Stock Trading- Winning Strategies pt 1
Submitted On 2008-07-30
Every investor like a seasoned fisherman must be abreast with sound foundational understanding of the undercurrent behavioral patterns of stocks investment. These winning strategies when fully understood can swell up your bank accounts beyond your wildest imagination.
1. Invest when a company is coming out for private placement. At this stage only very privilege few know about the company and the price of the offer will be ridiculously cheap. You know after the closure of offer you will get your share certificate quickly unlike public offers that can take as long as 8-10 months for you to get your share certificate. By the time the company comes to secondary market [floor] the shares will be in few hands, more people will be chasing the shares, thereby driving up the price.
2. Invest when the company is about to be taken over, for instance, If the Federal government is about selling its shares in a company to a core investor and also to the general public. In other words they are relinquishing their equities or holdings in such companies e.g. When National Salt was sold to Dangote group.
3. Invest when core investors are investing in a company. Core investors either local or international are strategic investors or fund managers with large pool of cash that they ingest into a company, the large pool of cash will energize the company to make huge profits for investors. You must investigate the caliber of people running this firm, their performability and competence before investing along side with them.
4. Invest during Initial public Offerings. This is when a company is coming out for the first time to raise money for business expansion e.g. Dangote Sugar refinery. It made over 300 % profits for investors that pitched tent with them.
5. Invest in an existing company shares on the floor just before they come for public offering. If the company is planning to come out for public offering and has strong fundamentals, rumours will drive the price up, and subsequently, when the technical suspension of the company is lifted, the price usually rally up to make huge profits for investors.
6. Invest in Penny stocks that have good technical and fundamental strengths. Penny stocks are low priced stocks in various sectors of the market. On a good season [bullish season] can make between 200% - 1000% for an investor. Look for penny stocks that have good earning per share and itís per earning to ratio is comparatively low and buy large volumes since they are cheap, youíre certain to make a kill.
7. Invest when prices of shares are low and down generally. During bearish periods, people do panic selling, that is when stocks that are usually scarce during bullish periods are cheaply available. Understand that every stocks has itís high and low periods, for instance A.G Leventis usually dips to a low point every November Ė December, that is a good time to buy.
Mastering stock trading winning strategies is vitally critical to your ability to post awesome profits in stock trading pursuit.
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John Efetobor is a Stock Analyst and Investor. Visit: http://stocktradingrevolution.blogspot.com
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