Showing posts with label How to Make Money in Stocks. Show all posts
Showing posts with label How to Make Money in Stocks. Show all posts
Seminar: How to Pick Stocks and Beat the Market
I am a Money Magnet! We are Money Magnets!
| Course Name | How to Pick Stocks and Beat the Market Create Wealth by Investing in Stocks |
| Schedule | August 5, 2011 - August 6, 2011 Friday - Saturday 8:30 am - 5:30 pm Ateneo Rockwell Campus 20 Rockwell Drive, Makati City |
| Price: | Php 10,800 |
Description
How to Pick Stocks and Beat the Market: Create Wealth by Investing in Stocks teaches concepts of business strategy and performance through an examination of valuation as value-creation. This course surveys and applies the interrelationships between business strategy, execution, performance, and valuation: in other words, plans, actions, cash flow results, and forecasts.
Traditional and advanced performance and valuation techniques are examined in specific relationship to valuation issues, such as: behavioral finance; competitive advantage analysis; business strategy; and execution. This course tackles guiding insights for fundamental valuation through macro theme identification, idea generation, bottoms-up analysis, and asset allocation strategies.
Applications range from corporate finance to investment management to strategic business planning. It focuses on the link between strategy and valuation – converting qualitative understanding of company initiatives into quantitative forecasts and ultimate impact on valuation – and the reverse. For this reason, it covers fundamental and quantitative techniques, which have been dubbed Quantamental™ linking planning to actions to results to forecasts.
Outline
- Embedded expectations: the single most important concept in fundamental valuation analysis
- Relative valuation in an absolute value world: Multiples as DCF heuristics
- Breaking valuation biases: Avoiding strategic decision errors from value-creation measurement errors
- Themes, macro, allocations, and stock-picking: understanding the mega-trends
- Why Bruce Lee would have been great at valuation (Yes, that Bruce Lee)
- When cash is not cash and why: Rethinking the cash flow statement and ROIs
- Competitive advantage periods, fade, and genuine assets; in practice, and application
- The DuPont Formula: Not the chemicals but the financial drivers. Never margins without turns.
- Issues in growth: Organic, M&A, share buyback conundrums
- From Fama and French to the quants' big three: V, Q, and M: What happened in August 2007?
- Decomposing the capital markets: Sell-side, buy-side, consultants, and the company focus
- Corporate governance, shareholders, insiders, and valuation impact: Strategy over structure
- Cross-capital signaling: Incorporating credit and derivative signals in company valuations
- Financial Red Flag analysis: Ticking time bombs seen in the financials
A stock seminar that we are interested to join. It's quite pricey but the outline seems promising. Unfortunately the schedule doesn't suit ours. You can register here.
Get your free email updates. Subscribe here.
Is it time to SELL your Stocks?
"In the stock market, you absolutely can't win either unless you have a strong predetermined defense to protect yourself against large losses. This may surprise you, but if you invest in stocks, you are going to make a never-ending number of mistakes in your selection and timing of purchase."
The above quotation was from How To Make Money in Stocks by William J. O'Neil. It highlights the fact that anyone investing in the stock market, even seasoned fund managers and investors, is prone to commit mistakes. This is why it's important to know when to let go and sell a stock. This is part two of How to Make Money in Stocks. Read the first part here.
The author gave about 36 Prime Selling Pointers to guide us. Here are some of those pointers:
- Buying right solves half of your selling problems. It allows you to sit through most normal corrections in the price of your stock. The author recommends cutting losses at around 7-8%.
- If after a stock's price is extended from a proper base, its price closes for a larger increase than on any previous up days, watch out! This move usually occurs at or very close to a stock's peak.
- The ultimate top may occur on the heaviest volume day since the beginning of the advance.
- Sell if a stock advance gets so active that it has a price run up for two or three weeks. This is called climax (blow-off) top activity.
- Big investors must sell when they have buyers to absorb their stock; therefore, consider selling if a stock runs up and then good news or a major publicity is released.
- New highs on decreased or poor volume means there is temporarily no demand for the stock at that level and selling may soon overcome the stock.
- After an advance, heavy volume without further upside price progress signals distribution (Dow Theory).
- Tops will show arrows pointing down on a stocks' daily chart (closing on the low end of a trading days price range).
- When it's exciting and obvious to everyone that a stock is going higher sell because it is too late.
- If a stock that has been advancing rapidly is extended from its base and opens on a gap up in price, the advance is probably near its peak.
- Sell if a stock's price breaks badly for several days and does not rally.
- Consider selling if a stock takes off for a good advance over several weeks and then retraces all of that advance.
- When quarterly earnings increases slow materially or earnings actually decline for two consecutive quarters, in most cases sell.
- Consider selling if there is no confirming price strength by another important member of the same group.
- Be careful of selling on bad news or rumors; they are usually of temporary influence.
- Try to avoid selling on shakeouts (below major price-support areas).
- If you didn't sell early while the stock was still advancing, sell on the way down from the peak. After the first break, some stocks may once pull back up in price.
- If a stock already has made an extended advance and suddenly makes its greatest one-day price drop since the beginning of the move, consider selling, but only if confirmed by other signals.
- Sell if a stock closes the end of the week below a major long-term uptrend line or breaks a key price-support area on overwhelming volume.
- The number of down days in price versus up days in price will change after a stock starts down.
- Wait for a second confirmation of major changes in the general market and don't buy back stocks you sold just because they can be bought cheaper.
- Learn from your past selling mistakes. Do your own post-analysis.
- Sell quickly before it becomes completely clear that a stock should be sold (ex: breaking an obvious support level).
- In a few cases, you should sell if a stock hits its upper channel line. Stocks surging above their upper channel lines should normally be sold.
- Sell when your stock makes a new high in price if it's off a third or fourth stage base.
- Sell on new price highs off a wide-and-loose, erratic chart price formation.
- Sell on new highs if a stock has a weak base with much of the price work in the lower half of the base or below its 200-day moving average price line.
- In some cases, sell if a stock breaks down on the largest weekly volume in its prior five years.
- Some stocks can be sold when they are 70% to 100% above their 200-day moving average price line.
- After a prolonged upswing, if a stock's 200-day moving average line turns into a downtrend, consider selling the stock.
- Poor relative price strength can be a reason for selling. Consider selling when a stock's relative strength on a scale from 1 to 99 drops below 70.
That completes the author's pointers on when to consider selling a stock. I hope you learned something new from this post. Before we end though, we'd like to highlight a concept that the author presented before enumerating these pointers. He said that stock investing should be treated like a business. Imagine yourself running a retail store (like a sari-sari store) but instead of buying commodities like oil, sugar, and soap, you are buying shares of a company. If the demand for a certain commodity is low, consider selling the commodity at a discount, even if you incur a little loss. This way you can free up your capital so you can buy more of the commodity that is selling fast. And remember to not buy the low demand commodity again unless a real demand for it arises in the market.
Up next on this series is pointers on when to be patient and HOLD a stock. Don't forget to subscribe to our FREE mailing list to keep you updated or LIKE us on Facebook. Get your free email updates. Subscribe here.
Thank you and keep on attracting wealth, Money Magnets!
How to Make Money in Stocks
I am a Money Magnet! We are Money Magnets!
Finished the first part of William J. O'Neil's book "How to Make Money in Stocks: A Winning System in Good Times or Bad." What I liked about his approach his how he combined both Fundamental and Technical analysis to pick the stocks to buy. I think his technique has a universal appeal, in the sense that it can be applied in any stock market in the world and in different times. Continue reading this article to learn more about William J. O'Neil's CANSLIM Method of picking the right stocks.
THE C-A-N-S-L-I-M METHOD
William J. O'Neil developed this method of picking the right stocks to buy by analyzing past stock market winners and examining what characteristics these stocks possessed that made them successful. Each letter in the name stands for a principle that you must considering in choosing the right stock. Let's go through them one by one
C = CURRENT QUARTERLY EARNINGS PER SHARE (EPS)
"The common Stocks you select for purchase should show a major percentage increase in the current quarterly earnings per share when compared to the prior years same quarter."
Choose stocks that have significant quarterly earnings increases. This can be at the 25% level or upwards. The basic rule is - the higher the better. And the author notes that in a market where there are a lot of stocks to choose from, we don't have to settle for those that are valued cheaply and promoted as companies that can rebound in the future. Chances are, this may never happen. So choose investments that are advancing strongly in terms of current earnings.
A = ANNUAL EARNINGS INCREASES
"Each year's annual earnings per share for the last five years should show an increase over the prior year's earnings. You might accept one year being down in the last five as long as the following year's earnings quickly recover and move back to new high ground."
Choose stocks that are consistent and stable. This will be reflected in the percentage of annual earnings increases and the acceleration or growth in earnings per share. This is said to be more indicative than the P/E ratio which is used by a lot of analysts to evaluate stocks.
N = NEW PRODUCTS, NEW MANAGEMENT, NEW HIGHS
"It takes something new to produce a startling advance in the price of a stock."
Watch out for stocks that are introducing a new product, changing into a new management, or if there are significant new changes in their industry conditions.
In terms of the stock's chart, look out for stocks that are making new highs. According to the author, the right time to buy is just when the stock is about to break out its price base. Our job is "to buy when a stock looks high to the majority of the investors and to sell after it moves substantially higher and finally begins to look attractive to some of those same investors."
Remember that in the stock market, "what seems to high and risky to the majority usually goes higher and what seems low and cheap usually goes lower."
S = SUPPLY AND DEMAND
"The law of supply and demand is more important than all the analyst opinions."
Stocks to pick:
- Stocks with lesser outstanding shares, they will usually outperform bigger firms if all other factors are made equal.
- Stocks that have a large percentage of ownership by top management.
- Look for companies buying their own stock in the open market.
- Stocks with lower corporate debt to equity ratio is usually better.
L = LEADERS AND LAGGARDS
"Avoid laggard stocks and avoid sympathy movements. Look for the genuine leaders." These are stocks with a Relative Price Strength greater than 70.
Learn to sell your worst-performing stocks first and keep your best-acting investments a little longer. True leaders are the first ones to bounce back to new price highs when a market decline is finally over.
I = INSTITUTIONAL SPONSORSHIP
Look for stocks with institutional sponsorships. This may take the form of mutual funds; corporate pension funds; insurance companies; large investment counselors; hedge funds; bank trust departments; or state, charitable, and educational institutions.
M = MARKET DIRECTION
Buy when the overall market direction is trending upwards. The best way to determine the direction of the market is to follow and understand everyday what the general market averages are doing. Knowing a little Technical analysis and being able to read charts and trends would help you in this department.
This completes the first part of the book where the author introduced the C-A-N-S-L-I-M method of choosing the right stocks. In the succeeding chapters, the author will show us when would be the right time to sell stocks! We can't wait to finish that section and share it with all of you. So please subscribe to the FREE mailing list so you won't miss any future articles. (Get your free email updates. Subscribe here.)
Keep on attracting wealth, Money Magnets!
N = NEW PRODUCTS, NEW MANAGEMENT, NEW HIGHS
"It takes something new to produce a startling advance in the price of a stock."
Watch out for stocks that are introducing a new product, changing into a new management, or if there are significant new changes in their industry conditions.
In terms of the stock's chart, look out for stocks that are making new highs. According to the author, the right time to buy is just when the stock is about to break out its price base. Our job is "to buy when a stock looks high to the majority of the investors and to sell after it moves substantially higher and finally begins to look attractive to some of those same investors."
Remember that in the stock market, "what seems to high and risky to the majority usually goes higher and what seems low and cheap usually goes lower."
S = SUPPLY AND DEMAND
"The law of supply and demand is more important than all the analyst opinions."
Stocks to pick:
- Stocks with lesser outstanding shares, they will usually outperform bigger firms if all other factors are made equal.
- Stocks that have a large percentage of ownership by top management.
- Look for companies buying their own stock in the open market.
- Stocks with lower corporate debt to equity ratio is usually better.
L = LEADERS AND LAGGARDS
"Avoid laggard stocks and avoid sympathy movements. Look for the genuine leaders." These are stocks with a Relative Price Strength greater than 70.
Learn to sell your worst-performing stocks first and keep your best-acting investments a little longer. True leaders are the first ones to bounce back to new price highs when a market decline is finally over.
I = INSTITUTIONAL SPONSORSHIP
Look for stocks with institutional sponsorships. This may take the form of mutual funds; corporate pension funds; insurance companies; large investment counselors; hedge funds; bank trust departments; or state, charitable, and educational institutions.
M = MARKET DIRECTION
Buy when the overall market direction is trending upwards. The best way to determine the direction of the market is to follow and understand everyday what the general market averages are doing. Knowing a little Technical analysis and being able to read charts and trends would help you in this department.
This completes the first part of the book where the author introduced the C-A-N-S-L-I-M method of choosing the right stocks. In the succeeding chapters, the author will show us when would be the right time to sell stocks! We can't wait to finish that section and share it with all of you. So please subscribe to the FREE mailing list so you won't miss any future articles. (Get your free email updates. Subscribe here.)
Keep on attracting wealth, Money Magnets!
Subscribe to:
Posts
(Atom)
