I'm new to the market, been lurking around for awhile now and have learnt a lot of valuable information. Not just on stocks but also investors psychology through observation. Watching how people here react, feel and what they do when they see green , and when they see red.
So far i'm just putting afew k's into the stock market just to get my feet wet.
My first stock was OXR and made some money selling them afew days later. But I want to aim at buying stocks to hold for afew months at least rather than afew days.
I was wondering if you guys could tell me if my logic makes any sense, and if i'm on the right track in terms of guesstimating stock values. I'm going to do this by mentioning stocks i'm interested in, and why. Please dissect my logic and tell me if i'm on the wrong/right track:
1: Telstra, with the price so low and dividend payments remaining constant. Is it not a good time to buy TLS shares now while the dividend % is so high? I don't understand why people don't jump on it when they can acquire more shares (thus more dividend payments) at significantly lower prices, even if TLS keeps sinking it’s still a great dividend %. So I must be missing something important here.
2: Webjet, the price of this online flight/rental service has been overall falling yet they've doubled their rate of online bookings in the past year and have a very high ranking of traffic on the internet. Both are factors closely tied to earnings/income this type of company would be making. Online-based companies make their profits almost entirely from their traffic and sales.
3: Netcomm, the price of this Modem Company has also been falling I think from losses made from one off costs to expand their market. My thoughts are that this is a very good medium term buying opportunity because I believe modem company sales are influenced enormously by the ISP's that offer them. How many of you got your ADSL modems from your ISP, contrast to how many that got them from a store? And almost all ISP's favour one particular modem brand company. I looked into all the major ISP's in Australia and Netcomm is the most common brand ISP's use. Giving them enormous market without the customers even knowing! Furthermore ADSL2+ has to roll out country-wide eventually and that means A LOT of people are going to need new modems because their old ones won't support it.
4: SOT, SP Telemedia is the owner of SOUL, which has recently started it's obviously enormous advertising campaign "Ya got to have SOUL!" . The share price of this has fallen over the past 6 months but in recent weeks looks like its slowly moving up as it's advertising campaign comes into effect. The SP Telemedia name might also be overlooked by having a name different to the massively advertised brand "SOUL". Though I feel weary about these One.Tel style companies for the long term.
All this of course is without ignoring the usual financial data as well. I flick through these on commsec's financial data pages, though I honestly don't understand most of it!
On top of the fact that these companies have been falling in recent times. One thing you might've noticed is that i've only been looking at IT/Telecom style companies because thats where i'm most knowledgable. And I also feel that they're being overlooked because everyone loves commodities at the moment. AND I think they are the easiest to research/grasp/understand their particular situation and positions then companies in other sectors. Is that the right track or am I completely insane and should run away from the stock market now? Is it best to stick with what you know best? i.e IT/telecom. Ultimately, does it help to know the field well or should I be looking at from a different perspective completely? Am I on the right track at all?
And last but not least - am I STILL being too speculative?
Cheers – and thanks!