Stock Analysis Skills- Basic abc Formula
© John Efetobor. All Rights Reserved
The basic ABC formula is a strategy I consider very vital and fundamental to stocks analysis, this is because without it, you cannot have a full grasp of what the capital market is all about. Stocks trading can be such an interesting endeavor if you can apply yourself to practical and common sense thinking.
As I write this article, there are about 265 companies listed on the floor of the Nigerian Stocks Exchange. These companies are further sub-listed into 33 sub sectors. Companies are sub-listed according to the services and products they offer. All this information’s are very important when it comes to stocks analysis.
The first thing you have to take into consideration is to take a close look at all the 265 companies one after the other, seven vital research you must carry out includes
1. Find out what each company is doing.
2. Find out what period of the year each company will be most favored to do more business.
3. Find out sector leaders amongst the companies in every sector.
4. Find out what each sector is all about.
5. Find out which company commands the highest trade volume in each sector per time and why?
6. Find out the job descriptions of each sector.
7. Find out for instance if Government pumps money into a sector, which company will profit more.
Let's review theses points in details!
1. Find out what each company is doing: Is it not surprising that people invest into a company without having a clue to what such a company is involved in terms of company location, what business they are involved in. In stocks analysis, this knowledge is very critical.
2. Find out what period of the year each company will be most favored to do more business. Most companies in the Nigerian Stocks Exchange do more business during specific periods of the year or are affected by certain seasonal events e.g. a sub sector like Building materials and construction will be most impacted during a period a heavy construction project like when the National Stadium was constructed in Abuja a few years ago, this is one of the prized Secrets Of Successful Traders.
3. Find out sector leaders amongst the companies in every sector. Do you know that in every sub sector, there are companies that enjoy more patronage in terms of business because of their leadership position e.g. in Agriculture sub sector Okomu Oil and Presco.
4. Find out what each sector is all about. The Nigerian Stock Exchange is sub listed into 33 sub sectors for clarity purpose, otherwise there will be conflict of business. You must understand what each sector is involved in, in terms of their business description, why? As you keep tabs on economic, social, religious, cultural and sporting events as to when they come up, you will easily decipher which sub sector and of course which particular company will benefit more from such events so that you can take position way ahead of others for you to maximize profits.
5. Find out which company commands the highest trade volume in each sector per time and why? If you take a close look at the daily trading patterns of the Nigerian Stock Exchange, you will observe that there are some companies that command superior volume of trade consistently over others. As an analyst, it is your duty to closely monitor these companies.
6. Find out the job descriptions of each sector. It is the responsibility of any stocks analyst to find out the production description of every company that is quoted on the exchange, in other words, it will be to your advantage talking about making millions from trading in stocks if you can take time to dig into the nature and scope of companies, especially the ones you have taking particular interest in. Why do you need to do that? When an opportunity that you would ordinarily ignore knocks, you can easily apply it to the companies that it concerns because of the timeless knowledge of the job description understanding you already have.
7. Find out for instance if Government pumps money into a sector, which company will profit more. From time to time Government releases funds to different sectors, from experience I know that there are some company that profit more; find them out.
8. Stock analysis skills is like a master key: Intelligent Stock Trading. skills is an invaluable asset, when you are in possession of it, you have the confidence that can enable you to access all doors in the capital market as far as stock picking is concerned.
The basic ABC formula is a strategy I consider very vital and fundamental to stocks analysis, this is because without it, you cannot have a full grasp of what the capital market is all about. Stocks trading can be such an interesting endeavor if you can apply yourself to practical and common sense thinking.
As I write this article, there are about 265 companies listed on the floor of the Nigerian Stocks Exchange. These companies are further sub-listed into 33 sub sectors. Companies are sub-listed according to the services and products they offer. All this information’s are very important when it comes to stocks analysis.
The first thing you have to take into consideration is to take a close look at all the 265 companies one after the other, seven vital research you must carry out includes
1. Find out what each company is doing.
2. Find out what period of the year each company will be most favored to do more business.
3. Find out sector leaders amongst the companies in every sector.
4. Find out what each sector is all about.
5. Find out which company commands the highest trade volume in each sector per time and why?
6. Find out the job descriptions of each sector.
7. Find out for instance if Government pumps money into a sector, which company will profit more.
Let's review theses points in details!
1. Find out what each company is doing: Is it not surprising that people invest into a company without having a clue to what such a company is involved in terms of company location, what business they are involved in. In stocks analysis, this knowledge is very critical.
2. Find out what period of the year each company will be most favored to do more business. Most companies in the Nigerian Stocks Exchange do more business during specific periods of the year or are affected by certain seasonal events e.g. a sub sector like Building materials and construction will be most impacted during a period a heavy construction project like when the National Stadium was constructed in Abuja a few years ago, this is one of the prized Secrets Of Successful Traders.
3. Find out sector leaders amongst the companies in every sector. Do you know that in every sub sector, there are companies that enjoy more patronage in terms of business because of their leadership position e.g. in Agriculture sub sector Okomu Oil and Presco.
4. Find out what each sector is all about. The Nigerian Stock Exchange is sub listed into 33 sub sectors for clarity purpose, otherwise there will be conflict of business. You must understand what each sector is involved in, in terms of their business description, why? As you keep tabs on economic, social, religious, cultural and sporting events as to when they come up, you will easily decipher which sub sector and of course which particular company will benefit more from such events so that you can take position way ahead of others for you to maximize profits.
5. Find out which company commands the highest trade volume in each sector per time and why? If you take a close look at the daily trading patterns of the Nigerian Stock Exchange, you will observe that there are some companies that command superior volume of trade consistently over others. As an analyst, it is your duty to closely monitor these companies.
6. Find out the job descriptions of each sector. It is the responsibility of any stocks analyst to find out the production description of every company that is quoted on the exchange, in other words, it will be to your advantage talking about making millions from trading in stocks if you can take time to dig into the nature and scope of companies, especially the ones you have taking particular interest in. Why do you need to do that? When an opportunity that you would ordinarily ignore knocks, you can easily apply it to the companies that it concerns because of the timeless knowledge of the job description understanding you already have.
7. Find out for instance if Government pumps money into a sector, which company will profit more. From time to time Government releases funds to different sectors, from experience I know that there are some company that profit more; find them out.
8. Stock analysis skills is like a master key: Intelligent Stock Trading. skills is an invaluable asset, when you are in possession of it, you have the confidence that can enable you to access all doors in the capital market as far as stock picking is concerned.
posted by John Efetobor - Stock Trading Strategist at
1:18 AM
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