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re: Stocks...
Posted on 4/24/10 at 10:55 am to wegotdatwood
Posted on 4/24/10 at 10:55 am to wegotdatwood
We'll just have to wait and see.
1
Posted on 4/24/10 at 11:08 am to RedStickBR
What do you think about TSEM in comparison to AXTI?
Posted on 4/24/10 at 11:25 am to wegotdatwood
TSEM looks nice in terms of P/E. They're expected to become profitable this year per E*Trade (EPS .26 for 2010). That gives them a Forward P/E of roughly 6 which is pretty low. Just be careful when using Forward P/Es as they are exactly that, forward (or future) projections. TTM P/E are based on earnings that have already been reported so are much more reliable. There is no TTM P/E for TSEM b/c it reported a loss over the past 12 months. Your job is to find out whether or not you believe the projected EPS figure of .26 for 2010 to be accurate. If not, and you find it to be overstated, then your Forward P/E becomes much higher which gets less attractive as it's raised. If, on the other hand, you find it to be understated, then your Forward P/E becomes much lower which gets more attractive as it's lowered.
If you find .26 to be accurate, then you have to decide whether a Forward P/E of 6 makes the stock a valuable investment today. Per FinViz, the stock is expected to grow 15% over the next 5 yrs. Many investors use PEG ratios (Price/Earnings/Growth) to determine whether a stock is undervalued. Anything under 1 is presumed undervalued. Anything over 1 is presumed overvalued. Anything at 1 is presumed fairly valued. These are presumptions because the fundamentals must support either of the above three findings.
Here our P/E, albeit Forward, is 6 and our growth rate is 15, giving us a PEG of .4, which means the stock is presumed to be pretty severely undervalued. It's your job to determine whether or not the fundamentals support that presumption. Will the stock be able to grow at 15% over the next 5 years? If so, it is likely undervalued.
How's the balance sheet?
If you find .26 to be accurate, then you have to decide whether a Forward P/E of 6 makes the stock a valuable investment today. Per FinViz, the stock is expected to grow 15% over the next 5 yrs. Many investors use PEG ratios (Price/Earnings/Growth) to determine whether a stock is undervalued. Anything under 1 is presumed undervalued. Anything over 1 is presumed overvalued. Anything at 1 is presumed fairly valued. These are presumptions because the fundamentals must support either of the above three findings.
Here our P/E, albeit Forward, is 6 and our growth rate is 15, giving us a PEG of .4, which means the stock is presumed to be pretty severely undervalued. It's your job to determine whether or not the fundamentals support that presumption. Will the stock be able to grow at 15% over the next 5 years? If so, it is likely undervalued.
How's the balance sheet?
This post was edited on 4/24/10 at 11:32 am
Posted on 4/24/10 at 11:38 am to RedStickBR
To be honest I'm not 100% sure how to read them. I'm not new to the stock market but I've never really figured out how to crunch the numbers like you can. I'm learning a lot though. Thank you explaining some stocks and what you like about them.
Posted on 4/24/10 at 11:41 am to wegotdatwood
I'll have to get to this later. I've got some work I need to get done that necessitates me taking my computer and putting it in a different room.
THF, fizz, Russian feel free to chime in
THF, fizz, Russian feel free to chime in
Posted on 4/24/10 at 2:48 pm to RedStickBR
I'm knee deep in CFA Quant material right now, and I have a pounding headache from last night, so I will defer comments until tomorrow. 
Posted on 4/24/10 at 7:08 pm to kfizzle85
You think I should switch to etrade? I heard there are a lot of bs fees. My bank charges 29 a trade which is pretty high comparing the online brokers but my bank doens't have many fees.
Posted on 4/24/10 at 7:10 pm to wegotdatwood
I don't know what you should switch to, but $29/trade is usury.
Posted on 4/24/10 at 7:52 pm to kfizzle85
Most I have ever paid with scottrade is 11. Standard is 7 and that's the most common price.
With that said, the website sucks, but I don't really want to use it for research any way. If you want that, open another account with a little money and just buy and hold with it.
With that said, the website sucks, but I don't really want to use it for research any way. If you want that, open another account with a little money and just buy and hold with it.
Posted on 4/24/10 at 8:50 pm to TheHiddenFlask
Any of yall know much about SINO or REDF. Could be great with growth potential in China and India.
Posted on 4/24/10 at 9:01 pm to RedStickBR
Posted on 4/24/10 at 9:09 pm to wegotdatwood
SInce you're new, get ST first. Then when you're ready to really kick it up a notch, switch to ET. ET is hands down the best of the general online brokers, but for a price, a price which can eat away at the profits of the investor w/ a small portfolio.
This post was edited on 4/24/10 at 9:10 pm
Posted on 4/24/10 at 9:29 pm to RedStickBR
What are some of the fees with etrade? I got an account but haven't put in any money at this point. So ST has fewer fees?
Posted on 4/24/10 at 10:50 pm to wegotdatwood
It all depends on how much you trade and how big your portfolio is. Also, don't accept the standard price. You can usually negotiate them down a little bit.
Posted on 4/24/10 at 11:02 pm to kfizzle85
Okay this is a lot to read for someone who is studying for exams, but I've made it halfway through Part I and am very intrigued. This reversion to the mean by earnings, in my view, gives credence to two investment philosophies:
1. Trading is better than buying-and-holding. Why hold through the reversionary and, at least according to this author, almost unavoidable earnings trip back to the mean.
2. Remember that whole debate we had about there being more downward pressure on stocks than upward? This seems to support that. There is no reason a stock trading below the mean would necessarily revert back to the mean absent any fundamental improvement. But according to this author, stocks above the mean are likely to do so as the more a company grows, the harder it is for it to grow at a rate which equals its growth rate as a start-up. This makes sense. It's much easier for a stock trading at 10 cents to see consecutive 50% percent increase in earnings quarters than it would be for say, AAPL or GOOG.
I hope I'm not reading too much into the article, but it seems to support two presumptions, both of which are large components of my investing philosophy. The author even goes so far as to attribute the inevitable reversion to the mean to "chance" in some cases. Very, very interesting. Thanks for sharing.
1. Trading is better than buying-and-holding. Why hold through the reversionary and, at least according to this author, almost unavoidable earnings trip back to the mean.
2. Remember that whole debate we had about there being more downward pressure on stocks than upward? This seems to support that. There is no reason a stock trading below the mean would necessarily revert back to the mean absent any fundamental improvement. But according to this author, stocks above the mean are likely to do so as the more a company grows, the harder it is for it to grow at a rate which equals its growth rate as a start-up. This makes sense. It's much easier for a stock trading at 10 cents to see consecutive 50% percent increase in earnings quarters than it would be for say, AAPL or GOOG.
I hope I'm not reading too much into the article, but it seems to support two presumptions, both of which are large components of my investing philosophy. The author even goes so far as to attribute the inevitable reversion to the mean to "chance" in some cases. Very, very interesting. Thanks for sharing.
This post was edited on 4/24/10 at 11:03 pm
Posted on 4/24/10 at 11:09 pm to RedStickBR
So for me. I have about 20 grand to invest with currently. Would it be wise for me to stick with my bank which charges a lot at 29 a trade or switch and deal with all the hassels I'm reading about with online brokers. I'm thinking I would like to get into day trading. All I've been doing on my down time is look up stocks. Currently in Afghanistan so it's not a guarantee I'll be able to get on and trade if there is a comms blackout.
Posted on 4/24/10 at 11:15 pm to RedStickBR
I'm slacking all around on my exam studying.
Posted on 4/24/10 at 11:16 pm to wegotdatwood
Honestly, you shouldn't be trading at all if you don't know how to do something as simple as read a balance sheet. I'm not insulting you by saying that. Rather, I'm encouraging you to get on the ball with at least learning one of the very basics of fundamental investing. I admire your will to learn, but step 1 is just that - learning.
Don't even think about day trading. Seriously, get that thought out of your head. Not to sound cliche, but you will lose all of your money. There is no doubt. When you day trade, you're going against some of the most sophisticated traders on the planet (market makers) who have ten times the information you do and one hundred times the knowledge. Don't even try it.
I'd rather err on the side of coming off as a prick than sugar-coating it too much and having you not take me seriously. Don't do it man. Your biggest investment at this point is in your own education.
Go pick up One Up on Wall Street by Peter Lynch. The whole book is good, but (I think it's Chapter 13 maybe) is the best crash course in basic fundamental investing I've ever seen. I had already read that book three times before I even made my first trade. Ignore the dated stuff. Focus on his financial statement analyses. Apart from lighting it on fire, there's not a quicker way to lost 20k than for someone who doesn't know what they're doing to take up day trading, and I assume some have even lost it quicker than how long it would take to burn through the whole wad.
Don't even think about day trading. Seriously, get that thought out of your head. Not to sound cliche, but you will lose all of your money. There is no doubt. When you day trade, you're going against some of the most sophisticated traders on the planet (market makers) who have ten times the information you do and one hundred times the knowledge. Don't even try it.
I'd rather err on the side of coming off as a prick than sugar-coating it too much and having you not take me seriously. Don't do it man. Your biggest investment at this point is in your own education.
Go pick up One Up on Wall Street by Peter Lynch. The whole book is good, but (I think it's Chapter 13 maybe) is the best crash course in basic fundamental investing I've ever seen. I had already read that book three times before I even made my first trade. Ignore the dated stuff. Focus on his financial statement analyses. Apart from lighting it on fire, there's not a quicker way to lost 20k than for someone who doesn't know what they're doing to take up day trading, and I assume some have even lost it quicker than how long it would take to burn through the whole wad.
Posted on 4/24/10 at 11:32 pm to RedStickBR
I want to get good at it though. I've never lost money in the stock market so that is probably better than some.
Posted on 4/24/10 at 11:50 pm to wegotdatwood
A beginner starting off w/ day trading is like tossing a kid into the ocean after he's had a couple swimming lessons and telling him you'll meet him on the other side. Except the kid may actually have a chance at making it. Seriously, don't try it until you know what you're doing. You have better odds at the casino.
I am very bothered by these statements:
I am very bothered by these statements:
quote:
I have about 20 grand to invest with currently. I'm thinking I would like to get into day trading.
This post was edited on 4/24/10 at 11:52 pm
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