Trade The Journey

Trade The Journey

Discovering my EDGE! No, not really!

Discovering my approach to analyzing a stock has been insightful. I started off confused like everyone else.

I’m still confused.

Every book on the shelf advertises successful investing strategies.

 

There are so many strategies to choose from. I can’t blame the sellers, they’re trying to earn a profit.

Each book entices you to make a purchase based on the level of ease the author can translate his system into.

 

Who would buy a book that advertised, “It’s 3-5 year learning curve before you feel comfortable as a trader, Get Started Now.

Oh, and let’s not forget the time-honored classic, “You could lose everything in the market so Be Careful.”

 

I’d put that book back quickly and look for something a little more positive. Immediate success is what I’m looking for, a strategy that’s not too difficult to learn or implement.

Ideally, I could read the book in under an hour and see a profit in a week or so.

 

Strategy and Systems-

 

Looking back, I don’t think some of the sellers realized what a system is. Or maybe they did, and they realized it wouldn’t sell.

A system is the interrelated parts working together to reach successful completion. This is my novice attempt in trying to form a definition of a system.

 

I set on course to create a system for selecting stocks to invest in.

With thousands of stocks to choose from, its easy to select a popular stock.

It’s liquid, and perhaps it might be in the bullish phase.

 

Sounds simple enough, but how long is that trend to continue? The best method for me is to identify businesses that I am familiar with. I prefer companies that I already purchase items or services from and whose business model I understand.

 

Sometimes I wait until I hear family members or friends mention the company in a positive light.

Let’s not forget that every company has a customer, and without the customer, the business will die.

I’m still learning to analyze the financial ratios, statements, economy and company mission in a holistic way. My mindset when looking at the numbers is to base it on how I manage my own finances. The ratios and financial statements help me assess the likelihood of a company maintaining, growing, or losing its competitive advantage?

 

Competitive advantage comes in many different forms- Advertising could be a competitive advantage. Culture could be a competitive advantage.

How does the Samsung technology match up with Apple? It’s debatable, a matter of preference.

But think about how difficult it would be to overtake Apples’ position in Culture!

It’s a bottom-up approach for me. After analyzing the stock, I move on to the sector and then the economy as a whole. Revisiting Apple, I might chart Apple alongside the S&P 500 index, a sector ETF, and its top competitor. I also like to look at the companies supply chain especially with the ongoing trade war.


These are some of the things circulating mind as I’m looking for a stock to either invest in or trade.

 

I may trade and invest in the same stock.

Each stock moves in its own way.

Questions? Concerns? Corrections?

 

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