how to make an educated guess.

Renee asked
"heyy nanna,I was just wondering what you meant by guess?" Well, deciding which one to invest in - is really making a thoughtful guess.. because there is no sure way to predict the future... tea leaves and crystal balls not included.
when I make a guess (or trying to decide if I should buy) I look up each company in asx /company research and get the full page which shows announcements etc.
www.asx.com.au
then prices/company research/
I have the list of companies beside me so I can take notes. I give each a plus or a minus, or put them on a scale of 1-10.

The first thing I do in this case, is look at the chart for any spikes.. then I go back to the announcements around the time of the spike. A spike in the price means that there was big buying.. so I want to know why. It could be after a company announcement at their shareholders meeting, where the general manager will give talk or a presentation on what/where/when/why the company intends to go and do.

I look at the spread in the high and low for the year (on the little price chart.)
I am interested if this company is rising or falling in it's share price? Are they at a low? could they be expected to rise back to their high? or go higher? I look at volume, which tells me how many shares are being bought or sold.

I also look at yahoo and type in the finance investing section the code plus .ax (.ax means aussie stock not a US stock)
eg say GDA.ax and it comes up with all their information. You can learn to understand their finance details, look at their profile, and especially look at ownership and inside transactions. to see who has been buying. Of course some of these are not up to date, but some are.

go to http://au.finance.yahoo.com/
and look at the sidebar.

for example I went there and typed in BMX.AX and this is their page.
http://au.finance.yahoo.com/q?s=BMX.AX&x=12&y=9

Now in this case there was a spike. and no announcement. So why? did they know something about the vic government announcement? which can be read on ...Here is an link to the story.

http://www.abc.net.au/news/stories/2008/07/23/2312137.htm

I might also write to the finance/investing stock talk forum
http://au.messages.yahoo.com/finance/finance_stocktalk/

I read what others are saying and I ask questions. someone answered with this link
http://www.morningstargold.com.au/images/mornstar- --aipho.pdf MCO

In this case I have also looked at the vic governments minerals website. I noticed that a few companies have been mentioned. like Dart mining, DTM . They had a big spike too at the same time. so I follow them up. Their share price went from 11c to 20c now 18cents.
I'm still on the GO GOLD GO hunt so I put them all on a watchlist in Yahoo and put in their current prices, and 1000 shares each. I will watch these to see if any suddenly increase. although I really want to buy a few before they spike, to increase our chances.

Another thing I do is checkout the high volume or gainers for the day on Yahoo and asx.
http://au.finance.yahoo.com/gainers?e=AX I f you have a watchlist, your codes will be highlighted in pink.

I could also google some keyword like "victorian gold find mining companies involved" and then follow through. It does take time, but research is what increases your chances of being right.

A good guess is better than a bad guess. I call it an educated guess.
That's is what this blog is about. learning, sharing, educating.