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Information is the key my friend.
A friend of mine has been developing a system that sort of works for him to make small ammounts of money on the stock market, he took his work and made a website with it. I told him i was going to pimp his site, because i think its a good idea...so anyway.
It will find stocks in a certain price range (you define) give you some info with links about the companies, and a bunch of usefull information regarding how close the stock is to being at the bottom of its trend.
Based on all the info he runs, if a stock shows up in RED on its MDP, that means you have "found the bottom" of that stock over the last X days, and if it is a historically good stock, you have a greater potential to make money.
Example: A stock has traded at 8 dollars a share for the past 5 years, but today is down to .85 cents. You think, wow, company definately isnt folding, good time to buy...buy 200 shares at .85 cents...it bounces back to 5.00 a share even...and you made a little over 800 bucks...
It works for him, almost relgiously...so im sold on it.
www.findthebottom.com
Information is the key my friend.
It may have worked in the last few months (especially on bank stocks) but it only worked because the Fed has been picking winners and losers. If you used that argument on GM (hey, GM's $1 and GM isn't going anywhere) you would have lost 100% of your investment because the Feds gave GM to the unions and ed over the shareholders and bondholders.
There is NO system that works every time and your friend is competing with some really smart people using the latest technology. Your friend may have flipped a quarter 5 times in a row and gotten heads but that doesn't mean it's gonna be heads next time.
Heh...by no means am i saying dude just do this and you will be rich...i think anyone with 2 peas in their skull can understand that. I am saying, he put together a tool that can provide you with some very helpful information that could otherwise take you hours of your own time to figure out. All of it is information that is available to you on the web, he just put it all together in one place to help you use your noodle and make an educated investment decision.
do with it what you will. Your example about GM is dead on. It isnt fail proof, but since he is dealing with "penny stock" so to speak. No one should loose their pants on taking a risk on a stock that seems ridiculously low compared to its lifetime averages.
I think anyone with a brain could have figured out GM was on its way out, given the massive ammount of media out there. Driving home the point this is just information, it isnt intended to be used in a vacuum.
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