In the last few weeks I have made some money by following the following process
request others to comment
check in the economic times stocks for 52 weeks high/ positive circuit breakers or stocks with highest gain in fortnight and month
and then follow the following steps
Check on screener,the last 5 year financials
if Operating margin less than 7% skip the stock
if debt equity ratio of more than 1:3 skip the stock
if it is not real business and only paper company skip the stock
if in the annual report there are negative comments or qualification skip the stock
check if there are some announcement by the company which are positive
then go to google and check related news of that company
check are there positive news or negative
check news against the promoters of the company
if it passes this test
go to moneycontrol
go to the message section and see the messages against the company
check if there is any useful information otherwise ignore
let me know if this is ok
I have made money from this approach from
uniply
MIC electronics
Cupid
Jaussus Polymers
readers comments are appreciated as this to me also looks to be a great danger, however last 2 weeks it has given 50% return
50% Gain in 2 weeks is really very good. You would do a lot better, if you can do something like this in long term.
More or Less, my way is the same.
I have a list of some 25 stocks which are discussed in VP & other blog, where I wait for some bad news to pound on.
I check 52 week low.
I weigh the odds, bad news Vs new gains.
I buy, hold them for a 1-2 months or so.
I have made a 22% profits. It can be very well called speculative trading
However, After joining VP. I am adapting to the veteran style of lazy investing.
That way, I can buy with conviction and learn.
This approach looks good. i have been thinking on this lines for some time. When you do the past analyse of the well performed stocks, they may get caught in this process of selection.
The market can trick you . This is like a mirage. Once you start making some money you go overboard and you lose emotional stability. Irrational thinking overtakes logical thinking and one wrong move can make you lose everything,I havent heard of anyone who has made a decent return in long run.If the game is so easy the whole world will do this. I may sound negative but this is reality,There is a huge downside risk in what you are trying to do and there is no Margin of safety .
