How To Monitor Your Stocks – (Tracking Your Stock Performance)

December 14, 2019

Hey everyone, this is Victor from The Fifth Person. At The Fifth Person we invest in great businesses… …be it for dividends or capital gains. My job is to help retail investors do the same… …so that they can grow their money safely and consistently over time. So today, we’re going to talk about what should you do after you’ve purchased a stock? You don’t just sit down there and do nothing. You want to monitor the company. You want to make sure that the company continues to meet your expectation… and especially so on the initial reasons why you invested into them. So the question right now is, how do you monitor your company’s development? Basically there are 3 ways you can go about monitoring your company… …or keep up-to-date of the company’s development. Let’s move on to the first method. The first method to track the company is through their quarterly or annual report. So what do you really look for when you look inside the quarterly or annual report? The first thing to look at is their revenue and net profit. Is it growing, stable or declining? What you prefer is growing net profit. Every investor, when they invest in any company, is to invest for growth. So we must make sure that the growth is still there. Second, it is to track them through their balance sheet. To see whether the company is still fundamentally strong. So what do you look inside the balance sheet is actually the cash position and their debt position. Are they having more cash? (than before) or more debt at this moment? The third thing that I look at inside the quarterly or annual report… …is the management’s forward view of the company or the industry in one year’s time. Fourth, when you look into the quarterly or annual report, you want to see whether your original thesis for investing into these companies are still intact. Last, when you are looking at these quarterly or annual report… …it is to see whether the company is facing any problems or issues? If there is, what is the management going to do to get rid of this issue or to solve this issue? This is your method on how you can monitor your company and their progress. Let’s move on to the second method Your second method to track or monitor a company is through News. When I say News, it’s basically the Newspaper. So what you’re supposed to do is that you will need to read the newspaper on a daily basis. At anytime there’s news about the company or any happenings of the company that’s reported in the newspaper, you’re always at the ‘moment’. If you read on a daily basis, you’ll get the latest News about the company (good or bad) However, this method can be quite tedious because you have to read the newspaper every single day. There’s a much simpler method to track the news… and that’s to use the ‘Google Alert’. What Google Alerts does is that when you go to Google Alerts… You can key in the company name. So every time there’s any news, or any blog post… or any information about a company surfaced on the Internet, Google will send all these information directly to your email. Now instead of you reading the newspaper every single day. The company news is sent to your email… and it’s very specific to the company whose name you have put inside Google Alerts. This is a much simpler way as compared to the first way (checking newspaper for news). and I have been using this for many years to track companies. So let’s move on to the third method on how you should track or monitor your company. So the third way to track or monitor a company is through analyst report. As retail investors, sometimes you do not have direct access to the management. Analysts however, always have the opportunity to visit the management. And after their visit with the management, they usually write it in a report… and what you want to find inside of report are ‘insights’ Insights about the conversations between the analyst and the management. You want to see (and hear) what the management is talking about the development of the company, the problems they are facing and how are they going to solve all those problems… or it can even be how they’re going to grow their business So these are all the insights you can find inside the analyst report …and the analyst has already did that job for you. All you have to do, is to decipher the information that is presented through the analysis report. So there you have it, the 3 methods you can use to monitor your company after you’ve invested into them.

No Comments

Leave a Reply