 
something that you 
understand. 
http://www.profitableinvesti...
You do not have to be an 
expert in computer 
programming or cellular 
biology to invest in computer 
companies or biotech...
But you need to have a clear 
idea of what these companies 
do to make money, what their 
costs are and who their 
competi...
And, you need to look for a 
margin of safety. 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-st...
This can simply be that the 
company has a product that 
totally dominates its field or 
that they have no debts and 
mone...
The point is that the company 
is protected in the event of a 
recession. 
http://www.profitableinvestingtips.com/stock-in...
Graham Formula 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
Intrinsic Value (V) = 
(Earnings per share x (8.5 + 
2g) x 4.4) / The current yield 
of AAA corporate bonds (Y) 
http://ww...
Earnings per share are for the 
last twelve months and g is 
your estimate of company 
growth in the next five years. 
htt...
Mr. Graham used 4.4 as a 
constant for the average yield 
of high grade bonds at the 
time he devised the formula. 
http:/...
You can adjust this for current 
yield. 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
This formula gives a stock 
price, what Graham believed 
should be the market value. 
http://www.profitableinvestingtips.c...
Compare this to the current 
price. 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
If the Graham price based on 
fundamental analysis is higher 
you may wish to buy the stock. 
http://www.profitableinvesti...
If the current stock price is 
higher than the calculated 
value you want to sell or avoid 
the stock. 
http://www.profita...
Finding Stocks 
http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
Profitable stocks are often 
those that are not currently 
being followed by lots of 
analysts. 
http://www.profitableinve...
Thus they may be hard to find. 
Start with what you know. 
http://www.profitableinvestingtips.com/stock-investing-tips/how...
A sad but true tale is that in 
the late 1970s Eli Lilly came 
out with Tagamet, the first 
effective medicine for ulcers....
At that time the trendy 
investment for well-heeled 
physicians was to buy and 
lease railroad box cars. 
http://www.profi...
Lilly stock skyrocketed and 
many investors lost their shirts 
in box car leasing scams. 
http://www.profitableinvestingti...
If the doctors who were writing 
prescriptions for Tagamet had 
invested in what they knew 
they would have made money. 
h...
Not every stock is has great 
possibilities but many are 
profitable. 
http://www.profitableinvestingtips.com/stock-invest...
If you are 
nearing retirement look to 
stocks that have been paying 
dividends for decades and, 
shades of Buffett, are e...
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How to Pick Stocks

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http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks

How to Pick Stocks

The financial pages are commonly full of success stories, stocks that have done well. But, how to pick stocks is not to invest in expensive stocks that have already gone up in price but in inexpensive stocks that are likely to do well in the future. We are talking about intrinsic stock value and the Benjamin Graham formula for deciding if a stock is over price or under-priced. We look at the numbers used to calculate the Graham formula but first of all the basics of fundamental analysis of stocks.

How Does a Company Make Its Money?

It is said that the most famous investor in the world, Warren Buffett, likes easy to understand stocks with strong balance sheets. The point of investing is to make money and not lose it. People invest in the stock market because they do not want to settle for the interest rate on a CD at their local bank. However, their CD is insured by federal deposit insurance and the stocks that they buy can just as easily go down instead of up in price. How to pick stocks starts with picking a company that does something that you understand. You do not have to be an expert in computer programming or cellular biology to invest in computer companies or biotech stocks. But you need to have a clear idea of what these companies do to make money, what their costs are and who their competition is. And, you need to look for a margin of safety. This can simply be that the company has a product that totally dominates its field or that they have no debts and money in the bank. The point is that the company is protected in the event of a recession.

Graham Formula

Intrinsic Value (V) = (Earnings per share x (8.5 + 2g) x 4.4) / The current yield of AAA corporate bonds (Y)

Earnings per share are for the last twelve months and g is your estimate of company growth in the next five years. Mr. Graham used 4.4 as a constant for the average yield of high grade bonds at the time he devised the formula. You can adjust this for current yield. This formula gives a stock price, what Graham believed should be the market value. Compare this to the current price. If the Graham price based on fundamental analysis is higher you may wish to buy the stock. If the current stock price is higher than the calculated value you want to sell or avoid the stock.

Finding Stocks

Profitable stocks are often those that are not currently being followed by lots of analysts. Thus they may be hard to find. Start with what you know. A sad but true tale is that in the late1970s Eli Lilly came out with Tagamet, the first effective medicine for ulcers. At that time the trendy investment for well-heeled physicians was to buy and lease railroad box cars. Lilly stock skyrocketed and many investors lost their shirts in box car leasing scams. If the doctors who were writing prescriptions for Tagamet had invested in what they knew they would have made money.

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How to Pick Stocks

  1. 1. How to Pick Stocks By: www.ProfitableInvestingTips.com
  2. 2. The financial pages are commonly full of success stories, stocks that have done well. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  3. 3. But, how to pick stocks is not to invest in expensive stocks that have already gone up in price but in inexpensive stocks that are likely to do well in the future. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  4. 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com Get 12 Free Japanese Candlestick Videos Includes training for all 12 major candlestick signals. http://www.candlestickforums.com http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  5. 5. We are talking about intrinsic stock value and the Benjamin Graham formula for deciding if a stock is over price or under-priced. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  6. 6. We look at the numbers used to calculate the Graham formula but first of all the basics of fundamental analysis of stocks. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  7. 7. How Does a Company Make Its Money? http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  8. 8. It is said that the most famous investor in the world, Warren Buffett, likes easy to understand stocks with strong balance sheets. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  9. 9. The point of investing is to make money and not lose it. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  10. 10. People invest in the stock market because they do not want to settle for the interest rate on a CD at their local bank. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  11. 11. However, their CD is insured by federal deposit insurance and the stocks that they buy can just as easily go down instead of up in price. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  12. 12. How to pick stocks starts with picking a company that does something that you understand. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  13. 13. You do not have to be an expert in computer programming or cellular biology to invest in computer companies or biotech stocks. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  14. 14. But you need to have a clear idea of what these companies do to make money, what their costs are and who their competition is. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  15. 15. And, you need to look for a margin of safety. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  16. 16. This can simply be that the company has a product that totally dominates its field or that they have no debts and money in the bank. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  17. 17. The point is that the company is protected in the event of a recession. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  18. 18. Graham Formula http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  19. 19. Intrinsic Value (V) = (Earnings per share x (8.5 + 2g) x 4.4) / The current yield of AAA corporate bonds (Y) http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  20. 20. Earnings per share are for the last twelve months and g is your estimate of company growth in the next five years. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  21. 21. Mr. Graham used 4.4 as a constant for the average yield of high grade bonds at the time he devised the formula. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  22. 22. You can adjust this for current yield. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  23. 23. This formula gives a stock price, what Graham believed should be the market value. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  24. 24. Compare this to the current price. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  25. 25. If the Graham price based on fundamental analysis is higher you may wish to buy the stock. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  26. 26. If the current stock price is higher than the calculated value you want to sell or avoid the stock. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  27. 27. Finding Stocks http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  28. 28. Profitable stocks are often those that are not currently being followed by lots of analysts. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  29. 29. Thus they may be hard to find. Start with what you know. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  30. 30. A sad but true tale is that in the late 1970s Eli Lilly came out with Tagamet, the first effective medicine for ulcers. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  31. 31. At that time the trendy investment for well-heeled physicians was to buy and lease railroad box cars. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  32. 32. Lilly stock skyrocketed and many investors lost their shirts in box car leasing scams. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  33. 33. If the doctors who were writing prescriptions for Tagamet had invested in what they knew they would have made money. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  34. 34. Not every stock is has great possibilities but many are profitable. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks
  35. 35. If you are nearing retirement look to stocks that have been paying dividends for decades and, shades of Buffett, are easy to understand with strong balance sheets. http://www.profitableinvestingtips.com/stock-investing-tips/how-to-pick-stocks

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