Your Questions About How To Pick Stocks

Chris asks…

Top Stocks Picks for 2012?

Any good stocks you can recommend right now?
I am thinking about Apple Inc as well as Amazon
What do you think?
What are you top picks?

Thanks

John answers:

Stay away from big names from last year. They usually disappoint. Apple is overhyped. AMZN is okay. I would go with industrial and utility companies, as well as construction and general suppliers.
I have a value pick list at http://www.screenulator.com/cgi-bin/view_watchlist?id=2
I like KMB, TRP, SYY, GE, GLW, CMC for long term
For short term trading, I use trend line analysis, and trade between 1 – 2 months, always made around 10% a month
check out my trading log at http://www.qi-research.com

Ruth asks…

Stock Market?

Sorry for being ignorant. Is there any website where i can learn about stocks market and the commonly used terms ( eg : EPS etc ) ?

John answers:

So, how to know which stock to invest in?
When you should buy them?
And, how you can make money from?

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
http://www.stock-investment-made-easy.com/good-stock-pick.html
Guide in Analyzing Stock
http://www.stock-investment-made-easy.com/analyzing-company.html

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
http://www.stock-investment-made-easy.com/calculate-intrinsic-value.html
How to Determine Margin of Safety
http://www.stock-investment-made-easy.com/margin-of-safety.html

now the last question, 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!

I hope this able to help you to get started. But if it is not what you are looking for, apology for my misunderstanding.

John asks…

Opinions on undervalued stocks?

I have seen where the street seems to punish stocks to a point where they are below their value, the company I worked for last year had a class action suit against them and the value dropped 1200%, in 1.5 years after the judgement/settlement it gained back 1200% and sits today at $12.00 +/- 2% day to day.

Are there any thoughts of stocks today in a similar position of being punished below their value or equity. I was watching RIM for the effect of the current law suit, and again the day of the settlement I think it went up 20% in one day!!!

John answers:

For me , the key to picking stocks is price to earnings ratio. Most stocks are grossly overvalued, for instance , because people are buying them at 60 to 100 times earnings. So ,to me, any stock that is selling as close to price to earning ratios as possible is “undervalued”.

Mary asks…

If I were to buy stock on etrade which one should I buy that would mature the best?

Basicly the qeustion….Im a beginner in stocks….

John answers:

Stacey … Stocks do not “mature” … They are a risk that you accept in hope of a future profit. Stocks can go up … Or down. The trick is to pick stocks that go up.

If you are a beginner in stocks, I suggest you get some education on the process.

If you have never invested (risked) money before, I suggest you start with mutual funds.

For mutual funds, check out Morningstar.com. For general investment info, try money-and-investing.com.

Remember to think of “investing” as “risking.” You will be a better investor if you can do that. Ignore the hype … Get educated.
I wish you luck!
Uppity Wench

Mandy asks…

what does awaiting stock pick mean?

ive orderd a boxset of zavvi and it says awaiting stock pick
does anybody know what this actually means as im pretty sure it doesnt mean there out of stock

John answers:

It means they are finding your product and picking it off the shelves. Next step is it being sent to its courier (UPS, USPS, Fedex, etc)

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