Category: Quora Answer

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Is it a good idea to invest in a stock that went down rather than up?

With all respect to Quorans who answered yes, I would say no.

A stock could move up or down based on fundamental factors, technical reasons and overall market sentiment. Now going by your question, I assume you would want to buy a good company if its stock price has fallen. It means you have done some fundamental analysis and arrived at the conclusion that the company in question is fundamentally strong.

That’s great. But, what if Mr. Market thinks that the stock is overvalued? The stock might remain sideways for the next few months and in that scenario, you would end up falling into a value trap. Continue reading “Is it a good idea to invest in a stock that went down rather than up?”

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How can we quantify William O’Neil’s CAN SLIM investment strategy?

Each and every factor of CAN SLIM can be quantified.

For the benefit of all users, let’s understand the history of CAN SLIM and what does it stand for.

CAN SLIM is a growth investing strategy formulated by ace investor William O’Neil. Early on in his career, O’Neil did an extensive research on U.S. stock market winners to find the common characteristics between them.

William O’Neil observed that most of the multi-baggers shared seven common characteristics. He then started investing in stocks that had these seven traits and went on to become one of the all time investing legends. Continue reading “How can we quantify William O’Neil’s CAN SLIM investment strategy?”

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How can one make money by investing in stock market?

Money can be made in stock market by purchasing stocks at a price that is lower than your selling price. However, wealth is created only when one does this on a consistent basis.

To generate profits on a consistent basis, you need to have an investment process that answers three crucial questions:

1. Which stock to buy

2. When to buy

3. When to sell

I will briefly discuss about the investment process that I use:

Which stock to buy?

There are over 5,000 stocks listed in the Indian market and selecting which stock to buy can be an extensive process. This holds true when one does not have an investment criteria. Continue reading “How can one make money by investing in stock market?”