There are 2 sides to
look at stocks and eventually invest your hard-earned money in it, hoping for a
return.
Definition
(1 sentence)
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Fundamentals
~ What’s the business value vs. current price worth? |
Technicals
~ charting & reading of
past price, volume to forecast price movement
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Tools
to use…
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~ Net Asset Value / Net
Tangible Assets
~ Earnings Per Share (what
company gets)
~ Dividends Per Share (what
shareholders get)
~ Company Management & its policies
~ Types of Industries (rising,
shrinking?)
~ Prospects of business…
The aspects that make a
business good (to buy)
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~ Trend-following indicators,
eg. Moving Averages, MACD to identify trends
~ Oscillators indicators, eg.
Stochastic, Force Index, Relative Strength Index (RSI) to identify reversals
~ Trend lines, resistances
& supports levels to estimate possible buy/sell points…
The aspects that make it a good
time to buy/sell
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Examples…
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Suppose you have some money,
you want to make the money work to return you more money, and a business’s
purpose is to earn money, what kind of business is good to buy?
Would you spend $ 1 million to
buy a business that has accounting net assets of $2 million?
Would you want a business that
pays you $1000 each day or lose $1000 each day?
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 Buy low, sell high (or sell high, buy low)
Buy at A, sell at B… Buy or
sell at C?
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