Market Strategy For Stocks Investment: Essay Samples
In the business world knowing the essentials of investment shall lead to sure success. Evidently, the way the world’s economy has been changing was into a platform that would encourage even the common people to invest. The world’s economy has grown much bigger in the 20th century and more accessible than ever with the existence of the worldwide web. But seemingly targeting the market without prior knowledge would be going into a battle without ammunitions. And to have a better approach in value investing most especially in stocks, the three lessons discussed in this paper will give answers to that. As part of the essay’s objective, it would tackle the three lessons that would give an insight to value investing. They are namely, Market Strategy, Competitive Advantage and Big Where it Counts.
Surviving in the stock market would really be very difficult to handle if there is no market strategy laid beforehand. The competition on this scene is definitely colossal. Definitely it is advisable that an investor must see an expert to have an initial input about the market that he or she is about to enter.
Practically, an investor would look unto a typical strategy to determine when will be the lowering of prices happens and vice versa for “shorting” or high pricing of stocks. When an investor has been doing a routine on how to buy and sell, he would definitely develop his own personal stock market strategy. It is just a puzzle that would need a little bit of common sense and a lot of critical thinking to be solved. Comfort zones for an investor can be established within a 3months period or 6 month the longest time span (Lewis, 2008).
An example of this is that when an investor is going to buy a stock on a department store. If an investor buys a stock of Best Buy (A Department Store) (regardless if it is a non-stock or market or not), an investor must pay attention to what is happening in the company. It is given that if a certain event happens in the company, say for example a lawsuit is filed because of a malfunctioning product; the stocks would surely go low in price. This is the right time for the investor to buy stocks. And if the company would regain its reputation by winning the lawsuit, then simple as that the stock price would go high; and it is time for the investor to sell some of the stocks.
In conclusion, stock market strategy is based on the familiarity of the investor to the nature of the stock market. It would really be impossible to succeed by just randomly buying and selling stocks just to bet for luck. Following that would be the competitive advantage of the investor in a stock market.
Competitive Advantage for Stocks Investment
It is very amusing to see a stock that has the high proportional growth, high ROE (return on equity) as well as a very low P/E ratio. That would be very ideal and a very sustainable investment and everyone would flock to that stock and would try to get a hold of it. However that is not the case if an investor doesn’t have competitive advantage (McLure, 2013).
Before investing, an investor must know the entirety of the company’s assets and liabilities. Additionally, the investor must know if the company is financially stable and has the competitive advantage to excel in the market. A sustainable company would be giving out shares that intrinsically sustainable, however if an investor is not familiar of it then buying stocks randomly would be very disadvantageous.
The future of the company definitely relies on the competitive advantage of it in the market. Basically, current trends on growth of an industry are not the basis of the longevity of the company’s growth. Additionally, if the focus is solely on the potential growth and not giving importance to the quality of the products of the company or the services; then that would be very a downfall to that company.
For example, if an investor invests in Pepsi Cola, he/she must be aware of the sustainability of the company. That would mean the available resources and available working force of the company. Additionally, if the company has been offering high quality products to their customers, it would definitely give a good following as well as a good feedback. Sustainability can be very tricky to be determined because of the underlying connection of the available technology that would help the company boost its longevity. However, if you are an expert on the industry you have invested you can directly tell if the company hast the competitive advantage that would give sustainable stocks in the future.
Over all the effects of sustainability of the company gives a competitive advantage. However, to know that diversification of the products into higher qualities could be much of an advantage in the stock market.
Big where it Counts
Lastly to be discussed is the chapter that is about the success of Wal-Mart. It clearly stated that the company is the smaller one and has done regional expansion and is consistent with its performance.
As an inference, the company who has the advantage geographically or based only on strategy would be very good performers in a longer time span. Many businesses are giving their stocks to their assets. That would be a playing safe strategy; however counting what you have first even if it is just small would be an advantage for the company.
For an example, the Filipino Food Company Jollibee, has been very keen to its assets. They are big in their home country but their expansion to other countries that have Filipinos has made them a more sustainable company. This has attracted investment from different parties. They did start in small parts, but with proper marketing strategy they have counted possible markets and tackled it and have shown good results (Jollibee Corp, 2014).
This would also include the management of assets, anticipating the demand, managing stock levels, insurance and theft. Counting this factors and having keen observations would help a company be successful in the stock market.
Disciplined Growth Investors: Finding Stocks With a Competitive Advantage - Yahoo Finance. (2013, June 26). Retrieved from http://finance.yahoo.com/news/disciplined-growth-investors-finding-stocks-090000094.html
Lewis, S. (2008, September 5). Stock Market Strategies For Beginner Investing. Retrieved from http://ezinearticles.com/?Stock-Market-Strategies-For-Beginner-Investing&id=1394954
Livingston, A. (2010, July 28). Stock Market Trading Strategy - Day Trading For Beginners. Retrieved from http://ezinearticles.com/?Stock-Market-Trading-Strategy---Day-Trading-For-Beginners&id=4755638
McClure, B. (2013). Competitive Advantage Counts. Retrieved from http://www.investopedia.com/articles/fundamental/03/040903.asp
Jollibee Corp (2014). Logistics. Retrieved from [ http://www.jollibbe.com.ph]