To
illustrate, you can tell the competency of the management by measuring
its ROE vs. the average ROE of the same sector. You need to make sure
that ROE is not boosted due to heavy debt.
From my experience,
we can scan some stocks with some screens that work on similar market
conditions. Do your own analysis of the scanned stocks. 70% of my
analysis are from data on balance sheets and other researches (including
lawsuit pending...). You have a better chance to profit - I do measure
my performance and the performances of my metrics about once every 3
months. However, there are many other factors that are obvious but not
show up in most researches. Apple's current plunge is a good example. To
me, it is due to profit taking and is accelerated by the expected
capital gain tax.
I am not too fond of technical analysis as most
of my trades I keep 3 months or more. However, I use market timing. The
last prediction was several days accurate (too close for comfort).
Today is a risky market, but we do have many deeply-valued tech stocks.
My
best recent one is DECK (bought in Nov. 13 and have over 40% return).
The financial statements are very sound. I took advantage of the short
squeeze.
I just bought QCOR. It is one of the few drug companies
I traded. The changing news here is more important than anything.
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