Quote:
Originally Posted by Robbb
Yes but the age old question that has never been answered for the long run...how do you know when a specific stock or even segment will make a move? Without insider information you are only guessing. Regardless how accurate your rear view mirror is, it is still a rear view which has no bearing on the future. If all the super computers on the planet cannot predict where the market will be tomorrow, how can we?
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If a super computer could predict the moves, do you really think that you or I would know about it? Do you really think Rennaisance Capital gave away their technological advantage as soon as it was proven? Perspective, there are people and systems, now called robots, which make decisions which humans can't because the robots can manage much more information that the human mind can absorb and then use to decide. . DBD
Ah, the number 1 determinate of equity pricing is revenue growth. . that's your first clue.
Second clue is industry and products. .
Industrial, manufacturing, commercia, retail, consumer: new products, new services, one time
purchase product or repeat buyers over what time span, and how often, and product life
cycle.
Third clue is near monopoly, oligopoly or very regional marketplaces and diverse competition.
Shows up in margin sensitivity, supply chain effectiveness and purchase price sensitivity,
and revenue growth. . .
Fourth clue is interest rate / inflation / fx rates sensitivity,
Fifth clue is debt to equity and Return on Assets ratios. .
Sixth is event risk: how sensitive is the company to customer events, employee events, new product events, political events, geopolitical events, etc. . which is inversely proportional to size
That's a good start to the analysis, and its not easy, but if you get it right, you can make quite nice returns. . DBD
finance guy