What stocks should I buy? Stock selection strategies // What stocks to buy, stock selection guide, what stocks to invest in, what stocks should i invest in, how to pick stocks, how to pick stocks to trade, how to pick stocks for beginners, stock selection guide, stock selection criteria, stocks for beginners, buying stocks, stocks to trade welcome to looking at the markets with David Moadel sometimes people ask me
which stocks should i buy maybe they come to me with a stock that they found
on a stock screener or that a co-worker or friend recommended to them or you
know maybe they founded in a newsletter or on a message board somewhere or in a
chat room and maybe it's a small company a new company a start-up are and they're
thinking maybe they should invest in that maybe they want to buy the stock
well I'm going to tell you some reasons not to buy these tiny small small
companies that people or newsletters or stock screeners recommend to you so
let's take a look at some research here this is an article from forbes magazine
and they're quoting Bloomberg and it says eight out of ten entrepreneurs who
start businesses fail within the first 18 months a whopping eighty percent
crash and burn
so what they're saying is that eighty percent of new businesses fail very
quickly within the first 18 months and i'm sure that within the first let's say
two years or five years probably the percentage grows even greater for from
there
so that's not very encouraging if you're thinking about buying a stock for a
small company or a new company a company that's just growing personally I i would
avoid investing your hard-earned money in these types of companies and i'll
show you some examples and I collected some small companies small caps penny
stocks here and you can see the charts this is from google finance the first
one is ticker any ph is a penny stock and we can see from the chart it has
just gone down down down and according to the chart it has lost eighty-seven
percent of its value that's not too good
and here's another small company penny stock MN KD and again you can see the
chart has lost
almost all of its value and it is gone down 90 three-and-a-half percent that's
not good
here's another one another small company penny stock ticker skl and look at the
direction of a chart sure it had some some up moves in there some pops in
there but overall down down and down and this stock on the chart has lost not
almost ninety eight percent of its of its value another penny stock here
ticker TR kk
again it had some some up moves here but overall it has lost almost all of its
value 99 . eighty-one percent of its value has been lost on this chart not
good
and here's ticker GBS n and I consider this a penny stock because it's under
five dollar under five dollars in value and from here to here it has lost it
actually says on the chart it has lost a hundred percent of its value
maybe it hasn't lost a hundred percent because then it would be at zero but it
has lost almost all of its value and and and you know these are small compass
small cap companies i recommend purchasing mega-cap companies big big
companies that have been around for awhile for years and years or even
decades companies that are very profitable companies that are household
names and these companies are less likely to lose much less likely to lose
almost all of their value
ok they might you know in in a bad economy they might go down you know ten
percent or even twenty percent during the Great Recession a lot of companies
lost fifty percent or more but then they came back up eventually
and.and that these are during the worst of times during a bull market these
companies usually don't go down
ninety percent or ninety-eight percent or ninety nine percent that's very rare
and so you're usually pretty safe buying really really well-known highly
profitable Holly probably profitable mega-cap companies and these are the
kinds of companies that I prefer to buy stock in if i'm going to buy stock
so if you'd like some help picking stocks choosing stocks that are right
for you and if you'd like to have if you'd like help putting together trading
plan you can send me an email anytime my email address is David Modell @
gmail.com if you like this video please give it a thumbs up on YouTube and leave
a comment because I like to read your comments they're very helpful to me also
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educational financial videos i hope this was helpful and I hope to hear from you
soon thanks a lot