Stock picks and tips

The World Wide Web has dramatically changed our lifestyle nowadays. It literally opens up a brand new world for us, a new and thrilling territory that holds a thousand promises and possibilities that have yet to be explored. Do you know that you able to trade stocks online and get access to your account anytime you want without leaving your house? The stock brokers can now carry out entire trades using the Internet, and it drastically decreases the cost and time involved. Stock trading on the internet is a great way to start exploring the possibilities of the stock market.

This is an indispensable service that many brokerage houses offer their clients. And the marvelous thing is most fees and commissions are lower on the Internet. It is important that you exercise several precautionary measures before you start your online activity. If you are new to trading, having the opportunity to actually talk with a broker will be fairly beneficial. If you are not savvy enough in the games of the stock markets, you could be in for some real danger. Before you start trading stocks online, try to learn as much as you can about the subject.

There are times when internet access is not possible. As a result, you may not be able to get online to make a trade. This is the time when your broker can be helpful, simply give them a call and request them to make the trade for you. This is a straight forward way to solve the problem, irrespective if you are a newbie in the stock market or if you are an advanced trader.

To be safe, choose to trade with online brokerage agencies that have been existing for a certain period of time. If you are looking for a company that been around for less than five years, you will be running a risk. Fortunately, there are a fair number of companies that have been trading long enough who do offer an online trading facility. This is a wonderful venue yet not everyone is up for it. Think carefully before you decide to do your trading this way, and make sure that you really know what you are doing!

 You must make your stock trading) as close to automated as you possibly can. Why? It removes all emotions from your trading. I am not saying my method (system) is the best in the world. But it is automatic and it does work in bull and bear markets. Sure, I am wrong. I take a loss and move on. No questions asked. No emotional decisions. No thinking about what could I, should I do. And when I snag a big winner I automatically follow my trading system)  trading system and let that kick me out of the trade as opposed to agonysing whether I should get out or give it some more room. I can't trade the very peaks and troughs. I have never been clever enough to do this. Nor do I have to.
 
   To me, being unemotional about my stock trading) is as improtant as the gains. I’d rather make 40% on my money using my automatic method than 60% but where I ran up and down with my emotions, worrying about positons. Second guessing etc. You have to decide what is important to you. Peace of mind or trying to wring out that extra 10% by being smart?
 
  What holds more value for you, time or money? It’s important to establish what you want first before you set off and get it. I haven’t looked at stock intra day prices for a few months now. And boy do I feel better for it. It can become a very bad and time consuming habit to check on intra day price quotes everal times a day. not to mention to ups and downs your emotions go through every time you see your stock price going with you or going against you.
 
  Automate your trading. Run it like a business. say goodbye to emotional trading and get a life away from the quote machine

If you are interested in getting involved in the stock market—that is, investing in shares of companies that are expected to bring in a profit—there are a few choices you need to know about. You need to decide whether to invest in penny stocks or the more expensive standard stocks.

The legal definition of a penny stock is any stock that is not traded on one of the major stock exchanges, such as the NASDAQ or the New York Stock Exchange, and that is fold for less than $5 per share. This may be because it is too small a company to qualify for these exchanges, or because the stock is so inexpensive that most traders do not wish to deal with it, since they will make very little money off of it.

However, amongst brokers and other stock-market experts, the term “penny stock” has a pejorative connotation, as though these smaller stocks were less worthy of the name than other stocks. Because of this mainstream stigma, and because of the lower cost of these penny stocks, most brokers will not get involved in penny stock trading.

This is where you have to make another choice about your penny stock trading. You can search around and attempt to find a broker who will work with you, or you could go through a discount brokerage house.

Discount brokerages specialize in penny stock trading. This trading is done on exchanges known as the pink sheets, or on the OTCBB, and the stocks are traded for $5 per share or less. This can be very risky trading, since these stocks have not been rated as high-performing, there is not always information revealed to the public, the OTCBB and pink sheets do not hold stocks to minimum standards of performance and quality, new stocks have no history, and the company you’re buying into may not have access to enough cash, therefore can’t always sell their shares even after they put them up for sale.. However it has also been known to produce excellent returns for many people, and the higher risks can be worth the higher rewards.

One problem with penny stocks, however, is that they can easily be fraudulent. A company can manufacture a history or a series of ratings that are not authentic but still seem attractive, then sell millions of dollars worth of penny stocks. By the time investors realize that their stocks are worthless, the fraudulent company has moved on or covered itself legally, leaving the investors with major losses. If you decide in favor of penny stock trading, it is a good idea to have a professional thoroughly examine the history of any stocks you do buy.

Penny stock trading is not for everyone, but it can be a useful and lucrative way to begin stock market trading. Many beginning investors use it as a means to learn their way around the stock market and to become more skilled at the practice of trading. If you are prepared for the risks, penny stock trading may be an excellent choice for you.

Copyright © 2008 Paul Mac Donald

For people who are considering investing in the stock market, few topics are of more interest than how to pick stocks. After all, the stocks that you pick to buy, hold, or sell will have everything to do with how much money you make or lose.

Although many experts have general guidelines and tips for picking stocks, there is no single correct way to do it. There’s no secret formula that brokers know and you don’t; it takes experience, skill, and an intuition honed over years of practice to become an expert at picking stocks and then knowing when to sell them again. The analysis of stock market data is an ongoing concern, and one that frequently overwhelms new investors or traders, but with practice, a trader learns to simply process the information almost unconsciously, without having to go through long, step-by-step processes. This split-second process is part of the intuition or hunches that good brokers get and which often prove so profitable in stock picking.

But there are things a beginner can consider when looking at stock picking. If you are considering investing in a company, you can easily do your own research into the company’s financial health and its projected gains and losses for the next quarter. You can also dig a little deeper and find out about those intangible qualities that often make or break a company. What is their reputation? Have they had slow and steady growth or short-term phenomenal growth? What is the work history of some of their executives? Are they known for good customer service or have there been a lot of complaints? These kinds of things will tell you as much about the possibility of a company as a good investment as will their financial reports.

This research is worth doing, and worth discussing with your broker, because if you become skilled at picking stocks, your personal wealth will increase. If you don’t get good at it, you will always have to depend upon others to look out for your best interests, or you will simply make bad choices in your investments.

When you are researching and analyzing which companies to buy stock in, the first element to look at is what’s called the discounted cash flow, which simply means what the company makes when you look at its income minus its expenses. If a company makes a million dollars a year, and spends $750,000 on wages, supplies, equipment, and overhead, then its discounted cash flow is $250,000. You can then decide if this is promising enough to suggest that the discounted cash flow will continue to increase, making stocks more and more profitable to have. If you think so, it would be a good time to buy those stocks.

Stock picking is both an art and a science. It looks at set factors, but it is based on intuition as much as anything else. If you do it well, it could mean a profitable future for you.

Copyright © 2008 Paul Mac Donald

An option has no value in itself; it simply means that you have a choice to buy stocks, bonds, or some other kind of material that does have value. These materials, the things you have an option to buy, are called securities. An option is simply a contract that says that within a certain time frame, you will have the choice of buying into an investment at a fixed price, the price being fixed in the contract.

There are two ways in which the buyer takes a risk in options trading. First of all, there is a price to pay for the contract. For the advantage of having a fixed price for the stock you may want later, you have to pay a price. Of course, your contract is an option, you do not have to buy that stock at the fixed price, but if you don’t, you will lose the money that you put down.

The other risk that you as the buyer takes in options trading has to do with the price of the stock you have an option on. If you take out an option on stock at a certain price, and the price goes up, you’ve gained a lot, because you are buying it for less than you can sell it for. You can make a profit. But if the price goes down, you can either buy it for the contract price and end up paying a lot more for it than it’s worth, or you can decide not to take the option, and lose the money you put down on it.

There are two sides to any options contract: the buyer and the seller. If you are the buyer, you don’t have to buy the stock you have an option on: that’s why they call it an option. If it seems like a good idea to buy when the expiration date nears, you can. The seller, however, has no choice; the seller has to sell if the buyer wants to buy. The seller has taken the money that the buyer put down on the contract in order to ensure the price, and now the seller has to sell, even if it turns out that he or she could have sold it to someone else for a higher price.

Another use of options occurs when employees of a company are offered employee stock options. This means that the employee has the right, but not the obligation, to buy shares of the company’s stock. Options can be short term, for example, three months, or long term, a year, or several years. Many people find this kind of option trading an excellent way to track a stock over the course of long term trends, and then to buy it and sell it when it seems to be at the height of one of those trends.

Options trading probably isn’t for beginners, but an experienced broker can help you to make the most of this choice.

Copyright © 2008 Paul Mac Donald

Did you know that you don’t always have to pay a commission to buy stock? This is a stocks for dummies lesson that everyone should know about. Some companies will allow you to buy and sell their stock directly from them and if you choose this method, you will not have to pay any commission to a broker. This is not something that every company allows though, and so you will need to do some research to find out if the comapny you wish to invest in offers this plan.

This is a great tip about buying stocks for beginners and anyone who just wants to buy a few shares. Many American companies have this sort of plan which is called a Direct Purchase Plan. Some of the top corporations who have this type of direct purchase plan are Chevron, Pfizer, JP MorganChase, and others.

If you are looking for this type of company, you might contact the investor relations department of the company you wish to buy stock of to find out whether they will allow you to buy their stock directly from them. If they do, they will be able to send you all sorts of information that will help you invest.

When you do find a company that does have a direct purchase plan, you should also request a prospectus about the program to find out what it’s limitations are. Some programs require that you already own some stock before you are allowed to purchase more through the program.

Many companies allow you to buy more shares with no commissions with the dividends you earn on your existing shares. This is very nice for someone who wants to accumulate shares over time. It can be set up so that all your dividends are automatically used to buy more of the company stock. You will then start to accumulate stock shares at different prices over time depending on their price when they were automatically purchased.

If you end up enrolling in a corporation’s direct purchase plan, you will probably get a statement every time you make a transaction with them and you will get a 1099 tax form at the end of the year detailing your activity. This will be an additional item that you have to keep track of separate from you brokerage statement. However, you may be able to sign up for the program through your brokerage account in which case everything will be neatly taken care of there.

Buying stock through a direct purchase plan is a great way to get involved in the stock market if you are just starting out. The stock market for dummies is something that you will need to invest a lot of time researching and this is just another of the many ways to get involved.

Have you seen the movie 2The Perfect Storm"? Here's The Perfect Stock.
 
With the coming toether of three seperate fronts one super storm is created.
 
  Well perfect momentum stocks are not quite as rare but I do feel those too happen when three distinct things happen in the stock market.
 
What are they?
 
1) Stock market stops going down and starts going up. The most important rule for investors to follow.
 
2) Stock technically looks great. Technical action does not mean Moving averages, MACD crossovers, and a whole host of other lagging and complete B*S* .it simply means price and volume.
 
The stocks fundamentals must match certain criteria. A great story, fantastic small companies at the right time fit this criteria.
 
  Well the stock I have recommended to my list fits two of the three. It could be all three if the marekt goes up now. Which right now it isn’t so I am not going to say this is perfect timing here.
 
Small company with masive room for future growth. It’s capitalizing on a huge trend affecting the whole of the planet now (most of my great momentum stocks have a great story behind them) Remember what I am always hoping for is a 10 bagger. I do not get many but that's what I want to try and find. If the stock looks like like it "might gain" 50%,100% at a push I am not interested in it.
 
I can do the grunt work in picking and trading these stocks for you. Most importantly is when to exit. Too early and you miss the move. Too late and you lose as well. It’s not easy but I have nailed enough great monster  momentum stocks to see how it works.
 
  Get in now at:

Momentum Stock Trading system
  
 and find which stock I am recommending. We are still waiting to get in.
 

Making 70% in the beginning. It was so simple. Making big money seems so easy when you nail it. I started dreaming about managing billions and taking over the world with your trading system. Doesn’t everyone?

Then the markets turned (as they ALWAYS DO) and I gave back about 40% of my profits. Still not bad. I was up over 40% as a complete novice.

But how did I do this? Well, I was simply doing the right things at the right times without even knowing it.

What are the “right things”?

1) It was a bull market. It was one of those glouries bull market cycles we had so many of in the 90′s. 80% of stocks were flying up in great trends. Money was flooding into stocks. This was a great time to be in the stock market. I was lucky on the timing no doubt about it.

2) I was investing/ trading in the leading momentum stocks and sectors. Software, internet, high tech sounded “sexy” to me so I only bought stocks in these sectors. I was looking for huge spike in volume (buying) and following them.

3) I was going with the leading stocks. If it was going up I as jumping in. Stop overdoing it. All technical analysis was ignored. No overthinking. I invested in the top stocks.

4) If I was wrong I would cut my losses. If I was right I rode it up as far as it would go. I didn’t get fearful with profits. I didn’t want my losers to “turnaround” (not that they ever do). Don't go looking for others to agree with me. I was like a robot. I never let losers become large and I let my winners grow.

And that is about it. You want to make money in stocks just do the basic things right:

1) Find the major trend of the markets and go with it. Bull market go long the leaders. Bear markets stay in cash or short stocks.

2) Always practice good money management. Do not put all your eggs in one basked but also do not diversify too much. Cut your losses, Let the winners ride. Take low risk trades and follow your rules.

When the cycle is right and you are aliment with it. Making money in stocks is dead easy. There’s nothing easier to do. BUT get it wrong. Get the cycle wrong and try to fight it and you find it very easy to lose money. It’s your choice.

When you start investing in the stock market, there are many bits of advice you will hear. One of them has always been that investing in stocks long term is one of the most profitable investment strategies. When you learn how to buy stocks for beginners, you are told to buy good solid companies and hold them for years. Don’t trade stocks and try to time the market, just buy and hold them. The stock market for dummies is hard enough without trying to time it perfectly. 

Does the buy and hold stock strategy still work in 2008? It seems it might not. The world has changed an awful lot in the last 50 years and that includes businesses. Years ago, you could pick a solid company, say an automobile company, and you could count on it growing year after year. Everything moved slower in those days and that included competition and the advancement of new technologies. You could pick a whole list of industry leaders, invest in them, and be sure that they would be worth more in 10 years than they were today.

In today’s world, a good company with a leading technology may be ahead in the marketplace now, but left in the dust just a couple of years down the road. Things happen so fast now that it is hard to pick a company to buy stock in that you feel confident that will still be a leader 10 years from now.

In the old days, large companies rarely had scandals or went bankrupt. Today, scandal and bankruptcy seem to be common place and stock prices can fluctuate wildly. Today’s investors buy stock in seemingly great companies, like Ciitgroup or Washington Mutual, only to find themselves down 75% several months later.

The Internet has also contributed to the rapid pace of the current day’s stock market. Day trading is something that was never done before the Internet. Everyone now has instant stock quotes and the ability to make trades effortlessly with the touch of a button. The stock market for beginners is more difficult to grasp now than it was in years past as information is instant and it is everywhere no matter where you live.

The world moves at such a fast pace now that it seems you can no longer buy a stock, sock it away, and come back 5 or 10 years later and be guaranteed of a gain. When you buy a stock now, you need to constantly monitor it to make sure nothing drastic changes. You need to be able to make decisions constantly of whether to continue to hold it or sell it.

One of the hardest concepts of stocks for beginners to understand is how stocks are valued. What is the driving force behind a stock price and what causes some stocks to be so volatile? When you buy a stock, you are buying a part of a company. (See how to buy stock for beginners to get started) However, that stock price of that company can go up and down drastically sometimes for almost no reason which in turn means the value of the company is going up and down as well.

Lets pretend you bought some shares of the stock Garmin in the last six months. If you were unlucky and bought it at its high, you might have paid as much as $125.00. Unfortunately if you look at the stock price today, you will see that the price is down to around $47.00. That is a decline of more than 50%! This also means that the value of the company went down more than 50% as well.

What happened? How can a company be worth only 50% of what it was just 5 months ago? Is the company really in that much trouble? Did a hurricane destroy a factory or two? Well, in Garmin’s case it is all because the perceived value of the company went down. GPS devices have been very hot for the last 3 years or so and the stock went up steadily because of the perception that Garmin was the industry leader and would sell a lot of units.

Suddenly, with the economy on the downturn and people not spending as much as they did for expendable items, the perception is that Garmin will not sell as many units in the coming years. The company is still doing well right now but everyone believes that things will change. Thus, just because people THINK things might change, the stock goes down and so does the value of the company. The perceived value of the company has gone down.

Stocks can shoot up for the opposite reason when people think a company is in the sweet spot and has a product or technology that will do very well in the future. In that case, the company stock may go through the roof even though they have few sales at this very moment.

Stock prices go up and down daily on what stock market investors perceive the value to be and not necessarily what the company is really worth. It is difficult to fathom this sometimes because you have to change the way you think about investing in stocks. This is another thing that shows that the stock market for beginners is a complicated beast to learn.