Monday, July 6, 2009

Don't Panic stay cool and invest

In the market we have seen price is change all the time you can see when you look closely in each quarter in a year when turnover report is show many time the price of it are rise up or some time it lower than it should. It remind to think about the risk on the price when it change isn't refer to their turnover so what else can control it.

"Stock market" Is the controller. News and trust of overall market make the people buy it when they trust and sell when they panic or think about blur future of the market wish isn't look at the overall and company earning in year and when crowned do the same you can see the power of panic sell that crowd can make stock graph extremely change by It is not refer with what company doing that is how index is give direction and effect to each stock.

Most of the investor around stock market is kind of that crowd in common they estimate to moving of the graph by news in that period of time some time they guess right graph movement but many time they wrong.

"VI" is abbreviation of Value Investor under this thought VI will not trust the news and tendency perspective but Value Investor will analyze on business profits of each company and concentrate in each quarter profit and draw a comparison between all index and P/E ratio(price-to-earnings ratio) it's measure of the price paid for a share relative to the annual net income or profit earned by the firm per share and EPS (Earnings per share).

This concept have demonstrate by great man of Value Investor like Warren Buffet and Benjamin Graham. they recommended to by stock when it have enough "margin of safety" which makes it suitable for investment and sell it when it over value this concept is make not risk for sure because you buy it at no risk time when it under "true" value because the price is change my "Market" not from it self sometime we see option price have going down more than it should example" Index is falling down -30% company profit just -10% but stock option price is -30% same as Index that you can buy this stock in discount price and at lease one day when Index is up to same level you can have capital gain from margin of margin of safety you have got and just earn money from dividend yield.

You can read relate article : How to Make no Risk In Stock Market


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