The other day, some classmates of mine came to me for consulting about how to begin investing in the capital market. They chose me as they all were Marketing Majors, and being a Major in Finance, I was taken as an "Expert in Stock Market" by them.
When they approached me, the first thought that came in my mind was that I had to suggest them some stocks that had the highest possibility of being proved as profitable. Aiming this, I developed a process which I later found to be a very easy and handy tool for beginners like them.
Following is the process (All one needs for this are some reliable recent market reports which are usually published by the largest brokerage houses as well as the stock exchanges):
Step 1 Going though the one month holding period returns of the top performing shares (in terms of Market Capitalization, Market Liquidity, and Holding Period Returns) during the last month or month before the last one (in case of unavailability of data).
Step 2 Identifying the stocks which produced the highest returns or caused the lowest losses.
Step 3 Spotting the amount of market supply (Number of Shares Outstanding) of the chosen companies in Step 2.
Step 4 Listing the companies which have the minimum numbers of share outstanding.
Step 5 Identifying which of the companies listed in Step 4 fall in “A” Category.
Step 6 Reviewing the dates of last held AGMs by the companies listed in Step 5 in order to predict the possible AGM dates.
Step 7 Listing stocks with the nearest possible dates of AGM.
Step 8 Buying stocks of the companies listed in Step-7 based on own affordability.
Wish all beginners a happy and profitable stock market experience.
--- Tanzina Ahmed Choudhury ---