How do u choose which stocks to buy?

Question

do u rely on organisations' recommendations to choose which stocks to buy?
or do u do the technical analysis yourself?
which approach is better?

or is there any other technique that u use? please mention them. thanks

Answer 1

I think these articles will help:
How to Find Good Stocks That Will Survive 2008 Market Crash
http://ezinearticles.com/?How-to-Find-Good-Stocks-That-Will-Survive-2008-Market-Crash&id=880879
How to Pick Good Stocks That Can Make You Rich in The Long Run
http://ezinearticles.com/?How-to-Pick-Good-Stocks-That-Can-Make-You-Rich-in-The-Long-Run&id=864890

In case you want to know what it takes to get started, read this:
How to Get Started Investing in Stock Market - 3 Must Do Checklists
http://ezinearticles.com/?How-to-Get-Started-Investing-in-Stock-Market---3-Must-Do-Checklists&id=880761

I hope the articles help! ;)

Answer 2

First there are stocks you invest in, and there are stocks you trade. These are the same companies, but sometimes radically different reasons.

Benjamin Graham wrote a book, years ago, that said individual stock picking was essentially "gambling" and that a stock picker has the same chances of beating the market as a professional gambler has to beat the casino. The edition of his Intelligent Investor book that I read included a foreword by Warren Buffet who praised his book by saying how enormously valuable it was to him. Buffet is a stock picker.

The difference? Buffet was picking companies that he might own some interest in, give some positive direction or influence, then watch the market value appreciate.

Meanwhile, John Bogle, mutual fund innovator, is also a Graham fan, and Bogle tries to pick which industry or market sector, as a general group, is in strong and rising interest--so he invests in a basket of companies, a sample of those market sectors.

With my investing money, I park most in mutual funds that similarly are focused in general directions that I think are better than others. With my trading money, there I "read the tea leaves" of opportunity and market interest, while keeping an eye on the company's intrinsic value. A company that is making money, even though the market is ignoring it, has a value that the "flavor of the month" stock doesn't. My trading money takes a lot more effort, piles more worry, and seems to tank about as often as it flies (ala Graham's casino). Good investing, meanwhile, can be pretty boring. That is why I commonly compare it to planting trees (investing) and chasing chickens (trading). Both can be profitable, both can also turn up empty at times.

Whether you go with the herd, or swim against the tide (contrarian), you will have wins and you will have losses. I've had some grand wins, and some colossal embarrassments. Whatever tack you take, you will too, eventually.

Answer 3

I use the recommendations of others for ideas, but never just blindly follow them. I read lots of financial articles on a variety of financial web sites. I watch a set of stocks on Yahoo! Finance - and that provides links to articles about those stocks - which often mention other stock ideas. I read many of those articles and get ideas from there, then I do my own evaluation.

I'm not a finance major and don't have an MBA, so I can't do a thorough financial analysis myself, but I do what I can myself and also read the opinions of S&P analysts (which I get free from my online broker), Zacks, and even the brokerage houses (though I don't have too much confidence in the latter since I still don't really trust that they're doing an independent analysis free from pressure to give a good rating).

Once I find stocks that I think might be winners, I make sure their stocks don't violate any of my absolute rules (don't buy anything with a ridiculous P/E now matter how bright the future looks, don't buy anything with high debt levels, etc.) Once I conclude that I'm interested in buying a stock, I use technical analysis to decide when to jump in. Though I still sometimes have stocks that drop immediately after I buy, it happens less often since I started using TA to time my entry.

Hope that helps.

Answer 4

Before picking the right stock you need to do some analysis.

There are two major types of analysis:
1. Fundamental Analysis
2. Technical Analysis

Fundamental analysis is the analysis of a stock on the basis of core financial and economic analysis to predict the movement of stocks price.

On the other hand, technical analysis is the study of prices and volume, for forecasting of future stock price or financial price movements.

Simply put, fundamental analysis looks at the actual company and tries to figure out what the company price is going to be like in the future. On the other hand technical analysis look at the stocks chart, peoples buying behavior etc. to try and figure out what the stock price is going to be like in the future.

Answer 5

I have worked in the investment industry for a few years now after obtaining degrees and accreditations in finance. All my education and experience in the field have brought me to the conclusion that no one can accurately pick individual stocks. If you want to get into investing you should develop a long-term approach. Buy some low expense ratio mutual funds (Vanguard and DFA are my personal favorites), index funds both international and domestic.

Though if you were really set on picking individual stocks I would look at all information you have available. Read the expert opinions both for and against any particular stock. Do some analysis yourself, look at P/E ratios, debt to equity, look through their statements... you can get as in depth as you'd like to. But when it comes down to it, it does not necessarily matter what you think a stock is worth but what everyone else in the investing world thinks a stock is worth... and the price already reflects that valuation. Good luck with your investing.

Answer 6

I think mutual funds are lame. I had one before when I started out and I made 20% and then I lost 20%. I had no control over my fund so I went to stocks and I haven't looked back.

I look at professional advice but I don't follow it. I look at cash flows because you can't mess with cash numbers and cash is what pays the bills. If cash flows were looked at closer, then people would have noticed that Enron was in trouble because their cash flows weren't looking so good. WorldCom tried to move I think it was $4 billion to the asset sheet as research rather than as an expense. So there are ways to mess with earnings but cash is cash. Look in the bank and see what they have. Look at the cash flow statement and see where the money went.
So my favorite website is
www.fwallstreet.com. I read it everyday and I learned how to value stocks by being safe and looking at cash flows.

So my decisions are 5% of 52 week range, 5% professional recommendations, 5% insider buying and selling and 85% of my own cash flow analysis of the last 10 years.

Notice I don't do any magic equations that dictate the future or look at hidden trends of charts

Answer 7

if u ask means u r novoice in this area so must prefer mutual funds to be on a safer side. if still up prefer stocks than u have to consider the volitility factor also then go by the fundamental stocks only also go by the sites for better risk analysis and proper time to time advise
www.moneycontrol.com
and
www.money.rediff.com (for the history of the stock)

Answer 8

To buy a stock we have to watch market for at least 03 months & also we have to take suggestions from consult presons. Then only we will get a confidence to buy a stock ourself.Anyway self confidence is very important.

Answer 9

http://www.onlineequitycalls.com : OnlineEquityCalls.com : Free NSE & BSE Shares Equity Calls & Latest Market News and Updates in Stock Market of India.

Answer 10

i just took a business class, and for extra credit we had to play with the stock market with fake money...


www.investopedia.com (follows the stock market, but you play with fake money) for practicing...

Good luck!