Spec stocks

[DeepState]

So you think technical is the way to go instead of fundamentals?

This could get me killed in here but, what the heck, bring it (actually, don't)....some technical analysis is very powerful. There are different classes of technical analysis though, without elucidating. My statement of 'very powerful' certainly does not apply equally to the different types. In and amongst this, fundamental analysis ultimately grounds security prices over time. If you have a time frame that extends into years, then knowledge of fundamentals would be advisable. If you day trade, you don't need to open a report.

You'll need to find your own habitat.

 

[So_Cynical]

Fundamentals was once a great way to go!
Not sure anymore!

A fundy needs to work hard.
Checking calculations.
Understanding balance sheets.
Have faith in companies ... directors ... accountants et al.

I don't think a fundy needs to work that hard ~ at least not with small simple to understand company's, with the bigger stocks there is just to much to take on board anyway, best to keep it simple and focus on what is important, its important to put a bit of work into timing, deciding at what price level you should be buying into.

Deciding what's the big picture and what's likely to happen (re this stock) at some point in the near future.

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On the subject of spec stocks i just had a look at a new one (new to me) and as usual its pretty hard to have em based on pure fundamentals...burning cash, looking for partners/funding, drilling holes and tabling unspectacular results.

 

[burglar]

... with the bigger stocks there is just to much to take on board anyway, best to keep it simple and focus on what is important ...

I once expressed an interest in a Telstra float, but the document was so complex I decided not to bother.
So yes, I agree with you!

 

[Faramir]

When does a company stops being a Speculation and converts into a good stock?
When it makes a one off profit or when it makes a series of profit announcements?
When an analyst on TV or AFR say "What a wonderful stock!"
What is/are the criteria of a spec stocks being changed to a good stock?

 

[ROE]

There are dozen thread on these sort of topics and it will always come back to TA vs FA
there is no perfect solution due to time, personal circumstances and personality; you can make money employ a wide range of strategies

build up some of the knowledge and get exposed to the market, after a while you will figure it out
which strategies works for you consistently ... stick within that circle, refine, enhance and be an expert in that area.

The Result

Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

 

[tom82]

Providing that there is an uptrend (which one has established), could one wait for a retrace of price of a company back to the 30ema, wait for a bulish close and then enter long position in the company?
Comments, thoughts?

 

[DeepState]

Where in the spectrum in the rainbow does blue turn to indigo and then turn to violet? There is no sharp change in classification nor single metric that accurately captures this stuff despite an understandable desire to do so.

Given ROE's mention of gold, I'll start by saying if you want fiat money then there is basically negligible speculation in the coupons of bonds and their final payment as issued by sound governments. That's different from saying zero risk. You know the cashflows and can discount them. In contrast, you get a concept stock where the possibility of (or range of) revenue/E/CF/D is basically not capable of being meaningfully estimated and hence cannot estimate value beyond cash on balance sheet. That's toward the spec end.

Speculation: the forming of a theory or conjecture without firm evidence (source: Page & Brin)

...better evidence, less speculation. Having investment skill also reduces the extent of speculation in the investment decision. Hence, for a given stock, a holding may be more speculative for one investor than another who is better informed or able to make superior judgments.

So at least two things make up the issue of speculation vs the opposite definition:

1. the fundamentals
2. your ability to use them for benefit.

Somewhat unusually, 2. can also include pure TA.