NWHS Investment club So you can avoid this !!!!
What's the difference between a bond and a stock?? <ul><li>Many of you probably know this.. </li></ul><ul><li>Stocks -you ...
Long vs. Short  <ul><li>Long position : buying a stock thus making money if the stock moves up </li></ul><ul><li>Short pos...
Long-Short Strategy <ul><li>Buying stocks that will outperform </li></ul><ul><li>Shorting stocks that will underperform </...
What determines stock prices???? LOOK AT THESE FACTORS WHEN DETERMINING WHAT STOCKS TO BUY!!! 1. Earnings base (EPS)  2. A...
Fundamental vs. Technical Analysis <ul><li>Fundamental Analysis: analyzes financial statements, industry, and management t...
Fundamental Analysis <ul><li>ROE (>15%) </li></ul><ul><li>Large cap stocks (larger companies) less volatile than small cap...
Moving Averages <ul><li>Can display on most stock charts such as the ones on YahooFinance </li></ul><ul><li>50 day MA > 20...
MACD <ul><li>Can be displayed on most stock charts </li></ul><ul><li>Crossovers signal direction </li></ul>
Support and Resistance
HOW YOU CAN BEAT THE MARKET   1. Keep  TURNOVER  (how much money the business takes) LOW AND MINIMIZE  FRICTIONAL EXPENSE ...
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Investment club powerpoint

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Investment club powerpoint

  1. 1. NWHS Investment club So you can avoid this !!!!
  2. 2. What's the difference between a bond and a stock?? <ul><li>Many of you probably know this.. </li></ul><ul><li>Stocks -you get to take ownership of a company and returns are somewhat erratic </li></ul><ul><li>Bonds -you are just a creditor of a company and returns are relatively unchanging </li></ul>
  3. 3. Long vs. Short <ul><li>Long position : buying a stock thus making money if the stock moves up </li></ul><ul><li>Short position : selling a stock before buying and thus making money if the stock moves down </li></ul>
  4. 4. Long-Short Strategy <ul><li>Buying stocks that will outperform </li></ul><ul><li>Shorting stocks that will underperform </li></ul><ul><li>Market direction doesn’t matter </li></ul><ul><ul><li>Long positions just have to outperform short posistions </li></ul></ul>
  5. 5. What determines stock prices???? LOOK AT THESE FACTORS WHEN DETERMINING WHAT STOCKS TO BUY!!! 1. Earnings base (EPS) 2. A valuation multiple (P/E ratio; higher the multiple, the more growth) 3. Discount rate 4. Risk of the stock 5. INFLATION 6. Economic strength of market and peers 7. Substitutes 8. Incidental Transactions 9. Demographics 10. Market trends 11. Liquidity 12. Market Sentiment
  6. 6. Fundamental vs. Technical Analysis <ul><li>Fundamental Analysis: analyzes financial statements, industry, and management to predict direction of a stock </li></ul><ul><li>Technical Analysis: uses chart patterns to try and predict the direction of a stock </li></ul>
  7. 7. Fundamental Analysis <ul><li>ROE (>15%) </li></ul><ul><li>Large cap stocks (larger companies) less volatile than small cap stocks (smaller companies) </li></ul><ul><li>Current Ratio: assets minus liabilities (>2) </li></ul><ul><li>P/E Ratio: (<15) </li></ul><ul><li>Price/Book Value (<1.5) </li></ul>
  8. 8. Moving Averages <ul><li>Can display on most stock charts such as the ones on YahooFinance </li></ul><ul><li>50 day MA > 200 day MA (bullish) </li></ul><ul><li>50 day MA < 200 day MA (bearish) </li></ul><ul><li>Cross between 50 day and 200 day MA signal either a bullish or bearish direction </li></ul>
  9. 9. MACD <ul><li>Can be displayed on most stock charts </li></ul><ul><li>Crossovers signal direction </li></ul>
  10. 10. Support and Resistance
  11. 11. HOW YOU CAN BEAT THE MARKET 1. Keep TURNOVER (how much money the business takes) LOW AND MINIMIZE FRICTIONAL EXPENSE (total cost after everthing is put in) 2. Commit to a investing philosphy!!!! 3.Avoid wipeout risk (Look at all the stats; don't take risks; if you don't understand it, don't buy it!!!) 4. View the market as a single stock 5. Pay yourself (set automatic withdrawals from paycheck/bank accounts so it can accumulate ) 6. Know when to sell your stock and buy an index fund 7. Smaller-medium companies are better (easier to grow earnings)

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