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#544 - Best Stocks to Buy: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about the best stocks to buy. Oftentimes, people always ask me or they’re searching online and I see these results pop...

#544 - Best Stocks to Buy: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about the best stocks to buy. Oftentimes, people always ask me or they’re searching online and I see these results pop...

A partire dalThe "Daily Call" From Option Alpha


#544 - Best Stocks to Buy: Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about the best stocks to buy. Oftentimes, people always ask me or they’re searching online and I see these results pop...

A partire dalThe "Daily Call" From Option Alpha

valutazioni:
Lunghezza:
4 minuti
Pubblicato:
Mar 20, 2019
Formato:
Episodio podcast

Descrizione

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about the best stocks to buy. Oftentimes, people always ask me or they’re searching online and I see these results pop into the Option Alpha search bar, but everyone's looking for the best stocks to buy. And so, I wanted to offer at least my opinion when it comes to actually purchasing stock. I think the first thing I would say is that if you are going to purchase stock, it’s okay to have really big convictions, but do it in small doses. Oftentimes, I think people get really wrapped up in a particular company or a particular sector and they’re very bullish, they’re very optimistic on them and that's okay. That's a big conviction. But just do it in small doses. Don't over-allocate. As always, as a general rule of thumb, don’t over-allocate into any one particular sector or company or industry just in case the bad things that could happen, happen to that particular company or sector or industry. And so, I'm okay having people buy a stock because they love the company or they love the leadership or they love the space. That's fine. Just do it in small doses. The second thing is if you are going to start buying stock on a more regular basis, I think you have to buy stocks that have value. And so, value can be measured in so many different ways. One of the ways you could do it is through cape ratios. You could also do it, just the regular PE ratios. But whatever metric you end up using, you want to buy stocks that have intrinsic value, that have some definable edge and value. I'm not a fan of buying stocks that have massively negative PE ratios which you see all the time with large growth, high tech companies that IPO. They have these massive expectations and they have to hit these massive expectations for anybody to potentially make money in the stock. I’m not all for that. I would rather see somebody… If you are going to buy stock, buy something with some sort of intrinsic value. And then the third thing is if you are looking to buy a stock, why not use options to replicate a stock position without the capital requirement? My biggest hang up usually on stock purchases is that stock is inefficient. Any more, it's not efficient in my opinion to go out and spend the capital that would be required to buy 100 shares of stock. I think it's much more capital efficient and a smarter move to use an option strategy to replicate a stock position with a fraction of the capital outlay. We’ve talked about this a number of times on our weekly podcast inside of our courses and our training tracks, but it allows you then with this additional freed up capital to diversify into other areas or just frankly just leave a little bit of cash left over in case the worst happens. Again, my biggest hang up with stocks is not that I think stocks are terrible. I just think that stocks are inefficient compared to options. Options offer a much more attractive and much more efficient use of capital compared to stock. Hopefully this helps out. As always, if you have any questions, let me know and until next time, happy trading.
Pubblicato:
Mar 20, 2019
Formato:
Episodio podcast