When to Dumpster Dive for Stocks

WHEN TO DUMPSTER DIVE FOR
STOCKS
By www.ProfitableTradingTips.com

http://profitabletradingtips.com/profitable-trading-tips/when-to-dumpster-dive-for-stocks
Earlier this year we asked how can
you make money trading penny
stocks?

“if you are going to trade stocks,
trade what you know.

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that means if you have specific
knowledge regarding a specific stock
sector stick with that.

if you are really good at technical
analysis algorithms use those.

if you want to make a killing in the
market pick a cheap stock with
promise and sell when it goes up a
hundred fold.

all of this sounds good but specifically
how can you make money trading
penny stocks?

there are three viable approaches.
knowing what no one else knows
about a stock, exceptional technical
trading skills and buying a large
number of cheap stocks are three
ways to go.”

Our article is pertinent when you read
an article in bloomberg saying
that dumpster diving for stocks is a
viable strategy.

“while there were bargains galore in
early 2009, late 2011 and even early
2016, if you want to find value in
these markets, you have to go
dumpster diving.

what follows are some of the worst-
performing asset classes, funds and
stocks over the past three years.

this list is like the island of misfit toys
in some respects, but you have to
expect that anything going down big
has to come with some baggage.”

Their suggestions of where to look in
the stock market dumpster for
bargains are these.

Retail
Grocery Stores
Movie Theaters
Restaurants
Energy
Commodities

The fact of the matter is that all of
these sectors are hurting and all are
hurting for good reasons.

We apply our thoughts on penny
thoughts to the issue of dumpster
diving.

If you are going to trade any of these
in search of profits pick one that you
have unique knowledge about.

Or pick one that trades at decent
volume and volatility and apply your
technical analysis skills.

The last choice is to simply pick
about 40 of them and assume that
the market has correctly priced them.

In that case the ones that don’t tank
will outperform the rest of the market.

Fundamentals versus
Investor Expectations
versus Blind Faith

The price of any stock is eventually
determined by its fundamentals.

Thus the search for intrinsic stock
value as explained in profitable
investing tips.

Companies that make money and
have prospects of continuing to make
money see their stock prices rise.

When investors expect to see a sea
change in the markets such as with
the election of Donald Trump they
jump in with both feet and often don’t
think a lot about just which stock they
are buying.

They simply expect a rising to tide to
raise all ships.

Unfortunately, as with the Trump
bandwagon, expectations do not
always come true.

In the case of Trump the chaos that is
the White House does not help with
the journeyman work of constructing
and passing legislation.

Anyone who is still in the market
based on the belief that Trump and
the Republicans will pull it together
and pass Trump’s agenda is acting
on blind faith

and that does not work for stock
picking and especially when you are
in the dangerous business of
dumpster diving for possible
bargains.

When to Dumpster Dive for Stocks

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