Jack’s journey started with buying stocks he saw being tipped in share magazines and online forums, which, in hindsight, is not a good place to receive investing ideas. Following many unsuccessful trades, Jack’s interest was sparked as to why he kept losing money. His competitive nature kept him up long into the nights as he started to study the stock market and different investing strategies.
At first Jack learnt about fundamental investing. He began understanding the importance of key metrics like increasing revenue and profits, and a solid balance sheet. He spent many hours studying the legends of fundamental investing, such as Warren Buffett and Benjamin Graham – author of ‘The Intelligent Investor’.
Jack began to buy companies displaying strong fundamentals. The results were hit and miss. Jack was frustrated why a company’s share price would decline after he had spent many hours doing careful research and the prospects for that company looked promising.
The question Jack asked himself was “surely there is a better way to time entries and exits on trades?”