6 red flags to avoid when investing that may spell trouble

Posted by Resource Center 11/06/2019 3 Comment(s) Investing, Finance & Economics,

6 red flags to avoid when investing that may spell trouble

 

1. Questionnable accounting practices

You can't make a quantitative deduction to allow for an unscruplous management the only way to deal with such situation is to avoid them.

 

 

 

2. Financial trouble is lurking

Rapidly increasing inventory, weak earning power in combination with lots of liabilities, rapidly increasing debts etc

 

 

 

 

3. New Competition

Avoid companies with rapid increase in new competition

 

 

 

 

 

4. Detoriating management

If management is getting worse that will reflect in returns.

 

 

5. Earnings with an upper limit

Business with little or no growth projections should be avoided.

 

 

 

6. Convertibles & stock options

Beware of companies that have issued convertible securities and stock options. If the value of the company increases, these securities will be converted into common stocks and dilute your return.

 

 

 

Author,

CEO

Ian M. Mugoya

3 Comment(s)

Brian Muriithi MMAC ADVOCATES:
11/06/2019, 06:29:47 AM
Reply

Thanks for the nuggets.

Ian Mugoya:
26/06/2019, 05:31:16 AM

welcome!

Caesar Tuva:
11/06/2019, 08:39:11 AM, www.create.guru
Reply

Solid and time proven advice. Thanks for sharing.

Ian Mugoya:
26/06/2019, 05:33:07 AM

welcome!

BRIAN KINYUA:
12/06/2019, 08:49:28 PM, www.livefornow.xyz
Reply

Valuable read.

Ian Mugoya:
26/06/2019, 05:35:00 AM

pleasure's all mine =)

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