[RedJoker]

Scorpion Man, that post was in no way meant to flame you, sorry if it came across that way.

The way I do fundamental research was how I was shown how to so the answer is no; I do not understand why I use some of the screens. However, I will attempt to answer the questions.

Beta is a product of the CAPM and shows how risky a stock is when held in a diversified portfolio. Yes; my restrictions are too tight, they were stated as ideals.

‘Low debt, why is that a positive thing?’ Debt always appeared to me to hold negative connotations, for individuals anyway. In a business sense, I’d imagine debt would reduce cash-flow. Why is cash-flow a good thing? Cash-flow is needed to invest in other projects and grow the company.
I imagine you are claiming that debt has negligible importance and not that low debt is a negative thing?

‘Where do projected revenues come from?’ If I knew that I wouldn’t need to use their projections [img]/images/graemlins/smile.gif[/img]. They probably come from past revenue figures, sales estimates, etc. These estimates can never be perfect because they are using history to predict the future. Estimates are often wrong, large gaps often occur after earnings.

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All that stuff is already in the price of the stock...making money in the market is all about second derivative change (do you understand why?).

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According to the EMH current stock prices include all information including past history and future projections. Therefore using projections to make super-normal returns will not work because the stock price already reflects this data.

I was watching an introductory video for ‘snapsheets’, one of the indicators available showed earnings (I think). They were looking at Amazon, AMZN. It showed that AMZN had been losing millions from 00-02 but gradually losing more each quarter. Around early 02 the trend started to change, it was still losing millions, but steadily less. By the time AMZN was profitable it was late 03, the stock price had already increased over 800% by the time it was finally profitable. Is that what you mean by second derivative?

There are thousands of stocks to trade, personally I think that filtering stocks to get to a tradable number requires some screens that may make moderate difference but I don’t think it is harming your stock selection. Although time may be better spent elsewhere I’m not sure it’s counter-productive.

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when I look back on my first hedge fund job out of business school now, when i had a TON more experience than you have now...i was totally, utterly clueless even then.

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The difference between what I know now and what I knew a year ago is vast, and what I will know tomorrow after this post is torn apart [img]/images/graemlins/smile.gif[/img]; I am under no illusions that I could ever know all the intricacies of the market no matter how long I trade.

Hi Degen, sorry could you explain pwn3d, I’m sure it’s some basic acronym or abbr. but I’ve never seen it before. Thanks.