When buying stocks, search for bargains among quality stocks

Franklin Templeton Investments  published book “16 RULES FOR INVESTMENT SUCCESS” that describe how Sir John Templeton invested his and his clients money.

Rule 5: When buying stocks, search for bargains among quality stocks

bargains among quality stocksQuality is a company strongly entrenched as the sales leader in a growing market. Quality is a company that’s the technological leader in a field that depends on technical innovation. Quality is a strong management team with a proven track record. Quality is a well-capitalized company that is among the first into a new market. Quality is a well known trusted brand for a high-profit-margin consumer product.

Naturally, you cannot consider these attributes of quality in isolation. A company may be the low-cost producer, for example, but it is not a quality stock if its product line is falling out of favor with customers. Likewise, being the technological leader in a technological field means little without adequate capitalization for expansion and marketing.

Determining quality in a stock is like reviewing a restaurant. You don’t expect it to be 100% perfect, but before it gets three or four stars you want it to be superior.

Earlier on Tradingwisdoms

16 Rules For Investment Success – Sir John Templeton

Rule 1: Invest for maximum total real return – Sir John Templeton

Rule 2: Invest do not trade or speculate

Rule 3: Remain flexible and open minded about type of investment 

Rule 4: Buy Low

Igor Marinkovic

Electronic engineer, futures trader and property investor and total beginner in making good web sites