What stocks will always be "in price"

in investing •  5 months ago


I will say right away that I'm not a broker and not even a bank employee who understands better in the markets than me, everything written here is purely my opinion. So this article is just for reference, and is not a motivation for action, but at leisure you can read.


Answering the question What actions will always be "in price?" I want to say that the main thing is not the growth of the stock to infinity, but equity paper, which brings its benefits to the holders in the form of dividends and moderately stable growth of the exchange value.As an example, which since the end of 2008 are in a wide "outset," but they give their owners a good dividend, so we can say with confidence that such securities will always be priced. Such shares are called blue chips.

To begin with, it is worthwhile to understand that the stock price is formed on the basis of market value, in other words if the company has a material base in the form of computers around the world that constantly need to update the software or has a network of stores in many countries, the reliability of such companies will certainly be higher than the companies of funds or small companies that have recently entered the market and yet have a small capitalization. I also want to note that the market will never exist and live forever on the earnings from the shares will not work, while the companies are limited only to the ground, perhaps someday we will conquer outer space and there will be no limit to the growth of companies and their shares, but this is certainly fantastic, with this level of development we probably do not need securities or other market relations. No one can say what kind of shares will cost in a while, but you can follow the principles of selection of securities, so as not to be mistaken with the choice of investment with a high probability, you can give an example of the rules of investing the legendary Warren Buffett:

1. Outline your plan of action in writing or keep it in your head, but the main thing is how you can more strictly adhere to it in practice.

2. Exercise sufficient flexibility: if any circumstances or new information significantly change the situation, make changes to your plan of action.

3. Study the dynamics of the sales volume and profit of the company. Analyze the sources of their receipt.

4. Focus on the potential investment object. Carefully analyze the range of products or services provided by the company, its position in the industry as a whole and in comparison with its closest competitors.

5. Gather as much information as possible about the people who manage the company.

6. If you have found a great investment site, do not pay any attention to unfavorable forecasts of market dynamics or the economy as a whole.

7. Do not invest only in order to invest money. If there are no suitable objects, keep your capital in cash. Many too emotional investors, not finding the ideal object for investment, acquire the best from the available and subsequently regret it.

8. Determine for yourself what you are versed in, and what is not. Invest only in companies whose business you know. 


Larry Williams said that in the price of predominantly they would call them "sinful actions" in the crisis, the products of such issuers are in demand, these are harmful but tasty drinks, cigarettes, alcohol, etc. If technology companies need to come up with new gadgets or create innovative products to stay on the world stage, it is easier for such companies to fly out of the market than they produce food and will always have profit, because people like to eat and eat and will eat. Also, there will always be in the price of companies that support the state, such as Gazprom, Sberbank, VTB, Aeroflot and FGC UES, I can only allocate American shares from Tesla, the state helps with car sales, provides transport tax incentives, securities of this issuer grow in price. It is also worth remembering that when earning an income the company can distribute it among shareholders and can invest in its development, as for me, with good management, with the second option the investor from the shares will get more profit, as the issuer develops and its market capitalization grows, and when paying dividends, you still have to wait until the paper closes the price gap.

Also, when buying a stake in the company, it is worthwhile to evaluate the long-term trend, if the price from the moment of IPO only falls, slowly but surely, then look at the reason for this, many sites provide an opportunity to see historical indicators for the issuer's revenues, but still there may be a story the company seems to be showing profits, but at the expense of high payments on IFRS does not invest money in its development, all the same it is better to look for papers with qualitative dividends, it's better to not earn enough money on payment to shareholders, and to earn additional money on the growth of a cat it is not necessary to be greedy and painstakingly select the most generous dividends.

It is also worth assessing the value of the dollar on the market, simply if the paper is traded for dollars, its price rose by 20% for example for 3 years, but the dollar itself fell in price by the same 20%, then we can say that we stayed with our own. For example, in 2018, the Fed plans to raise the interest rate, thereby reducing the number of dollars in circulation, but in Russia, on the contrary, there is a policy to reduce the interest rate and accelerate inflation to the target level. It turns out that when investing in Russian issuers, one should take into account the potential ruble devaluation at the 5- 10%, that is, the same gasprom is better to buy after a deep correction, according to a cyclical analysis, the quotes of this company begin to grow in the second half of the year, that is, until July we wait for the decline, and then we enter long, thorium will be the same as last year, when the quotes began to grow around July and after a half a year have grown strongly, the logic is soon likely correction, in this situation it is better to go out and buy again at about the same time. And in general, do not think that you can buy shares now for a couple of thousand dollars and forget about them for ages, and then your great-grandsons will become billionaires, yet the most effective is at least once a quarter as many funds do, review their portfolio and correct it.

I want to remember the story with the dotcoms, how they burst, and warn that it is not worth investing for a long time in the stock of funds that trade crypto currency, even if all the coins will live long and as we are told is a revolution in the economy, and digital gold will replace the money we used, as they grew at 100% per week, of course with a lower speed, but they can fall, like bitcoin this year is trying to grow, it constantly quickly rolls back, with ripple the situation is even worse. So such funds can fail. While there are no shares of such funds on the stock market as far as I know, they use tokens, who do not know this coin, is similar in function to shares, but experts predict the appearance of any ETH crypto funds on stock exchanges.

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