How to buy stocks - fundamental investment for a marketing genius

Before I can get on to some exciting stuff, I need to cover a bit of background.

So there are two essential camps of investors - there are those who study patterns in stock and instrument prices - and use the patterns to determine buying decisions .

Now in later posts we will show you some patterns that will blow you away - you wont find them in any book . So be patient we need to cover some background first.

People who make decisions on how to buy stocks based on patterns in prices are generally know as "chartists" – they talk of price action and technical analysis., of break outs, price ranges and indicators – and then theres a whole new category of patterns that I will show you!soon...

Then there are fundamental investors who look at the underlying company instead.

They are interested in profits, growth,assets, liquidity, markets , competition and market share. Most professional investment funds, base their decisions on fundamentals

Remember the warning. Most professional investment funds don’t do any better than the index. So they are sticking pins in with your money - and charging you for the privelege of doing WORSE than a monkey throwing darts at a dartboard.

Of course success is possible at fundamental investment

Warren Buffet – is the man who knows how to buy stocks based on fundamentals.

Warren buffet is proof that it can be done. The performance of his Berkshire Hathaway fund has been nothing short of staggering.

For long periods he exceeded 40% growth per annum a man with a true midas touch who is now the richest investor on the planet.

Buffets method of how to buy stock is to base decisions on his assessment of the potential of a company to become a massive brand - not now, but over the next ten years.

He searches which markets will grow massively and identify players in those markets who have what it takes to achieve massive growth in their sectors both on a large and smaller scale.

There have been many good books on warren buffet and his methods, so there is little point in reproducing thosw ideas here so we suggest the interested reader who would like to know more about buffet would do well to read this

Warren buffet is unquestionably a marketing genius. He sees the things that many do not. And thereby hangs the problem – you CANNOT reduce buffets methods to a simple set of rules.

What you want is a system on how to buy stock that is "Look for this, select these – check this and so on."

And that poses the problem – can the average investor discover how to buy stock like buffet ?– Whilst some have achieved success on more moderate scale, the general answer must be no!

So let us produce our rule number two

Rule 2 of how to buy stocks – find a system that can be reduced to a set of rules.

There are two massive reasons for this – first it is difficult to follow a system that has no rules and second is rule 1 – do not invest in what you cannot test – and if there are no rules, then how can you test your rules work on how to buy stock?

So does that mean fundamental investing is out? Absolutely not .

In the next post we will show a system for fundamental investing that has stood the test of time!

And in doing so we will push back the benchmark for what makes a good a system for how to buy stocks