Your Questions About How To Pick Stocks

Steven asks…

Stock picks for tomorrow. ?

What stocks are gonna pop tomorrow?
Lets check back wed evening and see who was on?
I say, S, HOG, WMT

John answers:

I look for market trends rather than one day movement. It’s a lot easier to filter out the “noise” (commentary) and see which direction, the market, a sector or stock is really moving. I usually look at daily and weekly charts first and then look at other data such as financial statements.

My main pick in the DJIA is General Electric. Obama is very keen about health care and green energy at the moment. GE is the biggest manufacturer of wind turbines. TAN is a good solar energy ETF.

Merck & Co (MRK) in the health care sector. It pays a high dividend yield of about 6%, has a low PE raito and is moving up.

Bristol Myers (BMY) is also a good heath stock, but only as a long-term investment because its short term price movement is too chaotic to see any trend.

Laura asks…

Best stock picks under $5?

Any good stocks at these prices?? I can do some more research before buying but I really dont know which companies are making news. Can someone list some good stocks that they think are going to do good in the next week or so? Also if possible give reasons why you think the stock is worth. Thank you.

John answers:

Since you asked for picks and nobody gave you any… These are stocks for the long haul or at least until they go up 50-100%

CC, ETFC, RAD – none of these companies will go bankrupt IMO and that is your risk.

CC has 2$ in cash and no debt – eventually they’ll figure out how to make money.

ETFC – won’t go BK cause they are not in as bad shape as the share price is telling, and they have a great brand. Someone will step in and buy them soon, I think.

RAD – Tons of debt but Jean Coutu owns ~30% and won’t let RAD go BK. Also many drugs coming off patent in 2008+ which is better margins as those drugs go generic.

All that being said … If you don’t know what you’re doing then stay in mutual funds.

William asks…

is this a good website for getting good stock picks?

John answers:

You can use that as your source of info, but don’t bet your money blindly. Btw, why don’t you pick stock yourself?

Fundamentally, you can use various key financial ratios to start screening which stock worth your hard earned money. From there, you can go to the next level by further study how they perform qualitatively. Look here for more info:

How to Pick A Good Stock
Guide in Analyzing Stock

then, you must study how much the stock worth. To do this stock valuation, you have to calculate intrinsic value. Once you got it, buy the stock when it is at its margin of safety, either it was discounted than its intrinsic value, or discounted from the past historical prices. Look here for details:

How to Calculate Intrinsic Value
How to Determine Margin of Safety

now the last point but the most important things, how you can make money from it? Look, good company will grow over time. If you invest for your retirement, you can sell the stock after 20 years with as much as 30% return per year! Doesn’t it sounds good? And besides, you’ll be earning dividends year after year, which will also grow annually!

Penny Stocks, Short Cut to Wealth

Daniel asks…

Where to get free penny stock picks?

Where can I get them?

John answers:

Free stock picks or tips are usually best avoided.

One useful way to get reliable tips can be to use computer software to help you select the best investments. I’ve attached a link to a review of one such system.

Sandra asks…

short sell stocks picks?

John answers:

Here are some stock picks that might be able to help you. Click on the Bearish tab for short picks

They are based on technical analysis (reading charts and using computer algorithms)

Good luck!

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