When you buy a stock, in the final analysis, it all comes down to your personal judgment. Since that is the bottom line to choosing a stock, how one goes about exercising that personal judgment is critical.
A favorable outcome has a “high probability” of resulting from following this little equation: Low price + high quality + solid outlook = favorable investment outcome
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When it comes to assessing the value of a company today, the financial statements clearly play an essential role. Without the financials, we simply would not even have a place to start.
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This week, a reader of “Choose Stocks Wisely,” wrote me and offered a great suggestion for the post I’m doing today. He brought to my attention the 7 for 1 stock split recently accomplished by Apple, Inc. (symbol AAPL). APPL had traded well over $600 per share before the split of June 9th but since has traded below $100 a share, reflecting the split.
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Truths found in Scripture (the Bible) apply to all aspects of life, including investing in common stocks. The Bible is very clear about God’s position toward the proud. It is referred to as an abomination to God in Proverbs 6:17. James 4:6 states that “God resists the proud, but gives grace to the humble.” In Proverbs 16:16, we read “How much better to get wisdom than gold! And to get understanding is to be chosen rather than silver.” Proverbs 16: 18, 19 tells us “Pride goes before destruction, And a haughty spirit before a fall. Better to be of a humble spirit with the lowly, Than to divide the spoil with the proud.”
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