Your Questions About Money Making Stocks To Buy

Mandy asks…

How will you spend your additional tax refund from Congress?

Congress has decided to refund taxpayers anywhere from $300-$1200 this May through July. The amount you receive will be determined by your filing status. But the good news is that If you paid income tax for the year 2007, you will be receiving some additional money this spring/summer.

How will you use this additional money?

Make a charitable donation or a political contribution?

Buy consumer goods?

Reduce personal debt?

Put it into savings?

Fatten an IRA?

Invest in the stock market?

Fund more education?

Spend it on something completely frivolous?

John answers:

I would hope Americans would use it to pay off their debts that need to be paid off.

Charles asks…

What does this economic and finance quote mean by Warren Buffet?

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
Warren Buffett

John answers:

To close the market means to stop all activity. If the market is closed, no trading can happen. Warren Buffett is saying that he doesn’t look for quick profits. In the stock market, the only way to make a profit or lose money is to sell and take the cash to your hand.

Warren Buffett is saying that he buys stocks with the intention to hold them for a long term. He looks for stocks that have long-term potential. This is something that a lot of people don’t understand. The stock market is thought to be a tool for making easy money for no effort. Many people feel that to be successful in the stock market, one has to find a way to be worth a million overnight. That’s what people talk about at parties. That’s why people get sucked into “penny stocks.” They think that they can make a quick buck but that’s not how to make money properly.

Here’s a secret. With the right amount of luck, a monkey could throw a bit of money at the stock market and the next day, be worth a million dollars. People who throw this kind of story around at parties are phonies. The real, important talent in the stock market is picking stocks that deliver a good long-term return. That’s why Warren Buffett is such a great investor. He looks for investments that have a clear profit picture for decades.

For example, take Netflix. Who would have thought that someday, it would put the likes of Blockbuster and Hollywood on the chopping block. That’s what’s happened. Their stock is worth over a hundred dollars while Blockbuster’s stock has been dropping steadily. Now look, Netflix isn’t going to dominate forever. Something better can and will come out. But still, the idea of paying nearly $5 for a movie rental and then paying a $1 late charge per day is probably gone for good. The idea of paying some fixed monthly amount for unlimited rentals and the ability to instantly stream movies is likely going to be the basis for the new model. Identifying these kinds of things is what makes a good stock investor.

That’s what he means by his quote. Warren Buffett doesn’t try to make a quick profit by looking for some stock that people are bidding up. Instead, he is looking for stocks that are going to generate cash flow for years to come.

Mark asks…

What stock should i buy now for a quick flip?

Give me 2 or 3 good stocks to buy for a quick flip and explain why you think this is the stocks to get into.

John answers:

If you are trying to have people hand you answers on which stock to make quick profits from, you would have a better chance putting all of your money on red or black at roulette.

Learn how to do some very simple Technical Analysis, follow stocks that take large plunges as every now and then they are unwarranted and correct upwards very shortly after. (Focus on good, reliable companies)

I would suggest learning about Bollinger Bands, Stochastics (Fast for quick flips), P/E ratios, volume levels, volatility, and lastly read the individual reports on your brokerage’s site, focusing on stocks in the neutral to outperform sectors. Use your screener tools to find stocks with low short interest, low P/E’s, and possibly around their 52-week low.

Lastly, even though I flip stocks occasionally, I only trade in companies that are turning a profit and look to continue to do so, therefore you may want to screen for EPS > .01

Good Luck!

Lisa asks…

What are your top 10 stocks to buy in 2013?

If you could choose 10 stocks to buy and invest long-term in for the year 2013, what would they be? Price does not matter. Thanks. Happy New Year!

John answers:

Study the company valuation. Its a lot of discount companies out there and under value stocks

2012 was the year of the housing recovery—and the year to own housing stocks.
2013 will be the year of the auto recovery and the year to own auto stocks.

I am not going to sale.. I am going to buy more shares within 2013 even if we go over the cliff. Now is the time to make some serious money. Buy and Hold is the best approach for right now. The name of the game is buy low and sale high. Losing money is not easy but the pay off will be wonderful. Financial stocks are cheap and they should be consider. Even with the risk within the next 3 to 5 yrs, they will be doing better. Keep a cash cushion so you could buy within the up and downs of the market. Every body is selling right now because of fear of the fiscal cliff and tax hikes.It is silly to try and avoid taxes because we will all pay more taxes either way. Stay invested, if you could afford to do it and buy more shares….
Take Care

Carol asks…

What is the name of the job or is it something you have to be in your own buisness stocks game?

“Other people money
with Danny Divitto
I don’t get how he made money if he bought stocks from a buisness not making money. Please explain this process and do you need a lot of money to do this?

John answers:

Danny Divitto bought stock of a company who was losing money. Management turned the business around, the company started to make money and Danny sold his stock at a profit. What he does not tell you is how many times he bought stock in other money losing companies, management could not reverse the fortunes of the company and Danny lost all or a lot of his investment. That’s why Danny wrote the book on investing, because the royalties on the book sales is much higher than his profits of investing in companies. If Danny had a truly good investment scheme racking in the money, he would keep that secret close to his vest, and keep it out of the hand of any potential competitor.

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