Investors have traditionally looked forward to dividend checks as a way of rewarding themselves for investing in their favorite companies.
Dividend returns today are quite low. Capital growth can substitute for this. The question is “How Important are Profits?”
Stock market traders are always looking for ways to trade successfully. It is easy to understand, because the main concern of a stock broker is his bottom line. You may be asking, what is the bottom-line? Maximizing profits is the bottom line. Maximizing profits is possible when you are able to consistently trade stocks. Here are some solid stock trading tips that are mostly common sense:
* Before entering a stock market, calculate the risks involved.
* Define clearly the entry and exit points
Scanning
a. Can we determine a company’s level of success by its profit reporting and their size?
b. Can we count on the company to provide us with continuous profits every year?
Can we assume that a company is safe to invest in because it has been profitable for more than 10 years?
Answer NO to each question.
The Daily Telegraph reported that Warren Buffet, of Berkshire Hathaway, stated in his letter to shareholders this year, “Never trust financial statements and don’t focus only on profit figures ….research, but focus on broader financial numbers”.
Calculate the risk before you start trading and be sure that you’re willing to accept it. When trading stocks, there is always a certain amount of risk. Calculating risk is not affected by whether you are a professional or a novice stock trader. Calculating the risk before accepting or agreeing to it is a common sense approach. Risk can be reduced once the stock trade begins to go in your favor.
What is profit? Profit can only be determined after “allowable expenditures” are taken into consideration, as determined by the taxation system of the country.
The game’s main objective is to determine what percentage of the company’s efforts should be paid to the Tax Dept. for the right to do business in that state/country.
Can we determine a company’s performance by its profit reporting? You may be able to tell by reading the paragraphs that follow that it is not a 100% accurate or reliable indicator.
Profits are not the only way to measure a company’s performance. We now know that profits are generated.
When you look at the profits, you will only see a manipulation to get a figure the taxman is looking for, or a number the company is willing set aside to pay taxes.
In the recent financial crisis, profits did stop and the effects spread to all industries around the globe. This should also answer the question b.
Knowing when to enter and exit stock trades can boost your potential profit. Stock traders often use technical indicators to determine the best entry and exit points. Many technical indicators can be used, including MACD, stochastics, pivot points and areas of strength and support. The open, high, lowest, and previous closing are also examples. Some stock traders pay attention to price action, VWAPs (volume-weighted average prices), and trendlines. Many other technical indicators are used to determine the best time to enter and exit. The stock trader will use whatever technical indicator they feel most comfortable with. The stock trader will be able to increase their profit rate once they have discovered the indicators that are most effective for them.
First, you can invest in niche-specific domain names and then sell them. The Google Adwords Keywords Tool or Wordtacker can be used to research niche keywords. You should target keywords that contain two or three words and receive a lot of traffic. For example, “weight loss” or ‘easy weight loss’. Enter the keywords in a search box at a domain provider like Crazy Domains or Daddy to check if they are available. Register it if you think it would make a good name for an online business.
It is your Virtual Real Estate Investment, and you can buy it, hold it, and sell it, like any other investment strategy. Your piece of Internet real estate (your Domain Name) is kept until someone contacts you to purchase it or you actively try to sell it or auction it off to the highest bidder.
You can also find profitable virtual real estate by using the same keyword research principles, but applying them to an online platform such as Facebook. You may find a lucrative investment by using a keyword combination such as “weight-loss”.
Thirdly, and the most exciting and lucrative way to make money is by utilizing the new internet platform that has just been launched. This new platform is a great way to get the best names for your stores before others do.
A research done many years ago on Investment Analysis showed that despite the fact that banks reported profits every year, most were in financial trouble.
In most cases, the success or viability of a company depends on other factors.
For a business to be truly “profitable”, or viable, it must have adequate systems, assets at the right location doing the right thing, and investments that produce the desired results.
The nuts and bolts are what need to be addressed.
Only those companies who have their fundamentals in place will be able to survive any change or external threat.
Investment Analyst firms spend their time assessing businesses in a way that is more in line with the inner management of a company, so that investors may invest wisely.
When it comes to maximizing profit potential, scanning is an important factor. Many scanners are available on the market. Some brokerage firms offer scanners that are integrated into their platforms. These scanners provide traders with excellent opportunities to scalp throughout the day. Stock scanners allow stock traders to define parameters instead of having to comb through thousands of stocks. The parameters are set by the stock trader and produce lists of possible stock picks within seconds. A scanner filters the stocks for the trader. Stock scanners cannot predict which stocks will be profitable, but they can increase stock traders’ winning percentages by providing fast technical analysis, which allows them to determine which stock has the highest profit potential.
Due to concerns about competition, managers are reluctant to divulge this information.
Profitable or reporting profits is not a guarantee that a company will be “safe”, even if it has been doing so for 10 or 100 years.
Sometimes, the investors of a business have too much at stake to let the company do things its way.
Even back in the British Empire, history has proven this. This should be the answer to c.
Investors need to be aware that the information provided by a company is often limited and also due to competition.
By looking at other aspects of the business, besides profits alone, we can learn more about a company’s future and its ability withstand financial shocks while remaining viable.
As investors, we must know: Is this investment safe? Is it Stable? Is it Viable or Stable? Not just profitable.
