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Green Stocks |
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Rule #1 - Do not lose money! Rule #2 - Never forget rule number 1! ( by: Warren Buffet )For comments or questions please email: : admin@equityresearch.com |
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Top Three Questions for InvestorsThere are three questions that will ultimately define whether you win or lose. The hard part is having the diligence to get the right answers.1- Should I be in the Game?At one point in the life of Warren Buffet, he sat on the sidelines. He decided not to be in the investment game. Why? He thought the entire market was overpriced. So, the first question is about knowing if you should even be in the market. How can you know?If the market is reaching new highs every day, that is a signal to be out. If the leading economic indicators point to recession, it is a good time to stay out. If smart money is leaving the market quickly, you should get out. If insider trades of top corporate officers is to sell, then it may be time to get out of the market. The way stocks move up is by supply and demand. Should you be astute enough, look to the supply and demand of sectors and then to individual stocks. Try and follow the smart money. If you think you are the smart money, stop being so cocky. 2- What Sector Should I Be In?Once you decide to be in the market, the next important question is what sector. History has proven that one or two sectors will usually outperform everything else by a long ways. For example, internet stocks in the 90s were really hot. In 2007 and 2008 energy stocks have done very well as gas has risen in price by a mile. If you get the right sector, then you are going to do much better than if you pick the right thing in the wrong sector. For the average investor, look to the top sector to be in and pick your stocks from there.3- Who is the Top Performer in the Sector?The top performer in the sector will often outperform the second or third performers by a lot. For example, the difference between Wal-Mart and Kmart on stock performance is huge. You might also compare Dell to other computer manufacturers like Gateway, Compaq, or HP. Dell simply outperforms these other companies so well it's like they are in a different class.So, once you get the sector, pick the top performer in the sector. Try for the #1 best company in the mix. Choose the company that is known for being the market leader. |
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