Abstract:
This study was directed toward the problem of determining mining investment criteria and selection of timing indicators to better assist in the decision of stock purchases and the predictability of their performance. The basic hypothesis for the investigation was based upon the assumption that certain investment criteria and timing indicators are common to the extreme performance stocks. Thus, stocks exhibiting characteristics common to those demonstrated by the extreme performance stocks will perform with some degree of predictability. The investment arena gives considerable attention and publicity to the extreme performance stocks in the stock market; particularly to the top gainers and to the top losers. The stock market investor, examining these stocks in retrospect is very perplexed. An investor holding these particular stocks, irrespective whether he is an aggressive-speculative or a defensive investor, cannot maximize his profit or minimize his losses unless the reasons behind the movements are known to him. A potential investor desiring to participate in the action seeks indicators which can predict future price movements of these stocks and particularly that of the others. The purpose of studying this problem was to determine the analytical techniques and tools which can be used to select stocks and predict their performance. Several of the commonly accepted principles of investment analysis were tested and evaluated. Included were financial analysis using diagnosis of income Statements and balance sheets, and market analysis using technical indicators. The analysis was aired at identifying the best techniques for selection of stocks and prediction of their performance based upon criteria and clues which can allow forecasting of severe price movements in advance of or, if possible, during the time of occurrence.