Stocks

Question 1

what is the dividend yield formula

Answer 1

annual dividend for share /Current stock price

Question 2

what is the margin of safety in value investing

Answer 2

the difference between the intrinsic value and the price bought

Question 3

Price-Earnings Ratio (P/E)

Answer 3

Measures the total value investors are willing to place on a company’s earnings per share. Calculated as Current Stock Price ÷ Earnings Per Share.

Question 4

How to Calculate P/E Ratio

Answer 4

P/E = Current Stock Price ÷ Earnings Per Share. For example, if the stock price is $48 and EPS is $4, P/E = $48 ÷ $4 = 12.

Question 5

High P/E Ratio

Answer 5

Indicates investors are extremely bullish on a company’s future growth potential, willing to pay a large multiple on earnings.

Question 6

Low P/E Ratio

Answer 6

Indicates investors are bearish or unenthusiastic about a company’s future growth potential, willing to pay a lower multiple on earnings.

Question 7

Trailing P/E Ratio

Answer 7

Uses a company’s earnings over the last 12 months to calculate P/E. Provides historical insight but doesn’t account for near-term growth.

Question 8

Forward-Looking P/E Ratio

Answer 8

Compares trailing earnings to projected earnings over the next 12 months. Useful for estimating future value if the company meets projections.

Question 9

P/E Ratio in Industry Comparison

Answer 9

Allows comparison of a company’s market value to its industry average. A higher P/E suggests optimism, while a lower P/E indicates pessimism about future growth.

Question 10

Significance of P/E Ratio

Answer 10

Enables investors to quickly evaluate how the market values a company’s earnings relative to competitors or industry averages.

Question 11

What are the 3 rules for a price one be considered a Support and resistance?

Answer 11

1. they have to have multiple rejections
   2.They move AWAY from swing low/high
2. a Support can become a resistance and vice versa (previous price basis)

Question 12

what are the 3 things that tells us there is a reversal coming

Answer 12

1. 50 Moving average crossover (price crosses MA)
   2.reversal pattern (look at notes)
2. the price is at a key resistance level

Question 13

what are the venta; compra names in trading

Answer 13

Buy= offer = BID

Sell = Demand = ASK

Question 14

Rules for break outs

Answer 14

1. Break out with above average volume
   2.keep adding as i get more rules

Question 15

Rules for break outs

Answer 15

1. Breakout with an above average volume
2. At Key price action level