Valuation method of stock-picking seven tips Money Tips

Category: Money Tips Date: 2006-07-05

The so-called valuation of stock-picking method, is to find undervalued companies, but ordinary investors to find such a company does in fact have learned.

In general, large organizations have a huge R & D institutions, ordinary investors, but fighting single-handedly, to long-term follow thousands of listed companies will undoubtedly be fantasy, but also not familiar with all trades. Therefore, ordinary investors looking for companies to give up their own ideas, from existing publicly available information to find.

At present the authority of the securities reported or business department will provide a number of studies, for we have significantly narrowed the scope of stock-picking. But not all companies are mentioned in the report could be invested, the following is a summary of my many years of practice method of valuation of stock-picking.

First of all, as far as possible are familiar with or have the ability to choose their own understanding of the industry. Research the companies mentioned in the report in their industry may be that we simply do not understand, or even spend a lot of energy on the future is difficult to understand the industry, this company is best to avoid.

Second, do not believe that the study report, the future price projections. Report may be made in the final pricing of the secondary market for the future. This forecast is based on performance projections derived from the combined earnings forecast, which predicted the price-earnings ratio in general simply calculate what the industry average, more volatile and not very useful.

Third, an objective approach to revenue growth. Performance prediction is the key, given the researchers subjective factors that may exist, it should be a condition of their re-verify each, until there is sufficient certainty so far.

Fourth, the research industry. When the basic recognition result of the company's performance after the turn, their own research should also look at the industry in which the company's aim remains to verify that the study mentioned, such as product price increases may be much like assumptions. This can be done via the Internet to complete.

Fifth, the valuation of the selected stocks. Do not believe the valuation of researchers must be their own valuation based on future performance, but also reduce the risk as far as possible.

Sixth, the volume of stock picking. Volume is not deceptive, and volume is proportional to the size of the relationship between stock price up or down. This volume and price with the point of view is sometimes correct, but in many cases is one-sided, or even completely wrong. Volume will also be deceptive in fact, often the best way to trap the main set, it know how much some of those price-volume analysis, but a fool would Sidongfeidong people hooked, and many people tend to suffer. In actual combat, the author summed up the following experience: the key trends in the changes in volume. Trend is gold, so-called "astronomical amount of days, in the amount of land" is only relative in terms of a certain period of time, the specific content you need to look at the disk status and location to be able to truly determine the possible future development trends . Movements in the stock, the amount of change there are many situations, the most difficult to judge is a limit, how many considered a big bang, the number of counted Su Liang, in fact there is no pattern to follow. Often only a "potential", that is heavy volume trends and Su Liang's trend, which comes from the grasp of the overall trend of the pre-judgment and the then state of the market changes, as well as hard to understand changes in market psychology.

And finally, to observe the disk, looking to buy a reasonable point. When making investment decisions, but also for intraday trading conditions to understand, especially on whether the main disk, or the main current situation to make broad judgments and ultimately find a reasonable point of purchase to avoid buying in a relatively high.

In short, stock trading is an investment, not gambling. 1 Based on the above method to determine the stock price if the target of nine million is clearly more than 8 yuan for the price of entry is obviously gambling on suspicion of. Stock Screening for investors is a basic skills need to accumulate experience and industry research, will be a gradual entry