this post was submitted on 08 Jun 2024
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chapotraphouse
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Finance firms put a huge amount of effort into short term trades, so it's really hard to beat them at that. But they also don't really consider any term longer than a financial quarter, so you can outperform the market over a few years with basic business sense.
Just look for boring companies and research them. By boring I mean companies that make, like, steel, or fertilizer, or pickles. Ask yourself whether their customers can actually afford to buy their thing (good for steel and fertilizer since they sell to companies, bad for pickles since consumers have no money). Check their earnings reports for their upcoming plans - paying down their debt is great, maintaining steady business and paying out dividends is good, expanding is risky if they're doing a lot of it, diversifying is generally bad (you can do that yourself by buying a different company, and they're usually diversifying by following the latest hype train).
However, the post-COVID stock market makes no sense to me. I haven't been trading since 2020.