There have been two big financial crises in history. The great depression of 1929 and the great recession of 2007. Although no two crises are the same, we can learn something from them. The aftermath of the great depression was the shrinking of the wealth of the top wealthy individuals. The aftermath of the great recession was an increase in the wealth of the top wealthy individuals.
From what am reading, Wall Street’s savviest investors are already pulling out their 2008 playbooks. The basic idea: Pay discount prices for ailing businesses and other distressed assets now, then cash in later when everything bounces back.
And I think right now is the time for someone to consider investing in he stock markets. Why am I saying so? The truth is when Uhuru announces his rescue package to SMEs the markets will recover. So before you put your shilling in the stock market, here is my list of 13 things you need to study first. Different people will have different lists.
1. What is your investment strategy i.e. long vs short term
2. What is the revenue, operating profit and net profit of the company for the last 5 years
3. What is the stock price history of the company for the last 5 years
4. Balance sheet in terms of overall level of debt, assets and liabilities, debt to equity ratio
5. Historical dividend per share for the last 5 years
6. What is the Price earnings ratio
7. What is the Price to book ratio
8. How does the Company's future look?
9. What are the industry risks and opportunities facing the company?
10. How big is the company in terms of market capitalization
11. Who are the directors and management
12. Who are the existing shareholders e.g. government or private individuals?
13. Publicity of the company i.e. is it positive or negative
From what am reading, Wall Street’s savviest investors are already pulling out their 2008 playbooks. The basic idea: Pay discount prices for ailing businesses and other distressed assets now, then cash in later when everything bounces back.
And I think right now is the time for someone to consider investing in he stock markets. Why am I saying so? The truth is when Uhuru announces his rescue package to SMEs the markets will recover. So before you put your shilling in the stock market, here is my list of 13 things you need to study first. Different people will have different lists.
1. What is your investment strategy i.e. long vs short term
2. What is the revenue, operating profit and net profit of the company for the last 5 years
3. What is the stock price history of the company for the last 5 years
4. Balance sheet in terms of overall level of debt, assets and liabilities, debt to equity ratio
5. Historical dividend per share for the last 5 years
6. What is the Price earnings ratio
7. What is the Price to book ratio
8. How does the Company's future look?
9. What are the industry risks and opportunities facing the company?
10. How big is the company in terms of market capitalization
11. Who are the directors and management
12. Who are the existing shareholders e.g. government or private individuals?
13. Publicity of the company i.e. is it positive or negative
