Value Investing: Selecting From The Bargain Bin

 
Picking a beaten-down stock requires a different kind of selection process. Normally, most companies beaten down this far have no earnings to speak of. Of course, if the company continues to earn money, one can apply normal valuation techniques. By that measure, many of these stocks appear outrageously undervalued: an indication of great buys. But this may also be a red flag that things are "too good to be true". Another criteria we look at focuses on the breakup value of the company and/or the ability of the company to keep operating in troubled times....
 

Trading Tips No 2: The Big Lie in the Stock Market

 
It is commonly reported that the stock market averages about 10% per year return over the long term (decades). So the investor that buys and holds a diversified portfolio of stocks or mutual funds is led to believe that their portfolio will grow by 10% per year on average. You know the mantra, “Not to worry, I’m a long term investor. On average, I’m earning 10% per year.” There is only one problem here. The facts, as you will see in a moment, state otherwise. Let’s assume for a moment that an investor could match the stock market average return of 10% per year (not likely, by the way, as most professionals fall short of this goal)....
 

Option Spread Trading

 
Spread trading is a technique that can be used to profit in bullish, neutral or bearish conditions. It basically functions to limit risk at the cost of limiting profit as well. Spread trading is defined as opening a position by buying and selling the same type of option (ie. Call or Put) at the same time. For example, if you buy a call option for stock XYZ, and sell another call option for XYZ, you are in fact spread trading. By buying one option and selling another, you limit your risk, since you know the exact difference in either the expiration date or strike price (or both) between the two options....
 

Does Japan Matter?

 
For the last 12 years we have seen the Japanese stock market slowly sinking from a high of 38,000 to about 8,000, more than a 75% loss and very close to the price of the Dow Jones Industrial Average. Why should we care about their stock market? Please understand that the stock market price is a reflection of the overall economy of a country. Every major country has a stock market index related to their economic health. Today almost every one of them has been in negative numbers for the past 3 years....
 

Again With the Bubbles?

 
A few years back - it seems like an eternity today - the U. S. stock market experienced a severe bubble burst. Legitimate stocks rose beyond reasonable valuations and ideas merely in the germination stage sold for prices far beyond those of real proven companies. When the bubble burst, billions of dollars of shareholder value evaporated. One would have thought we'd learned our lesson. Today, Yahoo and EBay, the two leading internet companies, again sell for prices beyond reasonable value. Again, people seem content to listen to a good story and place unrealistic valuations on companies that have no earnings or real prospects....
 

How to Short Stocks? How to Make Money when Your Stocks Go Down by Shorting

 
The stock market can present you with a lot of hot stocks every day. Many of them are new technology stocks that come from the nanotech, biotech, voip, healthcare, homeland defense or internet sectors. Most of them may seem promising, but the truth is that a good number of these trading & investing opportunities are extremely risky, while others are not as good as they seem. That's why it's very important to know how to choose the best especially if you want to day trade them. You don't necessarily have to trade momentum hot stocks all the time....
 

Stock Trading Secrets?

 
And if the Wall Street Insiders and the Professional Stock Brokers didn't want to reveal these trading secrets with you, then how come the companies or individuals selling you these products are so quick to give up these "Never before revealed" techniques? Is it because they don't work, or are their products just the basic rules of trading rewritten (once again) in a new and thought provoking way? Or, if you believe everything you read, is it really some highly classified and secret method for trading stocks that is being SOLD here?...
 

High Price/Earnings Ratios and the Stock Market: a Personal Odyssey

 
After some forty years of banking and investments, I retired in 2001. But since I do not golf, I soon found retirement to be very boring. So I decided to return to the investment world after ten months. However, those ten months were not a complete waste of time, for I had spent them in trying to utilize my forty years of investment experience to gain perspective on the most recent stock market "bubble" and subsequent "crash." There were several people who saw the stock market crash coming, but they had different ideas as to when it would occur....
 

War Market

 
There is no question that the stock market is being affected by war jitters. When it looks like peace we have a strong rally. When it looks like shooting will begin momentarily the market takes a dump. What should you do with your stock, mutual funds or cash that is waiting to find a home? Back when I was a floor trader we had a saying "When in doubt get out". And that applies just as strongly today to everyone whether you area professional trader or a retired person living off your equity income....
 

Understanding a Stocks PEG Ratio

 
A PEG ratio cannot be used alone but is a very powerful tool when integrated with the basics (price, volume and chart reading). You must enjoy crunching numbers and have a calculator handy to estimate your own PEG ratio. Access to quality statistical information from the web such as past earnings and future earning estimates is essential to calculate this fundamental indicator. A variety of websites produce a PEG ratio but I have not found one site that has a reliable PEG ratio that I can use for my own research, so I calculate it myself, ensuring accuracy with the final number....
 

Stealth Bull

 
If you have been watching the stock market at all you are probably very confused. You are not alone. One day is a hundred points up for the DOW and the next a hundred down. What is going on? There are many stocks that are going up and unless you are in the right ones you will be left behind. The professional money managers divide stocks and mutual funds in sections they call peer group. Many times you will find that while the general market is going down there will be one or several groups that are going up....
 
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