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15 September 2012

Are you a growth stock....


I am currently reading 'Goals' by Brian Tracy. In this book, Mr.Tracy asks this question...

Are you a growth stock?

What does this mean?

In stock market parlance, a growth stock is one which appreciates at the rate of more than 25% per annum over a forseeable future. The analysts could take any parameter, be it revenue or earnings, the identified parameter grows at the rate of 25% Year on Year for a forseeable future.

When applied to an individual, the above question, 'Are you a growth stock' implies multiple facets. To answer the above question, you have to consider the following.

1. What is the parameter that you are considering to measure growth : Unlike a company, that has only two main parameters to measure its growth, there are no common parameters when it comes to measuring growth. And these parameters keep changing as one grows older and mature. For some, the measures may be knowledge growth, as in how much more have I learned in the last one year. For others it may be earnings growth, how much have my income grown over the last year, while others may consider other parameters like spiritual growth, altruistic growth (how many more people have I helped this year compared to last year), networth growth etc.

2. What is the measure you use to measure your growth in the chosen area? For example, you may use the number of spiritual discourses that you attended this year as a measure of Spiritual Growth, or the number of articles/ books on spirituality that you read in the current year may be another matric. As the saying goes, what gets measured gets done.

3. And finally, are you growing at or above 25% rate in your chosen parameter?

Unfortunately, many people do not even reach the step 1 above. They do not have a destination, a goal, a measure or a plan. They get up in the morning, go thru the motions through the day and go  to bed at night, having wasted a whole day  and a month and a year. These people do not have any curiosity to learn anything new, and without learning anything new, you cannot grow.

Let me just give an illustration. There are many people who work in and around  Bombay Stock Exchange. This is the leading stock exchange in India. The place is dotted with Investment advisory companies. All around, you are inundated with material on stocks, investing and wealth creation. However there are many people who work around this area who do not know anything about Stock Market and Investing. Considering that stock exchanges are engines of growth, shouldn’t one have a curiosity to learn a bit about stocks and investing?

Don’t be like them. Look at the question ‘Are you a growth stock’ critically, take steps and get ahead in life.

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