Ein55 graduates should know how to analyse 8 giant internet stocks when I highlighted during 5-day Ein55 course:
BAT–FAANG:
B = Baidu
A = Alibaba
T = Tencent
F = Facebook
A = Apple
A = Amazon
N = Netflix
G = Google (Alphabet)
Alibaba and Facebook are younger giant stocks, more suitable for short term momentum trading, not proven yet for longer term investing.
Other 6 internet stocks are proven giant stocks for long term but due to high price growth (faster than earning growth), need to integrate trading into investing when considering for longer term investing. For Facebook, the share price dipped more than 20% in 1 day this week, mainly due to high expectation of global investors on future growth rate. When a company is profitable, it is still in sufficient, it has to exceed the expectation of investors. Stock market is forward looking, when a growth stock or momentum stock is doing well in share prices, supported by past earning, the pressure is higher to score better in business, otherwise the stock prices would be affected. Optimism strategy will be useful to integrate Fundamental Analysis (business world) and Technical Analysis (price world).
Among all the 8 internet stocks, Google (Alphabet) is more matured, has the best balance in sustainable price and business growth. An investor may like it but a trader may not.
An investor could choose the right type of stock for trading or investing based on own personality:
1) Momentum Trading – Buy High Sell Higher
2) Growth Investing – Buy Low Hold Long Term
3) Cyclic Trading/Investing – Buy Low Sell High
Since internet stocks are based on high-end technology which is dynamic in nature, an investor may consider for short term trading or long term investing but may not be suitable for life time investing as there are few technologies could last more than 10 years without strong challenge by newcomers with disruptive technologies.
Learn from Dr Tee to position in global and local stocks for trading and investing, aligning with own personalities. Sign up for free 4 hours stock investment course for public in Singapore (meet-up Dr Tee): www.ein55.com
For overseas (outside Singapore) readers, you may consider video course by Dr Tee with 75% discount now ($25, original price is $100). Content of video course and 4 hours meet-up course is different. Register video course here.
