Stock Twits, Motley Fool Etc.

Question 1

How can you tell if there is a high demand for a product or service?

Answer 1

Check their backlogs

Question 2

What is a backlog?

Answer 2

The term is used to indicate the existing workload that exceeds the production capacity. It can have positive or negative implications. It could mean a high demand for the service/product or it could mean rising inefficiency in the production process.

Question 3

A market order

Answer 3

In order to buy or sell a security immediately this type of order guarantees that the order will be executed but does not gurantee the execution price

Question 4

Peter Lynch on rate of Growth

Answer 4

As a rule of thumb a stock should sell at or below its growth rate-that is, the rate at which it increases its earnings every year. Even the fastest-growing companies can rarely achieve more than 25 percent growth rate, and a 40 percent growth rate is a rarity. Such frenetic progress cannot long be sustained and companies that grow too fast tend to self-destruct.

Question 5

Explain the incredible increase in share price of Walmart between 1970 (when Walmart went public) & and 15 years later when the stock kept going up?

Answer 5

Walmart only had stores in about 15% of the country leaving 85% of the Country still open for the company to expand.

Question 6

Peter Lynch Principle regarding which is better? Competition or total domination? (In an industry)

Answer 6

Total domination

Question 7

Peters Principle #17

Answer 7

All else being equal, invest in the company with the fewest color photos in the annual report.

Question 8

Peter Lynch Principle #18

Answer 8

When even the analysts are bored, it’s time to start buying.

Question 9

S&L stocks

Answer 9

bbr. S & L. A financial institution, organized cooperatively or corporately, that holds the funds of its members or clients in interest-bearing accounts and certificates of deposit, invests these funds chiefly in home mortgage loans and may also offer checking accounts and other banking services.

Question 10

Valuing an S&L stock

Answer 10

Current price
IPO price (see if it’s under)
Equity to Asset Ratio
(Higher is better)
Dividend 
Book Value
PE Ratio 
Avoid High risk real estate loans
(Commercial loans and construction loans)
90-day non performing Assets
Real Estate Owned

Question 11

Cyclicals: Proben method for losing half your money in a short period of time

Answer 11

Buying a cyclical after several years of record earnings and when the P/E ratio has hit a low point

Question 12

What is it in cyclicals that when compared to other stocks is bad?

Answer 12

A high P/E ratio may be good news for a cyclical. It often means a company is passing through the worst and business will improve.