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Quick Buck Stocks (Part 1)

8 November 2007 - Features - Editor

Imagine holding stocks like Google while it is still a garage operation: you cannot beat a closely held company which is about to fund major expansion by going public. It is a pity that the private equity market remains a preserve of the elite class of investors because it is such a legitimate way of making money quickly from stocks. Other classes of securities, such as ones related to commodities, or sophisticated derivatives, tend to carry high and unknown risks, whereas a knowledgeable professional with a reasonably full order book is a more reliable way to achieve superior appreciation.

Civil construction in high growth areas also offers great profit potentials, with rising realty values to cover revenue and growth uncertainties. However, buying stocks of companies seeking to expand working capital, or to launch untested brands, is fraught with financial hazards, so investors must put prior controls in place before parting with cash.

Mezzanine financing is another way for privileged investors to make rapid gains from carefully selected stocks. This comes close to establishing your own enterprise without much of the risks. A key to mixing capital infusions for equity and debt packages is to ensure that collateral keeps rising in value faster than the opportunity cost of your money. Technological obsolescence is a trap to avoid in this form of investing, especially if funds are to be deployed for expensive equipment about which you know very little.

Competencies for Profiting from Rapid Turnover Stocks

Preoccupations with structures and regulations tend to cast shadows on the core elements of investment strategies for stocks. There are unfortunate associations between making money quickly through stocks and doing things which are shady or at best, in the grey areas of laws. However, this is not necessarily true: skilled investors such as professional managers of hedge funds can legitimately deploy alternative approaches to building portfolios which create high value growth without uncovered risks.

There are a number of established alternatives to make quick bucks from stocks, and there is endless scope to invent new approaches as well! One of the best methods is to adopt event based investing decisions. This is a matter of being an early bird in terms of spotting new merger and acquisition moves. The trick is to buy stocks of the company targeted for sale, while simultaneously selling stocks of the impending purchasing company, well before the ‘street’ (in stock market lingo) gets to know or takes notice.

Another route to handsome gains in next to no time is to resort to macro-investing. All you have to do is to specialize in a particular sector of the economy, or to become an avid watcher of a country. This is the shared secret of large financial services corporations, which employ armies of specialists for industries and regions of the world. You learn the key factors for success in a type of business, or understand the unique competencies of specific countries, and tailor investments in stocks to known effects of crucial policy decisions.

Quick Buck Stocks (Part 2)

 


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