April 24, 2008

Short term investing - Guidelines

1. The stock should have some good news.
2. It should have higher than normal volumes.
3. Portfolio should always limit to 3 to 5 stocks.
4. Portfolio should always have spare money about 15%.
5. Don't sell when the stock is going up.
6. Buy only when the overall market has upward trend.
7. Sell your stakes when you see losses or stocks being dumped by big investors, as a precautionary measure, as this event foresights things are not going good.
8. New technology/innovative products, Energy, Food, Medicine are the future stocks
9. Buy a stock if you expect both the current quarter and the coming quarter results guideline will be good.
10. Some stocks recede after the earnings release and some move up. so check up this pattern in the chart and buy accordingly.
11. Check out the P/E, EPS, Beta, market capital (around 1 bln is good) and 52 wk high values.
12. research the demand vs supply theory before buying that stock. no demand no supply, stock goes down!
13. Check out the current market trend.
14. Look out for disasters that might soon occur that could effect the market. Oil prices and euro/$ value, bank interest rates, housing, agriculture, war, epidemic are important events to look for.
15. Medical penny stocks which expect medical discoveries/inventions are easy multi-baggers. Just be sure that the discovery/invention will happen soon :)