Stock Markets Exposed
Can someone tell me how to find the basis fundamentals on valuing and analyzing a stock . I want to buy?
GRMN and get rid of MOT But want to make sure it won't tank right after I buy it . I see there's a few insider trades , But how do you know its there's going to be upside momentum using the yahoo finance investment tools, any help would be grateful , Thanks in advance
Public Comments
- There are various methods of buying and financing stocks. The most common means is through a stock broker. Whether they are a full service or discount broker, they are all doing one thing—arranging the transfer of stock from a seller to a buyer. Most of the trades are actually done through brokers listed with a stock exchange such as the New York Stock Exchange. There are many different stock brokers from which to choose such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades. Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker. There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor's relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself. A direct public offering is an initial public offering in which the stock is purchased directly from the company, usually without the aid of brokers. When it comes to financing a purchase of stocks there are two ways: purchasing stock with money that is currently in the buyers ownership or by buying stock on margin. Buying stock on margin means buying stock with money borrowed against the stocks in the same account. These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stocks (collateral) to repay the borrowed money. He can sell if the share price drops below the margin requirement, at least 50 percent of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house using the car or house as collateral. Moreover, borrowing is not free; the broker usually charges 8-10 percent interest.
- Honestly, as a professional investment manager I have to say that any easy answer you get to this question is likely to cause more harm than good. The reason I say this is because so-called technical analysis of stock prices, i.e. analyzing trends, is an art and science unto itself that requires quite a bit of knowledge. To get the basic definition look here: http://en.wikipedia.org/wiki/Technical_analysis However, more problematic is that market timing has been proven ineffective as a means for making smart investment decisions. In fact, Bill Sharpe won the Nobel Prize in Economics developing "modern portfolio theory" which helps to prove this point. If you really want to do it yourself and make money, I suggest you read the bible among savvy investors, The Intelligent Investor, by Benjamin Graham. This is the book that taught Warren Buffett how to invest. http://www.amazon.com/gp/product/0060555661/ref=pd_sim_b_2/104-1118428-6071916?%5Fencoding=UTF8&v=glance&n=283155 If you really want to learn about personal finance and investing you can start by listening to my podcast, www.promoneytalk.com, the #1 rated personal finance podcast in the world. Hope this helps, Jason
