Category: Money Tips Date: 2006-09-03
The so-called method of valuation of stock picking, in fact, is to find undervalued companies, but the problem is that ordinary investors how to find these companies.
Major organizations have a huge R & D institutions, but we are only fighting single-handedly, to long-term follow thousands of listed companies will undoubtedly be fantasy, but also not familiar with all trades. Therefore, we have to give up their search for the company's 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 are a few to the valuation of stock-picking process:
1, as far as possible are familiar with or have the ability to choose their own understanding of the industry. The report to improve the company in their industry may be that we simply do not understand, or even spend a lot of effort later also difficult to understand the industry, these companies are best avoided.
2, do not believe the report of 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.
3, objective treatment of 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.
4, 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 report mentioned such as product price increases may be much like assumptions. This can be done via the Internet to complete.
5, valuation. This is the key to valuation of stock-picking. 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.
6, 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.
