Tops Stocks | The Good the Bad and the Ugly,

Further reflections of 2015.


Most of us have had a difficult time in the Australian Stock Market over the last 12 months.
There's been, The Good, The bad and the downright Ugly! (similar to my health!)

I Just picked up a copy of Martin Roth's Top Stocks 2016.

What a great concise evaluation of Australia's Leading companies over the last 12 months.

There has been great wealth created by some great Australian Companies.

If you just look at the top 9, all above 40% return on equity (ROE) ,  that means these great companies have rewarded their shareholders by making a return of 40% on the money the stockholder trusted to them.

Of further note is that on the Australian market  there were 32 Companies that returned above 20%.
Where else can you do that other than the stock market.

The disturbing thing of course is that if there is roughly 2400 companies on the ASX.
Only 94 Companies make it into Martins Book, and in a portfolio, we are probably only looking for about 10 to 15 to have a bit of balance.

So what does that mean?
Probably most of the rest of the 2400 stocks are rubbish you should ignore, many of them proven great wealth destroyers, who should have their management exposed for being completely incompetent.

This is what resonated (again) with me about Martins book, this game is not that hard, but you do have to be vigilant and committed to research.

If the companies you are looking at havn't made it into the top 94 he has included, then you should probably exclude them from your portfolio.

Martin's Roth's Top stocks 2016, is a refreshing, simple to read, and after a tough year, a wake up call to the realities of the great potential of the stock market.

So lets get on with it!