Your Questions About How To Pick Stocks

Linda asks…

what is the most accurate free stock picking service on the web?

John answers:

None of them are accurate. Most “free” stock picking websites are stock “pumping” sites. The people recommending those picks for “free” often own those shares and naturally tell you, by providing “free” advice, to buy or sell those stocks in order that they can gain financially.

Frank owns XYZ. He puts out a blog entitled “the best free stock picks on the web”. He recommends you to purchase XYZ because its the best stock in the world. You purchase XYZ and the stock price goes up. Frank then sells his shares and realizes a gain. Subsequently, the stock price falls after Frank exits his position and you’re left with a deficit.

This is often how it works and is why those recommended stock picks are “free”. In reality, those “free” stock picking sites come with a price and that price usually results in a loss to whomever is taking the advice.

The best way to avoid all of this is to do your own research and rely on your own brain. It requires time, patience, and skill. If you lack just one of them, then hire a professional to manage your investments for you. You’ll sleep much better at night.

Donald asks…

Why do people pay for stock pick information?

If the stock “picks” are real or correct why would you tell anybody. The same goes for get rich quick scams – if it worked why don’t THEY do it.

IBD 100 picks this week:

http://docs.google.com/View?docid=dhfm7vrv_14gbswcs

John answers:

The basic rule of Economics says that productivity is maximized when everybody does what they are good at. Some people are good at programming some are good at cooking and some others are good at Picking stocks. The economic value is maximized when we do what we are good at and buy or trade in services we are lacking at. Since there is no one to one comparison between services money serves as common denominator.

Coming back to best stock picks, these are just good stock picks according to fundamentals, there is no guarantee that they will always give superior returns. Just like when a great chef cooks it is not always that they make great food.

So the stock pickers have a service of providing stock picks, it brings them a constant income, like any other job, sometimes it works sometimes it does not.

Having said that not all services are as advertised. There are a lot of charlatans among us trying to fool people.

Charles asks…

To pick the right stocks do you just compare assets to market capitalization?

Or something like that?

Assets = Liabilities + Shareholder’s Equity

John answers:

It is much more complex than that to pick good stocks. First of all the market is forward looking so that means you have to pick companies that have room/potential for growth (meaning you need to be familiar with the industry they belong to). Then you have to compare the company you wish to invest in to similar companies (in terms of market cap, profits, P/E ratios, shares outstanding etc.) from the same industry. By doing this you can arrive to a conclusion if your company’s stock is cheap or not compared to its peers. If it looks like is cheap then you also have to consider the technical analysis (charts) and the overall market conditions (if it is a bear or bull market) in order to optimize the timing of your entry. You should also have a firm exit strategy and a time horizon for your investment.

Good luck !

William asks…

what are the things to see when picking up a stock?

Please explain all factors with examples

John answers:

When you are going to buy a stock always first check the last status of companies performance by checking its net profit of lastc 4 quarters and how much orders they have in their pocket,what is the book value of a stock .what would be the future stratagies of tht companies ,is tht company fundamentally strong or not.

See all these things when u going to pick a stock .
And never invest all at once ,invest in parts so tht if u see a dip in tht stock u would be able to buy it and make average of ur stock.

Ken asks…

Stocks to pick up after the fall.?

not to be like vultures hanging around waiting to capitalize on others misfortunes . . . . but, the market is going to turn around one of these days and I want to know what will be the stocks, kinds of stocks, that are going to make the greatest gains in the shortest amount of time.

what do you think?

John answers:

Visit the site below. They provide the hot stock picks every week in a newsletter.

They have a computer program that analyzes all the stocks then it spits out what it thinks are the best picks.

Go to: http://tinyurl.com/4reu8z

i’ve been using them since 2006 and have never lost with them.

I wouldn’t recommend anyone else. Most people are just trying to pump and dump these silly unheard of sub-penny stocks.

Good luck.

Now is the BEST time to get in. You could be doing VERY well by next month.

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