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The P/E ratio is a measure of the price paid for a share relative to the profit per share. A higher P/E ratio means that investors are paying more for each unit of income. The price per share (numerator) is the market price of one stock. The earnings per share (denominator) is the net income of the company for the most recent 12 month period, divided by number of shares outstanding. Investors can use the P/E ratio to compare the value of stocks. If one stock has a higher P/E that of another stock, all things being equal, it is a less attractive investment. Normally, stocks with high earning growth are traded at higher P/E values, because investor anticipate the high growth. One important screener for value investing is P/E.

When investing, you will be facing risk. The higher the risk, the higher the return you will get. When you are buying stocks, you are facing the risk of losing your money. Risk can be measured with beta. Higher beta means, it has high risk because volatility is high. Stocks with beta more than one, will have high correlation with the market index. Therefore, if the market index is going up, the stocks with beta more than one will likely be up too. If we are in a bull market, you should buy stocks with beta more than one. In addition, if we are in a bear market, you should buy stocks with beta less than one. These stocks are also called defensive stocks.

Oct. 24 – Stocks tumbled around the world, sending the developed markets benchmark to the lowest level since June 2003, on concern the deepening economic slump will reduce earnings. The U.K.’s FTSE 100 Index sank 6.9 percent and the pound slid the most versus the dollar since 1971 after the economy shrank for the first time since 1992. South Korea’s Kospi Index fell 10 percent as the country’s economy grew at the slowest pace in four years.

The MSCI World Index of 23 developed markets lost 5.7 percent to 859.24 extending its drop in October to 27 percent. MSCI’s index of 48 developed and emerging stock markets has plunged 48 percent in 2008. More than $10 trillion has been erased from the market value of equities so far this month, accounting for about one-third of the total value wiped off world equities this year.

The yen climbed to a 13-year high against the dollar as stock-market losses prompted investors to dump higher-yielding assets funded by low-cost loans in Japan.

Statement cash flow indicates how the cash position of the firm has changed during the period covered by the income statement. Understanding the statement cash flow can help you in stock investing. The statement of cash flows breaks down the sources and uses of cash into three components: operating, investing, and financing activities. From this, you can know how the company uses and gets its money, like:

• Are they using their money for expanding the business (investing activities) or not.
• How much money do they get from their operation (net income).
• How much money do they pay for their debt.
• How much money do they pay dividend.

By answering to those questions, we should know how the company is doing. Are they going to the right direction or not. If you think they are heading to the right direction, you might consider buying their stock.

Stock-Signal-Pro is made by Jeffrey Brewer. He has been a software engineer for over 15 years and worked with numerous fortune 500 companies in several industries. He started online trading and has completed over 1000 live trades to date using real money. He has spent the last 5 years specifically writing computer programs to analyze stock price behavior, which he has back-tested on hundreds of stocks – utilizing 20 years of data. Stock-Signal-Pro is the culmination of all his research and experience.

The system has what he called “Market Meter”, which can help you can enter and exit the market for maximum safety and profit potential. The “Market Meter” can tell you where the market is going and the strength of that direction.

You can keep your eye on five watch lists of your favorite stocks in the software. Each watch list can hold up to 100 ticker symbols. Stock-Signal-Pro looks deep into your watch lists and looks for the best technical set ups it can find based on a variety of established and tested criteria. Then Stock-Signal-Pro will scan all the stocks, update the data (free) and let you know exactly which stocks are showing profitable “set ups”. Learn Stock Signal Pro More

Balance sheet shows the financial position of a firm at a particular point of time. Knowing how to read balance sheet can help you in stock investing. Balance sheet shows the firms asset, which are resources used in its operation like cash, office equipment, and building. The balance sheet also shows liabilities (claims of creditor to assets) and stockholders’ equity (claims of owner to assets). The company gets their resources (assets) from borrowing (liabilities) and from their investor (equity). Thus assets = liability + equity.

So how do you know a company is good or not from its balance sheet? A good company will always grow their assets, means that they are expanding. Increasing liability could be good or bad. Too much debt / liability is not good for the company, because it will have more risk. The company might not able to pay all their debt. When reading balance sheet, always check the change of asset, and liability from the same period last year. For example, compare the first three months asset this year with the first three months asset last year. Also, check balance sheet with other company’s balance sheet in the similar industry, preferably the same size. Younger company will grow more then mature company. If company A’s asset grows 10 percent, and company B’s asset grows 20 percent, then it means that company B is better.

Invest4y.com is recognized as the leading provider of technical analysis stock software. Amazing stock trend signal buy sell signal software catches stock trend signal change in the very early stage when stock trend is changing and alerts stock buy sell signal when stock trend is formed.

This stock software is built on invest4y.com’s 4T stock trading strategy, i.e. WAIT, HUNT, SHOOT and PROFIT. You know exactly when to buy, hold or sell stocks with help of 4T stock trading strategy. It focused on trend, which can’t finish in a couple of days, but once it is formed, we have to respect it.

The software catches trend change signal in the very early stage when the stock trend is changing. After Amazing Stock Trend Signal Software alerts trend change signals, it will suggest buy sell signals if the stock software considers the stock trend is tradable. Learn Invest4y More.

CAN SLIM is a growth stock investment strategy developed by William O’Neill, the co-founder of “Investor Business Dailly” / IBD. He described his strategy in the book How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition . There are countless examples of this strategy’s success. The goal of the strategy is to discover leading stocks before they make major price advance. There are 7 components of CAN SLIM, which are:
C = Current earning per share. Current earning per share (EPS) must be up no less than 18-20% from the same period last year. For example, a company’s EPS for this year’s January-March must grow minimum 18%-20% from the same three month last year.
A = Annual earning. They should up 25% or more in each of the last three years.
N = New. The company should either be under new management, have new product or service. It also must have new stock price high.
S = Supply and demand. Find company with small outstanding stock.
L = Leader. Find a company that is leading the way or market leader. A stock’s Relative Price Strength Rating should be 80 or higher.
I = Institutioal sponsorship. The company must have institutioanal sponsorship like mutual fund companies.
M = Market trend. You must buy when the trend is up. Like increasing volume, and stock index going up.
Besides the seven characteristic, you also should cut all losses at no more than 7% or 8% below the buy price, to minimize losses.