HELP : 13. “There's no quicker way to tell if a large growth stock is overvalued, undervalued, or fairly priced than by looking at a chart book.” Q: what is chart book?
16. “Annual tax selling by disheartened investors at the end of the year drives the prices of smaller issues to pathetic lows.” Q: what is annual tax selling ? Thks
It appears to me the "chart book" is his book with the charts of the share price and the intrinsic value of the stock. If the share price is above the fair value, the share is overvalued.
In US, there is capital gain tax. So you pay gain on stocks as well as claim back losses. So at the end of the year, the funds will sell off the loss making stocks, especially those small capitalized stocks, to claim tax deduction for losses. They sell the small cap stock because the fund managers do not want investors to blame them on losses in small cap stocks, whereas losses in big cap stocks is ok because everybody owes them and nobody will blame you on that.
So come January, they will buy back the small cap stocks because small cap stocks historically have been providing them with better return; and hence the anomaly of The January Effect.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
jameslim88
17 posts
Posted by jameslim88 > 2013-09-24 17:40 | Report Abuse
all china base stock listing in malaysia is undervalue , do u dare to buy