How to pick the next profit stock - fundamentally

I love to learn, and I am constantly doing it. I don't think there are any other ways to earn money except learning it first. Either from people, from books, mentors, or whatever it may be...!

We have seen many books about getting rich in stocks. Some of us love fundamentals and others prefer technical analysis. While both ways can help earn money, I choose to be fundamental on stock!

One of the reason being that love economics and I was fascinated on the fact that small little things can change a stock price so much! And how small little news can earn you a lot, or make you lose money till your pants drop.

Saying how to pick a profit stock, I will go by some of these points:

First, knowing what happened around the world...Company especially cyclical ones are sensitive to economy and world environment. So this is the first and most important thing to look at before choosing. Let's take a great example, Japan's earthquake triggered the nuclear reactor...this is a bad news for Tokyo Electric Power Co (TEPCO). The company had a hard hit on the bad news, and those stock owners who did not read the news suffered great losses..

Second, company profile. This is simple, wanna know the company? Google it, or search it in wikipedia, or go to their site. Read it. After reading, ask yourself...do you really know this company well? Is the company as simple as saying  'Coca cola sells carbonated drinks'? or  'Starbucks sells coffee'? For some cases, if you can't figure out what a company is doing then avoid owning the share.

Third, is company earnings. Now you need spend some effort reading some of their earnings figure, profit numbers, etc. These are very much related to accounting. But wait, you don't need to be an accountant to read it. I flunk my accounts paper before and now I am reading income statement, balance sheet and cash flow statement. Ripley's??? Believe it or not??

Fourth, the management. Investors will only invest their money in a company that are trusted...If company was facing trouble or sudden change on management. We surely know that share price will be triggered. Great example of what happened yesterday, David Sokol resigned from Berkshire Hathaway (company own by billionnaire Warren Buffett). This triggered an impact over the company, and for sure a change will respond to a drop of share price. Be it short-term/long-term.

Legendary investor, Warren Buffett

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Go through this steps...you will find a company that's worth investing. I am sure of it!

........but if you are lazy, then you have just wasted your time reading my post just now. Too bad, find some other magic article worth your time. 

Are you thinking of getting profit over market uncertainty?

The market doesn’t like uncertainty. Yes, I am talking about the stock market, very uncertain since last month.

Dramatic events came like a chain of problems. Starting from Egypt’s protest to Libya’s battle to Japan’s tsunami. Things don’t slow down don’t they?

But still, face it…this is a stock market we’re talking about. Economy is a very sensitive element on such investment. I admit that novice investors are getting panic thinking that market is over, everything is going down!

Let me tell you, its wrong! Being a discipline investor you need to stick your head on the game. We don’t beat the market, we move along with it. Market is trading sideways right now, no denying, but as things are getting stable in the future, stock will move upwards. What goes down will always comes back up. Be optimistic!

So here’s some plan that perhaps you can do. I will target on certain industry that may help and when things are getting better, you know where to get profit from.

Japan suffered great losses over the unfortunate disaster. However they are not gone! They are the 3^rd largest economy in the world. And as they reported that they will need estimated 5 years to rebuild the wreck. They need a lot of materials for rebuilding.

And you come in play here. You may begin to target on cyclical industry such as energy, timber, metals/mining, and construction as it’s obvious that Japan will need plenty of those to proceed with their restructuring. And therefore, requesting imports from other countries in that case. Despite having to spend more money, Japan is actually helping these companies to earn profit.

Big companies like General Electric and Caterpillar have confirmed to participate in rebuilding Japan. You may start doing your homework now to see which other companies that may benefit from here.

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And that is for future, and for now I am not going to touch on anything yet. Market is still unstable, and share price swing even faster than my mood. I choose to wait and standby. Perhaps you can do so~ let the fund manager and analyst do their job.