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Choosing Stocks

Gene said: "How do you guys find/choose your stocks? Alot of the companies I see posted on here I havent even heard of. What are your sources? Media? Word or mouth? Also, if you have a company in mind where do you go to review its history? thanks as always!"

Avernus said: "[QUOTE=Gene]How do you guys find/choose your stocks? Alot of the companies I see posted on here I havent even heard of. What are your sources? Media? Word or mouth? Also, if you have a company in mind where do you go to review its history? thanks as always![/QUOTE] some of my favorites, I stumble upon....the rest, I just know of the technology and read up on them at their website and see who is more focused on what their prime goal is instead of offering several different types of products... I noticed that when a company focuses on their main product, they become known for it and tend to succeed more. Also, I look at their annual income sheet and see what kind of stage they are in. When I read news on a particular company and see they are spending alot, then I see their income statement...it explains why they lose money. This might be the best time to buy, if this company is doing the right things (buy low sell high technique of course), however this is rather risky...I think Sirius might fit this bill to a 'T', as they have been on my newswire anywhere from 2-7 times a day... anyways...yea..."

AlfredSokol said: "I look around the shopping mall and local areas for new companies that are doing exceptionally well. The companies that sell the most usually make the highest earnings."

Liviu said: "Try [url]www.morningstar.com[/url] They have a stock screener. You can search by multiple criterias like P/E ratio, sector, market capitalization, etc..."

IntelligentInvestor said: "Yo, AlfredSokol, that's pure Peter Lynch strategy... I just read "One Up On Wall Street." I can tell you that book will be on my bookshelf for many more years to come.. it's definitely a classic. Have you seen any new companies that are doing well recently?? If so, what are they??"

Yoshimi said: "This is [URL=http://moneycentral.msn.com/investor/finder/customstocksdl.asp]Microsoft Stock Screener[/URL] which really helps make good picks, its an easy screener which is pretty self explanatory. Tell me what you think."

alhamid said: "using peter lynch theory: i gotta say that a lot lot lot of people eat at cheesecake factory and their prices expensive!"

thezster said: "Been trading actively for 6 years, averaging 6 trades/day...... with basically the same 6 - 10 stocks... I pick a [B]solid[/B] company that I know will always be there. All of them average a daily swing of $0.50 +/- for the most part. Every time they drop 0.50 - I buy..... every time they rise 0.50 - I sell.... It's not foolproof.... I've been burned big time on bad news when the price dropped $1.00+ or more..... but with a solid "bricks and morter" company..... I know that if I hold on long enough, they'll get back in the black (so to speak). Only problem comes when the inevitable "margin call" comes in and I've got 3 days to clear accounts.... "ouch".... Averaging 30% return over the past 6 years.... so I guess something works...."

HappyHarry said: "[QUOTE=thezster]Been trading actively for 6 years, averaging 6 trades/day...... with basically the same 6 - 10 stocks... I pick a [B]solid[/B] company that I know will always be there. All of them average a daily swing of $0.50 +/- for the most part. Every time they drop 0.50 - I buy..... every time they rise 0.50 - I sell.... It's not foolproof.... I've been burned big time on bad news when the price dropped $1.00+ or more..... but with a solid "bricks and morter" company..... I know that if I hold on long enough, they'll get back in the black (so to speak). Only problem comes when the inevitable "margin call" comes in and I've got 3 days to clear accounts.... "ouch".... Averaging 30% return over the past 6 years.... so I guess something works....[/QUOTE] Simple approach. Do you set stop losses?"

thezster said: "Big believer in the KISS theory. I don't use stop limits any more. Once upon a time I did, but would find that, usually (not always of course) one of my solid stocks would "dump" - the stop order would execute, and within 48 hours the price would have rebounded back to normal. Sooooo....... I "Hold". For the most part I figure that, for instance, the big Orange Box, is going to get back to the original price, even if I have to hold for a while. E-Trade allows me 4X principle for my margin - which means I have to be careful not to get carried away. I usually play with my principle for basic trades......... if one of my stocks "dumps", I get into my 2X margin money........ If it really crashes..... I go for more..... Though those margin calls can be a real bit _ _. Up until last Spring, I enjoyed shorting those same stocks on the upswing, but with prices as depressed as they are - that's a dangerous ploy too. I stay relatively conservative - 30%/year is just fine with me."

AlfredSokol said: "How are you determining the 30% a year? Do you trade for a living?"

thezster said: "I guess you could say that... I retired two years ago at age 48. Now I make a few trades, go fishing, make a few more trades, go boating.... you know.... working for a living :) I figure my 30% based on my principle (around $300K).... not including commissions (averaging $10,000/yr @ $7.95/trade).... but before taxes (ouch.... how come Uncle Sam gets such a big chunk when I'm the one taking the risks?)"

AlfredSokol said: "[QUOTE=thezster]I guess you could say that... I retired two years ago at age 48. Now I make a few trades, go fishing, make a few more trades, go boating.... you know.... working for a living :) I figure my 30% based on my principle (around $300K).... not including commissions (averaging $10,000/yr @ $7.95/trade).... but before taxes (ouch.... how come Uncle Sam gets such a big chunk when I'm the one taking the risks?)[/QUOTE] Thanks for the detailed answer. What made you decide to get into investing? And Uncle Sam gets all the money because he makes the rules :)"

thezster said: "Started playing penny stocks with a friend at work......... made a few bucks, lost a few bucks....... but got hooked! It's gambling in it's purest form....... and quite addicting. There are days I'll take a $50.00 profit on a $50,000 investment, just so I can get back in and play some more......... Down side????? Of course, like the day I watched a quick buy go sour - lost $16,000 in 30 minutes......... My wife still reminds me of that (TYCO sucks)"

AlfredSokol said: "So are you trying to clip very small profits? Will you hold overnight?"

thezster said: "Trying to clip small profits? Certainly not! My point was, there are times I'll take a miniscule profit, just to get back in the game.... That $50.00 profit that I might take indicates that I believe the particular stock in question is going to continue a downward trend.... so I take the money and run.... hoping to buy back in lower - later. I'll hold overnight frequently. I'm a pattern day trader by SEC classification(swing trader/day trader).. not worried about clearing my position daily."

geomatster said: "I look for companies which are well known....'fundamentally strong', apart from this Newspapers are a huge source of information on news,announcements etc. Technicals play a huge role in deciding on a stock too. Websites definitely puts together the fundamentals and the technicals to give a comprehensive picture. As said earleir i refer to morningstar and [url]www.marketsimplified.com[/url] to make decisions."