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For Andy-man
I buy two types of stocks Investment and Gambled Stocks...
1. When I look for Investment stocks I look at large cap stocks with high volumes of trade (like Apple), if it falls into this catagory I will not Gamble with it. Then I look for low PE and high yield (or good performance over the last 2-5 years). I also check to see that their earnings are fine, if their earnings are low I expect to see a slightly higher PE, but I don't want something too high still.
For low earnings I then investigate on why their earning are low, check their cash assets, expenses, and total net worth. If their cash assets are high I would speculate that they are about to make a move to compensate for their low earnings (buy), if their expenses are high I speculate that they will have lay offs (sell) or sell of part of their company (buy), and if their total net worth is very high I would expect them to barter against it and maybe aquire a company or sell something off (buy). Yet, this is only if their earnings are low, which is rare for large cap companies...
2. Gambling stocks are just that - a gamble. I find stocks that look like they have a good product and buisness plan, as well as decent backers, I ignore all numbers and buy. Usually these stocks are cheap (less then $10/share) and you can get a deal. Other times the stocks are just down right risky investment, but it's the monkey game... Being in Pharma I generally gamble on pharma stock since I understand the buisness a little better than other markets (not much mind you), and can speculate better on whether such a company will sink or swim...
Basically, as I am young right now, I have about a 70/30 cash split on these types of stocks, with 70 being the more stable of investments.
A while ago I bought CAG (ConAgra Foods) after we talked about people making petrol out of chicken guts, and CAG funds that research. I checked them out and they had a low PE (12-13 range), a good yield (4-5%, when bonds were making 2), they were 5 points of their 52 week high (and 5 points above their low), they had high expenses, good earning, and a lot of cash... I also saw that they were in dealings to sell of some portions of their buisness... So I bought. The stock is only up a buck from where I bought it about 4 months, but it also has already returned me 4.5% on the dollar... That's better than any CD I could of bought! I like the stock. Thanks
I buy two types of stocks Investment and Gambled Stocks...
1. When I look for Investment stocks I look at large cap stocks with high volumes of trade (like Apple), if it falls into this catagory I will not Gamble with it. Then I look for low PE and high yield (or good performance over the last 2-5 years). I also check to see that their earnings are fine, if their earnings are low I expect to see a slightly higher PE, but I don't want something too high still.
For low earnings I then investigate on why their earning are low, check their cash assets, expenses, and total net worth. If their cash assets are high I would speculate that they are about to make a move to compensate for their low earnings (buy), if their expenses are high I speculate that they will have lay offs (sell) or sell of part of their company (buy), and if their total net worth is very high I would expect them to barter against it and maybe aquire a company or sell something off (buy). Yet, this is only if their earnings are low, which is rare for large cap companies...
2. Gambling stocks are just that - a gamble. I find stocks that look like they have a good product and buisness plan, as well as decent backers, I ignore all numbers and buy. Usually these stocks are cheap (less then $10/share) and you can get a deal. Other times the stocks are just down right risky investment, but it's the monkey game... Being in Pharma I generally gamble on pharma stock since I understand the buisness a little better than other markets (not much mind you), and can speculate better on whether such a company will sink or swim...
Basically, as I am young right now, I have about a 70/30 cash split on these types of stocks, with 70 being the more stable of investments.
A while ago I bought CAG (ConAgra Foods) after we talked about people making petrol out of chicken guts, and CAG funds that research. I checked them out and they had a low PE (12-13 range), a good yield (4-5%, when bonds were making 2), they were 5 points of their 52 week high (and 5 points above their low), they had high expenses, good earning, and a lot of cash... I also saw that they were in dealings to sell of some portions of their buisness... So I bought. The stock is only up a buck from where I bought it about 4 months, but it also has already returned me 4.5% on the dollar... That's better than any CD I could of bought! I like the stock. Thanks
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