How to pick profitable shares for your portfolio

Insider Secrets | 11 October, 2010 | Hot Topics:

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Dear friend,

Imagine knowing exactly which shares will do well and which to stay away from. you wouldn't ever have to work again. You'd wake up in the morning and decide which shares to buy and which to sell and then go fishing... Or visit your friends... Do the gardening... Paint a picture... Just imagine.

Well, we know neither of us have that special gift amongst us, otherwise we would be busying ourselves with other more enjoyable things instead of writing and reading this email.

So, we at Insider Secrets, went about discovering what makes a share a good investment - at least most of the time...

6 Secrets to picking profitable shares to invest in...

1. Top-Line Growth: Many great, undiscovered companies probably won't be making steady profits yet, but they should still be growing revenues like wildfire. Ideally, better margins and profits should follow as the business strengthens. The more a company grows its revenue, the closer you should watch it for the right moment to buy into it.

2. Profit Fortress: It's always a good idea to find unique companies that have some type of "unfair advantage" over the competition. Any business that churns out an ordinary product will eventually lose out to a company that can do it better, faster and cheaper. The most successful companies operate businesses that may have some type of government protection or products and services that aren't easily duplicated.

3. The Black Cloud Factor: Sometimes, one or two problems that are weighing down a company's stock can help you scoop up shares cheaply. Other times, it's uncertainty about the outcome of a lawsuit or regulatory issue that weighs the share price down. However, if the company's underlying business is solid, the share price should go up once the stock market's uncertainty is resolved.

4. Profit Catapult: A profit catapult is a future event that will drive a company's growth. A profit catapult for a small biotechnology company for example could be an action date by the FDA to approve a new drug. An approval of a company's first drug is a major step on its way to becoming profitable — and its first step toward making shareholders big profits.

5. Business Shock Factor: The business shock is simply how revolutionary a company's product or service could be. The great businesses of our time will possess "disruptive technologies" that could potentially change the marketplace as we know it.

6. Technical Factor: You need to look at all the technical data like ROM indicator, RSI indicator
and momentum indicators (overbought or oversold) to determine whether a share is in a “buy zone” or not. Technical analysts use hundreds of indicators to decide on the right moment to buy) and the breakout or continuation (an analysis of historic share prices shows certain patterns that are weak or strong indicators of a breakout, reversal or continuation of the current trend

P.S. Have you visited www.InsiderConfidential.co.za yet?


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