Why do things work out the way they do?

[Frankn]

I use to work for a very large corporation This gave me access to most of the offices in Maryland, some in West Va., some in Del. and some in Va. My black badge also got me into many military instillations so I picked up a lot of corporate secrets along the way like how do they make Gortex breathable and water proof. Sorry I had to sign a security agreement to get in there. Here's a good one I picked up from a stock brokers office. They buy a large amount of stock from some almost unknown corp. They spread rumors of a new product almost ready for market. Other traders computers pick up this suddon rise in value and they buy driving the price up furher. The orginal buyer dumpes his stock at the inflated price. The last ones to bail out loose. Here's one I picked up from an accounting office. I said, I wonder how much a flat tax would be. The accountant said it has all ready been figured out. If you exclude the poverty level and tax personal and corporate the same with no exemptiones, it would be 10%. Now this was several years ago so I would peg it at between 10% and 15%. Bear in mind, no exemptions.
OK now lets hear some other interesting info.

 

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[mikeofaustin]

Buy on bad news, sell on good news. Actually, this is the 'unknown' that [wanna be] traders talk about. A while back, i traded a little and learned that, if one could stay away from unknowns, like market sentiment' and instead only trade on known numbers, you could actually make it work for you. If you look at the numbers (actually a whole combination of numbers), you could actually predict where the stock 'should' be, versus where it's at now, and reasonably determine if it's over or under valued. One trade (that I didn't make) was when RIMM was around $80 a share. The numbers said it should be at $40 a share. next thing you know, the report came out about a cent above expectations and then it plummeted right after. Now, people were wondering why it plummeted if it was better than expectations.... The answer is, it was already factored into the price. And then just weeks later, it dipped to around $36 and sat at around $40 just as the books said it should be at. Also, all to often I see a stock at the correct price where it should be, and you get a reasonable report, and it dips 5%, but then just hours later, it comes right back to where it should have been. My best gains were from waiting for the quarterly, and watching what everyone else does. The key is, people over react all the time.

Now, if you can do that, to identify overvalued stocks, put your buy price very low, get in, and wait for the people to catch that dead cat bounce... and 'then' you sell on that fluctuation. BUT, with only a few thousand, you stand to only make a couple hundred... Not really worth it. But, an investor with big bucks could make a lot. It's work, to look at these things... So, with returns on CD's at an all time low, it's a wonder that more conservative "home" traders don't get returns of at least 10-20% yearly returns from their idle cash. Perhaps it's the work involved. I don't know. Heck, you can find dividends right now that are better than CDs.

 

[Frankn]

The big boys play with them. If you track for about 6 Mo. you can see the high and low pattern. They push them up and drop them down. I made money working the highs and lows. I knew what price to buy and sell, but the timing was unpredictable. You had to play it strictly by the numbers. Frank

 

[mikeofaustin]

The big boys play with them. If you track for about 6 Mo. you can see the high and low pattern. They push them up and drop them down. I made money working the highs and lows. I knew what price to buy and sell, but the timing was unpredictable. You had to play it strictly by the numbers. Frank

One of my favorites was ROST (ross strores). It was very cyclical and very predictable. And of course, MCD (mcdonalds). It's done nothing but upward trend for a long time (for longs). But, you need to get in during a low (like during the drop to $48 a couple years ago), you'll notice that a 50 percent return (since then) is pretty good. !!! Sorry... I just looked... More like a 100 percent return. 2 fold! I only wish I had put more into it.

That's exactly what I'm talking about though. But, right now, for a big cap stock, the P/E is just way to high. This is exactly when I would cash out and wait for another dip.