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Investing In Cryptocurrency

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Investing In Cryptocurrency

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  1. TIPS for Identifying Stocks for SHORT POSITIONS Most of the information regarding stock picking addresses investors that wish to “go long”. Most investors are looking for stocks that will increase in price in the future. But what if you’re interested in finding stocks to short? There’s less information regarding the identification of stocks likely to decrease in value. Fortunately, many of the same rules apply, but in reverse. Stocks likely to decrease in value often have these characteristics: THE EARNINGS ARE EXPECTED TO FALL. ✓ If a company’s earnings are dropping, the stock price will often fall. ✓ It’s easy to find projected earnings for any company on a U.S. stock exchange. THE PRICE TO EARNINGS RATIO IS OFTEN HIGHER THAN THAT OF COMPARABLE COMPANIES. ✓ You’re looking for a stock that’s overpriced, and this is one method of making that determination. ✓ Ideally, look for an overpriced stock with poor earnings projections. INCREASING DEBT ✓ If debt is increasing, it’s important to determine why. ✓ Is the company borrowing money to pay bills? That’s a great sign for stock you wish to short. A DECREASE IN RETURN ON ASSETS ✓ If the company is generating less revenue on its assets, the stock price is more likely to fall. A DECREASE IN GROSS MARGINS ✓ Decreasing gross margins are another sign that the stock could be dropping in the future.

  2. FALLING CASH RESERVES ✓ Look at the balance sheet and compare the cash holdings this year to last. Dwindling cash reserves often signify that the company is in trouble. DIVIDEND CUTS ✓ When a company begins to struggle financially, the dividend is often the first item to take a hit. DEFECTION BY UPPER MANAGEMENT ✓ When the CEO and his friends abandon ship, take notice. Shorting stocks can be lucrative. An effective strategy for identifying which stocks to short is finding companies whose future doesn’t look so bright. Remember to look beyond the numbers. The financials provide clues. It’s important to develop an accurate story from those clues. Get more information, please visit https://investtribe.org/

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