Investor Help (NO Ihub questions)

[Gixene]

I was wondering if someone could help me on the subject of book value? After using the formula on over 25 stocks. I realized that I may not be using the formula correctly. The formula was telling me all of the stocks were extremely overvalued. I believe problem might be factoring assets and liabilities.

I got this formula from Investopedia. The formula I have is...

(Assets) – (Liabilities) = (Net Worth)

(Net Worth) / (Shares Outstanding) = (Book Value)

It wasn't clear weather it should be current and/or long term assets and liabilities. I have been factoring both current and long term.

Thanks, Gulley

[Gixene]

Now that I mostly understand a strategy for entering the market. I need to learn more about strategies exiting. I found this link to be a little helpful...

http://www.investopedia.com/articles/trading/04/092904.asp

Are there any more resources I can read about this that you think would be helpful?

[Gixene]

Thank-you, Churak.

[cintrix]

thanks, chu

[Churak]

IMHO:

Net current assets is current assets minus current liabilities. The "Net" in net current assets is why you deduct curr liab from curr assets.

Net curr assets is not the same as anything to do with book value - net curr assets is an indication of liquidity.

Check out this link for definitions

http://www.investopedia.com/dictionary/

[Gixene]

Thanks, greatly appreciate that.

[cintrix]

1. excluding stockholders equity

2. and 3. let me get someone else to explain it - I honestly haven't looked at fundamentals in years - I used to know the difference between all of them - I really don't look into this that much anymore so I don't want to be telling you the wrong thing

[Gixene]

Well, I wasn't being honest with you cintrix. I wanted to keep this out of discussion, though I will explain. Soon will be the first stock I personally choose to invest in. I have only bought and sold one stock, which a friend recommended me. I was naive investor at the time. I bought into it with no clue about the business. When I wanted to learn more about not only the company, but the market itself. He told me not to worry and that I'll make a great return with the stock. We no longer communicated, more on his part. As to why, I don't know. Though an already long story short. I didn't know what an exit strategy was and sat on it longer then I should have. In the end I lost 80%. I do understand your first paragraph about blind investing. I learned my lesson, I'm putting it behind me and starting fresh on my own.

I would eventually like to learn all of the different strategies of investing. Though I'm a broke 21 year old college student, who isn't giving up on the market after my past experience. I barely have enough left where I'm forced to buy stock from one company, I can't diversify. At this point in time, I feel value investing is the best choice. It's basic, most simple for me at this point and it seems to hold the least amount risk of any other strategies.

I do have questions regarding the links you provided...

1.) When it comes to calculating book value or net current assets per share. One of the numbers needed is liabilities. Should I include shareholder's equity into the liabilities?

2.) Since book value is an inverse of earnings yield, is it important to look at earnings yield when comparing stocks or vise versa? Since their both coming from the same numbers.

3.) This question goes along with the question above. Net current assets per share seems to also be the inverse of book value?

I believe that's all the questions I have for now.

I thought I would buy a stock a few days after selling the first stock I held. Though I'm glad you're here to help with what you can. I feel more confident and I'm not even sure if I want to buy in next week. I want to come up with an exit strategy before making a move.

Once again, thank-you very much for replying cintrix,

Gulley

[cintrix]

You know, most people don't pick what type of trader they are going to be. You don't just one day wake up and say "I think I want to be a value player." Most people who first start out will find a stock that they are interested in, invest in it, and learn about that stock. Hopefully for them they DON'T make a load of money on their first play. Why? Because that is, imo, the kiss of death. You are better off losing money in the beginning so you don't get cocky and have a false sense of "I am really good at this." After you begin trading and you have a bunch of trades under your belt you then will become familiarized with the different types of approaches.

When I first started out I was trading based on the growth stock theory of William O'Neil - his CAN SLIM strategy. This is because I would read Investors Business Daily religiously since because back in the dark ages we didn't have access to the information we have now on the internet. When I decided I wasn't interested in long term investing and wanted to trade short term I began trading based on news. Then I got into trading based on filings. I also did a lot of bk trading at one point too. I am now a bounce trader and have been for many years. I still will trade something based on a filing, news item, and bk play every now and then if something interesting comes out.

Once you begin trading actively you will figure out what type of strategy you like and works best for you! Just remember that you WILL lose money and to take your losses when they are still small.

[Gixene]

Sorry for the slow reply. I wanted to be sure to read all of the links at once, instead of bits and pieces because of my horrible reading comprehension. Firstly, these links were very helpful. It seems to me this is the best, basic strategy for any beginning investor in my opinion. Then from there, your welcome to branch out. After reading, I have no current questions on this subject. Though I'm sure when I break it down, I might request further explaining. I'm realizing, more then ever before. That there are no set guidelines to picking a stock for everyone. For each strategy of investing, presents endless strategies for each individual. Now my current goal is to choose what personal guidelines I want when deciding the value of a stock and weather to buy or wait for a better time to buy.

Thank you cintrix very much for pointing me in the right direction.

[cintrix]

that would be based on fundamentals - you would have to read up on what type of criteria you want - earnings, pe ratio, book value, etc.

Go here and then after you read it go to the links on the bottom of the page and read up:
http://www.investopedia.com/university/value-investing/value-investing3.asp


Table of Contents

Value Investing: Introduction
Value Investing: What Is Value Investing?
Value Investing: How Stocks Become Undervalued
Value Investing: Finding Undervalued Stocks
Value Investing: Finding Value In Financial Reports And Balance Sheets
Value Investing: Finding Value In Income Statements
Value Investing: Managing The Risks In Value Investing
Value Investing: Famous Value Investors
Value Investing: Couch Potato Value Investing
Value Investing: Common Alternatives To Value Investing
Value Investing: Conclusion


PR

[Gixene]

So I came to the conclusion that I am a value investor. Though I'm confused about how investors find intrinsic value. Could you please offer any help on this subject?

[Gixene]

Thanks for your response. Your advice is very helpful. I understand that you can't choose my strategy, I'm just looking for some guidance. You have helped me realize that there are many different strategies. So I have need to do some more reading. Hopefully learning more about different strategies will help me of what I specifically want to look for when picking a stock.

[cintrix]

I don't have an exact answer for that. I find more thill in pennies due to the risk for high profits. Though the only benefit I see in big boards are dividend yields, which I find very attractive.
Ok, first off, you can have a thrill ride in the big boards too. There are plenty of volatile moves - look at tlsa, aapl, or unxl the past few days. Big board stocks are not just for divys.


I would like to be able to invest in either, but if I had to lean towards one. I would most likely say pennies.
Let me give you just a little advice about what you just said. Don't ever "invest" in penny stocks. If you want to trade them short term, fine, but don't invest. There are very few good penny companies. The really good ones are few and far between. Don't get caught up in a penny stock and start listening to what they are pumping on their boards. You will lose money if you do that.

I can't pick a strategy for you. This is something you will have to figure out for yourself. I personally am a bounce player. I like to trade big board stocks that are down a certain percentage for a quick bounce play. There are others who play news. They watch the news like hawks and jump on a stock the minute good news hits. Then there are technical traders who don't have a clue what the company does but they watch the charts for a technical move.

I can only offer advice that if you plan on trading pennies be very careful of the promoters, check the filing and watch how big the os is, and if they are diluting. It's a jungle out there.

[Gixene]

I have never thought about that. I didn't come in to the market with a specific strategy of investing.

Are you big boards, pennies?

I don't have an exact answer for that. I find more thill in pennies due to the risk for high profits. Though the only benefit I see in big boards are dividend yields, which I find very attractive. I would like to be able to invest in either, but if I had to lean towards one. I would most likely say pennies.

Are you a value investor or are you looking at growth?

I had to look up the definitions for these terms. If I understood it correctly, a growth stock could be looked at as a new and growing company? Then a value stock would be a mature company that grows slowly, but pays dividends? If I understand correctly, I would most likely choose growth.

Are you long term or short term?

I think I would enjoy a stock that requires close attention, that would require me to see where the stock is at a few times throughout the day. I would say, short term and holding as long as a day, to as long as 3 months depending on the situation.

Do you think you could point me in the right direction about what kind of investor I am?

I greatly appreciate your help, thanks cintrix.

[cintrix]

You have to decide on what type of investing you want to do. Are you big boards, pennies? Are you a value investor or are you looking at growth? Are you long term or short term? You have to narrow down what it is you are planning on doing.

[Gixene]

Good morning all! I'm new to investing here. I have been trying to make a check list if you will, of things to look for when picking a stock to buy. After reading just about every article on the internet, I feel overwhelmed of the many indicators you can use to pick a stock. I think I could be trying to get too in depth too quickly, which has me on edge. Is there a basic list of indicators to go by, that would let me feel comfortable buying a stock while I build up my knowledge over time? Or is there a place you recommend I start for basics?

Thanks, Gulley

[Garyst]

MIC, You're welcome.

[Mitchibus]

Thanks!

[cintrix]

Go here:
http://www.otcmarkets.com/homee

Put the ticker in the "get quote" box.
On the left click on "filings and disclosures."

Look for the most recent 10q and open it. In the beginning of the filing you will see a sentence that will say as of "such and such date" the common amount.

You can also go to that same page and hit "company info" link instead of "filings and disclosures" and you will see a brief description and on the right "Share structure" where it lists the outstanding. While that is the fastest way to check, I like to go right into the latest filing just to make sure that I have the most updated figure.

[SmallCapValueInvestor]

Thanks for the appreciation Gary.

[Mitchibus]

And can anyone tell me how I can determine how many shares a company has issued?

[Mitchibus]

Good thanks, and yourself?

[Princess_Jess]

Hows everyone doing?

[Garyst]

MIC, that is an awesome response and very nice of you to take the time to help answer those questions for poster follownoone.

[FollowNoOne]

http://beginnersinvest.about.com/ : Great resource for beginning investors and experienced investors wanting to tighten up on their game. I have been reading article after article.

[SmallCapValueInvestor]

Not a problem. Love to learn and help.

[FollowNoOne]

This was very helpful. Thanks for the info.

[SmallCapValueInvestor]

Came across your link via Newbie's board and figured I'd give your questions a shot. Note I'm only student and have been in the market for less than 2 years now, so I'm not a great source, but here I go anyway.

1. How to measure the economy?

In the US we have the U.S. Bureau of Economic Analysis (BEA). They offer GDP data and various interactive data tools. Thier site is here (www.bea.gov) Please note that sometimes the data isn't always what it looks like so following someone like Peter Schiff and checking his site and his YouTube channel for his personal analysis would be a great idea. I consider Peter Schiff to be a genius. He knew that the government involvement with mortgages was going to cause a bubble and eventually burst and cause a recession. Mind you, during the time he was warning about this all the government came out and said that since real estate is a tangible asset there would not be a burst like in the dot-com boom. Obviously after what happened in 2008 we now know Peter was right. Of course he wasn't the only one who warned of this, but he and Ron Paul were two of the big ones.

2. What cycle of the economy are we in?

If by cycle you're asking between the boom and bust cycle, the answer is a boom. Big board stocks and blue chips have rallied recently big time and caused a bull market. However, this isn't a sign of recovery. It's the FED (Federal Reserve) printing money to tune of billions of dollar a month to help give the imprecision all is well. Nothing more than a government fraud in my opinion. This can go over and the bubble can burst at any time causing big losses or the FED might continue doing its thing causing the markets to go up while taking away value from our dollar since the more money they print to give the impression all is well the less value there is the dollar already in the market.

3. What businesses / sectors do well in each cycle?

I like looking at the Markets Data Center from Wall Street Journal (link here: http://online.wsj.com/mdc/page/marketsdata.html). Under the US Stock tab they have a panel for Industries/Sectors you can use that to track different Industries/Sectors and check their performance

4. How does the dollar and gold/silver relate to each other

Well the dollar is a currency and gold/silver are pressisious metals. Since we are no longer on the gold standard the dollar is a fiat currency and is simply faith based. We assume it to be worth a dollar not because of its value, but because you are told that's its value. The dollar actually lost over 90% of its purchasing power since 1913. (Chart here: http://www.small-business-goldmine.com/images/MeltingDollar-1913.gif)

5. How do you evaluate a company for investment?

There is a lot of different metrics. Google fundamental analysis a lot of stuff will come up. Your broker most likely even has a lot of learning material on their site. They have a very strong incentive to teach fundamental analysis since when you make better trades you trade more often with larger amounts thus driving them more commission. Ask them if they have a knowledge center on their site or try to look it up.

6. How to read charts for short / long investments?

Reading chart is a lot to learn. I recommend learning moving averages and stochastic oscillators. Moving averages will show you trends and stochastic oscillators will tell you when a stock is overbought or oversold. You can learn a great deal from stockcharts.com they have a charting service as well as a charting school and education center.

7. What are the various reports that measure the economy and where can I get them from and when?

See answer to question 1

8. What indexes to pay attention to and why?

Well if you want to sounds intelligent, I’d say track the majors one. But in terms of usefulness I'd say gather a list of indexes and try to understand what they track, if they cover a segment of the market that you think is important to your investing/trading strategies and analysis pick those indexes to track.

9. What to look for in international economies and how they relate to and affect the US economy?

I was watching an interesting video clip where an investment manager said he likes domestic stocks with international exposure so he can buy the stock on the NYSE for instance and if it has exposure to China and China does well his investment would capture sales and revenue from China doing well. He also said something I found to be funny, that he looks which countries they are installing the most elevator in because elevators are a sign of more large buildings and corporate offices. Not sure how that acutely works out though.

10. When to invest long and trade short?

Not sure if you mean long vs. short term or long vs. short positions. Long vs. short term is hard to say and is a matter of one’s personal analysis. Long vs. short positions, I'd say if you thing there is upside potential go long and if you see downside go short, but keep in mind shorting is very serious and losses are technically unlimited.

11. What signs to look for to short a company?

Overvalued companies, companies with legal problems, declines in sales and/or equity

[FollowNoOne]

Returning back to the basics : Recent losses prompted me to hit the reset button and really dig deep into my investor education. Here are some questions I came up with over the weekend and appreciate any direct explanations or links:

1. How to measure the economy?

2. What cycle of the economy are we in?

3. What businesses / sectors do well in each cycle?

4. How does the dollar and gold/silver relate to each other

5. How do you evaluate a company for investment?

6. How to read charts for short / long investments?

7. What are the various reports that measure the economy and where can I get them from and when?

8. What indexes to pay attention to and why?

9. What to look for in international economies and how they relate to and affect the US economy?

10. When to invest long and trade short?

11. What signs to look for to short a company?

Thanks.

[Joe C]

You have probably found out by now but, the lack of color is because the price paid was between the bid price and the ask price so it is not classified as either a buy nor a sell.

[RRV]

You know when someone sells it shoes up as red and when
Someone buys it shows up as green, what does it mean when there is no color what does that represent? Does anyone know?

[cintrix]

There was a good one called mffais.com but they don't give out that free info anymore. You can look at this one for daily inst ownership:
http://www.insidercow.com/notLogin/latestInstitutional.jsp

[thecryptomarket]

Quiz Time! Does anyone know a website or free software to chart out or detect institutional trading on a stock. Something to show if a institution/mm/hedge funds is buying and selling a stock. P.S i need one that does pink sheets. TIA!

[Josh_Ortiz]

Ok, thanks for your help!

[cintrix]

Yes, you would put in a limit order to sell at .0002 and hope that you get filled.

[Josh_Ortiz]

Sorry, 0.0002.

[Josh_Ortiz]

Ok thanks. And how would I sell it at 0.002? Is it the same idea?

[cintrix]

Just put your order in as a limit for .0001. Leave it there and if you are lucky it may fill on at the bid.

[Josh_Ortiz]

How would I buy a stock like ELAY at 0.0001 with a limit order?

[OTC Scam Hunter]

OK. Sorry.

[cintrix]

Wrong board. Read the sticky. Ihub questions don't belong on this board.

[cintrix]

Which penny stocks can you transfer to Etrade? Etrade generally does not accept any penny stocks from another broker unless you are bringing over a good deal of other stock and cash and there aren't too many pennies in your port.

[Spank it]

Use Etrade, they don't have a surcharge like share builder. I had the same problem and just switched over. You can also transfer your stock for a fee ...

[KeepitGreen]

I use ShareBuilder but, the Low Price Security Surcharge is killing me..
Anyone know of a goodBroker for sub-pennies?

[Joe C]

Hi Lucas, how is the learning process going? Have you been able to find what you have been looking for?

[OTC Scam Hunter]

I'm just wondering....

What are the rules in regards to Market Maker employees posting on iHub?

What are the rules in regards to Market Maker employees influencing iHub boards?

Is there any way to verify if someone is a Market Maker employee?

If one is suspicious of an iHub poster being a Market Maker employee, who would one report them to?

Thanks for your time and understanding,
Dwayne

[cintrix]

I could be wrong, but I think your cash balance more than covers it. Full value is 1500 plus you need an additional half of that which would be 750 - that is under your 3k cash amount. If it goes down your full margin amount - the 6k will be the broker's collateral. But when and if they give you a margin call I am not sure. If I were you I would get on the phone with your broker - or better yet, email them this way you have your explanation in writing.

[FollowNoOne]

? about Shorting Stock / Margin Trading:

Example: I have a $6,000 margin account with $3,000 accounting for cash. I want to short sell 100 shares of JDOE that costs a total of $1500.

Although I have more than enough liquid capital to borrow the shares, do I still have to get $750 in a margin loan from eTrade even though I have $3,000 in cash?

OR

Do I just borrow the shares up until the cash value that I have before they call it if the cost gets near or exceeds the liquid amount that I have in my account?

Any clear explanation on how this works is appreciated.

[Pipa]

On the right...."show intro"