Beaten Down To Under $5 But Showing Signs of Turning Up

Major stock market averages are trading near record highs. This means many stocks are overvalued. But, it also means we are in an up trend. That indicates it could be beneficial to look for stocks that show signs of improving fundamentals that could be at the beginning of new up trends. Improving fundamentals are important to consider but they are rarely enough to base an investment decision on. Many stocks have improving fundamentals. But, it takes the buying power of other investors to push a stock price up. This is because of the difference between a company and a stock. Although we ...
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Patterns Unlock Profits in Stocks

In the most general terms, there are two types of investors – those who think they are failures and those who believe they can succeed. Investors who believe they are failures will cling to index funds. They tell others that no one can beat the market and to try is futile. So, they settle for funds whose goal is to lose 50% or more in a bear market. This is shown in the chart below. iShares S&P 500 Index Fund (NYSE: IVV) lost as much as the stock market in the bear market that ended in 2009. Investors who believe they are ...
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The Best Trades for November

As we enter the next to the last month of the year, we are continuing to provide real time buy recommendations for a successful trading strategy, just like we have every month since the beginning of the year. Each month, we provide a list of stocks that have historically delivered gains for the next month. It’s time for us to update on this strategy. We are following 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 ...
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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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