Felt a bit tired and wanted to keep it easy today.
Today I picked up "Common Stocks and Uncommon Profits", by Philip A. Fisher, to keep a pace with both value and growth investing.
On initial reading of the "theory of common-stocks" it seemed to be strictly against the trend/growth investing. But going through it again hinted that trend and growth investing are not the same thing.
The instability of individual companies (in case of value investing) may conceivably be offset by means of thoroughgoing diversification. More- over, the trend of earnings, although most dangerous as a sole basis for selection, may prove a useful indication of investment merit.
The theory also asserts:
that the investor who can success- fully identify such “growth companies” when their shares are available at reasonable prices is certain to do superlatively well with his capital.
Thus I thought that it is a proper time to keep a pace with both the books.
The initial preface of the book provided two quantitative measures:
- Above-average sales organization (something also seen on day 17).
- Worth-while profit margin.
The second point of "worth-while" profit margin filtered out few pending companies from the list: Hind Industries and Unique Organics. Both have a brilliantly growing top-line and exports, but the margins have been terrible (less than 5%).