Beating the Market

[Schifference]

I plan on beating the market.

All stock analysis is number based.

I have built several spread sheets.

Without knowing any particular company, I found a source naming all stocks by symbol.

The first step was to see if they were making a profit. Any company that was not profitable was not considered.

If profitable determine how far off the 52 week high. If stock is trading at 52 week high or close to it forget about it. There are too many to choose from so don't waste time on those at their highs.

Next assign a point system. Assign a positive score for good attributes and a negative for bad.

Total the scores.

Companies with better scores are more fundamentally sound.

After picking good fundamental stocks examine each stock on technical data. For example if a stock is very good like Apple but at their 52 week high they are not a good buy. They might be a great deal at $80 but not a buy at $96.

Then.....................

[Nic]

Good luck. Millions have tried it, millions have failed.

[Bryan]

Look for stocks with a low pe ratio, then you need to do months of analysis work within the sector to see what changes are coming that may have an impact on the company and understand what the company is doing to meet that. At least for a long buy.

[osan]

I plan on beating the market.

All stock analysis is number based.

I have built several spread sheets.

Without knowing any particular company, I found a source naming all stocks by symbol.

The first step was to see if they were making a profit. Any company that was not profitable was not considered.

If profitable determine how far off the 52 week high. If stock is trading at 52 week high or close to it forget about it. There are too many to choose from so don't waste time on those at their highs.

Next assign a point system. Assign a positive score for good attributes and a negative for bad.

Total the scores.

Companies with better scores are more fundamentally sound.

After picking good fundamental stocks examine each stock on technical data. For example if a stock is very good like Apple but at their 52 week high they are not a good buy. They might be a great deal at $80 but not a buy at $96.

Then.....................

I hate to break this to you, but numbers - even fundamentals - while necessary, are not sufficient indicators of a company's prospects. Not even close. You have to understand what it is they do, the environment in which it is being done, and a whole host of other factors. It their technology potentially disruptive? It is a dinosaur doomed?

Numbers in themselves do not cut this mustard with sufficiency. Seems you are looking for an automatic method that makes choosing easy. Good luck with that - but if you succeed, contact Warren Buffet. I have no doubt he will pay you at least $1B in cold cash or gold or whatever you want if you can prove to him that it works reliably.

[Jordan]

Look for stocks with a low pe ratio, then you need to do months of analysis work within the sector to see what changes are coming that may have an impact on the company and understand what the company is doing to meet that. At least for a long buy.

If history is any guide you could buy the bottom quartile of any stocks by any earnings metric -- P/E, EV/EBITDA, P/B, P/TBV, P/S, etc. -- and beat the market. That's a total basket approach, and throughout history, the value stocks have won. Not necessarily groundbreaking, but relatively simple if you have the cajones to do it.

[Schifference]

Update

I started investing a month ago with $60,882 balance today $63,315. $2433 gain or 3.999%. S&P in same time frame has gone from 1980 to 2003 gain of 23 points or 1.1148%. DJI has gone from 17056 to 17098 gain of 42 points or .024%.

Obviously this could be luck and may not be indicative of future endeavors but I am hopeful.

[Schifference]

Prediction CAP will go up in the near future. I own 1000 shares.
I commented on TRR when it was at $4.95 & SORL when it was a little over $3.

[Schifference]

CAP closed up $.33 today. The $19390 investment netted $330 or 1.7% in one business day. I sold 500 shares.
SORL closed at $4.15
TRR closed at $5.84

[Zippyjuan]

Don't forget to include capital gains taxes and transaction costs in your return figures.

[oyarde]

Don't forget to include capital gains taxes and transaction costs in your return figures.

I was hoping he was going to tell me how to avoid that.