I did read his post. I think he just pulled that out of his hat.
If you had only 1 hour to look at a financial statement, what would you glance at?
- Thread starter RGLD
- Start date
I did read his post. I think he just pulled that out of his hat.
Scat, thanks for nice reply.
Let's go back to this post....
One good reason is to sort out the dogs.
I'm a long term investor but also a trader, I trade weekly in the order of maybe minimum 5 trades, max around 15 trades a week.
A very key part of my strategy is the first thing I look for is a dog stock, I'm really keen and happy and quick to find a dog and boot it out of my trading universe.
I'm looking to find an excuse for a dog stock before I find an excuse to keep it.
The reason is dogs will most often give negative surprises in this volatile trading world, and negative surprise come fast and severe, it can kill off a huge profit in the bat of an eyelid and be extremely annoying.
The way to find dogs is to read some fundamentals quickly, doesn't take long once you know what and where to look for it.
Surprises come frequently, the more quality stocks most often have positive surprises which work opposite to negative surprises.
A stock trader may enjoy and be more profitable using a shorting strategy, in which case he would then prefer dogs.
But just repeating, to me this is a very important part of my trading strategy and fundamentals will often show me this info when I see deceptive strong trending stocks.
Numerous times I've seen dummy rallies spurred on by gawd only knows who, running up hard then bad news. WHACK!
Let's go back to this post....
Fundamentals can be very handy for trading imo and the OP with his headline would probably be refering to stocks.
One good reason is to sort out the dogs.
I'm a long term investor but also a trader, I trade weekly in the order of maybe minimum 5 trades, max around 15 trades a week.
A very key part of my strategy is the first thing I look for is a dog stock, I'm really keen and happy and quick to find a dog and boot it out of my trading universe.
I'm looking to find an excuse for a dog stock before I find an excuse to keep it.
The reason is dogs will most often give negative surprises in this volatile trading world, and negative surprise come fast and severe, it can kill off a huge profit in the bat of an eyelid and be extremely annoying.
The way to find dogs is to read some fundamentals quickly, doesn't take long once you know what and where to look for it.
Surprises come frequently, the more quality stocks most often have positive surprises which work opposite to negative surprises.
A stock trader may enjoy and be more profitable using a shorting strategy, in which case he would then prefer dogs.
But just repeating, to me this is a very important part of my trading strategy and fundamentals will often show me this info when I see deceptive strong trending stocks.
Numerous times I've seen dummy rallies spurred on by gawd only knows who, running up hard then bad news. WHACK!
Ps: I don't look too much at financial fundamentals, just a bit but it's not my main centre of attention.
I look at who the directors are primarily and I also scan back on their news announcements.
For example, with mining explorers often the bullshit artist explorers will do numerous capital raisings and talk shit a lot. Lots or few announcements about nothing, lot of hot air marketing and no content.
Here's an example how I go to news quickly.
https://stocknessmonster.com/news/nst.asx/
I look at who the directors are primarily and I also scan back on their news announcements.
For example, with mining explorers often the bullshit artist explorers will do numerous capital raisings and talk shit a lot. Lots or few announcements about nothing, lot of hot air marketing and no content.
Here's an example how I go to news quickly.
https://stocknessmonster.com/news/nst.asx/
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I believe Tesla was one month away from bankruptcy at one point when ramping up for their model 3.
Amen.
Was the stock still at $160?
Item 1 (business) and 7 (MD&A) to learn about the company, its operating segments, and "what happened" y-o-y or q-o-q. Great way to also learn about margins and cost management.
Next, I'd examine the income statement in order to understand the trends in revenue growth, EBIT/EBITDA growth, and net income. Companies need to spend money (lower EBIT, lower EPS) to expand revenues (higher revenue growth) -- but once they are able to scale growth efficiently, EBIT begins to rise first, followed by EPS (as company is able to pay down debt to free up cash). Knowing where we are in the revenue, EBIT, and EPS cycle is key.
Finally, depending on what I'm seeing in Items 1/7/financials, I may dig around looking for definitions, granular details in the footnotes, or what have you.
Next, I'd examine the income statement in order to understand the trends in revenue growth, EBIT/EBITDA growth, and net income. Companies need to spend money (lower EBIT, lower EPS) to expand revenues (higher revenue growth) -- but once they are able to scale growth efficiently, EBIT begins to rise first, followed by EPS (as company is able to pay down debt to free up cash). Knowing where we are in the revenue, EBIT, and EPS cycle is key.
Finally, depending on what I'm seeing in Items 1/7/financials, I may dig around looking for definitions, granular details in the footnotes, or what have you.