Marketing Director at The Law Offices of Craig Goldenfarb, P.A.
Tom is the Marketing Director at the Law Offices of Craig Goldenfarb, P.A. The Law Offices of Craig Goldenfarb is the entrusted mid-size personal injury, medical and legal malpractice, and nursing home neglect law firm to thousands of clients in West Palm Beach for over 15 years. Tom's ...more

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Three Things To Avoid As An Amateur Stock Picker
9 years ago

Joe, nothing wrong with doing something stupid, so long as we learn from it. You and me both tried day trading before reality throw a cold glass of water in our face, and we woke up. You lost money, but you're a wiser investor now. The newbies will learn, too.

Three Things To Avoid As An Amateur Stock Picker
9 years ago

Haha. Thanks for the comment, Ilene.

I would say red flags include grossly exaggerated revenues, especially quarter-over-quarter, as financial reporting fraud doesn't just suddenly happen with one filing. Grossly exaggerated revenues might be growth of 50%+ every quarter over the last 2-3 years. I would also watch for an unusual amount of shifting in executive ranks (also available in filings). Thirdly, watch out for any company in which the majority of the stock is owned by a prevailing interest (executive, officer, etc.) that isn't a large multi-national with proven revenues and audits.

Many other red flags exist, and I welcome any and all to add theirs here in addition!

T

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