Easy reading for Australian share market beginner

The Weather report says it's only 32 degree...felt like 36!  The best thing to do is reading in a cool room, here goes the reading note and my last day of relaxation.

One of the colleagues at work recommends this book during the conversations.  It is a very easy reading for beginners, as for me, still there is some information noteworthy.  My experiences with investment started as soon as I started working full time.  The years living with professional Australian accountant and enterprise manager probably influenced me somehow.  I was also lucky enough to meet a good financial consultant.  By then I thought what he told me was easy to comprehend and the concepts are clear.  Later I realised a lot of the concepts come from Warren Buffett's.  Discipline, is and always will be, the word to learn.

Picture taken from Border's online book shoop.

Edwards, Tracey. (2006). Shopping for Shares: The Everyday Woman's Guide to Profiting from the Australian Stock Market. John Wiley & Sons Australia Ltd: Queensland.

Chapter 4
Investing for the long term

p. 51
Here are my simple rules for choosing companies with long-term potential.
Rule 1: Is it a market leader (does it appear in the ASX 500)?
Rule 2: Is its debt-to-equity ratio less than 75 per cent?
Rule 3: Does it have return on equity of 15 per cent or more?
Rule 4: Will I get a five-year share return of 15 percent or more?
Rule 5: Is it a stable company (Does it perform consistently year to year)?
Rule 6: Is the current share price trading at less than 16 times the earning per share price?  If so, you might have just found  yourself a bargain.

p. 54
What you are looking for is a company whose debt-to-equity ratio is 75 per cent or less.  You can find this figure under the risk section of your company data sheet.

p. 55
...Return on equity (ROE) measures the amount of profit that the company has made on your behalf as a shareholder.  In most cases this means the higher the profit the higher the return on equity.

p. 61
Usually the maximum price I am prepared to pay is 16 times earnings.  I'll simply look for the earnings per share (EPS) figure on the company's financial information sheet and multiply that figure by 16 to find the price I'm prepare to pay for the share.  EPS can be found listed in the newspaper near the share price or on the company information sheet.