Cheap Stocks with Track Records of Long Term Growth

Investors often look at small cap stocks for growth. The math supports this idea. Smaller companies can grow quickly and the stock market is likely to reward growth with a high valuation. This means a small stock market investment in a small company can deliver a large gain to an investor. But, small companies can be risky. They often lack a track record of success that extends back several years which means an investor is buying the stock based on the company’s prospects for the future. The future is, of course, uncertain, and that is one reason there is a ...
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Technicals for Long Term Investors

Investors who say they are focused on the long run often look for value stocks. They believe that they should buy stocks that are undervalued, hold the position for years and eventually sell at a large profit when the market recognizes the value of the stock. This strategy is reasonable but it depends on the market recognizing the value. The stock market investment is really a place where investors use money to express their views on stocks. Ben Graham, the great investor Warren Buffett’s business school professor, expressed this in a memorable way. Learn more about How to Trade in ...
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A Portfolio of Low Priced International Stocks

Sometimes, investment ideas can come from monitoring trends. This week, we noticed a new trend appears to be at work. Combining this with some other long term trends in the market results in a short list of stocks that could be among the market’s biggest winners in the short run. One of the long term trends in the stock market is the increasing importance of global economic diversification. This can be applied to stock selection by analyzing a company’s sales. Companies with a significant amount of foreign sales will be the global companies poised to benefit from this trend. Testing the Value ...
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Get Ahead of Uncle Sam

When the ball drops in Times Square on midnight, January 1, 2018, the old year is over. This means your tax bill is due and there is little you can do at that point to lower the bill. You can make contributions to retirement accounts and take a few other actions after the first, but you have few choices then. Now, you have time to plan, and more importantly you have time to act. There are a number of actions you can take to help preserve gains, potentially defer taxes and possibly even reduce taxes. However, we are not tax advisers ...
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Using P&F Charts to Find Price Targets

In a recent article, we highlighted the usefulness of point and figure (P&F) charts. This week we revisit the charts and explain how they can be used to find precise targets. That can help traders determine whether the potential rewards of a trade are acceptable, given the level of risk involved. Rather than reviewing the construction and fundamentals of the P&F chart, we would refer readers to the previous article which can be found here. In this article, we will describe two techniques for determining price targets. Both techniques are based on the concept of symmetry, a principle that technical ...
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Following in Buffett’s Footsteps

Like many analysts, we closely follow the actions of Warren Buffett. Widely regarded as one of the greatest value investors of all time, Buffett’s investment decisions provide the only insights available to his thought process. He never fully explains why he buys or sells so we are left to study the action. Recently, Warren Buffet's investment company Berkshire Hathaway Inc. announced that it is buying a majority stake in Pilot Flying J, the truck stop company run by Cleveland Browns owner Jimmy Haslam. Flying J was the source of the fortune used to purchase the football team. Details of the deal ...
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What the Economy Says About the Stock Market

Traders are familiar with the Dow Jones Industrial Average, the Dow. It might be the most widely followed stock market index in the world. The index was developed by Charles Dow in the late 1800s and has been maintained ever since. Even though it’s almost 120 years old, the Dow is not the world’s oldest stock market average. That honor belongs to the Dow Jones Transportation Average, or the Transports. That average was also developed by Charles Dow and was his first attempt to tie the stock market and the economy together. Stocks generally go up when earnings are rising. This usually ...
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Low Priced Stocks That Could Double

This week, we wanted to take a look at low priced stocks. We are defining these as stocks that are priced at less than $5. We often focus on stocks that trade at low prices and there is a reason for that – these are the stocks that are most likely to record large gains. The stock market provides an enormous amount of data. It also provides the opportunity to make large amounts of money. The opportunity provides a motive to study the data and there are detailed studies on almost every aspect of market behavior. There are studies on how ...
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