The Best Strategy to Earn Money

Whether or not you can get money depends on what method you are using. You may buy stocks from others’ recommendation or rumor or charting methods. Technical analysis methods are direct and easy to use, but they are not always correct.

The best way is buying value stocks and holding them until getting money. The reason is very simple: This method is proved very effective and repeatable by Peter lynch and Warren Buffett. But how do you know a stock is a value stock and is undervalued?

1. The best way to get a value stock is to research a stock’s past, present and future.
1). the past: The stock has very strong profitability in the past 3 years or 5 years. Warren Buffet always likes the stocks with past 5 -10 years average ROE >15%. 2). the present: No debt, the profit margin is high, big free cash, PE is low, sector leader, big insider holder… 3). the future: Growth, growth and growth. The future profit growth should be strong. It is said the 80% EPS growth estimation is correct by the Wall Street analysis.

2. The best way to know if a stock is undervalued is comparing its PE with its EPS growth. It is Peter Lynch's way, “The P/E ratio of any company that's fairly priced will equal to its growth rate ... But if the P/E ratio is less than the growth rate, you may have found yourself a bargain.…”.

The software from Trade4Rich.com has the basic functions to check if a stock is undervalued and a stock’s past, present and future. It is a requisite tool to a stock investor.

Get money by investing value stocks Whether or not you can get money from the stock market depends on what methods you are using. You may read the financial articles and buy stocks from others’ recommendation or rumor. You may use charting methods to find top or bottom, support or resistant to buy or sell a stock. Technical analysis method is very direct and easy to use, but they are not always correct. The best way is buying value stocks and hold them until you get money. The reason is very simple:This method is already proved very effective and repeatable by Peter lynch and Warren Buffett. Some guys got money by technical analysis methods or rumor or news, but those are not repeatable and very occasional. How do you know a stock is a value stock and is undervalued ? 1. The best way to search a value stock is to research its past , present and future. 1). A Stock’s past: if a stock has very strong profitability in the past 3 years, 5 years, this stock has very reliable past. Warren Buffet always likes this kind of stocks with past 5 -10 years average ROE >15%.ROE is the best financial data for a stock’s past profitability appreciation. 2). The present: No debt, profit margin is high, big free cash, PE is low, sector leader, big insider holder. 3). The future: Growth, growth and growth. The profit growth should be strong. This quarter and next quarter EPS growth should be strong. Next year and next 5 years EPS growth should be strong. It is said the Wall Street 80% EPS growth estimation is correct. 2. The best way to know if a stock is undervalued is comparing its PE with its EPS growth. It is Peter Lynch's method. “The P/E ratio of any company that's fairly priced will equal its growth rate ... But if the P/E ratio is less than the growth rate, you may have found yourself a bargain. A company, say, with a growth rate of 12 percent a year ... and a P/E ratio of 6 is a very attractive prospect…….“ The software from Trade4Rich.com has basic functions to check if a stock is undervalued and check its past, present and future. It is a really very useful tool to a stock investor.