This really is focused on those who would like to spend money on individual stocks. I would like to share with you the methods Personally i have tried over time to select stocks i have realized being consistently profitable in actual trading. I love to use a mixture of fundamental and technical analysis for selecting stocks. My experience has shown that successful stock selection involves two steps:

1. Select a standard with all the fundamental analysis presented then
2. Confirm that this stock is an uptrend as shown by the 50-Day Exponential Moving Average Line (EMA) being higher than the 100-Day EMA

This two-step process boosts the odds that this stock you decide on will likely be profitable. It even offers a transmission to offer Chuck Hughes that has not performed not surprisingly if it’s 50-Day EMA drops below its 100-Day EMA. It can be another useful means for selecting stocks for covered call writing, a different type of strategy.

Fundamental Analysis

Fundamental analysis may be the study of monetary data such as earnings, dividends and your money flow, which influence the pricing of securities. I use fundamental analysis to assist select securities for future price appreciation. Over many years Personally i have tried many options for measuring a company’s rate of growth in an attempt to predict its stock’s future price performance. I have used methods such as earnings growth and return on equity. I have realized the methods are not always reliable or predictive.

Earning Growth
As an example, corporate net income is be subject to vague bookkeeping practices such as depreciation, income, inventory adjustment and reserves. These are typical be subject to interpretation by accountants. Today as part of your, corporations they are under increasing pressure to beat analyst’s earnings estimates which ends up in more aggressive accounting interpretations. Some corporations take special “one time” write-offs on his or her balance sheet for things such as failed mergers or acquisitions, restructuring, unprofitable divisions, failed product, etc. Many times these write-offs are not reflected as a continue earnings growth but alternatively appear as a footnote on a financial report. These “one time” write-offs occur with additional frequency than you could expect. Many firms that form the Dow Jones Industrial Average have such write-offs.

Return on Equity
One other indicator, which has been found isn’t necessarily predictive of stock price appreciation, is return on equity (ROE). Conventional wisdom correlates a top return on equity with successful corporate management which is maximizing shareholder value (the larger the ROE better).

Which company is much more successful?
Coca-Cola (KO) having a Return on Equity of 46% or
Merrill Lynch (MER) having a Return on Equity of 18%

The answer is Merrill Lynch by measure. But Coca-Cola includes a better ROE. How is that this possible?

Return on equity is calculated by dividing a company’s net gain by stockholder’s equity. Coca-Cola is really over valued what has stockholder’s equity is only add up to about 5% from the total market price from the company. The stockholder equity is really small that just about anywhere of net gain will develop a favorable ROE.

Merrill Lynch alternatively, has stockholder’s equity add up to 42% from the market price from the company and needs a much higher net gain figure to make a comparable ROE. My point is the fact that ROE will not compare apples to apples therefore is not an good relative indicator in comparing company performance.
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