David Trainer's  Instablog

David Trainer
  • on ETF Quick Picks And Lists
Send Message
David is CEO of New Constructs (www.newconstructs.com), an independent research that specializes in unearthing key insights from the Financial Footnotes of Annual Reports. Having analyzed over 50,000 annual reports and their Financial Footnotes, New Constructs research regularly produces Hidden... More
My company:
New Constructs
My blog:
Hidden Gems and Red Flags
My book:
The Valuation Handbook
  • How To Make Money Picking Stocks 0 comments
    Aug 28, 2012 1:06 PM

    The best long-term strategy for making money in the stock market is: "Buy low expectations and sell high expectations."

    Sounds easy…but it is not easy…or everyone would do it, right?

    There are two key challenges to executing this strategy:

    1. Measure the true profitability of the business, which requires translating accounting data into economic earnings, to understand its historical cash flows.

    2. Measure the future cash flow expectations embedded in the stock price.

    Understanding the expectations for future cash flows embedded in stock prices is not possible with accounting data or any ratios (e.g. P/E, EBITDA, etc) based on accounting data. You need a dynamic discounted cash flow model to measure the expectations embedded in stock prices.

    Leveraging our patented research platform, we build and update thousands of economic earnings and discounted cash flow models daily, which is why we have confidence in our stock picks.

    For more details on how we find stocks with "low expectations" as well as super-high expectations, see Investment Strategy 101.

Back To David Trainer's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • Are banking standards actually applied equally to all banks? - and other morning reads for July 18: http://tinyurl.com/plo4nv9
    Jul 18, 2016
  • Linking Exec Comp to ROIC Model Portfolio: July 2016 - Available Today! http://bit.ly/29W4cg0
    Jul 15, 2016
  • What happens next as Treasury yields hit an all-time low? - and other morning reads for July 15: http://bit.ly/1KOyk9C
    Jul 15, 2016
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.