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How to Value Shares and Outperform the Market by Glenn Martin

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13. Optimising Share Selection

You will usually find quite a few companies which exceed the 115% valuation hurdle (if that is what you choose), using the default valuation process. You now need to sort the wheat from the chaff.

For a start, you should never take a percentage share valuation at face value. You may get a few valuations as high as 300% or 400% or more; you need to undertake some due diligence on each target share in order to eliminate anomalies and other adverse factors. The more research you do, the greater chance you have of avoiding costly mistakes.

In this section I explain the techniques which you should use to whittle down a longlist into a shortlist and eventually to a buy or sell list. These techniques are split into ...

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