What are the Things to know before investing in stocks?
Benjamin Graham who is known as “the father of value investing” and also the mentor of Warren Buffett recommended several things that a defensive investor must know before investing in any stock, they are discussed below:
Adequate Size of the Company
According to the market capitalization of the companies, stocks are categorized as – the mega cap, large caps, mid caps, small caps, micro caps and the nano caps. Micro cap companies have greater market capitalization than nano caps but less than small, mid, large and mega cap companies. Here what Graham says is that the stocks of the very small size companies should be avoided as they are affected very badly in adverse situations. Continue reading