PornGuy, regardless of their understanding of the stock market, everyone has their own strategy to investing (gambling). Some skip over buying the stocks themselves, and focus on the options market.
As I have no insider knowledge of any one company, and don't have the resources to retain a reliable team of analysis, I have accepted the reality that I am in fact gambling, and I will only gamble what I can afford to lose.
I have chosen to spread myself into various general industries that I have relative understanding of, professionally or as a consumer. To dilute risk further, I have taken the extra step, of purchasing stocks in several companies that compete in the same industry.
Last, I am not looking for the safe bet, but for the big payout. Looking back on the previous crisis, and the one we have now, I looking at:
- the previous 52 week high with the hope they return to that level within 2 years
- stocks that are 1/4 to 1/3rd what they were a few months ago, so the potential gain is 3-4 x or 300-400% within those 2 years.
- P/E between 3 and 7
- majority of analysts show a strong purchase or hold
If you want me to share my own spread sheet, write me at alex @ nalem dot com.
Good luck!
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