I continually hear from economists, talking heads, other market letter writers, analysts and assorted "experts" that I need to know all kinds of "stuff" about the stocks and mutual funds I am going to buy and I should keep up with them on a regular basis.
What is this important "stuff"?
Let's see. Oh, I know. Price to Earning ratio, P/E. That's always a big one on almost everyone's list. Simply put it is how many years it will take a company's earning to pay back the price today. It can be from five to infinity if it is not earning anything. Today there are many companies that have P/Es in excess of 50. That's 50 years to earn back your investment. Kinda steep, don't you think? For years the average has been 14 or 15. Today it is about 28 to 30 depending on who is counting.
A stock selling at 14 P/E is fairly valued by "experts", but if the stock is going down is that still a "fair" value? Do you want to buy something that is a fair value, but looks like it will sell for less in a few months?
Then there are all kinds of things market analysts like to look for and talk about such a gross sales, net profit, management experience, competition, industry sector, price/volume relationship, interest rates, rate of inflation and I could go on for a couple of pages, but you get the idea. When, and if, you do this type of analysis you will find most of the numbers don't agree with each other to give you a clear idea of whether to buy or sell. It is like trying to pick a button out of a washing machine during wash cycle. The more you look the more confused you become.
Brokerage companies want you to try to use all this "stuff". They encourage you to become confused. That way if you pick a stock that goes down they don't take any blame. "The market is very complex" is their favorite phrase. Whether you win or lose they make money in commissions.
If this "stuff" is of no value in stock selection (and it isn't) then how are you to find stocks that go up? It is so simple that brokers don't want you to know. In fact, most of them don't know. Here is the answer. Find a stock or better yet a mutual fund that is going up. Is that too easy?
There is a basic law of physics that says a body in motion will remain in motion in the same direction until disturbed by another force. The Law of Inertia. This same principle can be applied to the stock market.
Find a stock or mutual fund that is going up and buy it. When the direction changes to down (or even sideways) sell.
You don't need all that "stuff".
Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.
Congress recently passed another new law that is supposed to outlaw financial crime. Corporate officers will be sent to jail for "cooking the books" as it is called. Among other things it is taking the stockholders money and paying themselves huge bonuses for nonperformance. These guys are even worse than mutual fund managers who do the same thing ? get paid big salaries yet continue to lose your money.
Quality Investment Information: Standing Firm In the Face of Opposition
THERE'S SOMETHING TO BE SAID FOR standing firm in the face of opposition. Interestingly, most of the best stock decisions have come at times when the mainstream is saying precisely the opposite. Predictions like these can be valuable if one is to build an investment strategy around their view of the world.
Planning Your Dive and Diving Your Plan ? Trading!
A colleague of mine just returned from a scuba diving trip inCozumel, which just happens to be one of my favorite places todive. Anyway, she was telling me about an unexpected difficultyshe encountered while swimming around the corral reef down about85 feet. It wasn't anything serious but her story reminded me ofsomething my scuba instructor used to say over and over again."Plan your dive, and dive your plan".
Invest In The Stock Market For The RIGHT Reason, Using The RIGHT Choices
Invest in the stock market for the RIGHT reason, using the RIGHTchoices!
Advisory Service for You?
It depends on your level of understanding of the market and the amount of money you have.
Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. It is now undervalued and is worth that much more. Really?
Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading
Profitable day traders recognize that momentum trading is among the fastest & most effective ways to harvest BIG piles of cash in the stock market.
Race Horses and Mutual Funds
For years investors have been taught to lookinto the composition of a mutual funds. In otherwords the "experts" want you to take the time toanalyze the stocks within the mutual fundportfolio, categorize them by industry group andtry to understand the objective of the fundmanager. This is nonsense.
Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market??
Well maybe that's overstating it a little, but it's certainly one of the most important.
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."
How to Maximize Your 401k Mutual Fund Returns
When it comes to 401k's there is an overabundance of sad stories. Here is one that at least has a happy ending-and it's getting happier all the time.
Trapeze Artist - Swinging with the Stock Market
When we go to the circus we see a trapeze artist working on a high wire or swing either alone or with other athletes. They know what they are doing because of constant practice, but every once in a while there can be a mistake, even a small one that can cause one of them to fall. The result is death or serious injury when they hit the ground.
Being Wrong Buying Stock is Okay
Being wrong is OK, but let's not carry it to extremes. That applies to everything, but let's limit our discussion here to the stock market.
Traders, Defend Against the Dreaded Death Spiral.
It has often been said that there is only two ways to get hurt really bad on a stock trade, getting caught in a "death spiral" by not using DTM: Decisive Trade Management in the way of stop loses and having a stock halted on you. Halts you have zero control over. Death spirals are of your own making if you do not practice the use of stop loses.
Struggling Stocks, Booming Commodities
Discover the Biggest Trading & Investing Online Mistake
Any online investor / trader seeks an excellent off or online future trading career opportunity. Despite this goal, did you know 95 percent of all traders go broke within the first two months? Why do investors lose vast amounts of wealth in one or more of the following markets ? option trading, forex trading or currency trading, stock trading, future or commodity trading etc? in such a short amount of time?
How Much Information Do You Need?
You have decided to buy some stock or mutual funds, but wonder which one to buy. You need more information so you call your broker for advice. A so-called "full service" broker will bury you with all kinds of reports, analysis sheets and other pretty pieces of paper, but will probably try to sell you something that makes him the most commission.
Mutual Fund Honor Roll ? Buy High, Sell Low by Chasing Performance
Buy high and sell low -- It's not a typo.
Every day on CNBC-TV they show a 200-day moving average line superimposed on the stock price history. It seems they give great credence to this manufactured line as it represents 10 months of price action. What is it? Does it really mean anything?
3 Components Needed for Beating the Market
Time to look back
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