Sentiment and Signal Stock Score

About 4 months ago I began playing the stock market. It took a long time to get a trading account open, and in the meantime I started looking at health stocks. I figured with an aging population, there's going to be money to be made there.

I picked a few stocks, bought them, and I was off. Shortly there after I discovered the Sentiment and Signal stock scores. Here is a exert of what I learned about them:

Consider stocks that have a Sentiment Stockscore of 60 or higher. Focus on the charts of stocks that have a Signal Stockscore of 80 or higher. When these two criteria are met, there may be a high probability opportunity in the market.

There was more, but in general, low stock scores were not good. So, I looked at the stock scores of my choices. Not one was over maybe 35, but most were twenty something, or even less. I looked further at what I had rejected, and wow, they had great stock scores, 60, 70, 90, absolutely great. And I thought, I'd never buy these stocks, but I thought to watch them, and I set up a portfolio which I called "Rejects July 20th, 2006."

My reject portfolio's 4 month performance?

ABT up 0.39%
AGN up 2.39%
CI up 15.18%
HCA up 4.43%
JNJ up 7.06%
KMI up 2.93%
LLY down 5.33%
SIE down 32.71%

Overall, the portfolio I set up is down 0.75%

And well, I'm up 22%. I'm not in the same stocks I started with, but I don't think I've bought a single stock that would be recommended through these scores.

In my humble opinion, toss these indicators in the garbage. Read the financials.

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Stockerblog - The Stock & Bond Blog: Highest Yielding Stocks that pay Dividends Monthly and Quarterly

So, looking around, looking at these choices would be far better than Google.

Stockerblog - The Stock & Bond Blog: Highest Yielding Stocks that pay Dividends Monthly and Quarterly

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Fools Born Every Minute

One of my more recent hobbies is to play the stock market, and just look around at what's out there.

People tell me constantly to be careful.

Careful about what? I truly believe that if you do your homework, and do the math, you will do ok, and do much better than putting your money in a bank. You won't necessarily pick all the right stock, but you will pick stocks good enough to beat the market, and so far, it is working for me.

Google would be a typical example of why people lose money. I've look at Google a few times and it has utterly amazed me that people fork money over for a share priced over $400 each. Truly, if I go to spend $400, I check out the competition and I take some time making a good purchase.

Well, here's what 3 minutes of homework on Google shares says to me:

Earnings last quarter, $2.36 per share, taking dilution into consideration.
Easiest estimate of annual earning, multiply by 4: 4 x $2.36 = $9.44
Check out the share price, $426.06.
Do a quick annual return calculation, $9.44/$426.06 x 100% = $2.22% annual return

Next, what is book price: $43.89, around 1/10th of the share price.

Well, I wouldn't buy it at $300, or $200, or even $150. I might consider it at around $100.

So, what happened in after hours trading? The stock went up $31. And some fool is predicting a $600/share price. It may do that, but that doesn't mean it is worth that.

Some people are in for a very hard landing.

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Bird flu

So I'm a little behind the times, but I just read a report that there has been a confirmed case of bird flu transmitted via human to human contact, published last June, and the whole family died.

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Introduction

So, I'm starting a blog and all blogs should start with an introduction of sorts.

There are certain quotes that are profoundly influential in my beliefs:

No man is an island. - John Donne

Our choices in life can have profound consequences, good or bad, to those around us. When we make poor choices, well, there are people who care about each and every one of us and they are hurt by our poor decisions. One only needs to lose a loved one prematurely to truly understand how truly connected we are.

Life is 10% what happens to you and 90% how you respond to it.

I do not know the source of this quote, but what an incredible truth. We all have challenges and opportunities. We can move forward and make the best of challenges, or we can make them worse by our attitude and response to them. Our response to life makes a bigger difference to our future than what actually comes are way. We can embrace an opportunity, or we can let it slip away. We can not necessarily control what comes our way, but we can control how we respond to it.

Never doubt that a small group of thoughtful citizens can change the world. Indeed, it's the only thing that ever has - Margaret Mead

I believe that we can effect change in the world for the greater good. Change doesn't happen overnight, but if you believe in something, and work at it consistently, you can effect change. I've worked through a 10-year process of effecting policy change, so I know it can be done, and indeed, I know that most good changes that happen in policy are fought for and worked on by only a very few people.

What experience and history teach is this -- that people and governments never have learned anything from history, or acted on principles deduced from it - Georg Wilhelm Hegel, 1770 - 1831

To me, this one represents the cyclic nature of how each generation seems to need to make the same mistakes, or what one generation fought to make better, the next lets go, only to leave it for the generation after to fight again to fix it.

So, there's a philosophical introduction.

Other things, I try to eat right, and exercise.

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