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[Investing 101] – How to Pick a Winning Stock 100% of the Time

13 Wednesday Apr 2016

Posted by Sudarshan Sridharan in Investing 101

≈ 2 Comments

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100%, AAPL, amazon, AMZN, Apple, basics, beginner, beginners, bill gates, blog, buffet, Business, ceo, choose, chose, faang, fang, financial, followers, for beginners, GOOG, Google, How, Invest, Investing, Investment, Investor, Investor Letter, Investors, make, money, monies, mzn, Netflix, NFLX, pick, prime, quora, retire, samurai, scump, seo, sridharan, Stock, Stocks, sudarshan, sudarshan sridharan, Tag, Tags, Tesla, Ticker, Tickers, to, Trader, tube, Twitter, warren, warren buffet, win, winner, winners, word press, Wordpress, you, youtube


First of all, I’ve gotten quite a bit of feedback since I started writing the blog again. Due to the feedback received I will be writing about Virtual Reality Stocks, Under Armour and Michael Kors, and expediting the Investing for Beginners series. This article was going to be apart of one MASSIVE Investing for Beginners article, but I’ve decided to make it a series. I will be adding to these as I go, and then at the end of the series, I will be compiling all the articles into one big, edited, article.

I know I’ve gotten behind on the 30 articles in 30 days, but I’m really trying to get back on track with these articles, and with school work, so it’s been a bit of a grind.

I know that this article is totally out of place in the series and should be like the 3rd or 4th article in the series, but honestly, I’m not really feeling like explaining the primitive basics of how the stock market works right now (midnight), so enjoy this article.


As I’ve said before, I’m more of a, “Use your heart not your head” type of investor. That philosophy takes on different styles of investing every time, but for this article I will be sticking to one specific style.

The stock market isn’t something that you have to study for years and have a natural talent for, it’s just like a game – play it long enough and you’ll learn everything about it, and become extremely skilled at it.

All you do is look for stuff you use in your everyday life. Then you ask yourself a couple questions, and then you decide whether or not you want to buy the stock by asking yourself a few more questions. It might seem really dumbed down and simple, but that’s because it is.

This is one of the easiest ways to find a stock that you know you will not lose money in (as long as you don’t invest in Financials like banks, or Healthcare stocks, you should be fine). Why? Because these companies are NECESSARY for the world to go on. Chances are, if you use something, and your friends use something, then the majority of everybody uses it.

This is how  found stocks like Netflix, Tesla (although it wasn’t necessary or mandatory at the time when I found the stock in 2012), Amazon, Adobe, Microsoft, Apple, Google, FaceBook, Visa, Nike, Under Armour, Activision, Electronic Arts, and a lot, lot more.

If you’re reading this and going, wait, all this kid did was spit out FAANG (Jim Cramer’s acronym for the super successful tech stocks that are holding the Nasdaq up), and a few other stocks that are super obvious, well you’re right. Except, I found every stock in FAANG 3 years before Cramer (Netflix being the last of the stocks that I identified in 2012). How? Well I just asked myself these questions:

  • What do I use everyday?
  • Do other people use it everyday?
  • Can the world function without it?
  • Will people feel a void if it doesn’t exist?
  • Do all my friends and family use it or want it?
  • Will it impact them if it disappears?
    • If yes to all the questions above, proceed to find the items creator and check if they have a stock.
    • If they have a stock, ask yourself these questions:
      • Have the recently announced earnings?
      • Have they shot up a lot recently(50% or more in the last quarter is how I define it, you’ll come up with your own definition as you learn)?
      • Are they expected to do poorly in earnings?
    • If the answer to any of the above is yes then I don’t recommend buying the stock. The only times I’ve broken these rules and still made money is with Netflix every January when they report earnings and have over inflated comps which analysts never expect and the stock shoots up (check out my post from Jan. 2014 when the stock went up 86% the week I recommended buying it), and with every other stock in FAANG, as well as a few other trades. However, seeing that this is [Investing 101], I’m going to assume that you don’t have enough experience to make that kind of call yet.

Now that you’ve asked yourself all these questions, I recommend blindly going to your brokerage of choice and putting in an order to take a ~5% or less stake in the company.

When I was 11 (I think this may have been before I turned 11), in 2011, I made a list of 3 companies the world couldn’t go on without. The list was:

  • Adobe
  • Microsoft
  • Google

Are you surprised to see Microsoft and Adobe on that list? Well now I’d probably replace Microsoft with FaceBook, and keep the rest of the list the same. Either ways MSFT has done spectacularly in the last 5 years, as has ADBE, and GOOG/GOOGL. Amazon (AMZN) was a strong contended for the Microsoft slot until Jet.com came out. Now you have Ali-Baba spin offs, and Jet.com to cover just about all of your online shopping needs. While no one under 35 uses FaceBook anymore for purely social media purposes, it’s used by just about every business, hosts a plethora of games, and is leading the way in virtual reality development (and in about 50 [sic] other fields as well).

Anyways, the reasoning behind Adobe was that everyone used PDFs. Gamers everywhere used Flash, and Youtube is based on Adobe Flash. Imagine if Adobe went under, the few months (at least weeks), you’d be without Youtube would be devastating for people everywhere.

The reasoning behind Google was (and still is) that it is used by everyone, for just about everything on the internet. Teachers say, “Google it,” not, “Bing it,” or, “Yahoo it,” (Yahoo, right that still exists), entire businesses are built off of Youtube, manipulating Google Search Engine Results, Google Blogs, AdSense, Scholar, Wallet, Play, Android, literally everything that is anything, Google was involved somewhere along the way.

Now if you’re in a betting mood, you can take a chance on companies that have fallen on hard times. I recommended a company called Aeropostale on Quora a few weeks ago. ARO had fallen from $30 to $0.20 cents. I figured that I saw enough Aeropostale shirts floating around school that it was still relevant, and that it couldn’t possibly just go under like that (and even if it did, oh no, you just lost $0.20 a share). I went to school and asked 10 girls when the last time they wore Aeropostale was.

I was surprised by the number of people who’d worn it within the last week (7), so I figured YOLO, lets go for it. On April 4, the stock rallied to above 50%.

I’d give some more anecdotal evidence about why these simple questions are so good at getting the job done, but you won’t believe it until you see it for yourself. Go ahead, track a stock for a couple weeks (or months), that you picked using this method and report back with the results.

I don’t recommend using this for banks, healthcare stocks, or social media stocks because they are so fragile and move due to far too many other reasons. Social Media stocks are incredibly hard to make money off of because most social networks don’t have proper advertising and revenue structures in place.

I try to respond to every email I get, but there are an awful lot of them, and only one of me, so give me a few days and I’ll get around to you. I hope this article was helpful in some way, and if it was, please rate it and leave a comment.

I’d write some more, but it’s almost 2 am here, and even if I did go to bed at 9pm last night, I’m feeling tired, so good night, and hope this helped!

 

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A Strong Case for Netflix (Ticker: NFLX)

22 Wednesday Jan 2014

Posted by Sudarshan Sridharan in News

≈ Leave a comment

Tags

AAPL, Apple, earnings, Investing, Investment, money, Netflix, NFLX, Profit, quarter, quarterly earnings, Quarterly Earnings Report, Report, Stock, Stocks, Ticker, Tickers


So I bought Netflix yesterday at 3:52 pm, rushing to sell all my BAC and TSLA stocks to put 90% of my money into NFLX. I’ve written EXTENSIVELY (even when I wasn’t holding Netflix shares) about why it’s such a solid trade. I’ve just finished this study I was working on, and I learned something else from the study, Netflix and Apple are slated to go up so much, that it’s going to blow your mind (Well I think it should be obvious to all of you reading this that both stocks are going to skyrocket after their quarterly earnings reports).

The Facts:

Out of the Last 8 quarterly reports, Netflix has reported a Quartlery Loss twice! The first time I bought Netflix, was at, $88 and osme odd ccents. This was after the stock completely tanked from $300+ to $55. I’m a strong believer in, “The Market will bring back stocks that are vital to the American Household,” and guess what, Netflix is vital to every binge watcher who’s seen House of Cards, to the 6 year old kid who watches Netflix every day after school.

After I bought Netflix, it reported its first quarterly Profit in some 6 quarters. Overnight my shares almost doubled, and it didn’t let up the next day, or day after. The same thing happened (but to a lesser extent) the next time Netflix reported a quarterly earnings, and it has continued for four quarters after that. Oh and guess What? Netflix is Reporting Quarterly Earnings TODAY! That’s why I was scrambling to buy it yesterday at 3:52 pm after maximizing my profits on TSLA and BAC.

https://www.google.com/finance?q=nflx&ei=8dzfUujoM4GJsgez0wE

As you can see from the chart above, Netflix has had PHENOMENAL growth over the last 12 months.

The Problem

Netflix not only depends on this Quarterly Earnings Report to keep its drive alive, it also depends on the Report to make a $12 billion deal with 21st Century Fox. The fact that Netflix has rebounded from the $250.00 drop back to its former glory in just 12 months is also astounding. However, if Netflix doesn’t report a profit, it won’t break the $400.00 threshold, and if it doesn’t break the $400.00 threshold soon, it’s doomed to go back down, even if it doesn’t go to astronomical lows like last time.

The Bottom Line:

Well I trusted enough in Netflix to pull through (as it has for the last 6 quarters, and with the release of hit shows like Orange is the New Black and House of Cards to bring the company back to its former glory.

EDIT: The chart isn’t working so I have attached a link in it’s place. Sorry.

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Random News on our favorite Nasdaq Stocks: Google, Tesla, Netflix

23 Saturday Nov 2013

Posted by Sudarshan Sridharan in News

≈ Leave a comment

Tags

Disney, DSY, GOOG, Google, Hero, Heroes, Netflix, NFLX, Revenue, Stock, Stocks, Super, Super Hero, Tesla, Ticker, Tickers, TSLA


TESLA:

The Consumer Reports report came out with car rating and guess what….

The results offer a rare piece of good news for Tesla, which has faced increasingly tough questions after three cars caught fire in less than two months. This week, U.S. regulators launched a safety probe into the Model S.

“Owners of the Tesla Model S gave it the highest owner-satisfaction score Consumer Reports has seen in years: 99 out of 100,” the magazine said.

After the Model S, the Porsche Boxster sports car came in second place with a score of 95. The Porsche 911 sports car and Chevrolet Volt, made by General Motors Co, both got a 91.

I got that nice piece from an article on 4-Traders.com

GOOGLE:

You gotta love dividends. Especially when a stock which is valued at $1500.00 is trading at $1,031.00 Read this…..

Google (GOOG), the third largest company by market cap in the world has been on a tear lately. It’s shares are trading just shy of an all time high, and investors are rejoicing. And soon, shareholders will have another reason to cheer – Google may be just a few months away fromannouncing its first dividend. The blogosphere and analysts have beenbuzzing with speculation on this subject for the last year, and now the writing may be on the wall.

Google fights every day to win over consumers, and the Google investor relations team works diligently from morning to night working to please investors. With major tech competitors such as Apple (AAPL), Microsoft (MSFT) and Cisco (CSCO) all returning huge shareholder value via buybacks and dividends, Google will have little choice but to join the tech stock dividend bonanza. Considering Google’s massive cash hoard and abundant free cash flow, it seems like a very small price to pay.

I got the little snippet from seekingalpha.com

NETFLIX:

So I heard you liked Agents of Shield…

Netflix, Inc. (NFLX) has inked a deal with The Walt Disney Company (DIS) to develop and produce a number of original shows featuring Marvel Super Heroes. Marvel Studios confirmed this story based on its press release last November 7.

This is another great news for Netflix investors who firmly believes in the company’s momentum growth. The deal gives Netflix the opportunity to further enhance its original content strategy. After the success of its original shows like House of Cards, Arrested Development, and Orange is the new Black, Netflix has the chance to reach out to a different demographic by producing action TV series starring Marvel’s heroes.

Yep that should be good news for many key investors. Maybe Carl Icahn wants to join the Netflix Bandwagon again?

Hope this little weekend update helps! Enjoy!

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Netflix Soared 2.64% ($9.00) as Predicted

21 Thursday Nov 2013

Posted by Sudarshan Sridharan in News

≈ Leave a comment

Tags

Consumer Information, Home, Moving average, NBC, Netflix, NFLX, Stock, Stocks, Tesla, Ticker


So if you read my article from Thursday of last week, you would have noticed that I predicted that Tesla would go shooting up after November 20th. Today is the 21st, one day after the 20th, and it Netflix (Ticker: NFLX) has shot up $9.00 today after going to a weekly low yesterday of 340.33. Netflix shot up $9.00, as predicted.

Why the Jump?

Netflix’s jump was one of the easiest jump’s to predict that I have seen to date. Not only were the charts lined up (both the 200 day moving average and the 50 day moving average were both the EXACT same price, and the general rule of thumb is that if the stock surpasses both moving averages for 3 days it will go up. If you aren’t a firm believer (or not a believer at all) of charts, then their continuous stream of positive news might have convinced. Netflix has released two new shows, signed two deals with Fox and NBC, AND it also passed 1 billion dollars in earnings this quarter. All signs of an INCREDIBLY stable, fast growing stock.

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Aside

Netflix ready to have a great 2 weeks? Or it’s 2 worst yet!

14 Thursday Nov 2013

Posted by Sudarshan Sridharan in News

≈ 2 Comments

Tags

First, First Solar, FSLR, Invest, Investing, Investor, Investors, Netflix, NFLX, Solar, Stock, Stocks, Tesla, Ticker, Tickers, Trade, Trader, Trades, Trading, TSLA


image

Picture Courtesy of T.D. Ameritrade ~ Text typed on chart using Windows Paint

Remember that nice long article I wrote about Netflix (Ticker NFLX) the first day I published this blog? Well if you do (and I honestly hope you do since it’s only been something like 2 and a half weeks since I started the Prime Pick), then you’d know I covered Netflix extensively like how I covered Tesla for a little while. Anyways, I was on stockcharts.com (great site) just looking up some typical stocks because I was bored today and two stocks REALLY caught my eye. Want to guess what the other stock was? It was First Solar (Ticker: FSLR) which I’ll cover in another article (probably the next one). FSLR reached Multi-Year highs.

As you can see (where I’ve typed in the picture), if Netflix penetrates the $338.08 mark for 2-3 days, you can be guaranteed to see a Netflix run starting between November 19, 2013 – November 20, 2013. Why? Because it’ll be breaking it’s 50 day moving average and 200 day moving averages.

On the flip side, if Netflix can’t penetrate 340.44 by November 20, 2013, prepare for a nice little Bear run or at least a stagnation of stock price. Ultimately Netflix’s stock price hangs in jeopardy and can instantly go either way for the rest of the next two weeks, and if anything like Tesla happens to Netflix (or any stock really), you can rest assured that that particular stock is going to have a bad week. (Yes that sentence is supposed to have two that‘s in it.)

That’s my Prime Advice for today!

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Why NETFLIX (NFLX) is a Good Buy Now

23 Wednesday Oct 2013

Posted by Sudarshan Sridharan in News

≈ 2 Comments

Tags

Netflix


Netflix (Ticker: NFLX) has gone up almost 750% since the beginning of the year, (from $50.00 to $370.00 back down to $330.00) and it very recently went to an all time high before drastically falling. If you look at the one year chart of Netflix, you’ll notice how it’s just been drastically increasing since January. If you look at the dramatic increases of Netflix in recent months, you’ll notice that back in 2010, Netflix soared to these astronomical prices, before falling extremely fast to close to $40.00.

NFLX Chart 1year

NFLX CHART

So why do I think Netflix is a good buy?

Well first of all, Netflix fell $40.00 dollars yesterday, because Carl Icahn dumped half of his nearly 6 million Netflix shares yesterday, causing Netflix shares to plummet. However, now that investors know the truth behind the drop, they started buying back into Netflix at the $320.00 range. Today alone it has made $8, and it’s poised to make much much more in the near future.

As long as there is a market for investors to trade on, there will be people who respect quarterly earnings, and when Netflix reported a whopping 10% increase in revenue in Q3, the stock shot up 10%. A cheaper alternative to cable television, Netflix proves time and again that it will come out on top.

Here are some basic facts about Netflix and quarterly earnings:

– Every time Netflix releases quarterly earnings, it generally ends up gaining anywhere from $40 to $60 in after hours and pre-market trading. This carries over into the day after the market officially opens and Netflix generally grows from there.

– There is a loss after a few weeks (2-3) after Netflix report previous quarter earnings. This time however, the drop came the very next day due to Icahn selling 3 million shares, but he said,”The stock remains strong and is severely undervalued.” In his 13D filing of the stock trade.

Why won’t Netflix fall like how it did in 2010?

It won’t fall 550% like how it did in 2010, it also wont just keep rising, but as long as there is internet, and Television holds the general public’s interests, Netflix will remain strong in sales and customers. But that isn’t answering the question. Basically Netflix has over 100 million PAYING customers. Each one of those customers is paying $8+ a month. And through advertising, Netflix broke 1 billion dollars in revenue last quarter. Even if Netflix does fall flat, it will be able to pull through for at least 6 more quarters before it runs out of cash for it’s needs.

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Welcome to the Prime Pick……

23 Wednesday Oct 2013

Posted by Sudarshan Sridharan in News

≈ 2 Comments

Tags

Apple, Bank of America, Blackberry, Google, Investing, McDonald's, Netflix, Tesla Motors, Ticker


Welcome to the Prime Pick! I made this site about 5 minutes ago, so I figured I should introduce myself. You can refer to me as “you” for the time being, and you should bookmark this page as your one stop investing advice.

I started trading in February of 2008, and many all of my trades have been insanely successful, and all of them have at least gone up 150% since I called them. I am primarily a Day Trader, but I have started to do long term (like 3 days or more) trades.

Stock Picks:

Apple (Ticker: AAPL) @ $150.06 sold at $612.07 McDonald’s (Ticker: MCD) @ $54.79 sold at $102.12 Google (Ticker: GOOG) @ $412.17 Netflix (Ticker: NFLX) @ $68.31 BlackBerry (Ticker: BBRY, was RIMM when I bought and sold) @ $11.37 sold at $18.16 (Yeah, I didn’t make over 150% on this one, but I made money off of Blackberry….) Bank of America (Ticker: BoA) @ $7.60 sold at 15.33 Tesla (Ticker: TSLA)@ $22.04 sold at $142.16

Well that’s just a list of stocks I’ve dealt with in recent memory.

I’ll try to keep you updated on different stocks or how the market is going every day.

If there’s anything you want to get my opinion on or just want to get in touch with me, you go to the CONTACT US tab and write to us.

Enjoy!

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