Seeking for a system

Its been some time since I last post as I just got back from hongkong. Recently, I have been reading a book named "The Winning Investment Habits of Warren Buffet and George Soros" and learnt quite a bit from it. Although their styles are poles apart but they share the same mentality where they tend to have their own system.

Currently, my strategy is to buy stocks with relatively good business by using some ratios like PE, PB to determine and also to read through their annual report to get an idea of their management, competitors and their prospect. Secondly, I will also check out the company's financial status by going thru their balance sheet, income sheet and cash flow and in my opinion, cash flow gives you the best picture of their financial status because this is where it involves all the transactions which is finalised. Example : Some company may have high revenue but low cash flow provided by operational activites due to large amount of trade receivable which may result in bad debts but having said that, I will still check their history because they may not be able to report the actual revenue due to the time conflict of annual report preparation.

Till now, I dont have a system to determine my exit therefore I'm adopting a buy and hold strategy whereby I will only sell them if their business fundamentals are greatly affected. One downside of this system is that I'm still not confident to judge a business therefore it may result in a early or late exit which may result in huge losses... Guess I have to do some trial and error and also to read up more!!