Winning With Stocks: The Smart Way to Pick Investments, Manage Your Portfolio, and Maximize Profits
In Winning with Stocks, the reader is going to find a short list of the most valuable indicators (fundamental and technical) for picking stocks. On the fundamental side are ratios designed to quantify financial and working capital strength (current ratio, debt ratio) and profitability (revenue trend, net return).
Technical indicators include price history, trading volatility, and trading range trends. Combination indicators include dividend yield, earnings per share, and the all-important price/earnings (P/E) ratio. The author provides suggestions about picking stocks using these limited number of tests.
The stock market in the United States is the most popular investment market in the world, used not only by millions of individuals, but also by institutional investors: mutual funds, pension plans, insurance companies. Just about everyone who invests, has a retirement plan, or works for a large company is in the market. But how much do they really know about picking stocks? That is the big question answered by Winning with Stocks.
An irony of how people invest is that—especially in the stock market—rumor, gossip, and opinion are given greater weight than research. This is a widespread flaw, with ‘‘the crowd’’ more often wrong than right (giving rise to contrarian strategies), and with the market characterized more by emotion than by logic. It has been said that if the market were a person, he or she would probably be in therapy.
Stocks can be selected by sector, reputation, or price. Some people like the fundamentals (financial information), others prefer technical analysis (charting patterns, price trends, and volume/price study). Both fundamental and technical schools offer valuable ideas.
This book is aimed at the novice or investor/trader with limited experience. The intention of this book is to explain the market in a spectrum of risks and opportunities, so that the reader will be able to make an informed decision about how to make profits while limiting risks in the stock market.
- A Short History of the Stock Market
- The Bottom Line
- Yield and Yield History
- The ‘‘Practical’’ Dow Theory
- A Few Valuable Fundamentals
- Identifying the Risk
- The Egg-and-Basket Idea
- Liquidity in the Market
- Volatility and Leverage
- Alternatives to Direct Ownership of Stocks
- Market Timing
- Applying Your Comprehensive Program