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Wednesday, December 30, 2015

Intuition and Math as Methods of Picking Stocks


No one has a golden formula that predicts outcomes. Some of the best investment firms use complex software, tools, and formulas and at times still get it wrong. They hedge their offerings in a way that helps ensure risk is minimized. 

Most of us do not have the ability to use these systems for our personal uses. They are expensive and complex. However, most people can use their intuition and follow up with a more concrete analysis to help determine when to buy and sell stocks. 

Intuition isn't about blindly picking any stock you want without consideration to market principles. It is about studying different stocks, reading the news, talking to people, and finding out what industries you like. 

The more you learn the more likely your intuition will dig deep into your unconscious and pick stocks that have the most market appeal to you. The stocks will "feel right" and draw your interest because you may find some unique value in them even though you are not consciously aware of why. 

Instead of fighting...just go with it! Explore your interest. 

You don't want to leave everything to intuition. It only helps you explore areas of interest and potential investment options. Exploring ideas without restriction is one method but it should be followed up with more scientifically oriented analysis.

Some methods you can use to conduct an analysis can be found HERE. These are simple formulas that will help you use a method beyond intuition to make sound judgments. 

Knowing what you want to do and understanding the market is the first step in investing. After that you will want to learn some basic math and make calculations that are beneficial in your decision making process. Remember that most information you need is public. With time, patience and practice you can learn to slowly beat the market. 

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