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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: AlienTech who wrote (7135)	1/26/1999 7:55:00 AM
From: LastShadow	Read Replies (1) \| Respond to of 43080

New Web Chat room on the website home.earthlink.net It puts the user list and chat window all in one screen and does not appear to interfere with other java apps. It doesn't require any information bu a screenname, so don'tworry about the rest of the form. pm me or post here if anyone wants to try it out today. ls

To: AlienTech who wrote (7135)	1/26/1999 8:37:00 AM
From: LastShadow	Respond to of 43080

Informational Post: For all you seasoned traders, this isn't new, but for the novice investors and lurkers, I plagarized the following: Signs of Earnings Trouble Spotting Trouble Before Its Too Late Getting blindsided by a disappointing earnings report can be a very painful experience for investors, as the market often treats these stocks like a rented mule. It is no longer shocking to hear of a company loosing 25%-30% of its value in one day due to a bad report. Clearly, the fewer of these losers in your portfolio the better. Today Briefing.com takes a look at how to reduce the chances of holding a stock that is about to implode. It's not that hard, but it does require doing a little investigative research - a job too many investors are unwilling to do in today's high-flying, care-free market. Profit-Margins Put simply, profit margins reveal how much a company makes for every dollar of sales. While margins can be stated in different ways (such as gross or net), it is never good to see a declining trend. It should be noted that gross and net margins will occasionally move in opposite directions. Don't be too alarmed if gross margins are rising while net margins are falling, as the company could be expanding its sales force - a move which should help bolster profitability in the future. However, if net margins are rising while gross margins are falling take note, as the former number can be massaged to look good. Inventories This is a tough one, as a rise in inventories can be interpreted differently. On the one hand, it could signal that demand for a company's product is growing. On the other hand, it could signal that a company isn't selling its products as fast as expected. How to tell the difference? One way is to look at the inventory to sales ratio. Then compare that figure to the same period the prior year (or two or three). Though the percentage itself means different things from industry to industry, a rising trend spells trouble anywhere. If you're willing to spend a little more time it can be very insightful to compare the I/S ratio of the company you're interested in with the I/S ratios of its industry piers. Cash Flow In this instance we are concerned with whether the company has sufficient cash flows to fund the ongoing business and finance growth. You'll want to steer clear of those companies in which net income has been rising over time while operating cash flows have been falling. Eventually, the firm will have trouble growing its business. Operating cash flow appears on the statement of cash flows in a company 10-Q & 10-K. Accounts Receivable Accounts receivable, found on the balance sheet, represent monies owed to the company for products/services sold. When a company's accounts receivables are rising faster than sales there is usually trouble ahead. Why? Well, it could signal that a company is recording sales prematurely or that the company is so eager to move merchandise that has extended the deadline for receiving payments. In addition, a customer that buys too much now will take a long time before buying again. In which case future comparisons won't be favorable. Better Safe Than Sorry Taking the time to ferret out this information from the company 10-K and 10-Qs may not be exciting, but it could keep you from experiencing the heart racing anxiety that occurs from watching your stock drop off a cliff after it "surprised" the street with disappointing numbers. Remember, these are warnings signs and not guarantees of future trouble. Also, other factors such as currency fluctuations and the regional downturn in Latin America can have adverse effects on earnings. But where there is smoke there is usually fire.