That is specialized in those of you who wish to invest in individual stocks. I would like to share with you the ways Personally i have tried over time to pick out stocks that we have discovered being consistently profitable in actual trading. I want to use a combination of fundamental and technical analysis for picking stocks. My experience indicates that successful stock selection involves two steps:

1. Select a stock with all the fundamental analysis presented then
2. Confirm that the stock can be an uptrend as indicated by the 50-Day Exponential Moving Average Line (EMA) being over the 100-Day EMA

This two-step process increases the odds that the stock you end up picking will be profitable. It offers a transmission to trade Automatic Income Method containing not performed not surprisingly if it’s 50-Day EMA drops below its 100-Day EMA. It is another useful way of selecting stocks for covered call writing, a different sort of strategy.

Fundamental Analysis

Fundamental analysis will be the study of financial data such as earnings, dividends and your money flow, which influence the pricing of securities. I use fundamental analysis to help select securities for future price appreciation. Over the years Personally i have tried many options for measuring a company’s growth rate to try to predict its stock’s future price performance. I used methods such as earnings growth and return on equity. I have discovered these methods usually are not always reliable or predictive.

Earning Growth
As an example, corporate net income is subject to vague bookkeeping practices such as depreciation, cash flow, inventory adjustment and reserves. These are all subject to interpretation by accountants. Today inside your, corporations are under increasing pressure to beat analyst’s earnings estimates which results in more aggressive accounting interpretations. Some corporations take special “one time” write-offs on his or her balance sheet for such things as failed mergers or acquisitions, restructuring, unprofitable divisions, failed website, etc. Many times these write-offs usually are not reflected like a continue earnings growth but instead arrive like a footnote over a financial report. These “one time” write-offs occur with additional frequency than you might expect. Many businesses that form the Dow Jones Industrial Average have taken such write-offs.

Return on Equity
One other indicator, which I have found is not necessarily predictive of stock price appreciation, is return on equity (ROE). Conventional wisdom correlates a top return on equity with successful corporate management that is maximizing shareholder value (the better the ROE the greater).

Which company is much more successful?
Coca-Cola (KO) having a Return on Equity of 46% or
Merrill Lynch (MER) having a Return on Equity of 18%

The solution is Merrill Lynch by measure. But Coca-Cola includes a better ROE. How are these claims possible?

Return on equity is calculated by dividing a company’s net profit by stockholder’s equity. Coca-Cola can be so over valued what has stockholder’s equity is only equal to about 5% with the total rate with the company. The stockholder equity can be so small that just about any amount of net profit will make a favorable ROE.

Merrill Lynch on the other hand, has stockholder’s equity equal to 42% with the rate with the company as well as a much higher net profit figure to generate a comparable ROE. My point is the fact that ROE doesn’t compare apples to apples then is not a good relative indicator in comparing company performance.
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