There are 7 steps of value investing by which you can successfully pick Indian stocks for your portfolio. They are:
Step # 1: Plan Your Overall Finances
Before you even think about investing in Indian stocks, first review your finances. Here are some ideas on how to plan your financial future.
Step # 2: Generate Lots Of Choices In Stocks
Generate lots of choices from which to select suitable stocks. Here are some ideas on how to generate great choices in Indian stocks.
Step # 3: Study The Qualitative Characteristics
Study the qualitative characteristics of a stock. Assess if its strong, average or weak.
Step # 4: Study The Quantitative Characteristics And Calculate Intrinsic Value
Here are some ideas on how to study the quantitative characteristics of a stock and how to calculate its intrinsic value.
Step # 5: Calculate Margin Of Safety
Here are some ideas on how to calculate the margin of safety of a stock.
Step # 6: Accept Or Reject. Repeat Steps 3 To 5
If you find that the qualitative characteristics of the stock are at least average and the quantitative margin of safety is at least average, it is a value stock and you can consider the stock for investment. Else reject the stock.
Repeat for all other stocks.
Step # 7: Build Your Stock Portfolio
Here are some ideas on how to build a stock portfolio.