Using stock view to help generate trading ideas for profit

(Last Updated On: September 26, 2014)
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Using stock view to help generate trading ideas for profit

Sorry for any bad typing

Sector view allows you to see cyclical or defensive based on the world view as in GDP. With a list of stocks in a sector, always use the least amount of work based on info in the market. Use price earnings ratio, people misinterpret what this metric means.

If you indentify which sectors are going out perform as a trading idea, you use the EPS or Price earnings ratio=stock price/EPS. It should be how much is the world prepared to sell a company earning for?

The company with a lower EPS, go with the one with lower EPS as you could paying higher against the average EPS of the sector. Cheap or expensive EPS should never be used as nothing is neither. It is quality of earnings. People are willing to pay for companies with high EPS with selling low EPS. So don’t listen to research analysts. Don’t argue with market when you short companies with high EPS.

x price with .9*x EPS which PE radio is 10%. You need to watch company news to see how they maintain PE ratio over time but could talk EPS to maintain that. The price is the signal of the quality. News event will affect stock EPS. Use short with lowest EPS and long with highest EPS in same sector with lowest most amount of risk since you hedge out market and sector risk. The dead money opportunities will not give you the same return.

If stock guidance for EPS growth is hjgh, the EP radio will be high but once it is guided down, the EP ratio will drop to which means people will sell it which means there was a discount to the sector compared to competition. You will not be able to rely on research analysts for this since they report late. You watch to get use 1 year of forward out. You look 6-12 months ahead.

For further info, use yahoo finance, ycharts.com, nasdaq.com, marketwatch.com

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