Volume is the key to future stock announcements

Volume is the key to future stock announcements

As we have covered numerous times on this blog, subject of insider trading is never too far away. It would be wrong to suggest that the authorities have not made progress but to suggest it is now under control is possibly stretching the truth. However, if insider trading is under control, why do we regularly see stock trading volume spike ahead of announcements?

Watch the volume

There are many ways in which you can pick the next stock for your portfolio, research, recommendations or simply following stocks which have higher than usual volumes. You can throw in all your research, public expectations and comments on the bulletin boards but good old-fashioned high-volume is worth its weight in gold. Why? Continue reading “Volume is the key to future stock announcements”

Is Uber really the new Amazon?

Is Uber really the new Amazon?

The recent collapse in the Uber share price prompted the company to introduce plans to become “the Amazon of the transport industry”. This has prompted a number of leading analysts to look at the comparisons between Amazon and Uber and see whether this really is the case.

Initial losses

In the early days, when Amazon was effectively ignored by the stock market, the company amassed hundreds of millions of dollars in losses. In the early days Uber has amassed billions of dollars of losses since inception. While some would argue the multiples have changed since Amazon was a fledgling, there are other issues which need to be taken into account. Continue reading “Is Uber really the new Amazon?”

The pros and cons of low liquidity stocks

The pros and cons of low liquidity stocks

It is fair to say that some low liquidity stocks should not be on the stock market. However, this platform offers a very useful means of raising capital going forward. We will now take a look at the pros and cons of low liquidity stocks and how you may benefit.

Price volatility

If a stock has a relatively low liquidity then a relatively large sale/purchase can have a significant impact on the share price. For those looking to buy stock, a seller can offer the opportunity to pick up some “cheap” stock in the longer term. When there is a relatively large buy in the market this can offer those with large holdings the opportunity to lighten their load. Continue reading “The pros and cons of low liquidity stocks”

The difficult plight of first to market disruptors

The difficult plight of first to market disruptors

In the past we have discussed the often difficult plight of first to market disruptors in general detail. In this article we will take a look at an array of specific companies who have been extremely disruptive but are currently paying the price. There is no doubt that these types of innovative companies are required but how can they benefit as much as those who follow?

Tesla

You only need to look at the Tesla share price see the extreme volatility in this groundbreaking electric car manufacturer. Under the guidance of Elon Musk the company had initially gone from strength to strength creating a multibillion-dollar business which has only once ventured into profit. Musk was once seen as the main reason for buying Tesla shares then very quickly his entrepreneurial/controversial approach backfired. He brought unwanted attention to the company as a consequence of his personal social media interactions and making unsubstantiated promises. Continue reading “The difficult plight of first to market disruptors”

Why do accounting irregularities keep happening?

Why do accounting irregularities take so long to emerge?

Whether looking at the UK, US of any other stock market around the world, on a regular basis there seem to be accounting irregularities with large publicly traded companies. This is despite the fact that many of these companies are audited by some of the best-known names in the industry. How does it take so long for accounting irregularities to emerge?

False market in shares

Very often once accounting irregularities have emerged the new auditors will rebase profits going back years. Whether this is a different accounting policy or potentially fraudulent activity surely during the period of irregularities, the market in the shares could be deemed false? Continue reading “Why do accounting irregularities keep happening?”

Common stock market sayings

Common stock market sayings

The stock market is central to both national and worldwide economies. Pension funds, house prices and many other areas of everyday life are dependent upon healthy stock markets. However, the world of investment can be a very strange and bizarre place with some unique sayings.

The trend is your friend

The trend is your friend is a very popular saying in investment circles. In simple terms, share prices are based upon public information and in many cases non-public information. So, while the public information on a particular company may be suggesting a share price direction very different to that on the market, take note of the trend. There may be things going on behind-the-scenes that you don’t know about – yet. Continue reading “Common stock market sayings”

Chinese trade tariffs hit US businesses

Chinese trade tariffs hit US businesses

June was the first month in which the escalation of tariffs on Chinese goods imported into the US increased from 10% to 25%. This rise in tariffs impacted $200 billion worth of Chinese goods with Donald Trump also announcing a further increase which will begin in September. The initial increase in tariffs was aimed at industrial components but the increase which will become effective in September will impact $300 billion worth of Chinese consumer goods.

The real cost of tariff increases

Even though Chinese imports were down by 31%, across the field of goods impacted by the June tariff rise, US businesses paid an additional $2.4 billion in tariffs compared to the same period last year. The fact this is a figure for one month is breathtaking to say the least especially when you bear in mind the worst is yet to come. We know that many US businesses have been forced to put up their prices while experiencing a dramatic fall in sales. Certainly not the road to economic growth! Continue reading “Chinese trade tariffs hit US businesses”

Balancing profitability against regulatory scrutiny

Balancing profitability against regulatory scrutiny

The recent eye-catching figures from Alphabet (the parent company of Google) have opened a very interesting debate regarding balancing profitability against regulatory scrutiny. Recent Alphabet profits hit $9 billion and already they have prompted calls for regulators to become more involved with the sector. We have seen this time and time again with other companies such as Microsoft, IBM and many more. So, is there really a balancing act between profitability and regulatory scrutiny?

Encouraging growth

When the likes of Google and Microsoft were relatively small but fast-growing companies they were the darling of the political scene. They were put forward as the next generation of technology companies which would literally change the way we operate on a day-to-day basis. Fast forward a few years, the companies have grown, profits have mushroomed and they have to a certain extent become a law unto themselves. So, while the politicians are happy to encourage and in some ways assist with growth in the early days they like to rein it in further down the line. Continue reading “Balancing profitability against regulatory scrutiny”

Does your portfolio need overseas exposure?

Does your portfolio need overseas exposure?

When structuring your investments the common consensus is that you should introduce overseas investments to the mix. Focusing on your domestic markets obviously reduces direct diversification with your future investment performance laid squarely at the door of your domestic market. So, surely it makes sense to introduce overseas exposure?

Diversification is the key

If we look at business sectors on a local, national and international level, you are unlikely to see all business sectors moving in the same direction or even to the same degree. It is therefore useful to introduce not only a mix of overseas investments but also different sectors at different stages of development. In some ways you are planting the seeds for tomorrow’s successful investments today – assuming you get it right! Continue reading “Does your portfolio need overseas exposure?”

Netflix struggling for growth

Netflix struggling for growth

Despite the fact that Netflix has been one of the darlings of the US stock market in recent times, the company’s shares fell by 10% on Thursday after reporting disappointing figures. In what many see as the “curse of Q2” the company is fighting to retain credibility and confidence in future forecasts. So, why were investors so concerned about recent figures?

Has strong Q1 growth been a problem?

As we touched on above, many analysts believe that healthy Q1 growth was always going to lead to disappointment for Q2 figures. However, few could have forecast the significant shortfall in paid subscriber numbers! Continue reading “Netflix struggling for growth”