Analyze Any Stock In 12 Minutes Or Less | Seeking Alpha

Analyze Any Stock In 12 Minutes Or Less | Seeking Alpha



Here is an outstanding article by a successful investor who talks about six important tests which are keys to picking the right stocks.  The first test involves insider ownership by well known trusted people.  The second test is whether or not you think the company will be around 10 years from now.  Apple, Google, and Facebook are examples of easily passing these first two tests.



I have owned a mining company for over 10 years, but the stock has gone nowhere except for a brief time in 2010 when a fellow miner paid off the company's debts.  This company passes the first test because the CEO of the company is a trustworthy geologist who has been with the company the whole time.  However, the company has failed the second test because the mining industry is a tough business.  Commodities are a boom and bust scenario, and you can't count on anything 10 years in the future.



The third test is whether or not the stock has an upward trend.  Is it making new highs?  Is the 50-day line above the 200-day line?  This is called a golden cross.  Apple and Starbucks pass this test.



The fourth test is the elevator test.  Is the company known well enough to talk about it on an elevator ride?  I know two people who were able to retire early from my company because they invested mostly in well-known companies that were oversold.  One person made over $600,000 and the other person reportedly made over a million dollars.