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Sunday, May 12, 2019

Stock selection and cryptic currencies only in first gear

Hi readers

What a week it's been?
From Trump playing with the Chinese to the cryptic coins starting to run (as expected).
Stockmarkets around the world are playing a wait and see game.
But there is no need to wait and see.
For some unknown reason investors hate buying stocks when there cheap.
Don't ask my why they just do.
The same with cryptic currencies when there cheap no one want to buy them.
Your starting to see some margin lending shorts getting squeezed hence the aggressive spike in price but as the astrology shows there is a long way to go ..
Yes it will come down as well but the positive aspects will continue pushing higher the sector.

Yes I do hold
Bitcoin, Ethereum and litecoin.

For those who keep asking for a road map to stock selection.
The brief in which I use to find niche stock selection.

1. Demand for the service or product.
2. Who is the competitor.
3. Is the service or product realistic to bring to market.
4. The growth going forward where is it and can it increase.

Once companies pass this test then I begin doing the financial astrological on them and the management.
Looking at stocks with high volumes and percentage gains is mythical investing.
As your simply following the money flow .
That to me is crap, luck of the game.
I don't believe in luck.

Next you have to make a decision upon what is your investment outlook.
Every investment I make I plan on a five year time frame for the business to mature.

Rule of thumb Small cap stocks make money after 4 years of listing.
First year they bleed money to become.
Second year they bleed but growth is evident.
Third year they begin to break even, with growth continuing.
Fourth year the show a profit (small)
Fifth year they become a profitable company.

This is what your looking for in small cap stocks.

Yes you will have smart ass management who thinks they know better, but that's how 95% always play out.
Farm Pride is a clear bloody example and it my own fault for hanging on.
I should have dumped the stock after the AGM meeting.
But it is what it is and will become active again.

That's why I don't like mining companies or marijuana companies, there are so many in the game it ridiculous.
Clean coal technology stocks, and financial after pay stock are Ponzi schemes. (My opinion)
When the music stops see if there is a chair left.
Backed by hopes and ideas of no substance.

So please BECAREFUL when your investing in small cap stocks most don't last more than 5 years and only 20% become mid cap stocks.


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