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educational blogs |
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If you have not had the dubious pleasure of the first 2 bits of this Blog Series, then you should be able to locate them at the following Links:
http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-1-of-3 http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-2-of-3 This final Part of the Blogs is a bit different as it postulates (is that a word?) a technique for analysing a Stock and then has an example to show it in action. When reading any News item and in particular when looking through Results on Recovery Situations, a great way to understand the true relevance of the information is to separate bits that are Historic from bits that will impact in the Future. To a large extent I do this in my head in the Mornings when working through the RNS Statements and this is easier to do on Stocks which I know extremely well because I have held them a while and the changes in the Business leap out at me. The logic being that bits that are in the past are irrelevant really (ok, they do give some context but 9 times out of 10 they are unlikely to be repeated), and it is things that are likely to impact in the Future that really should be concerning us and getting our attention. I think this is a huge mistake a lot of People make - it is so easy to focus on past problems and totally overlook a significant change that is happening within the Business. I know this because I make this cognitive error all the time myself.
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If you have not had the dubious pleasure of reading the first part of this Blog Series, then you should be able to locate it at the following Link:
http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-1-of-3 Financial Strength Debt and Cash are arguably the most important Numbers you can find in the Headlines - and you would be amazed how often the Debt Number is conveniently not included. I have even had Results Statements in recent Days where I have found no mention of the Debt level in the first few bits of the Results Update and I have had to scroll and scroll and scroll right down to the actual ‘Financial Review’ bit to find any mention of Debt - and of course you can be 100% certain that if I have had to do this then the Debt Mountain is chunky and the Debt has probably increased (if the Debt had improved, you can guarantee they would be bragging about it up front !!).
If you follow me on the Tweet Machine you have probably noticed by now that every morning from just after 8am I am looking through the RNS News Feed for the Day (which I usually find on Investegate or if that is playing up I go to the LSE RNS Feed), and first off I am looking for Stocks I hold and any News they have put out.
Before this I usually grab my Mobile Fone where I use the ADVFN App and even bang on 8am there are movements on some of my Stocks and if I know one of them is due to put out a Trading Statement or a Results Statement, then I use the App to have a quick look at the Headlines or perhaps the full Statement if it is just a quick Trading Update. The ADVFN App is superb and an easy way to track your Stocks and you can set up Watchlists and all that for Stocks you don’t hold and of course it works on Tablets and stuff. I also use it to see what the Indexes are doing but unfortunately there is a 15 minute delay on the FREE version but I do find that the Intraday Charts it shows do seem to be pretty near Real-time. |
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