Traditional investors look at the technology sector and shake their head with disbelief and dismay in equal measures. Many of these large technology companies are valued at billions of dollars yet they are unlikely to make a profit for many years to come. Indeed, many will never make a profit and fall by the wayside as competition intensifies. So, is there really a place for technology shares in the portfolio of a passive investor?
A hedge for the future
The key to successful investment is to gain exposure to sectors in particular companies which are doing well today and will do well tomorrow. There are also many companies which are valued on “hope value” today but may well create a massive return going forward. In effect, technology shares which are unprofitable today offer a hedge for the future. If you find a good one, it may well be a game changer for your investment portfolio! Continue reading “Technology shares are a hedge for the future”
There is no doubt that the Internet has changed the way we live and the way businesses operate. The ability to communicate with people all across the globe in a split second has change the world we live in. However, from an investment point of view, which sectors have been disrupted by new technology?
When we say which sectors have been disrupted by new technology perhaps we should say which ones have been most disrupted? Is there really any area of business which has not been heavily impacted by the Internet? Continue reading “Which sectors have been disrupted by new technology?”
The more often you buy and sell shares the more chance your investment nerve will be challenged and your emotions often brought into the frame. History shows us that the most successful investors of all time are those who can hold their nerve, take emotion out of the situation and look at cold hard facts. So, how can you learn to hold your investment nerve in challenging times?
Focus on the fundamentals
You may see wild swings in share prices as a consequence of market conditions, sector conditions or perhaps there is something going on with a particular company. What often start out as “small whispers” can very quickly grow arms and legs and lead to a tanking for a company share price. On the plus side, markets may overreact on the upside and the downside but in the end they will find a balance. Remember, the level of the share price is made up of information in the public domain and that still private. Continue reading “Learning to hold your investment nerve”
In what many believe is a case of “locking the stable door after the horse has bolted” Facebook has today announced a raft of new security features ahead of the 2020 US presidential elections. Those who follow Facebook will be well aware that alleged middling by Russian parties in the 2016 US presidential election may well have allowed Donald Trump to claim victory. Whether or not this is true, there is no doubt that foreign bodies have been attempting to influence voters in the US, and even the UK, ahead of crucial elections.
New safety features
While we await further details, Facebook has today confirmed that postings related to the US presidential elections, as one example, would be more transparent. This comes after the company announced that a number of Russian and Iranian based Facebook networks had been taken down as a consequence of “coordinated unauthentic behaviour”. The company, a champion of freedom of speech, was very quick to point out that these networks were taken down as a consequence of their behaviour not their content. Continue reading “Facebook adds new security features ahead of 2020 US election”
In a perfect world we would all like to buy a stock today, sell it tomorrow and bank a huge profit. The reality is that there are significant risks when looking to buy and sell stocks in the short term. As a consequence, it may well be worthwhile considering high yielding stocks which tend to have a significant degree of support already.
High yielding stocks and cash flow
Even though there are some individuals who are able to buy and sell stocks on a short-term basis and bank a significant profit, this is not easy. If you buy a stock at the wrong time then you may be forced to take a loss or hold the shares until they recover. If you bank a loss, this reduces your investment pot, if you hold until the shares hopefully recover, then you are committed and your trading funds have been depleted (at least in the short term). Continue reading “Why high yielding stocks offer support”
It is safe to say that no stock will ever go open up in a straight line. There will be periods of excess buying and periods of excess selling which can create volatile movements in share prices. These movements can be further exacerbated with good or bad news. In this article we will look at stocks which have been hit by bad news, rumours or untruths and when might be the right time to buy.
Momentum is everything
If you invest in stocks and shares you will very quickly realise that momentum is a big part of investing. As the following of a particular company continues to grow there will be more interest in the shares, they would be more liquid and larger investor such as institutions might become interested. If the news is positive, the strategy is working and the share prices move on upwards this can create significant upward momentum. Continue reading “Have you ever tried catching a falling knife?”
Those who follow currency markets will be well aware that sterling has fallen by circa 20% against the dollar and euro. This is a sizeable reduction in the value of sterling and reflects the ongoing concerns about Brexit and the UK political system. At the same time, the UK stock market is not a million miles off its all-time high. But how can this be, the UK economy is under pressure, sterling has collapsed yet the stock market is relatively high?
Back in the 1980s there were times when sterling was trading at two dollars to the pound but today it is around $1.24 to the pound. This makes UK products and services much more attractive to overseas customers because rather than paying two dollars for every pound they are now paying just $1.24 for every pound. As a consequence, companies with international exposure may well have seen a significant rise in their order books even though we are in one of the most difficult economic and political situations of recent times. Continue reading “Currency movements and inflated profits”
There are very few shares listed on the stock market which are not subjected to rumours and counter rumours at some stage. The fact that company shares are tradable can often make them susceptible to dark forces which may have an underlying aim. This may be something as simple as starting negative rumours so the share price drops and they can start picking up stock. You would have thought in this day and age it would be fairly simple to find the origin of rumours?
Smaller stocks more susceptible
There is no doubt that smaller companies are more susceptible to rumours, counter rumours and those challenging the truth. They can be fairly volatile as a consequence of limited liquidity and unfortunately the best time to buy is when there are sellers around. The best time to sell in size is when there are buyers around. So, even if you were to find a small company with great prospects it may take some time for the underlying value to be revealed. Continue reading “Rumours, counter rumours and truth”
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”
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.
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?”