Blog

http://www.tradingtips.com/Value investing has an appealing logic to many investors. The idea is simple. Value investing generally involves searching for stock trading tips at discounts to their fair value. These stocks can be bought and held until they trade at or above their fair value. These ideas were first put forth by Benjamin Graham, a business school professor who counted Warren Buffett among his students. Graham is widely considered to be the father of value investing and he wrote widely on the topic. His work includes descriptions of strategies that he found to be successful. Graham developed and tested the net ...
Read More

As investors, we often talk about value. But, we don’t always agree on value. The disagreement could be as to whether a particular stock offers value or even exactly how we should measure value. In this article, we explore some of the common approaches to measuring value. The most popular measure of value could be the price to earnings (P/E) ratio. However, now all companies have earnings. In the case of a company without earnings, the price to sales (P/S) ratio or the price to book (P/B) ratio could be more useful. P/E Ratios The most popular measure of value could be the ...
Read More

Finally. It’s done. After months of speculation, tax reform has been completed. Now, analysts can get to work determining exactly how the new rules will affect various companies. It is almost certain there will be winners and losers. In all likelihood, the winners will outnumber the losers. That is generally bullish for the stock market trading. If there are more winners than losers, that means we should expect the overall level of earnings of publicly traded companies to rise. Rising earnings should lead to higher share prices. But, the details will require more analysis. In general terms, the corporate income ...
Read More

Over the past year, we have shared trades based on a seasonal strategy. At the beginning of every month, we provided real time buy recommendations and we also tracked the results of the previous month’s recommendations. Now, after a year, we are able to show you the results for the past twelve months. This system was based on one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month we ran a scan to ...
Read More

“Fed watching” is among the most important tasks of traders. The Federal Reserve and central banks around the world have often had large impacts on stock market trading. This is because the central banks set interest rate policy. Stock markets are often driven by the outlook for interest rates. This is because interest rates are a baseline benchmark in the stock market and they provide a signal related to economic growth. Policy changes are interpreted to indicate changes in central banker’s outlook about the economy. For example, if the Fed is raising interest rates, this is a signal to the markets ...
Read More

Earnings season is generally a time of increased volatility in the stock market. Traders know this from experience and it fits into standard financial theories. The academic community has demonstrated that stock markets in developed nations are informationally efficient. This means the current price reflects all of the information about a company. This is logical and there are alternative explanations but this one seems to fit the data very well. Notice that the theory merely says stock prices reflect what is known about the stock. It does not state that this is absolutely the correct price of the stock. The current price ...
Read More

Right now, the stock market has been in an up trend for years and hasn’t suffered a pull back of 5% or more in more than a year. This seems like we could be near a significant top. And, that means now might not be the ideal time to buy new stocks. Of course, those same words could have been written at any time in the past few months. Not buying may seem like a cautious approach to take to the market, especially when it is going up. But, not buying carries perhaps the biggest risk to small investors. The arguments against ...
Read More

The iPhone is one of the biggest commercial successes of all time. The product has changed the way many people live. Even those with Samsung or other smart devices benefit from the innovations of the iPhone. When the first iPhone was introduced, Apple’s legendary CEO Steve Jobs informed analysts that the company’s goal was to capture 1% to 2% of the worldwide cell phone market over the next year. Ten years later, Apple has sold an estimated 1 billion iPhones and has 20% to 40% of the market. The iPhone has always been sold at a premium price and high prices ...
Read More