When to Buy and Sell Stocks
How to Buy: Check for a buffer in the earnings to eliminate the risk that a drop in income can clear the dividend. Buying when the yield is attractive relative to the history of the stock
When to sell: fundamentals start to worsen (lose market share, add too much debt, acquire unrelated business, no research and development or share price appreciation
Medium-sized growers (star): large mature companies continue to grow at moderate rates
Often large companies: Coca-Cola
Sales: P / E increases more than historical average, or if growth starts to slow, or new products fail
Fast Growers (?): Smaller radical companies with annual growth rates estimated at more than 20% high P / E.
: Make sure there is enough room for expansion, […] Note whether the extension is accelerating or decelerating. Be careful if the stock's PE ratio is greater than the business growth rate
When to sell: Note the end of the fast growth phase. Whether the sell P / E ratio is much higher than the current growth rate or if the company has expanded to a reasonable level (note the Starbucks (SBUX)).
Circulation (Boom and Bust): Automobile, Airline, Tire Company, Steel, Chemicals, Defense, Manufacturing
), Toyota (Toyota), Boeing (BA), Delta Air Lines (DAL), Michelin Group, Alcan, Dow Chemical.
Sales and profits rise and fall as expansion or contract economy picks up. Time is everything, stock volatility is huge
How to Buy: Watch sales and inventory trends and cost reduction programs. When the business conditions start to look better when buying
When to sell: The economy begins to brew in the media, stocks start to rise, recruitment stops and the Fed directs a possible rate cut may be necessary. Some Cylicals are pre-runners, while others are laggards, so looking for specific industries to fall in their cycles
Turnaround (Nightmare to Love Incidents): Usually set up with turbulent times.
Magna International (MGA), General Motors (GM), Merck (MRK), Pfizer
How to Buy: Ask the question of touch. Can the company survive the attacks of creditors? How much cash and debt? What is left to shareholders? Does the company reduce costs and increase sales?
When to Sell: When it turns around, all the worries are over. In addition, if inventory starts to grow faster than sales, or debt increases, or if the P / E ratio is too high due to earnings growth.
Asset Drama (Discoverer Fees): Railways are usually rich in land and may have mineral and timber rights that are not known to the market.
How to Buy: Ask a Question: What is the value of an asset? How much debt and debt increase? Is there a catalyst (corporate intruder) that helps in the release of wings worth?
When to Sell: After the market appreciates the value of an asset. Once it's in the news you know it's time to at least get some profit