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You are here: Home > Finance > Stocks Mutual Funds > Do You Know When to Buy and Sell? Use The Sine Wave Model |
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Suggest You - Do You Know When to Buy and Sell? Use The Sine Wave Model
Attack Of The Killer Google Zombies! for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle.Don't share this with people of a nervous disposition because I really can't restrain myself any longer.Picture the scene if you will...[A conversation last week though it could be this week or the next - it happens all the time...]Anon: "We want lots of people to find our website but it doesn't seem to be happening for some reason."Michael: "Can you tell me some of the methods you've been using to market your website?"Anon: "Well really we're just waiting for Google to update and then we'll be fine. Once that happens our problems will be over."Michael: "What else are you doing to market your website?"Anon: "There isn't anything else you can do is there?"[Michael slaps head..]In Search Of The Holy Google GrailYes - it's the attack of the Killer Google Zombies. People that think Google IS the Internet. Google is not the Internet. Google is not the search engines. Google is one search engine. That's all.There are millions of Killer Google Zombies out there right now just staring at Google looking to see whether they are Any Neuromarketing: Smart Marketing Or Jedi Mind Control Trick? Probably the hardest decision for most stock investors is knowing when to buy or sell a stock. Some investors trade at a fast rate, buying and selling very actively. Others buy stocks on a regular schedule, but don’t know when, if ever, to sell. Some investors believe the answer is to “never” sell, buying and holding essentially forever. There is a whole spectrum of philosophies and approaches.In the international bestseller "Blink," Malcolm Gladwell explains why our decisions to choose brands, select a mate, sue our doctor or make choices that decide Presidential elections, aren't as simple as they seem.Why we often let unconscious biases affect our opinions about people who are taller or have a different skin colour. And why we find it even harder to explain them when asked.I consider "Blink" essential reading for all marketers. I mean, which blue-blooded marketer wouldn't love to know how the workings of their customer’s brain will decide whether their new packaging is going to work or fail?Or why their new website is converting far fewer visitors than the old one? Of course we would.But is it really possible to understand why people choose Budweiser over Coors? George W. over John Kerry? Coke over Pepsi?No one really knows for sure. And asking people why they took those decisions doesn't necessarily give the right answers.Why? Because most of us really haven't a clue as to why we make those choices.95% of consumer decision-making occurs subconsciously, according What makes the most sense? Is there even a single right answer? In order to get started thinking logically about this all-important issue, let’s create a simple model of how stock prices change. The model is idealized and represents no real stock, but it is a powerful tool for thinking about the questions of when to buy and when to sell. Here’s the model: Picture a simple sine wave, with a horizontal line straight through the center of it. The straight line represents time, while the sine wave represents the changing price of your stock over time. The price starts at the left end of the timeline, or “time = 0,” which could be right now. The sine wave starts at the centerline, rises for a while, levels off at a peak, declines for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle. Anyb Financial Advisor ver” sell, buying and holding essentially forever. There is a whole spectrum of philosophies and approaches.A financial advisor is a person who advises people of all walks of life on financial affairs. He is a very valuable servicer in the area of saving money and making investments. He makes investment decisions, manages your finances and gives you all financial advice. Thus he influences the vital decisions in your life, career, business and future.So the financial advisor should definitely be a qualified and experienced person who has experience with various financial matters. In matters related to money, experience counts. Practice makes perfect, says the proverb. You can never risk your career and money for unintelligent advice. So qualification and competence matter.How will you check a financial advisor’s credentials? Of course the reputation and references are important. Credentials must also be considered. The designations may sometimes vary, like financial consultant or certified financial planner. They of course are professionally qualified for the post.Next is the educational background. Here you have strike the right balance. You might find some very brilliant and competent financial advisors who h What makes the most sense? Is there even a single right answer? In order to get started thinking logically about this all-important issue, let’s create a simple model of how stock prices change. The model is idealized and represents no real stock, but it is a powerful tool for thinking about the questions of when to buy and when to sell. Here’s the model: Picture a simple sine wave, with a horizontal line straight through the center of it. The straight line represents time, while the sine wave represents the changing price of your stock over time. The price starts at the left end of the timeline, or “time = 0,” which could be right now. The sine wave starts at the centerline, rises for a while, levels off at a peak, declines for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle. Any Credit Repair Help f how stock prices change. The model is idealized and represents no real stock, but it is a powerful tool for thinking about the questions of when to buy and when to sell.When trying to repair bad credit, you can either try and repair credit by yourself or use the services of a credit repair company that specializes in helping people repair bad or damaged credit if you don't feel comfortable doing it on your own. If you are having problems with your credit, you may need to get the help of a professional credit repair service. Do you want to fix up your credit report so that you do not get turned down for loans when you need them? Well, there are services that claim to be able to repair your credit.However, you should not hire credit repair services expecting them to get you a positive review on your credit even if the negative items on your report are real. Another tactic that credit repair counseling services use is to send to the three credit reporting agencies letters stating that the negative information on your credit report is inaccurate, and demand that they remove this information. Some credit repair companies will tell you to dispute all of the derogatory information in your credit report, even if it is true.If you think that the information in your report is inaccur Here’s the model: Picture a simple sine wave, with a horizontal line straight through the center of it. The straight line represents time, while the sine wave represents the changing price of your stock over time. The price starts at the left end of the timeline, or “time = 0,” which could be right now. The sine wave starts at the centerline, rises for a while, levels off at a peak, declines for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle. Any Business Sellers - Beware of the C Corp Asset Sale he straight line represents time, while the sine wave represents the changing price of your stock over time. The price starts at the left end of the timeline, or “time = 0,” which could be right now. The sine wave starts at the centerline, rises for a while, levels off at a peak, declines for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle.We recently completed a Merger and Acquisition engagement to sell our client to a large publicly traded company. Our client had started her company 25 years ago and had set it up a C Corp. She never was advised to change that structure in preparation for a much better tax treatment on the sale of the business.The buyer had an acquisition policy of only asset sales and no stock sales. The tax implications to our client were punishing. In a C Corp Asset Sale, there is no such thing as a long-term capital gain for the corporation. Since our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary income and would have been taxed at a rate of about 30%. Once taxes are paid by the corporation and a distribution is made to the stockholders, the stockholders are then taxed at the 15% individual long-term capital gains rate.Let's say that the purchase price was $5 million. With an asset sale, the Corporation would first pay 30% of $5 million, or $1.5 million. On the distribution, the shareholders would pay 15% of the $3.5 million distribution or $425, Any Five Things You Forgot About Great Sales Training for a while, passes down through the centerline (so that the price goes below where it started), levels off again forming a trough, rises smoothly back up through the centerline, goes on to another peak, and so on. Each full rise, fall, and re-rise to the centerline is a cycle.Great sales training differs from what you’re probably doing, in five significant ways. In your heart you knew these things. You've just forgotten!(1) Nobody ever learned a behavioral skill by being talked at. Want to improve that golf, tennis or baseball swing? Don’t expect a speech by a retired Hall of Fame athlete or a video to do it for you.Yet, what do we do? We have classroom training sessions because most of us have warmed school desks for so long that we’re used to that medium. Some chalk-talk is fine, as an overall orientation, but the best method is to coach trainees, one-on-one.(2) For thousands of years apprenticeships have worked in all of the skilled trades. Aspiring shoemakers learned by being around their parents, who were seasoned pro’s, and they, in turn, learned at the feet of their parents. Novices watched, noting how the family interacted with customers, and they were given small tasks to master before being given bigger ones.Today, there is far too little time dedicated to enabling new hires to observe veterans at work.(3) Today’s salespeople get far too little feedback Anybody familiar with stock price movements knows that prices are volatile. They go up, they come down. None of them, of course, traces a perfect sine wave shape, but the sine wave picture is a simplifying assumption: It is a smoothed-out version of what stock prices actually do. For our idealized model, let’s say that each peak in the cycle is 20% above the centerline, and that each trough is 20% below the centerline. So there is a 40% difference between the peak price and the lowest price of each cycle. That happens to be the difference in the real world between many stocks’ high and low prices for a year. So in our model, let’s make each cycle one year long. Finally, tilt the whole thing upwards slightly, so that the centerline, rather than being horizontal, is pointed upward at 10% per year. This represents the average return of the stock market over the past century or so. That’s our idealized model. Let’s call the company that it represents Sine, Inc. Sine’s stock has behaved like this since the company went public 100 years ago, and it will behave like this infinitely into the future. What can we learn from this
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