How to know the best time to buy a particular stock
popular books February 27th, 2008
There are two schools of thought on forecasting the future price of a company’s stock: the Fundamental Analysis School, and the Technical Analysis School. Investors who follow the Fundamental School typically have little concern for a stock’s current price. They instead focus on products and profitability. They look for the relative strength and profitability of the company compared to competitors. This style of investing includes people like Warren Buffett (of Berkshire Hathaway) or Peter Lynch (formerly of the Fidelity Magellan Fund).
The technicians, on the other hand, say the historic numbers found in reports made to the Securities & Exchange Commission (SEC) and analyst statements don’t matter — the only thing that matters is the current price of the stock.
Who is right? Surprizingly, they both are!
So how can you figure it all out? I have found an incredible online tool that does all the work for me! It’s called “The Mentor Center” and it gives you an easy way to use both disciplines to make your stock selections.
One of the unique features of The Mentor Center is the D.A.R.N. Process, a built-in analysis tool which caters to the Fundamentalist method. It is the starting point for the process and helps you quickly sift through the more than 15,000 publicly traded stocks to find good investment candidates. Here’s what the acronym D.A.R.N. means:
Direction: The stock’s direction is also known as its trend. The assumption is that a stock will tend to continue in the same direction it is currently heading, so if you look at a historical chart and see that the stock price over time tends to increase, you rate that trend favorably. A downtrend, however, gets a negative rating.
Analysts: What are the analysts saying about a target company? Are they positive, or negative, or even more importantly, how many of them are watching the stock and have their opinions changed over time?
Reports: By looking at the company’s financial reports made to the SEC, you can gauge their financial worthiness. You can also spot key trends and weaknesses.
News: Today’s news is very important to your decision about the future of the company. News has a substantial impact on most companies.
In The Mentor Center, the key elements of the D.A.R.N. Process have been automated. Right clicking on a stock symbol will bring up a menu which allows you to explore each of the D.A.R.N. elements, while selecting Tools / Searches / D.A.R.N Search from the main menu of The Mentor Center gives you a rank-ordered list of companies which receive high ratings for their analyst and report scores (the “A?and “R?in D. A. R. N.).
Take a simple test ride and you’ll be amazed at what you will learn. A simple demo tour is available on my About Me Page here: Mentor Center Tour Begins Here
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