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Title: ChangeWave Investing 2.0
Subtitle: Picking Monster Stocks While Protecting Gains in a Volatile Market (Unabr.)
Author: Tobin Smith
Narrator: Tobin Smith
Format: Unabridged
Length: 5 hrs and 44 mins
Language: English
Release date: 11-14-01
Publisher: Random House AudioBooks
Ratings: 3 of 5 out of 26 votes
Genres: Business, Personal Finance & Investing
Publisher's Summary:
ChangeWave Investing 2.0 presents a radically improved method for picking the next monster stocks while protecting current profits. Using the ChangeWave principles, the audio explains:
©2001 Tobin Smith; (P)2001 Random House Inc., Random House Audio, a Division of Random House Inc.
Members Reviews:
The right stock in the best space at the right time wins
To qualify for a changewave company, the company must be $1 billion in size.
Changewave 1st Screen : They must have a growth rate in the top 10 percent companies in the new economy.
Changewave 2nd Screen (Top 10 sectors) : five times S & P 500 growth
Changewave 3rd Screen (Supersectors): Top 10% growth rate in each new economy industrial category.
Changewave 4th Screen (Market): Top 1%
Predicability is essential in changewave. The most predictable winner in a top secular growth space goes to the highest valuation - everytime.
All things being equal, the simplest to understand secular growth and competitive advantage logics wins the growth stock debate.
People buy stocks the same way they buy other products. People buy products they are comfortable with; the product is simple too understand and its indispesible to the consume.
Fundamentalist figure out stock value based on fundamental research and analysis. They predict the stock price will go up. P/E = Price of Share/Retain Earnings. This tells you if the investors are being unrealistic about the price in relationship to earnings growth. However, price is a function of present value and future earnings, It does not consider capital generators, such as, copy rights, intellectual property, and patents. Capital growth companies accounted for 50 percent of all the corporate profits.
When the dust settles in any information technology-based industry, there will be one company with 60 to 70 percent of the market share and the bulk of profits and valuation in the segment. The number two guy will have a 20 percent share.
Technical analysis is employed to decide buy and sell patterns. Technical analysis uses bar charts and indicators to buy and sell.
The momentum investor waits to see what everyone else is doing. If there's momentum behind a stock, he assumes that the momentum will continue and bets on that fact.
The innovators: Because only 3 to 5 percent of the world are innovators. The early adopters: 10 to 15 percent are early adopters. The early majority: "I need more evidence"
Change wave looks at marketing, first, and considers how marketing will use product superiority as a compeling motivator to buy. Product superiority does not guarantee a consumer buy trend. (Beta verse VHS, DVD verse CD,CD verse memory stick). Customer acceptance is more important than product superiority. The winning product will have the best marketing.
Suppose a company builds a car that rides on air and suppose it comes with special safety features than are 80 percent more effective at saving lives. Does everyone go out and buy the new car? Probably not because safety does sell just increases cost. Now suppose other companies are starting to build a similar vehicle. Its radical departure from terrestial ground transportation creates a changequake. It looks like the old transportation technology is being abandoned.