Home > About Investments > CAN YOU PREDICT THE FUTURE?


May 7th, 2010

It’s always difficult to know what is going to happen with a stock.  Is it set to go up? Is it going to go down?  It seems you never know until it is too late. 

However, if you are willing to do a little digging, you can get some insight as to whether a company is healthy or not.  It doesn’t require loads of work, but it does require a little.  I thought I would give you a crash course on how to become your own stock expert.

Actually doing this research can be kind of interesting. Picture yourself as part Warren Buffet and part CSI detective.  It only requires two things and about ½ an hour to get a good picture of the health of a company.  Those two things are Google and the company’s financial statement.

 Is Anyone Abandoning Ship? 

Go to Google, find out if there is any news about the company’s CEO, Financial Officer, or other big wigs abandoning ship.  This news is pretty easy to find.  You should also Google these people, even if they are staying, and see if they have any bad behavior in their past.

They’re Late…They’re Late!

Next, Google company’s history of Missed/Late/or Inaccurate financial filings. Accounting restatements can happen for many reasons, most of them bad.  If you find the company makes this a regular occurrence, you need to really evaluate whether that is a company you should be invested in.

 Up to Their Necks…

How much debt does the company have as compared to that of its competitors?  The easiest way to determine this is by using the debt-to-equity ratio.  You can find this on the company’s financial statement or many other places on the internet.  Take a look at a few of its competitors debt-to-equity ratio as well.  How does it stack up?

Read more rwmg.net

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