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Bob's Advice for Stocks

Click HERE for my BLOG: Stock Picks Bob's Advice!

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A place for ideas on the market...new methods for picking stocks....and ways of learning how to look at investment ideas... BE SURE TO READ MY ALMOST DAILY UPDATES ON THE WEB LOG WHERE WE LIST OUR PICKS....PLEASE NOTE THAT ALL PICKS ARE IDEAS SELECTED BY ME AND THAT YOU SHOULD DISCUSS THESE IDEAS WITH YOUR OWN INVESTMENT ADVISOR PRIOR TO ACTING UPON THEM.

 

  SIGNALS AND COMMENTARY PROVIDED HERE ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INVESTMENT RECOMMENDATIONS.  EVERYONE HAS TO MAKE HIS OR HER OWN DECISIONS BASED ON THEIR OWN FINANCIAL SITUATION, INVESTMENT INFORMATION, PERSONAL GOALS AND RISK TOLERANCE.  PAST PERFORMANCE DOES NOT GUARANTEE FUTURE PERFORMANCE. 

 

OPINIONS ARE BASED ON RESEARCH AND DATA BELIEVED RELIABLE, BUT THESE SOURCES MAY ALSO BE SUBJECT TO ERROR EVEN THOUGH THOUGHT TO BE RELIABLE.  ERRORS MAY ALSO BE MADE IN REPORTING THESE SOURCES, MOST OF WHICH ARE PUBLIC INTERNET SITES.

 

BUT THERE IS NO GUARANTEE THAT RESULTS WILL BE PROFITABLE.  I AM NOT RESPONSIBLE FOR ERRORS OR OMISSIONS, AND I MAY INVEST IN THE VEHICLES MENTIONED.

 

THE USE OF MARGIN AS DESCRIBED HERE ON THIS SITE MAY NOT BE APPROPRIATE FOR ALL INVESTORS AND MAY RESULT IN MAGNIFICATION OF TRADING LOSSES .  PLEASE DISCUSS THIS ASPECT AND ALL ASPECTS OF THIS SITE WITH YOUR CERTIFIED INVESTMENT ADVISOR AS I AM NOT A CERTIFIED INVESTMENT ADVISOR.

The following is a list of books that I have found helpful in learning about the market.  You can help support this webpage by purchasing books through these links!  Thank-you!

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Click on HERE for my BLOG, "Stock Picks Bob's Advice" and find my latest pick and comments.

Currently I have been working on a new approach to picking stocks utilizing daily momentum as the initial screen, followed by the latest quarter revenue/earnings results, and followed by a long term fundamental look utilizing Morningstar.com 5 year earnings/revenue results and free cash flow.  It sounds complicated but it is really quite simple to use and has been working well with the recently stronger stock market. 
 
To protect against losses, I have been placing 8% loss limits and have started selling issues that hit a 30% gain with sales of partial positions. I recommend starting at 50% invested with the rest remaining in cash.
 
If stocks hit 8% losses right away do not replace these issues until you are down to 75% cash and 25% equities and always remain at least at that level.  Only add NEW issues if you are selling a partial position for a GAIN.  This way, the account will tend to move into cash in a declining market and move into margin as the market advances!
 

Clicking HERE will connect you to the cnn.com site where you can view the daily percentage gainers on the NASDAQ, NYSE, and AMEX.

I have been a stock market fan since 1967 when I picked my first stock....five shares of Global Marine at $63/share....close to the historic high.  I didn't know much then what I was doing (!) and hopefully through extensive reading and observation....I have learned a few things.  (That stock almost went straight DOWN after buying it....but nevertheless I was hooked).
 
I am not a broker and do not want to present any stocks without letting you know whether I myself have purchased them.  I will try to always let you know so that you may examine these purchases as clearly as possible.  I am also new at this website process.....so bear with me....leave me comments...and tell your friends.  I look forward to your input.
 
If you have any questions, comments or ideas or would like to participate in this site, please email me at bobsadviceforstocks@lycos.com 
 
Bob 
 

Some basic things to know about using my stock-picking method:

 
1)  You probably should check your stocks on some regular basis....daily or at least weekly.
 
2)  Results are certainly not guaranteed.  This is an idea that I use that may or may not be profitable but hopefully will stimulate you to generate new ideas yourself.
 
3)  I may own these issues already as I also am investing and using these techniques.  I will try to remember to let you know if and when I own a stock and certainly will try to post this for your review....but be aware of this.
 
4)  First place to start screening stocks is a list of the daily percentage gainers.  I often will peruse the list of NASDAQ, NYSE, and AMEX stocks for this purpose....can use the list on CNN.money site.
 
5)  On this particular site (I will try to add a link soon), you can 'click' on the stock symbol and this will send you back to the 'profile' section.  This is an important screening step.  With my method, I INSIST on positive earnings and revenue growth.  This is NOT a value approach.  This involves earnings momentum coupled with a daily momentum analysis.  If both earnings growth and revenue growth are positive, and there is NOT a loss present, I look to the next step.
 
6)  Checking Morningstar.com, for FREE, type in the symbol in the place for a report.  Then, under the tabs for financials you will see something about a '5 year restated' performance....click on this and you will see a series of bar graphs showing the annual revenue growth/shrinkage (!) of this company. 
 
--things to look for here include a CONSISTENT pattern of growth each and every year.  (as this website develops I will get some examples for you).  In addition, it is preferable to have the STRONGEST series of revenue growth (year over year) as well as earnings growth....at least in the teens....and sequential growth included.  (this is a LOT to ask of a company but we cannot afford to own ALL The stocks....only the BEST.)
 
--in addition, the Morningstar site will demonstrate free cash flow somewhere about 2/3 of the way down....look for improving free cash flow in the number reports. 
 
If your screening is successful, then the stock is a BUY.  Keep a tight 8% stop-loss on your investments and let the losers go if they hit this stop.  Try not to be doing this in a market trending DOWN...as many of the great stocks you have will be dropping.  Once you are ahead in a stock, you can withstand a correction....usually.  But sell on the 8%.  Also, start peeling off some shares if the stock hits about a 30% gain....maybe sell about 1/6 of your shares....and peel again each subsequent 30% gain....using the money to add to your portfolio with a NEW position. After 4 such sales, you will probably have removed your original investment; while leaving an equal $ amount still invested.  At this point, I would slow down the sales further to gains at 120%, 180%, 240%....etc...for additional 1/6 position sales.  I shall try to follow this strategy in my trading account.
 
If you hit the 8% stop, wait to replace this position with a new position until you have sold a portion of your remaining positions due to a GAIN!  In that way, you will tend to avoid compounding your losses...and hopefully be buying stock in a better environment!  Good luck!

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