When buying stocks, it is advisable to choose shares of large companies, also called large stocks. However, what exactly is a large stock? Or rather, what is a large company?
There are large companies that everyone knows, and then there are those that only a select few know about – for instance suppliers for the automotive industry, or waste disposal companies. Their stocks are just as good and just as large; the question of whether the public knows about them is irrelevant.
Large companies offer obvious advantages. They have a whole army of managers, board members and investors whose only interest is in making the company successful. All of them, but also the owners, are exercising controls to ensure that the interests of the shareholders are protected. That’s why stocks of large companies are a good choice.
We use clothing sizes to categorize stocks, from XXS to XXL (many employees, a lot of revenue and profit). This makes it easier for you to determine the size of a company when selecting stocks with the Obermatt method.
In the video, you can see how new stock investor and osteopathy specialist Michael Stadler chooses a strategy of buying only XXL stocks.