The Number Crunching Games!!

Good luck to some of us who bought KAMN! It's not a bad start!!

Being small individual investors, we are swimming in a water with many sharks around us. So how to avoid being their prey? We need to be careful, very careful. I am not the guy listen to Jim Cramer saying buy, buy buy!!! and then buy the stocks he recommended. With all the due respect, he is a good guy, both educational and humorous. I learnt a lot from him. What happen if you buy the stocks he recommended, because so many people are watching him, whatever he mentions, it will jump $5 in the morning, you buy at the exactly the wrong moment, you will be killed.

So if you don't listen to him, where do you get information for your investment decisions? I check with numbers, a lot of them.

There are several groups of people in the market, some of them called themselves as fundamental/value investors, some of them are momentum or chart readers. That means you have to look for fundamentals and technicals. That's not enough, remember what I said about sharks? These are hedge funds, short sellers, to certain degree the big firms like GS, MER. Their analysts provide with you with buy or sell "recommendations". Guess waht are their intentions, they want your money. That's why you thought you found the absolutely best stocks in the world, the next morning you would get tremendous amount of selling pressure. Guess who are doing the selling, the big guys who recommeded you the stocks. They got into these stocks long time ago, and their portfolio went up 100%, they need money to buy new stock, they sell them to you. They got a lot of suckers taking in the bait! Whoosh!! We got killed again!!!!

So what we gonna to? We want to watch the fundamentals, technicals and keep an eye on the smart money. Fortunately SEC required them to do a lot of filings, and we have the EDGAR database. You can get all sorts of information if you have the desire. If you want to find what GS is buying, which stocks they are holding? You can find them there. You want to know what Warren Buffett are buying or selling? You can find them there, too.

Nowadays, we have access to a great deal of information that we did not have before. So how can we make efficient use of it all? We are in the age when digital communities are so popular. We have you, me and Pradeep!!! We can find all kinds of information and share it with each other, we can trained to be good swimmers in this dangerous water!!!

If you are confused about which stocks to buy from Pradeep's list, I think I can be helpful.

I monitor many numbers, but they mostly fit into the following categories:

(1) Fundamentals
(2) Technicals
(3) Smart Money Flows

I created a file with 39 columns on it, covering fundamentals, technicals and smart money flows. I use them to build a model, try to use artifacial intelligence (AI) algorithms to automatically extract which parameters are important in determining the future stock price movement. Of course I need to calibrate my model often so that it's always reflect the current market conditions.

My intention is to find 1 or 2 good candidates every week and post them on this site. I don't expect every one of them will turn into a super star, because nobody can predict the market with 100% accuracy. You just can't, it can not be done! The market is filled with many emotional people, some of them are happy, scared, hopeless, nobody knows exactly what they are going to do with their money. The only hope we have is to check as many parameters as possible before we invest, statistically we will have higher winning odds than the fellows who don't do their homework.

My model can crunch all the numbers to find out if the big guys are buying or selling, then if I feed Stockbee's list, it will select the best stocks with strongest fundaments and enable us to buy them at the best possible entry points.

Let's see if this approach works.

Good luck to all,

Mkt Swimmer