Successful share buying method

Legacy_user

Here is a genuine share purchase method that has brought me in a lot of success:try it as a dry run and in a bad market you won't find many qualifying shares to buy:
Select a share in a normal sector (ie. not say in the AIM)
which has the following:
1.It should be below £1.00
2 A fairly close spread
3 Yield must be 7.5 or more
4 share price must be near it's low
5 When it reaches it's low still wait in case it falls further
6 The day it rises steam in
I bought Stanley Leisure using this many years ago and also Victoria originally at 71p which went up to £4.00
Just check it out and let me know

Slasher_2

Any tips on a few companys to invest in?

Pal

A few comments and some questions:

1.It should be below £1.00

The share price is a function of the value of the company and the number of shares in existence.  Why do you limit your choice to companies worth less than £1?  Do you limit it to companies that were worth less than £1 before their shares started falling in value, or those that were previously above £1?

2 A fairly close spread

This is function of the daily supply and demand of shares (i.e. how tradable they are by market makers).  What difference does it make that the spread is low?  What do you consider to be a "close spread"?

3 Yield must be 7.5 or more

A yield this high indicates a severely damaged company.  Why did you choose 7.5%?  

Also, I assume you are talking about historical dividend yield (i.e. the current price compared to the last paid dividend), which has nothing to do with how the company will perform in the future and the yield on its next dividend.  It appears to me that you are using past financial performance to choose companies that have more recently been subject to severe financial damage, a very risky proposition.  Both Enron and Marconi would have fitted into your criteria.  Both had historical dividend yields of over 7.5% at one point, and both reached "lows" and bounced back before collapsing entirely shortly afterwards.

4 share price must be near it's low

How do you know when it is "near" it's low?  Enron and Marconi are great examples again.

5 When it reaches it's low still wait in case it falls further

How do you know when it has "reached" its low?

6 The day it rises steam in

What if it hasn't actually reached its "low" yet?  What if is simply a market related bounce (e.g. short sellers closing off positions) before the crash resumes again?

How long do you hold on to the shares once you have bought?  What happens if they fall in value after you have bought them?  Share profits are made when you sell the shares.  Their notional value while you are holding them is irrelevant.

I bought Stanley Leisure using this many years ago and also Victoria originally at 71p which went up to £4.00 Just check it out and let me know

What you are doing is momentum trading, but without any of the normal technical measures used by advanced momentum traders.  You are also investing in companies based entirely on market data rather than any knowledge of the underlying company itself. That isn't to say it won't work for you, but if it does I believe it is more due to luck than the success of the method.