Saturday, October 17, 2009
WHEN TO ENTER A STOCK
For a fund manager, primary job is to maximize his fund value while minimizing risk. We also want to maximize profit ...only difference with us and fund manager is risk tolerance and calculation. They follow strategic way to keep risk within its preferance. To many people, risk calculation is very much tough fundamental analysis. some people think the risk is related with company................
above idea is partially true. Real truth is risk is more market specific than stock specific. its actually sensitivity of a stock compared to market. Thus when we think of investment, its high time we should also think about the market condition.
This is the Fund manager checklist before investing..
1. Is economy growing or stable or declining?
2.Is the sector we are thinking about looks promising?
3.What is the true position of the company relative to the industry?
if you are a hardcore TA, u may say........i dont need to know those bullshit. The reality is if you are a welleducated TA, then u will also follow the checklist.
Just the question pattern will be different...
In these case..your checklist is.........
1.Is the market index upward trending or mkt looks promising??
2. What is the sector char saying longterm?
3. What is the individual stock saying??
Its actually the same.........few peoples fights over TA and FA. But actually TA and FA is mixed...FA talks about what and why....and TA says what happened and whats happening and based on that what gonna happen??
Actulayy if someone do not take the pro lead then who is gonna follow ?? So FA ar market maker and TA are follower. FA does take intiative and TA does good timing. Both are best at their target.........and u r really lucky if u can combine them=============
why we talked about so much about market timing and entry??? because market is shaking at the moment....so u should also be watchful before any stock ...it does not matter if its gold mine or diamond mine. Keep in mind you are here to buy gold at silver's price !!! So if u are not confident about market now dont be confident on any stock !!!! i a mean any stock!
COURTESY: SPECULATOR VAI, SB.
above idea is partially true. Real truth is risk is more market specific than stock specific. its actually sensitivity of a stock compared to market. Thus when we think of investment, its high time we should also think about the market condition.
This is the Fund manager checklist before investing..
1. Is economy growing or stable or declining?
2.Is the sector we are thinking about looks promising?
3.What is the true position of the company relative to the industry?
if you are a hardcore TA, u may say........i dont need to know those bullshit. The reality is if you are a welleducated TA, then u will also follow the checklist.
Just the question pattern will be different...
In these case..your checklist is.........
1.Is the market index upward trending or mkt looks promising??
2. What is the sector char saying longterm?
3. What is the individual stock saying??
Its actually the same.........few peoples fights over TA and FA. But actually TA and FA is mixed...FA talks about what and why....and TA says what happened and whats happening and based on that what gonna happen??
Actulayy if someone do not take the pro lead then who is gonna follow ?? So FA ar market maker and TA are follower. FA does take intiative and TA does good timing. Both are best at their target.........and u r really lucky if u can combine them=============
why we talked about so much about market timing and entry??? because market is shaking at the moment....so u should also be watchful before any stock ...it does not matter if its gold mine or diamond mine. Keep in mind you are here to buy gold at silver's price !!! So if u are not confident about market now dont be confident on any stock !!!! i a mean any stock!
COURTESY: SPECULATOR VAI, SB.
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