Ken Dolan: Hi everybody! We’re glad you joined us. Daria and I did a seminar not long ago and one of the question people asks us was like, what are the kinds of questions because everybody doesn’t buy mutual funds. Some people actually try to buy individual shares of stock. But their question is, what kinds of questions should I be asking to my broker or my financial planner to maybe come up with stocks that will actually go up?
Daria Dolan: There is a concept.
Ken Dolan: Up.
Daria Dolan: Up, first question should always be, Mr. Broker, Ms. Broker you asks me what my objectives, my investment objectives were when we got open this account here. How is this stock match those objectives? Because if doesn’t and I can’t give you a good reason why it would meet what your goals are and if it’s safety then it better be your pretty darn good blue chip stock.
Ken Dolan: Okay, that’s a good one, doesn’t meet my objective. Number two, here is a question. Is it a leader in its field, in its field or doesn’t have the potential to be a leader in its field. Well, give me another one.
Daria Dolan: Well, in the words of the great Peter Lynch buy a company that can be run by an idiot because sooner or later an idiot is going to run it. So, the next thing that you want to find out is how strong the management team is and how much stock to they own in company.
Ken Dolan: The management team?
Daria Dolan: The management team. If they have invested in it then maybe you shouldn’t be either.
Ken Dolan: Listen to this one. It’s not on our lists I’m throwing it in a freebie. How about I can sing a lot of insiders the major management members selling a lot before I buy it, wait a minute.
Daria Dolan: Although that a little trickier to use as a gage because in some cases its stub for tax purposes and you know I mean if it is quest the board you see everybody will be a VP or higher next to the main.
Ken Dolan: But what if everybody’s doing it?
Daria Dolan: If they're all doing it then you know you’ve got problems but you can you know the CEO sell shares. It could be because the accountant said “Hey we got to do this to pay some taxes.”
Ken Dolan: Alright, okay. Here is another one, does the company that Mr. or Ms. Financial are trying to get me to buy or they maybe with the company. Does it have unique product to surface or it is just one of a bunch of the companies in the same field. What is unique about what they do and what they have to sell?
Daria Dolan: And you use, or at least at the very list to understand what their product or service is. It is not a good thing—
Ken Dolan: Both of you, the financial planner and you.
Daria Dolan: Well, but you is the stock owner. If you don’t understand the business, for example, I know nothing about medicine. I would never ever invest a biotech firm personally because I don’t know what cutting edge, what’s good, what’s bad you know what the future is. So, if you don’t understand the product or service I’d say, there is your first indication that this is not the company for you to buy.
Ken Dolan: Good. Let me give you a couple of quick once too, if the company is death low or less stable, the less to under control. Number two, what’s the down side to the company for the B, or to A or to B. What’s the down side to the companies bright future you told me what it is you know it has unique proof it is management its been there for a while it’s product to understand. What could go wrong in this scenario?
Daria Dolan: Then, since we are staring a recession right smack in the face right now.
Ken Dolan: Says you.
Daria Dolan: Says me.
Ken Dolan: Alright.
Daria Dolan: How does did this company fair during the last recession? It was an around until the last recession then you’re going to have to go on assumptions made by analyst by the broker themselves but preferably a longer term companies so that you have some sort of track record how well they do. Is it a product re-service the people are going to need no matter how bad the economic times maybe?
Ken Dolan: That’s the good one Daria, because you are concern if that can put some stuff on dolans.com talking about the recession and the effect of the federal stock like that. I like that one. How does the company’s performance X, Y, Z were talking, how is that compare with the performance maybe the last not only how much it sells or what they sells but how is it compare in terms of profit. Maybe even do this with companies in its market place what other real spot on competitors. How will do they compare?
Daria Dolan: How innovative is the company? Because you know if you’re investing in a company because it has a great flash base on one product and there is nothing else in the pipe line. Trust me eventually that product falls out of favor. So, how many other innovations do they plan on coming out with or how do they plan on making what they currently are doing so well with do better.
Ken Dolan: Could that be a plan B?
Daria Dolan: Yeah.
Ken Dolan: Of course. Also, how about this one. How did the company—I meant to mention ago when you say recession Daria. How do the companies fear during the last recession? How well did the companies stock react?
Daria Dolan: I said that already dear.
Ken Dolan: I’m I repeating you?
Daria Dolan: Yes, you are. So I think its time for me to just sum the sold up with the first and foremost.
Ken Dolan: Is it about selling?
Daria Dolan: Yes. This is most important because everybody knows want to tell you when to buy not a sold out there usually wants to venture when you should sell. What could go wrong and under what conditions in that what price Mr. or Ms. Financial Person.
Ken Dolan: Do we sell?
Daria Dolan: Do we sell the stock.
Ken Dolan: Bottom line is simply this, before you go to running off had passively especially girl is on certain market times. Before you make decision with your significant other or your broker financial planner, ask these questions. If you can't get the answer to this questions your probably with the wrong company with the wrong broker, with the wrong financial planner in the wrong situation. That somebody can explain to you a situation of why these make sense to you in three or four or five minutes, then they don’t even know what they’re talking about.
Daria Dolan: And if you can’t explain it to someone else, they haven’t done there job.
Ken Dolan: Stock Picking 101, we’ll be back.
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