by tonytran2015 (Melbourne, Australia).
As a small investor (or gambler ?) you can also pick up the warning signs of an impending share crash.
To possess that ability a small investor has to have a realistic knowledge on how some listed companies crash and on how such crash can generate a market wide crash. This posting is my a short guide to picking the signals.
1. The operation of a company listed on a share market.
Let us be simple about it.
A company on a share market is just a business, a money making machine. Its value depends on its anticipated income and its trade name plus net tangible asset backing (liquidated values).
A company listed on the share market has to bear the extra burden of extravagant salaries and bonus to directors, showmen, corporate executives (who all seem NOT KNOWING the business which they are overpaid for), external advisers…
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