Criteria of Good company

Q & ACriteria of Good company
Elbert Thien asked 6 years ago

I’m new to BursaMethod. Up to date I just watch 3 video, and is about choosing the good company to invest. 

  1. What if i judge the company is good to invest. . That fits all 5 criteria likes Good ROE, Consistent Earning, Less debt, Good management, and simple business. Suddenly one or two of the criteria went wrong, should I jump out? Or should I wait? 
  2. And in order for a company to went wrong, do I need to wait a year, wait for the Annual Report out, then only can evaluate for second time? 
1 Answers
KCLau Staff answered 6 years ago

Hi Elbert,

1. Business is dynamic. Some business model is stable (like the consumers product such as Nestle & DutchLady). Some are more cyclical like property developers and Plantation stocks. When one of the criteria change, you will need to evaluate whether that is permanent. If it is likely to be permanent, you can consider to switch to stocks that is better at a better price too.

2. The financial report is due quarterly. So every quarter you can evaluate the company, no need to wait for a full year.