Home run and the stock exchange.

Compare stock market to baseball. In baseball, base hit appends more often than home run.Do not try the home run every time; better try a base hit.

Invest in stocks that have a chance of growth and that will perform over time.

Management

Checking management should be your primary criteria.

When management is good and people in the company you want to invest in have done a super job elsewhere and in that company, you have a positive criterion.

If that company is in a non-cyclic sector of the economy, like public service, food, finance and others; you have a second positive criterion.

The price/earning ratio of that company is reasonable; you have a third positive criterion.

That company pays a fair dividend; you have a fourth positive criterion.

That company has a growth rate superior to other company of the sector; you have a fifth positive criterion.

Compare

Now, compare that to what a friend told you about a company that is supposed to make a four base hit on the market.

He tells you: Watch the news about that company on Monday, it is going to be the hit of the century.

What appends the next Monday? It is a bust. Instead of a four base hit it is a strikeout.

It might have been a four base hit if you had been lucky.

But home runs append maybe once out of 10 tries, base hits is at best 4 out of 10 tries.

If you append to have a few good average batters, those are the ones that will make your company grow.

Good average batters

Home run batters can be compared to wheeler-dealers that try for the big thing but bust more often than they succeed.

In the long term, good capable, thoughtful and rational managers will succeed and sometimes get a home run. Check meaningful ratios.

Wheeler-dealers may succeed, but most of the time they loose and make you loose too.

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