What stocks will be always "in price"?
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  1. #1
    Super Moderator Gulfstream's Avatar
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    What stocks will be always "in price"?

    First of all, I'm not a broker or even a bank employee who understands the financial markets, everything written here is purely my opinion. So this article is just for reference and is not an incentive to action, but at leisure, you can read.

    Answering the question, what stocks will always be valuable, I want to say that the main thing is that it is not a growth of the stock to infinity, but equity share, which brings benefits to the holders in the form of dividends and moderately stable growth of the exchange value. Such actions are called blue chips.

    It’s important to understand, the stock price is formed on the basis of market value, in other words, if the company has a material base in the form of computers around the world that constantly need to update the software or has a network of stores in many countries, the reliability of such companies will certainly be higher than funds companies or small companies that have recently entered the market and still have only a small capitalization. I also want to point out that. the market won’t always exist and trying to live forever on the earnings from the shares will not work, while the companies are limited only to earth, perhaps someday we will conquer the space and there will be no limit to the growth of companies and their shares, but this, of course, is a fantasy, with this level of development we probably won’t need securities or other market relations. No one can say which shares will cost how much in the future, but you can follow the principles of selection of securities, so as not to be mistaken with the choice of investment with a high probability, you can give an example of the rules of investing the legendary Warren Buffett:

    1. Have your plan of action in writing, or keep it in your mind, but the main thing is how you can strictly adhere to it in practice.

    2. Exercise sufficient flexibility: if any circumstances or new information significantly change the situation, make changes in your plan of action.

    3. Study the dynamics of the sales volume and profit of the company. Analyze the sources of their receipt.

    4. Focus on the potential investment object. Carefully analyze the range of products or services provided by the company, its position in the industry as a whole and in comparison with its closest competitors.

    5. Gather as much information as possible about the people who manage the company.

    6. If you have found a great object for investment, do not pay any attention to unfavourable forecasts of market dynamics or the economy as a whole.

    7. Do not invest only in order to invest money. If there are no suitable objects, keep your capital in cash. Many too emotional investors, not finding the ideal object for investment, acquire the best from the available and subsequently regret it.

    8. Determine for yourself what you are versed in, and what you aren’t. Invest only in companies whose business you know.
    Larry Williams said that in high value will predominantly be the so-called "sin stocks", during the crisis the products of such issuers are in demand - they are harmful but tasty drinks, cigarettes, alcohol, etc. If technology companies need to come up with new gadgets or create innovative products to stay on the world stage, it is easier for such companies to fly out of the market than those which produce food and will always have profit, because people like to eat and eat and will eat. Also, there will always be a company that supports the state, in Russia such are Gazprom, Sberbank, VTB, Aeroflot and FSK EES. From American stocks it is possible to allocate "Tesla", the state helps with sales of cars, grants privileges on the transport tax, in general it supports, therefore the equity securities of this issuer grow in price.
    A good example of stability is the shares of Coca-Cola, at the moment it is a stable action with beta 0.76, last year the company showed not the biggest profit, as its representatives stated because of the tax reform, the net profit was negative. But despite the latest reports, the shares have already recovered after the decline, and certainly will continue to grow. Warren Buffett said he would never sell his shares to Coca-Cola, and the company has grown to such a level that it is a sustainable business, so it can be argued that these shares, not with 100% certainty, but will always be valuable.
    "Altaba Inc"(formerly "Yahoo") is another company for long-term investment, a ticker on the AABA stock exchange, the quotes of this stock are in a bullish trend since 2003 and are only accelerating, the company does not pay dividends, but it may be for the best for investors, calculating the purchase of the issuer's share for the period of 10-20 years, the price/earnings ratio indicates an undervaluation of the shares and the eps indicator indicates a good profit of the company. The final capital grows from year to year, of course mostly due to investors, but still, I believe in this company, it is one of the few that in the current situation does not draw a reversal pattern on the chart, but as it grew, it grows.
    It should be remembered that when earning income the company can distribute it among shareholders, or can invest in its development, as for me, with good management, with the second option the investor from shares will get more profit, as the issuer develops and its market capitalization grows, and when paying dividends, you still have to wait until the paper closes the price gap.

    When you buy a stake of a company (shares), you should estimate those stocks in the long-term trend, if the price from the moment of IPO only falls, slowly but surely, then look at the reason for this, many sites provide an opportunity to see the historical indicators for the issuer's revenues, but still may be the story that the company seems to be showing profits, but at the expense of high payments does not invest money in its development, all the same it is better to look for papers with adequate dividends, it's better to earn less on payment to shareholders, and to earn additional money on growth No need to be greedy and carefully select the most generous dividends.
    We should also take to the attention the dollar’s value on the market, simply if the share is traded for dollars, its price increased by 20% for example for 3 years, but the dollar itself fell in price by the same 20%, then we can say that we broke even. For example, in 2018, the Fed raises the interest rate, thereby reducing the number of dollars in circulation, but in Russia, on the contrary, there is a policy of lowering the interest rate and returning inflation to the target level. When investing in Russian issuers, one should take into account the potential devaluation of the ruble at the 5- 10%, that is, the same "Gazprom" is better to buy after a deep correction. I do not think that you can buy shares now for a couple of thousand dollars and forget about them for centuries, and then your great-grandsons will become billionaires, the most effective way is at least once a quarter, as many funds do, review their portfolio and adjust it.

    I want to bring up the story with the dotcoms, how they burst, and warn that it is not worth investing for a long time in the stock of funds that sell cryptocurrency, even if all the coins will live a long time and as we are told is a revolution in the economy, and digital gold will replace the money we used, as they grew at 100% per week, of course with less speed, but they may fall, for example, bitcoin this year is trying to grow, but constantly quickly rolls back, with ripple the situation is even worse. So such funds can fail. While there are no shares of such funds on the stock market, as far as I know, they use tokens, for those who don’t know, its a coin, similar in function to shares, but experts predict the appearance of any ETH crypto funds on stock exchanges.

    Warren Buffett said that it's worth buying stocks with the goal of never selling them, for this you need to find only the best of the best. Of course, now the time is different, and it does not happen that one piece of advice works for centuries or, for example, calculated according to statistics that your strategy gives a positive expectation and trade on this strategy, do nothing more and earn, but no, the market is not for lazy people. Therefore, one must be flexible in trading. As many well-known personalities in the world of finance say, the world economy and, in particular, the US economy can stagnate for a couple of years and then even the best stocks can either decline or, at best, show a small increase.

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    Last edited by Gulfstream; 10-13-2018 at 12:28 PM.

  2. #2
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    How deterministic is it to predict a stock that with always be "in price". You can never tell with certainty what stock would rise or fall in the nearest future or in the long run.
    A dramatic turn of events, either negative or positive can swing the tide against or for a given stock as the case may be.
    Therefore using the word always is kinda being unrealistic due to the uncertainties that are inherent in running a business.

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