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).

one time home cleaning Lake Forest ...

In The News:

Ford's new privacy promise pledges not to sell driving data to insurers or brokers, but disabling connected car data sharing could cost you key features.

Google says Videostrong deliberately installed backdoor malware in over 1.3 million Android TV boxes, turning them into a botnet for criminals.

Foundation Future Robotics co-founder Mike LeBlanc says the MK 2 humanoid is ready to engage enemies with machine guns in Ukraine's combat zone.

EAIGLE says its AI camera technology cuts truck check-ins from 10 minutes to under 30 seconds, potentially reducing fuel waste across supply chains.

The Fox News AI Newsletter covers the latest artificial intelligence technology advancements, including the challenges and opportunities AI presents.

After the military, some veterans are left wondering what's next? Nonprofit organization Vets to Drones is helping them take on a new path by becoming certified drone pilots.

Natasha Lopez says a Flock camera system helped a Georgia deputy track her family, and after she spoke out, a fake Facebook page targeted her children.

Data broker opt-outs may not keep your personal information private for long. Five common myths leave retirees especially vulnerable to scams.

What's Nvidia's future after the resignation of CEO Jensen Huang amid scandals? Weigh in here!

Meta's AI age-estimation technology now scans Instagram accounts worldwide, placing millions of teens into stricter safety settings automatically.

The FTC sent warning letters to 25 companies over misleading health insurance ads as open enrollment brings a surge of deceptive offers online.

Michigan's new prison scoring system claims 30% better violence prediction, but Recidiviz says it doesn't actually use AI to classify inmates.

University of Texas at Arlington researchers reveal how AI analyzes public Instagram posts to craft spear phishing emails that feel personal.

VOLTA-AUTODOXER malware uses AI to analyze stolen data and rank victims by potential value, helping criminals target the most profitable accounts.

Daimler Truck's Oregon demos show how a Freightliner Cascadia's automatic emergency braking responds when dummy cars suddenly cross a moving truck's path.

Facebook ads promising to recover stolen funds are targeting scam victims again, and Meta confirmed removing flagged accounts after investigation.

Tesla Cybertruck production is winding down at Gigafactory Texas to make room for Cybercab robotaxi manufacturing, but key questions remain for owners.

Identity theft can hide in phone accounts, medical records and utility bills long before it shows on a credit report. Eight places to check now.

JR East's towering ZIZAI ZX-3 chainsaw robot tackles dangerous branch-cutting along Japan's Koumi Line while a trained operator controls it remotely.

A massive DHS data leak exposed records of over 41,000 employees, revealing links to undercover ICE operations, Palantir tools and AI platforms.

The Fox News AI Newsletter covers the latest artificial intelligence technology advancements, including the challenges and opportunities AI presents now and for the future.

UCLA's PhoneBot turns old Android phones into the brain of a two-legged humanoid robot that walks, follows people and stands up after falling.

A fake Amazon invoice charging $988.18 for an iPad lists the same customer support phone number three times to steer panicked victims into calling.

A handful of food delivery robots from Uber Eats and other platforms have gotten kicked and knocked over in Philadelphia and Los Angeles.

Data broker opt-out forms may not protect your family. People search sites can still expose your info through a spouse's or parent's profile.

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

Stocks & Mutual Fund