Worse types of stocks or comapnies to investment in?

Discussion in 'Trade Journals & Stock Tips' started by springbreeze, Sep 4, 2014.

  1. springbreeze

    springbreeze Well-Known Member

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    We tend to ask what are the best, top, most .... So, I thought, why not start a thread on what are the worse... So:

    What do you think are the worst types of stocks, companies, funds, bonds, real-estate (or whatever other investment you can think of) someone can invest in?

    What are the worse types of start-ups someone to invest in?

    What types of investment look really risky or bad in the beginning but tend to turn really good in the end?
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I will typically look at companies that are declining fundamentally, are ridiculously overvalued, or are basically broken or in industries likely to become obsolete or otherwise get beaten down by govt regs, new technology, or whatever. These types of companies are best avoided by the novice investor, and can perhaps be carefully bet against by the more advanced investor via put options, or perhaps writing covered calls or taking an actual short position on the stock.

    Many retailers, MLM companies, and things the current govt hates like coal stocks seem to be hurting in recent years and likely to continue hurting.
     
  3. Fury

    Fury Member

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    Penny stocks jump to mind. ANY type of investment done hurriedly without any research into the purchase also jumps to mind. Stock, companies, funds, bonds, real-estates... you can make those work for you. Any one of those can get you rich and powerful. But any one of those can turn out to be a complete dud if you didn't do your research and you back the wrong horse.
     
  4. Determined2014

    Determined2014 Guest

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    That is good wdvice, I have never looked at it that way, this was an eye opener for me.
     
  5. Gelsemium

    Gelsemium Senior Investor

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    Thanks for the advice JR, I hope that soon enough I a able to take all this into practice, when I have enough to invest I will be already a pro. :)
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Of course I hope that the tide turns on coal and similar industries in the next couple of years. ;)
     
  7. My401K

    My401K Well-Known Member

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    For the beginner you should probably stick with the tried and true blue chips. Your return won't be as high but over time you will see consistent gains. If you decide that there is a company you want to add to your portfolio take the time to do some research, check the company press releases, look at what they did historically and then go from there. Years ago I had a hunch on Harley Davidson, this was right before it became the replacement choice for the mid life corvette. I did well but times change as do tastes and trends. You have to be aware what is going on in the market and do some research on your own.
     
  8. dianethare

    dianethare Senior Investor

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    Well said...just got an early Christmas gift 'sort of'...and i almost put it in the wrong basket if i can say so but thanks to intuition and landing on your thread in that regard, am taking time out before i regret big time, i believe when it comes to investing, one ought to be very/extremely cautious!
     
  9. tournique

    tournique Well-Known Member

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    Such an insightful post. Thanks for all the tips. What's your view on penny markets though?
     
  10. Onionman

    Onionman Senior Investor

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    We all tend to look at profitability and the meeting of earnings expectations, but when you're looking at the quality of a company you should really put more emphasis on the balance sheet. That's where you will see where the company is too stretched on its obligations, the quality of its cash flows and the levels of debt. That's really where you should be looking with companies as it will reflect future trends in the company, and possibly the economy or industry.
     

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