Follow A Few Stocks Well
If you have been following individual stocks for any length of time then you know that it can be either interesting and exciting or tedious and frustrating. It all depends on how you approach the task.
To become skilled at stock tracking one must have firsthand experience. You will learn more by owning a stock for two weeks than by watching a stock for two years. The reason is simple. Ownership places money at risk, and the risk of losing money greatly heightens one's attention.
Anyone who follows individual stocks should be aware of the fact that the price of a stock has essentially three main influences:
1. Direction and strength of the overall market.
2. The current investing theme - found in an industry group or sector.
3. Earnings. And here the trick is to trade on the anticipation of earnings rather than on the specific earnings increase. Once the earnings increase is announced, investors buying at that point are actually buying the stock at inflated prices.
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To become skilled at stock tracking one must have firsthand experience. You will learn more by owning a stock for two weeks than by watching a stock for two years. The reason is simple. Ownership places money at risk, and the risk of losing money greatly heightens one's attention.
Anyone who follows individual stocks should be aware of the fact that the price of a stock has essentially three main influences:
1. Direction and strength of the overall market.
2. The current investing theme - found in an industry group or sector.
3. Earnings. And here the trick is to trade on the anticipation of earnings rather than on the specific earnings increase. Once the earnings increase is announced, investors buying at that point are actually buying the stock at inflated prices.
* * * * *
posted by Bob Moser at
3:36 PM
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