Home
>
Stocks & Mutual Fund
>
Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Fundamental analysis.

Fundamentals analysis says the best way to predict the future trends of a stock is to understand the financial figures of the underlying company. The fundamental analyst would calculate a theoretical value of the company using cash flow analysis, recent dividends and earnings, future dividends and earnings projections plus a host of other economic numbers. If the current stock price is lower than the calculated value, a trader who uses fundamental analysis would buy this stock.

This writer has the opinion that fundamental analysis is difficult to master for it to be useful as a forecasting tool. Understanding and analyzing balance sheets and profit and loss accounts is not enough. You will need to analyze the micro and macroeconomic picture as well. Often you will need to be have the same knowledge equivalent to senior-management of a company you want to analyze ? minus the leadership and management skills.

Take the example of Google's free 2 GB e-mail service. How much does it cost them? Probably about $2 yearly for each customer. Assuming 100 million internet users sign up, the advertising revenues from this segment alone would provide a tidy profit. It is the analyst job to provide a good educated-guess of this number. More importantly, this new signings will provide a customer base to challenge Yahoo and Microsoft. With Google's dominance in the search engine market, the data mining of such a huge pool of internet users will provide them with an edge in deciding future strategies over its two nearest rivals. Try translating this to what can Google earn in the next two quarters.

One of the better tools is the Z-Score, developed by Edward Altman, a financial economist and professor at New York University's Stern School of Business, in 1968 to predict corporate bankruptcies within a two-year period. This formula has a 70-plus percent accuracy rate

Technical analysis.

The "price action discounts everything" premise is central to charting, also known as technical analysis. Technical analysis uses graphic representations for prices and makes uses of various quantitative techniques to forecast price trends.

A technician makes profits in any market by having positions in line with the price trend. When the trend is up, then buy. Conversely, when the trend is down, then look to sell. Technical analysis is not an exact science, but it is easy to learn and effective.

Technical analysis is a good starting point for beginners. The foundation should include classical technical analysis, Japanese candlesticks, trendlines, RSI, MACD, ADX, stochastics and moving averages. Learners can complete these core topics within three to six months. With constant practice, you should be able to independently analyze and identify the current trends in the stock market.

Most users of stock charts may only focus on daily charts. However, if users pay equal attention to weekly as well as monthly charts, the picture is intuitively more complete. This is equivalent to understanding how the short, medium and long-term investors are viewing the markets, after all three main types of investors form the market. A handful of stock charting software has this feature of showing say, the relative strength index for the daily, weekly and monthly values on a single screen.

One last point - no single method in technical analysis is sufficient for real-world investing. For example, even if you master Elliott Wave Theory or Gann techniques, by itself it would bring more heartache and disappointment. Often, you will need knowledge from other disciplines and sources to improve your overall investing skills.

Some tips for successful investing in stock markets.

1. Investing is a business. The rules of running a profitable business are the same as investing in stock markets.

2. Learn to spot your own mistakes fast. When a mistake is made, exit your position and live to fight any day. The faster you realize your own mistake and the faster you react will reduce your losses, hence increasing your chances of winning in the long run. A useful method is using a 10% stop loss exit strategy. If you are long, and your stock price goes down by 10%, exit. If this same stock reverses and starts to surge, take this as your mistake of not identifying a more accurate (lower) entry point.

3. Understand yourself inside out. What makes you happy, sad, excited, depressed, ecstatic - the whole spectrum of human emotions are merely states of the mind. This is easier said than done but you have to keep improving your own control mechanisms.

4. Learn the methods of successful fund managers ? diversification, emotional detachment and having realistic expectations. Investing is a marathon not a sprint.

5. Money management skills. Whether the amount is $10,000 or $10 billion, the same rules apply. There are plenty of sources of information on this subject from the internet.

6. Learn technical analysis.

The main thrust of this article is to avoid making mistakes that will cost you dearly. How you prepare yourself for bear markets, sideways markets and market crashes are vital to your success.

There are no secrets in investing ? no magic formula, no discovery of some useful ancient secrets. Just knowledge, hard work, common sense and discipline will serve you well in the years ahead. This verse from a 2500-years-old text is a useful reminder:

"Those who know do not speak, Those who speak do not know."
- Tao Te Ching, 56th verse

Stan Seecrets' Postulate: "There are two types of people in the world ? those who know what they don't know and those who don't know what they don't know."

You may freely reprint this article provided you publish it in its entirety, including the author's bio and activating the link to the URL below.

The author, Stan Seecrets, is a veteran software developer with 25+ years experience at (http://www.seecrets.biz) which specializes in protecting digital assets. He has developed real-time prices delivery systems and has witnessed stock markets collapse of 1987 and 2000/2001 in real-time. You can contact him via email (Stan at Seecrets.biz).

tidy up service Glenview ..

In The News:

Essential phone settings to enable before losing your device, including Find My network, location services and security features for iPhone and Android.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Cybersecurity research shows weak passwords remain a major threat, with simple patterns and number sequences putting millions of accounts at risk.

New Android malware BankBot YNRK silences phones, steals banking data and drains crypto wallets automatically. Learn how this advanced threat works.

FDA approves first human trial for Paradromics' brain-computer interface that could restore speech for paralyzed patients through neural technology.

New phishing platform QRR targets Microsoft 365 users across 1,000 domains in 90 countries. Learn how to spot fake login pages and protect your accounts.

OpenTable now uses AI to track your dining habits and share insights with restaurants. Learn what data they collect and how to protect your privacy.

Google's discontinued Nest thermostats still secretly upload home data to company servers despite losing smart features, raising serious privacy concerns.

New Android malware NGate steals NFC payment codes in real-time, allowing criminals to withdraw cash from ATMs without your card. Learn protection tips.

DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.

Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.

Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.

Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Fake AI apps disguised as "ChatGPT" and "DALL·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.

Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.

Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Stocks & Mutual Fund