There are many types of investment methodology out there. All
of them has their own merits. I for one, personally like to
invest in turnaround stocks. What is turnaround stocks? They are
normally companies that are experiencing problems (hopefully
short-term), and a lot of people are not willing to wait for
those companies to recover.
I personally like turnaround stocks for two main reasons;
First, turnaround stocks have problems in the open. The problem
has been disclosed and our task as investor is to figure out how
much the company is worth should the problem persists or when the
problem goes away. Granted, there might be more problems
discovered along the way. But at the very least, some of the
problems has come out and the share price generally has dropped
because of that.
Secondly, expectation is low for turnaround investment. Share
price is already depressed due to known problems. The company
does not have to 'beat expectation' every time it reports
earning. All it has to do is clear out the problems that causes
its stock price to drop on the first place.
How should one find a potential turnaround candidates for
their portfolio? The one thing that I found useful is to read the
financial news. Companies that are in trouble can be easily
spotted in the news. For example, this week brought news from
Pier 1 Imports Inc. (PIR) and Doral Financial (DRL). Are these
companies in trouble? Sure. Are they turnaround candidates?
Possibly.
Another good source would be the list of stocks that are
touching 52 week low. Most of these lists would be companies that
are experiencing problems and hence has the potential of turning
around. For example ATI Technologies Inc. (ATYT) trade closes to
its 52 week low of $ 11.20.
What to avoid when sifting through lists of potential
turnaround investment? I would avoid company that is getting
hammered due to the delay in its financial reporting. No matter
how low the share price is, investors do not and should not
invest in companies that has some trust issues.
Once we identify our target, we can then do some analysis to
determine the fair value of the stock. There are chances that
some companies may never recover. So, we have to take that into
accounts when doing fair value calculation. Calculating fair
value is a whole brand new topic and I won't get into the details
here. But obviously, a stock will have a higher fair value if it
can recover from current problems than a stock that cannot
overcome its current problems.
Hari Wibowo manages a small finance website aiming to help new
investors getting started. Curious? You can find his other
writings at http://www.noviceinvesting.com
Sri Lanka Rupee, Stocks Drop After Currency Trading Band Removed Bloomberg The central bank narrowed the currency's trading band against the dollar on Feb. 3 and Feb. 6 and today, prior to announcing its removal. The monetary authority raised benchmark interest rates for the first time since 2007 on Feb.
India Eases Currency Trading Limits for Some Banks Wall Street Journal By SUDEEP JAIN MUMBAI -- India's central bank has asked banks to approach it individually for relaxing some foreign currency trading limits and has already eased restrictions for some banks, a top official said Monday. "Some limits, based on their ...
iFOREX Adds Oil to its list of Tradable Commodities MarketWatch (press release) ROAD TOWN, Tortola, Feb 09, 2012 (BUSINESS WIRE) -- Leading currency trading company, iFOREX, has recently expanded its services, giving all Forex trading accounts direct access to oil CFDs. Targeting an audience that has little or no experience with ...
This January Azerbaijan's exchange currency trading totaled $82.5 million Azerbaijan Business Center Baku, Fineko/abc.az. The Baku Interbank Stock Exchange (BBVB) has renewed statistics of its operations. BBVB reports that in January 2012 the nine participating banks concluded 28 deals in 36 trading sessions in e-trading system (BEST).
FOCUS: Technology Buoys Retail Currency Trading, Reshapes Old Models Wall Street Journal By Eva Szalay Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Retail foreign-exchange trading is emerging as one of the biggest growth areas in the currencies space, and some of the trading firms that facilitate these flows are building up a whole new ...
Morgan Stanley Currency-Trading Head Stephen Mettler Leaves Bank BusinessWeek By Michael J. Moore Jan. 26 (Bloomberg) -- Stephen Mettler, who oversaw Morgan Stanley's interest rates and foreign-exchange trading businesses, has left the bank. Mettler, who joined the firm in 1997, retired, according to an internal memo obtained by ...
Bank of England and ECB Hold Steady, Indonesia Cuts CNBC.com [CNBC] ----------------------- MULTI CURRENCIES VS THE DOLLAR Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm. Learn more: The essential vocabulary for currency trading is on Key Currency ...
RELATED ARTICLES5 Questions You Need To
Have Answered Before You Back-Test Your Forex
System
As 90-95% of new forex traders lose money within the first
3-6 months this article helps to guide new forex traders by
asking 5 questions that the forex trader needs to know
prior to back-testing their forex system.Let us jump right
in.
A Beginner's Guide to
FOREX
FOREX is the abbreviation for the Foreign Exchange market.
FOREX is basically an international exchange market where
currencies from all over the world are bought and sold for
profit.
Internet and Computer
Systems in the FOREX Business
With every passing year the interest in electronic trading
is bigger, more especially trading shares and currency
through Internet. A new profession came forward - this of
the currency dealer.
Day Trading the Index
Futures - How to Judge Good Entries
QUESTION: If the SP futures fall through support and go
straight down for another two points, and I want to get
short, should I a.) enter immediately, b.
Experience
Throughout our course on futures trading, we have tried to
point out to you that there is a great difference between
having an investor attitude and being a trader. There are
also many similarities.
FOREX Trading
Philosophy
Keen on starting FOREX trading? Why would you not be? Many
beginning FOREX traders are captivated by the allure of
easy money. FOREX websites offer 'risk-free' trading, 'high
returns' and 'low investment' - these claims have a grain
of truth in them, but the reality of FOREX is a bit more
complex.
A Short Introduction To
FOREX
FOREX is the world's largest and most liquid trading
market. Many consider FOREX as the best home business you
can ever venture in.
Hedging Foreign Exchange
Risks
The exchange rate of the Macedonian Denar against the major
hard currencies of the world has remained stable in the
last few years. Because of the IMF restrictions, the local
Narodna (Central) Bank does not print money and there are
no physical Denars in the economy and in the local banks.
Money Management, Part
1
There are some common mistakes I've seen traders make in
the area of money management. First, let's understand what
money management is all about.
Factors Influencing a
Currency Pair Exchange Rate
IntroductionThe exchange rate refers to the value of the US
dollar against the values of currencies of other countries.
Such a rate helps determine how much we pay for imported
goods and services and how much we receive for what we
export, among other things.
How to Trade
Currency
We all know when you go on a trip to another country; you
need to take some travelers checks and some cash in the
currency of that country. This can be advantageous because
one country's currency is usually worth more or less than
the other.
An Evaluation of the
Devaluation
A Minister of Finance is morally right to lie about a
forthcoming devaluation and a woman has the right to lie
about her age. This is the common wisdom.
Mechanical or
Discretionary Trading - Which is Best?
Discretionary Trading. Pure discretionary trading will rely
solely on the traders judgment. For example a
discretionary trader may spot a particular pattern
developing on a chart and decide to enter a trade on that
basis.
Day Trading Training ...
You need more than just going to a free stock market
workshop to learn
Day trading is all about making buy and sell decisions.
When you make a trade either your going to lose money or
your going to make money, and some other times you will
break even.
Forex
Profits
The Forex Market-What, When and Why?Forex, FX and the Forex
market are some common abbreviations for the Foreign
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market in the world, where money is sold and bought freely.
E-currency Exchange
Trading
If you are reading this article you are probably one of the
many people who have spent countless hours searching for
unique ways to make money on the internet. Very few people
have gone on to succeed and most have failed miserably time
and time again.
Business and the
Forex
The business world is a complex web of supply and demand.
Money and goods, physical or otherwise, pass through the
global market every single day.
Trade Exit - How To Cut
Losses And Let Profits Run
Cut your losses short and let your profits run. This is the
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Forex Options Market
Overview
The forex options market started as an over-the-counter
(OTC) financial vehicle for large banks, financial
institutions and large international corporations to hedge
against foreign currency exposure. Like the forex spot
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Where to Get Forex
Training
For those of you who are interested in forex trading, you
may want to start off by getting some good forex training.
Forex training is a necessity for anyone with this
interest.
MORE RESOURCES updated Thu. February / 09 / 2012
