This question is for those of us who currently have some money invested in the stock market:
How do you choose which publicly traded stocks to invest in?

Do you rely on business newspaper reports, analysis of general trends like globalization, hot tips about mergers and acquisitions, analysis of the graph showing the direction in which the stock is moving, or IPO adverts?

In answering this question, can you disclose which stocks markets you participate in and what percentage of your income is now in the stock market?

on wat market are the stocks u are referring to traded? this might allow us reply u better.

Technical Analysis all the way!

I try to avoid days when earnings are reported!

on what market are the stocks you are referring to traded? this might allow us reply you better

It doesn't matter. if you own stocks, whether in Nigeria or in the US, we want to know what made you pick those particular stocks!

Technical Analysis all the way!

I try to avoid days when earnings are reported!

Are you a professional trader? Can you name some specific stocks you've picked, why you picked them, and whether they have performed to your expectation?

One of the first things to understand about buying stocks is that what you buy is in some ways a function of who you are. If you're an optimist, growth investing might be for you. Long on patience? Value investing may be the better fit.

Individual investors generally fall into one of three categories: growth investors, value investors or dividend investors, A stock's price often reflects how profitable investors think a company will be in the future. So most investors follow a growth strategy, which means that they look for companies with strong prospects for growing their sales and earnings. Definitions vary, but stocks expected to increase their sales (and their net income) from one year to the next by at least 15% generally qualify as growth so you can chose any one you want to buy

"Are you a professional trader? Can you name some specific stocks you've picked, why you picked them, and whether they have performed to your expectation?"


Yes! I'm a professional trader. I deal in Equity Options, the derivative of Stocks known as Stock Options, not outright Stocks!

You trade equity options. The "right to buy" shares at a given price for a fee. That means you might bet against stocks as often as you bet that stocks will grow. How do you choose which stocks to bet for or against? can you give us examples of recent trades and reasons behind them?

Give us more insight into how you are able to put food on your table from what looks like a game!

Nwoke:

You trade equity options. The "right to buy" shares at a given price for a fee. That means you might bet against stocks as often as you bet that stocks will grow. How do you choose which stocks to bet for or against? can you give us examples of recent trades and reasons behind them?

Give us more insight into how you are able to put food on your table from what looks like a game!

I don't see options trading as "betting" although you can make a good case that stock trading is nothing short of "betting". Divulging recent trades is not a professional thing to do, more so that nairaland is not an investment forum.

Recent trades: SNDK, LCAV, OIH, AMD, to mention a few!

Divulging recent trades is not a professional thing to do

This makes no sense to me unless you're working for someone as a stock trader. Are you?

more so that nairaland is not an investment forum

The Nairaland Business Forum is a forum that covers entrepreneurship, investment, and management, and this is an investment topic!

Shares of stock represent partial ownership of a
corporation and are often referred to as “equities.”


Categories of Stock

Stocks are often classified by financial analysts into four
separate categories:

• Income stocks
• Growth-and-income stocks
• Growth stocks
• Aggressive growth stocks

Income stocks
Income stocks stress income and generally pay higher,
regular cash dividends. Growth of assets, and thus stock
price appreciation, are less important to income stock
shareholders than are dividends. These stocks appeal to the
investor who needs current income. Income stocks are
usually the least risky, so they fit into the portfolio of the
more conservative investor

Growth-and-income stocks
These are stocks that produce perhaps more modest
dividends, but that also have a reasonable expectation of
growth or appreciation. “Blue chip” stocks are growth-andincome
stocks from companies that are well known and have
strong records of growth, profit, and dividend payments.
These are relatively safe investments and generally appeal to
the investor with a lower tolerance for risk.

Growth stocks
Growth stocks generally do not pay a high percentage of
their earnings in dividends. Instead, the company reinvests
some or all of its earnings back into the corporation (such as
for expansion or research and development). This, in turn,
can make your investment more valuable if the company is
successful in achieving that growth. Growth stocks can have
significant price fluctuations and are generally riskier than
the two previously mentioned categories of stock.

Aggressive growth stocks
Like growth stocks, these stocks are of faster-growing
companies that pay few or no dividends. They are
considered high-risk stocks. Although the chances for loss of
principal are high, so are the chances of rapid growth.

Stcok markets vary in trend across the globe. There are so many tactics one can employ in selecting choice stocks depending on one's intention in the first place (capital growth, profit making, saving for retirement or future family). In Nigeria, some stocks pay out dividends regularly without offering bonuses. Some give out bonuses without dividends. Some do both. It's never advised to spread ur money thinly amongst all the stocks. Carefully study a company before u buy into them. Also remain loyal to ur stocks. If u have Oando shares, then don't buy fuel from Total (if u can help it )

Always read Financial Standards (out every monday) for expert opinion.

A website that will really help you -

www.estockswatch.com

guys, I'm just trying to collect real life experiences so I can connect them with the theory.

Nwoke,

Do not run into conclusions.

I've got some oando shares I got for N95. They are presently at N82 or so. This is actually the right time for me to buy more, bearing in mind that the decline in value can be attributed to the MEND crisis. Oando wouldn't make much gain to buy crude at $74/barrel and sell it to Naija market without a commensurate increase in pump price. If you observe, most oil stocks are down except those in the upstream sector. People are shying away from them and dumping their money in the banking sector, hence the good run with 1st bank and GTB. Most bank stocks are on suspension due to recent IPOs. So, 1st bank and GTB are actually enjoying alone what they should be sharing with Zenith, Union Bank, Diamond bank and IBTC.

Stocks usually appreciate in value just before positive company results are announced. That also explains GTB's present performance. Guiness is competing with NB hence they seem to play a ding-dong game. One often rises when the other is falling.

I do have some stock, and you need to do alot of stock reading and research, is all i will say.

Rhea: Thanks. that was insightful.

Others: I think you're misunderstanding my question.

I did not ask "how to pick stocks" because I know all the theory you know and more.

The question I asked is "how do YOU PICK stocks". I am asking for your experiences. Why am I asking? Because I want to understand the psychology of an investor.

If you think I'm planning to invest in the stock market and I'm loking for tips, you're wrong. I'm just trying to understand how you guys reason, that's all. Do you now understand? Not "how to" but "how do YOU".

So I'm asking for real life experiences from active investors. The theory I know, thanks. Rhea, thanks.

I simply buy stocks of companies i buy goods and services from. I have GM because i drive a Chevy, I have Rambus because they make chips that i use in my PC/PDA ETC. I have some McDonald shares because my nephew loves the dollar menu, I have Verizon because i pay them a monthly bill. I have Exxon Mobil because i buy gas there. So that is my method and it has worked for me so far. (Knock on Wood)

@ Nwoke

Your question is not clear and most people buy shares based on research and feel and websites like cnbc.com Ameritrade ETC can help.

Old glory, thanks for your response. I find it useful.

hi everyone, just new to the blogg, i like it.

Of all the things that lure me into buying the stocks of companies, nothing speaks great volumes into my head like branding. 85% of the stocks I have bought are because of the way the companies package theirselves and their products.
My eyes have become so sharp now that Conoil which I bought for 127 naira has become 78 naira. All the same, company branding still has has effect on my picks. This is because I have the notion that if I company can brand itself so well, it means it knows what it's doing and will be profitable at the long run.

I buy stocks based on my research and usually when people are running out.

The problem with investing in stock )or whatever is that "ther is not only one right way". There is many strategies/approch to investing. It all depend only from investor. First of all you should replay for question about risk and income you expected. Secondly you pick up different tools to evaluate income/difference/risk. Then you invest.

What you should remember is that investing is art of making decisions using the fact and information that you have, The more you know (and before others ones) the better for you,

Some things are perpettual. Some events affect global economy. Example from my floor. In Poland the main deliverer od petrol is PKN Orlen. Look at the chart and you can see how stock dealers react about growing prices of oil,
http://www.parkiet.com/notowania/wykresy.jsp?isin=PLPKN0000018
The children knows that if price of oil ar growing globally that local rafineries just wait to price out their clients,
another one, Mol
http://www.parkiet.com/notowania/wykresy.jsp?isin=HU0000068952

Found this useful: http://invest-faq.com/articles/strat-survey.html

Brother-in-law investor
Your brother-in-law phones, or perhaps your stockbroker or the investment writer for the regional newspaper. He has the scoop on a great stock but you will have to act quickly.

Technical investor
Moving averages, candlestick patterns, Gann charts and resistance levels are the sort of things the technical investor deals with.

Economist investor
This type of investor bases his decisions on forecasts of economic parameters.

Scuttlebutt investor
Consists of piecing together information on companies obtained informally through wide-ranging conversations, interviews, press-reports and, simply, gossip.

Value investor
"attempts to value a stock independently of its current market price"

@Nwoke,. I am an active investor in the nigerian stock market  so i am going to answer your question based on experience.
whatever is what doing at all is worth doing well, and if what we are talking about has to do with your financial wellbeing, you need to open your eyes well before making a decision on how to invest/multiply your hard earned naira.

so how do i choose my stocks? you have mentioned most of it yourself in your opening post: daily newspapers, financial based/business newpapers, companies website, trends,stockbroking firms website,rumours,government regulations e.t.c. The question is how to  channel the array of info from these media for effective stock picking.

I only invest in company with good history of consistent earning, stable management,resilience and market value share.
examples of such companies are FIRST BANK, UNION BANK, GTB, ASHAKA, . 

Government regulations also affect my investment decision. e.g federal government ban on the inportation of cement may force me to take a look at the cement industries. Obasanjo first major increase of fuel prices heralded the unprecedented growth of petroleum firm shares two years ago. abi, how do u explain the movement of conoil  stock from N20  to almost N200 in six months!
the latest is the current consolidation in the banking sector.


my story has not been all rosy though, I have incured some losses before but my single gains have more than cancelled those losses.

am a system engineer but my  interest has made an accountant  of me . OK.

I think the answer to your second question (percentage of investable income) depends on your status in life: financial, marital, family background, attitude , e.t.c
I'm single, so i can afford to invest more than 50% of my income .and of course, the 50% depend on your pay packet. i have ist bank, gtb, ashaka, gtb, oceanic bank in my portfolio.

This year alone, i have made enough profit from first bank to cover my expenses for the rest of the year. This is what a good investment can do for you. I started 3 years ago.


here are some of  the sites.

www.expresson-line.com
www.firstglobalselect.com
www.moneywise-ng.com

hope you find this 'epistle' useful.

If its with regards to the Nyjer Stock Mkt and you want to make the short term profit the key for this quick buck strategy is to find out what the house buying or what the big players are buying and then get in with the ride.

Such infomation makes a diffrence cause the market is not as developed and ''information'' is not freely available to all man at the same time unlike developed markets.

i trade international stocks, picks penny stock with market cap; $50m- $2bm, 52 weeks price gain above 90%, insider holders of 10%, average daily trade not more that $3m, must be profitable in earnings, PEG less than one and long term debt to equity must be 0.

click the ebook , go down and see proof of my stock account

[img]http://dc200.4shared.com/img/r4Xa1Swe/Free_Think_Dollar_Business_ebo.pdf[/img]