1. Why do you want to be? An entrepreneur
2. Want to create a stream of "slack" income
3. Do you want to create for yourself, regardless of other sources of income? A security
4. Do you want to supplement your income so that you have enough money for some of the finer things in life?
We offer you plenty of reasons why you should start. Part-time business
Profitable trading is the perfect part-time business. The market is not a variation on your wealth, education, racial background or other characteristics of your individuality. Office politics, difficult bosses and difficult employees do not play a role. Trading You just can trade from anywhere you want. If you have some few simple rules, and you can run it as you see fit your business.
Trading is the "ideal business".
Of course, if the trade were fertile so easy, everyone would be reaping the profits. The truth is most people that trade will lose money. This is due to some reasons. Many of the people who are in this trade not succeed because they do not know the right way to do in this area business.
If you do not know to trade, that does not mean that you are not smart. On the contrary, there are many very sharp people who lose in the market millions of dollars. If you do not know how to trade, there is usually a simple explanation: you do not need a coach or a system. Do not let this discourage you.
Most people never master trading because it seems difficult to win and they rarely have contact with an experienced, successful trader or trading method that really works. They usually live alone or numerous seminars and read more books go. Not that reading books is bad, but in most cases almost everyone never collects excellent results.
Trading success is difficult if you do not know what you're doing. We can pave the path to achieve trading success and show you the real shortcut to be from books away. This program will only work for you if there is a strong desire to succeed. It will require you to work a little. After a little practice, it will become easy.
You must be willing to drop all preconceived ideas you have about trading unlearn bad habits, and the development of the discipline needed to be successful and consistent action. Are you willing to do this?
Wonderful - now you can make your life long dreams into reality.
Close your eyes and imagine what a successful trader means for you, you will see the making of crafts and trade profitably. Feel the great and peaceful feeling of having extra money in your bank account. This visualization exercise will help you a solid, dignified, to formulate personal goals and keep you motivated and focused.
Your first assignment is to write a primary goal for your trading plan!
The various reasons that you should think to do it are listed below for your convenience:
· You can take if you are involved in this activity your own decision.
· You will learn the art of making investments which could even allow about inflation in the market.
· It makes you especially when taking on your own you grow. Decision
You should also understand how you tend to react under stress. People with different personality profiles behave in dissimilar ways by stress. Again, self-awareness and some basic techniques to compensate for suboptimal behavior go a long way. ONCE YOU overcome these fallacies YOU CAN MASTER TRADING FIELD.
One should go ahead and do it to others commands listen. By him and this makes him the master of his own ship, where he will not
Sunday, 29 December 2013
Friday, 27 December 2013
My Top 5 Stock Pick Sources for 2005
1. Insider buying information
Insiders are company's CEO, president, board members,
executive vice president of the various departments.
Insider buying information top my list for obvious reasons.
Insiders have lots of reasons to sell their shares: buying a
house, huge vacation expenses, etc. However, there is usually
only one reason, when to buy the shares of their company insiders
with their personal money: the insiders believe the stock
prices are cheap and they can make money by buying their own
stocks.
Insider buying information is also very informative to
understand market sector movement. Many time I looked at
buy the insider information from industry point of view.
Particular sector had constant for some time
insider buying activities of several companies of the
same sector, which may indicate a sector-wide
undervaluation or bullishness. That was exactly what I found
in late 2003 and early 2004, when I found a lot of insiders
oil and natural gas companies constantly buying their
stocks. Eventually I chose two oil and gas resources in the late
2003 and early 2004 Whiting Petroleum (ticker WLL) and
Chesapeake Energy (CHK Ticker) from insider buying
information and they have been very successful for my premium
investment newsletter Blast Investor Real-time Plus (BIRTP)
and rewarded myself financially very substantial.
2. Guru Watch
It is definitely worth tracking stock picks or worth
ideas from the legendary gurus such as Warren Buffet, Eddie
Lambert, Jim Rogers, etc.
Wall Street Journal is a great source of investment and
financial information. My 2003 stock pick PetroChina (PTR)
was from an article in the Wall Street Journal, which published
news of Warren Buffet buying PTR. I immediately bought in
PTR stock on the same day that I read the article and
beautifully benefited from this choice.
Warren Buffet is the best value investor in the world and
you can not afford to ignore him. One way to follow Warren
Buffet picks is to go to Yahoo Finance and then read news
headlines under the ticker of BRK-A.
Recently, internet information grew so big and I believe
it is now much easier to follow gurus from web instead of
reading newspapers or magazines. An easier way to follow guru
picks to tracking services offered to use. in the web Here I
recommend the tracking service
Gurufocus.com. GuruFocus tracks almost all
value-oriented Wall Street gurus. Their list of gurus is
huge, Warren Buffet, Edward Lambert, George Soros, etc. They
even a newsletter warn you publish the latest guru buy
and sales promotions. Their service is great and the best so far, the
is all free!
3. Software Screening Tool
Blast Invest works internally a Mysql based relational
Saving database of about seven thousand shares with all
valuation metrics and tools that I can do for Benjamin
Graham NCAV ranking, return on equity modeling, low pe or
low price sale screening, etc. We work database
information every week and I constantly mine the database
looking for the big winner that can reward both me and my
newsletter readers.
Insider buying information can be even more powerful when
you can combine insider buying data with appreciation or
screening strategy, which is exactly what we do at Blast Invest
with this powerful internal relational database.
However, I found the free or low-cost screening tools out there
in the web are not impressive. Validea.com tool is nice, but
it lacks the powerful feature that I want. Yahoo or MSN tool
tool works, but they are not for power value
investors. Therefore, I can arrange my internal screening tool
very high for getting stock leads, you'll be disappointed
if you do not have access or can not pay for this powerful
instruments at a reasonable cost.
4. Online Message Board Networking
Stock message boards are wild and you may be surprised that
I put this as one of the top sources of information for getting
stock leads. Well actually, I got tips and found very solid
stock leads from internet message boards.
Actually I started myself as wild BBS stock guru many
years ago before I started blastinvest.com newsletter
business. Many Chinese American friends who regularly
visit major online BBS (mitbbs.com, or goofiz.com) would know
my past track record very well. My past BBS investment
performance certainly good performance of most if not all
The value of mutual funds hands down. My past
surely you can tell us something about the nature and quality
of message boards. Sure, most of the BBS members probably
not investing gurus, and some people in the forum can stock
is dangerous stock promoters or hypers. But certainly
there are some excellent stock gurus out there and there are
valuable investing or stock pick information there. So just
be careful and do your homework if you use information
online stock boards.
Two of the known value investing forums in the U.S.
Forum Value and Value Investor Club. Unfortunately,
Value Forum is fee-based message board and you can not post
messages without paying any fee. Value Investor Club seems
for beginners or amateurs refuse and they only want gurus
(Maybe Wall Street gurus) offering stock tips together.
I myself certainly do not agree with the approach of Value or Forum
Value Investor Club. That is why recently Blast Invest LLC
launched a free forum specifically for the individual value
investors: value-investing-forum.com. For more information
about why you should join a forum, regardless of whether
you're a beginner or a smart value investing value
investor, click here:
http://value-investing-forum.com/viewtopic.php?t=483
5. Traditional newspapers and magazines
This group includes Investor's Business Daily, Forbes,
Fortune, Barrons, etc, I read them all from time to time.
If you live near New York City and tune in to Bloomberg
radio, go bombardment of ads, as heard
"Barrons, investing information, the best source of stock".
However, my rating on their capability of giving me stock
leads or ideas are poorer than the above channels. The stock
picks published in the public media are pretty mediocre.
Of course, I still believe that they are very useful information
to understand the economy and what Wall Street gurus know
do or think. So they may not be worth subscription
fee for you to pay, they are definitely worth your time to
visit public library once a while to read them.
Insiders are company's CEO, president, board members,
executive vice president of the various departments.
Insider buying information top my list for obvious reasons.
Insiders have lots of reasons to sell their shares: buying a
house, huge vacation expenses, etc. However, there is usually
only one reason, when to buy the shares of their company insiders
with their personal money: the insiders believe the stock
prices are cheap and they can make money by buying their own
stocks.
Insider buying information is also very informative to
understand market sector movement. Many time I looked at
buy the insider information from industry point of view.
Particular sector had constant for some time
insider buying activities of several companies of the
same sector, which may indicate a sector-wide
undervaluation or bullishness. That was exactly what I found
in late 2003 and early 2004, when I found a lot of insiders
oil and natural gas companies constantly buying their
stocks. Eventually I chose two oil and gas resources in the late
2003 and early 2004 Whiting Petroleum (ticker WLL) and
Chesapeake Energy (CHK Ticker) from insider buying
information and they have been very successful for my premium
investment newsletter Blast Investor Real-time Plus (BIRTP)
and rewarded myself financially very substantial.
2. Guru Watch
It is definitely worth tracking stock picks or worth
ideas from the legendary gurus such as Warren Buffet, Eddie
Lambert, Jim Rogers, etc.
Wall Street Journal is a great source of investment and
financial information. My 2003 stock pick PetroChina (PTR)
was from an article in the Wall Street Journal, which published
news of Warren Buffet buying PTR. I immediately bought in
PTR stock on the same day that I read the article and
beautifully benefited from this choice.
Warren Buffet is the best value investor in the world and
you can not afford to ignore him. One way to follow Warren
Buffet picks is to go to Yahoo Finance and then read news
headlines under the ticker of BRK-A.
Recently, internet information grew so big and I believe
it is now much easier to follow gurus from web instead of
reading newspapers or magazines. An easier way to follow guru
picks to tracking services offered to use. in the web Here I
recommend the tracking service
Gurufocus.com. GuruFocus tracks almost all
value-oriented Wall Street gurus. Their list of gurus is
huge, Warren Buffet, Edward Lambert, George Soros, etc. They
even a newsletter warn you publish the latest guru buy
and sales promotions. Their service is great and the best so far, the
is all free!
3. Software Screening Tool
Blast Invest works internally a Mysql based relational
Saving database of about seven thousand shares with all
valuation metrics and tools that I can do for Benjamin
Graham NCAV ranking, return on equity modeling, low pe or
low price sale screening, etc. We work database
information every week and I constantly mine the database
looking for the big winner that can reward both me and my
newsletter readers.
Insider buying information can be even more powerful when
you can combine insider buying data with appreciation or
screening strategy, which is exactly what we do at Blast Invest
with this powerful internal relational database.
However, I found the free or low-cost screening tools out there
in the web are not impressive. Validea.com tool is nice, but
it lacks the powerful feature that I want. Yahoo or MSN tool
tool works, but they are not for power value
investors. Therefore, I can arrange my internal screening tool
very high for getting stock leads, you'll be disappointed
if you do not have access or can not pay for this powerful
instruments at a reasonable cost.
4. Online Message Board Networking
Stock message boards are wild and you may be surprised that
I put this as one of the top sources of information for getting
stock leads. Well actually, I got tips and found very solid
stock leads from internet message boards.
Actually I started myself as wild BBS stock guru many
years ago before I started blastinvest.com newsletter
business. Many Chinese American friends who regularly
visit major online BBS (mitbbs.com, or goofiz.com) would know
my past track record very well. My past BBS investment
performance certainly good performance of most if not all
The value of mutual funds hands down. My past
surely you can tell us something about the nature and quality
of message boards. Sure, most of the BBS members probably
not investing gurus, and some people in the forum can stock
is dangerous stock promoters or hypers. But certainly
there are some excellent stock gurus out there and there are
valuable investing or stock pick information there. So just
be careful and do your homework if you use information
online stock boards.
Two of the known value investing forums in the U.S.
Forum Value and Value Investor Club. Unfortunately,
Value Forum is fee-based message board and you can not post
messages without paying any fee. Value Investor Club seems
for beginners or amateurs refuse and they only want gurus
(Maybe Wall Street gurus) offering stock tips together.
I myself certainly do not agree with the approach of Value or Forum
Value Investor Club. That is why recently Blast Invest LLC
launched a free forum specifically for the individual value
investors: value-investing-forum.com. For more information
about why you should join a forum, regardless of whether
you're a beginner or a smart value investing value
investor, click here:
http://value-investing-forum.com/viewtopic.php?t=483
5. Traditional newspapers and magazines
This group includes Investor's Business Daily, Forbes,
Fortune, Barrons, etc, I read them all from time to time.
If you live near New York City and tune in to Bloomberg
radio, go bombardment of ads, as heard
"Barrons, investing information, the best source of stock".
However, my rating on their capability of giving me stock
leads or ideas are poorer than the above channels. The stock
picks published in the public media are pretty mediocre.
Of course, I still believe that they are very useful information
to understand the economy and what Wall Street gurus know
do or think. So they may not be worth subscription
fee for you to pay, they are definitely worth your time to
visit public library once a while to read them.
Wednesday, 25 December 2013
Nicolas Darvas: 1955 - 1960
What I like about Nicholas Darvas?
Where do I start? I consider Nicolas Darvas the BEST dealer, or as he him-self said, "investor" in the world. I admit a man's poison is another man's medicine. You can not really define what is the world's best trader. It is my opinion.
Why? You must, absolutely MUST, read, re-read, study and think about every rule in the book "How I Made $ 2 million in the Stock Market". I will not lie when I say I read it over 100 times and I still read it at least once a month. Amazingly I keep learning new points.
Darvas was actually the first CANSLIM trader without the finer points. This can set up William O'Neal followers. Although Darvas actually not studying profit sectors, shares etc. are freehand stock selection meant he using CANSLIM methods. Remember that this was way back in the late 1950s.
He turned $ 25,000 into $ 2.25 million by scanning the newspapers in just five minutes during late at night, early morning, period. He him-self said it was not so much the amount of money he made happy, but the convenience and peace of mind reached him. It was so easy. Granted, he was lucky he traded his system during a roaring bull market. But his system makes money in all market conditions. It's just a fact that you can make during a run-away bull market much more. That can be said for most systems.
The perfect position for trade. When he was wrong on a trade he shrugged, cut his losses and looked for the next. No second guessing. No emotion. No ego involved. He told the reporter who interviewed him for a time magazine article he expects to be only half the time correctly.
Undoubtedly his best quality was his ability to question everything. When he was wrong why? What worked and why? What did not work in the stock market and why? Question everything and eliminate what does not. He pieced together a system that fitted his personality. The person who can do this will be a big winner in the markets.
Defects:
Whatever defects may be the best trader of the world? Actually there is one and it was very dangerous.
Money management. Boy he was happy! Buying a 100% position in a stock could leverage on the death of his account. When he 2,500 shares, on the margin of EL Bruce (a small cap unrecognized stock) bought IF things had turned his ugly here, ie the prices gapped down or fell off very sharply, Darvas would undoubtedly have been finished. Instead of writing a book about how he made his fortune in the stock market, he would have written about how they had lost a fortune. Fortunately, he made more than $ 300,000 from this transaction alone. Had he had his money management rules in place, that the profits would not have been so great but at least it had not worked out that he could live to fight another day. IF things
It took several Darvas 'immersed' in the market with little attention to the management of money and the risks. Ignorance was really delicious. Jesse Livermore was not so lucky.
Conclusion:
A shining light of hope for the man in the street that everyone some time, education, desire and determination can make BIG money in the stock market. You do not have to make massive return information to state of the art technology, data, or have in-side.
If you Darvas $ 2.25 million by scanning the paper for five minutes before going to sleep what does that say for today's hi-tech trading techniques?
His methods still work and will always work. If it stops so will the stock market.
**** 1/2 41/2 Star Trader (PS there will never be a 5-star dealer)
Where do I start? I consider Nicolas Darvas the BEST dealer, or as he him-self said, "investor" in the world. I admit a man's poison is another man's medicine. You can not really define what is the world's best trader. It is my opinion.
Why? You must, absolutely MUST, read, re-read, study and think about every rule in the book "How I Made $ 2 million in the Stock Market". I will not lie when I say I read it over 100 times and I still read it at least once a month. Amazingly I keep learning new points.
Darvas was actually the first CANSLIM trader without the finer points. This can set up William O'Neal followers. Although Darvas actually not studying profit sectors, shares etc. are freehand stock selection meant he using CANSLIM methods. Remember that this was way back in the late 1950s.
He turned $ 25,000 into $ 2.25 million by scanning the newspapers in just five minutes during late at night, early morning, period. He him-self said it was not so much the amount of money he made happy, but the convenience and peace of mind reached him. It was so easy. Granted, he was lucky he traded his system during a roaring bull market. But his system makes money in all market conditions. It's just a fact that you can make during a run-away bull market much more. That can be said for most systems.
The perfect position for trade. When he was wrong on a trade he shrugged, cut his losses and looked for the next. No second guessing. No emotion. No ego involved. He told the reporter who interviewed him for a time magazine article he expects to be only half the time correctly.
Undoubtedly his best quality was his ability to question everything. When he was wrong why? What worked and why? What did not work in the stock market and why? Question everything and eliminate what does not. He pieced together a system that fitted his personality. The person who can do this will be a big winner in the markets.
Defects:
Whatever defects may be the best trader of the world? Actually there is one and it was very dangerous.
Money management. Boy he was happy! Buying a 100% position in a stock could leverage on the death of his account. When he 2,500 shares, on the margin of EL Bruce (a small cap unrecognized stock) bought IF things had turned his ugly here, ie the prices gapped down or fell off very sharply, Darvas would undoubtedly have been finished. Instead of writing a book about how he made his fortune in the stock market, he would have written about how they had lost a fortune. Fortunately, he made more than $ 300,000 from this transaction alone. Had he had his money management rules in place, that the profits would not have been so great but at least it had not worked out that he could live to fight another day. IF things
It took several Darvas 'immersed' in the market with little attention to the management of money and the risks. Ignorance was really delicious. Jesse Livermore was not so lucky.
Conclusion:
A shining light of hope for the man in the street that everyone some time, education, desire and determination can make BIG money in the stock market. You do not have to make massive return information to state of the art technology, data, or have in-side.
If you Darvas $ 2.25 million by scanning the paper for five minutes before going to sleep what does that say for today's hi-tech trading techniques?
His methods still work and will always work. If it stops so will the stock market.
**** 1/2 41/2 Star Trader (PS there will never be a 5-star dealer)
Monday, 23 December 2013
Why You Should Start Investing Now Not Later?
You can not be too late to start if the market is always unpredictable. Inflation rates fluctuate up and down so with high inflation will get nothing if you gain too. So you need a bit of serious attitude towards the start of trading. Do it today to get more return tomorrow!
Today's world is a rat race and everyone wants to win the race, so it is very crucial for a pull up their socks and get to work in practice and try and see if you like those ideas are really about works in the real world. Many times it is seen that a business manager can not solve a small problem, but for someone with no experience in the business made it very easy for that novice person can think out of the box that was not professional.
So it is very important for more and more young people to get involved and try to make the entire trade and fair much better in the standards and quality so that future stocks can only mean profit and nothing else for everyone To get into this immense profits and to stand in this trade you must ensure the following two things:
· Extra Money
· Some savings for your future.
The extra money will allow to make sure can be made of your daily requirement of money if that money is short term about your business as a long term investment and you might not have to book losses in case your investments turn negative and you should take the money out.
Long-term investment is actually an idea where some savings even earn a better return of inflation, so you always have a better backup in case of an emergency should have.
With all this and hear all about it, we think you are confident enough not to think of the company, but to simply note correctly. Thinking is not a solution.
Today's world is a rat race and everyone wants to win the race, so it is very crucial for a pull up their socks and get to work in practice and try and see if you like those ideas are really about works in the real world. Many times it is seen that a business manager can not solve a small problem, but for someone with no experience in the business made it very easy for that novice person can think out of the box that was not professional.
So it is very important for more and more young people to get involved and try to make the entire trade and fair much better in the standards and quality so that future stocks can only mean profit and nothing else for everyone To get into this immense profits and to stand in this trade you must ensure the following two things:
· Extra Money
· Some savings for your future.
The extra money will allow to make sure can be made of your daily requirement of money if that money is short term about your business as a long term investment and you might not have to book losses in case your investments turn negative and you should take the money out.
Long-term investment is actually an idea where some savings even earn a better return of inflation, so you always have a better backup in case of an emergency should have.
With all this and hear all about it, we think you are confident enough not to think of the company, but to simply note correctly. Thinking is not a solution.
Saturday, 21 December 2013
Deja Vu, All Over Again (and Again...)
During every correction, I encourage investors to the destructive inertia that results from trying to determine avoided: "How low can we go" and / or "How long will this take? "Investors who add to their portfolios during downturns invariably experience higher values during the next advance. Yes, Virginia, just as surely as there is a Santa Claus, there is another market ahead in our future.
Corrections are part of the normal menu "shock market", and can be brought about. By bad news or good news (Yes, that's what I meant to say.) Investors always over-analyze when prices are weak and lose their common sense when prices are high, thus perpetuating the "buy high, sell low" Wall Street line dance. Await the perfect time to jump in a falling market is as foolish a strategy as taking losses on investment grade companies and holding cash.
Repetition is good for the CPU of the brains, so forgive me for reinforcing what I said in the face of every correction since 1979 ... If you do not love corrections (and deal with them, such as visiting relatives) you really do not understand the financial markets. Not be offended, it seems like very few financial professionals want you to see it this way and, in fact, Institutional Wall Street loves it when individual investors panic in the face of uncertainty. Psstt ... uncertainty is the regulation playing field for investors, and hindsight is not welcome in the stadium.
A closer examination of the news that's fit to print (but not often enough printed) you need to make more confident in the coming years regardless of your politics.
The good news is very good: 1. Employment, jobs, and unemployment numbers are as good or better than they have in years. 2. Production numbers are stronger and trending up. 3. The "core" inflation is historically low. 4. Interest rates are historically low. 5. Orders for durable goods upward trend. 6. Operating results are strong. 7. Corporate dividend payments have increased. 8. Equity as an asset class, are considered the most reasonably valued, compared with Real Estate, Fixed Income, and Commodities. 9. Income tax rates are at historic low levels, in particular with regard to investment income. 10. Gross domestic product grows.
The bad news is not so bad, pretty much the same ole things: 1. Hurricane damage. We have actually had fewer major storms than expected. The ones we had were devastating, but the reconstruction / preparation task ahead will be good for the economy. 2. War in Iraq. There is always a war of some kind, somewhere. It's bad, but only the battlefield has changed ... and war has always been good for the economy. 3. Politics. We have an unpopular president who can not seem to get out of its own way. Who were the last held? They had no wars? 4. Wall Street / corporate scandals. Hardly new and never economy busters. 5. Energy prices. I still do not see gas lines, and maybe someone will insist on additional refining capacity. 6. Trade deficits. News would give foreigners more money so they can buy our products more. 7. High consumer debt. New? Not. 8. The threat of terrorism. A major serious problem for the past how many years? The federal regulatory agencies probably do more damage to the economy. 9. The bird flu pandemic? Maybe, but not yet, and we will really have we that bad boy pharmaceutical companies or not? 10. The Anniston / Pitt break, and neither the Yankees nor the Bosox in the World Series. Now we're talking!
Clearly, there are no new (economic) to be overly concerned about. Problems And for now, we just (and I mean just) have to do with the opportunities at hand. Low but increasing interest force fixed income prices down and yields up ... An Opportunity! Economic good news stimulates higher rates which will reduce inflationary pressures ... share prices downward trend Opportunity Two! The forces of good are intersecting with the dark side of the calendar mentality Wall Street, which sell for timely tax losses and portfolio Window Dressing ... Opportunities One and Two squared!
There is an investment Mindset solution to the problems that most people have to deal with corrections, and rallies also, for that matter. I never understood why "yard sale prices" here are so scary. What if you cut off a finger each time you get a splinter? Heal wounds, and so are the prices of high-quality effects.
In recent years, Wall Street and the media the process of investing in a competitive event of Olympic proportions and stature turned. What was once a long-term (one year is not a long-term), goal directed activity, has become a series of monthly and quarterly sprints. The direction of the market is not as important as the measures we take in anticipation of the next change of direction. Performance evaluation should rethunk (sic) in terms of cycles!
The problems and solutions, to establish understanding and retraining down. It would be impossible to cover to be here, each of these topics, but here are a few teasers. You need to focus on the application of the securities in the portfolio. You must understand and accept the normal behavior of your securities in the face of different environmental factors. You must overcome with calendar period Market Value analysis, your obsession and switch to a more manageable asset allocation approach that centers on your portfolio capital.
But for now, relax and enjoy this correction. It is your invitation to the fun and games of the next rally.
Steve Selengut
Corrections are part of the normal menu "shock market", and can be brought about. By bad news or good news (Yes, that's what I meant to say.) Investors always over-analyze when prices are weak and lose their common sense when prices are high, thus perpetuating the "buy high, sell low" Wall Street line dance. Await the perfect time to jump in a falling market is as foolish a strategy as taking losses on investment grade companies and holding cash.
Repetition is good for the CPU of the brains, so forgive me for reinforcing what I said in the face of every correction since 1979 ... If you do not love corrections (and deal with them, such as visiting relatives) you really do not understand the financial markets. Not be offended, it seems like very few financial professionals want you to see it this way and, in fact, Institutional Wall Street loves it when individual investors panic in the face of uncertainty. Psstt ... uncertainty is the regulation playing field for investors, and hindsight is not welcome in the stadium.
A closer examination of the news that's fit to print (but not often enough printed) you need to make more confident in the coming years regardless of your politics.
The good news is very good: 1. Employment, jobs, and unemployment numbers are as good or better than they have in years. 2. Production numbers are stronger and trending up. 3. The "core" inflation is historically low. 4. Interest rates are historically low. 5. Orders for durable goods upward trend. 6. Operating results are strong. 7. Corporate dividend payments have increased. 8. Equity as an asset class, are considered the most reasonably valued, compared with Real Estate, Fixed Income, and Commodities. 9. Income tax rates are at historic low levels, in particular with regard to investment income. 10. Gross domestic product grows.
The bad news is not so bad, pretty much the same ole things: 1. Hurricane damage. We have actually had fewer major storms than expected. The ones we had were devastating, but the reconstruction / preparation task ahead will be good for the economy. 2. War in Iraq. There is always a war of some kind, somewhere. It's bad, but only the battlefield has changed ... and war has always been good for the economy. 3. Politics. We have an unpopular president who can not seem to get out of its own way. Who were the last held? They had no wars? 4. Wall Street / corporate scandals. Hardly new and never economy busters. 5. Energy prices. I still do not see gas lines, and maybe someone will insist on additional refining capacity. 6. Trade deficits. News would give foreigners more money so they can buy our products more. 7. High consumer debt. New? Not. 8. The threat of terrorism. A major serious problem for the past how many years? The federal regulatory agencies probably do more damage to the economy. 9. The bird flu pandemic? Maybe, but not yet, and we will really have we that bad boy pharmaceutical companies or not? 10. The Anniston / Pitt break, and neither the Yankees nor the Bosox in the World Series. Now we're talking!
Clearly, there are no new (economic) to be overly concerned about. Problems And for now, we just (and I mean just) have to do with the opportunities at hand. Low but increasing interest force fixed income prices down and yields up ... An Opportunity! Economic good news stimulates higher rates which will reduce inflationary pressures ... share prices downward trend Opportunity Two! The forces of good are intersecting with the dark side of the calendar mentality Wall Street, which sell for timely tax losses and portfolio Window Dressing ... Opportunities One and Two squared!
There is an investment Mindset solution to the problems that most people have to deal with corrections, and rallies also, for that matter. I never understood why "yard sale prices" here are so scary. What if you cut off a finger each time you get a splinter? Heal wounds, and so are the prices of high-quality effects.
In recent years, Wall Street and the media the process of investing in a competitive event of Olympic proportions and stature turned. What was once a long-term (one year is not a long-term), goal directed activity, has become a series of monthly and quarterly sprints. The direction of the market is not as important as the measures we take in anticipation of the next change of direction. Performance evaluation should rethunk (sic) in terms of cycles!
The problems and solutions, to establish understanding and retraining down. It would be impossible to cover to be here, each of these topics, but here are a few teasers. You need to focus on the application of the securities in the portfolio. You must understand and accept the normal behavior of your securities in the face of different environmental factors. You must overcome with calendar period Market Value analysis, your obsession and switch to a more manageable asset allocation approach that centers on your portfolio capital.
But for now, relax and enjoy this correction. It is your invitation to the fun and games of the next rally.
Steve Selengut
Thursday, 19 December 2013
Without Discipline The Market Will Crush You
Discipline. Without it, you're in a world of hurt, but unfortunately, we double talk ourselves to believe our own bullshit. It will add up and crush you.
Have you ever been in something, saw it fall and then made all kind of excuses for it, now it's every day item lower? Sure you have. Have you ever won a few in a row, and then immediately turn you into some kind of god stock, and buy bigger and heavier the next time, only to see it all go down the drain? Sure you have.
Many times what separates a good investment from a wish, it is discipline. We've all made stupid mistakes in the past, but we have learned enough to change? Our roads In many cases, the answer is no. But therein lies the key people. If you learn to be disciplined, you will be. Much better investor
Let's say you buy 100 shares of XYZ and it's about spending a few hundred dollars. Then the next trade 100 shares of ABC, and it goes on to create a few hundred. That human nature is to get. Braver Out of the box you buy 400 shares of ABC and the "tree" the next time it is acid and erases all your previous winnings. Why do you have to buy as many shares Because your previous two victories strengthened your ego. You have pride. You thought you had it all figured out. That's gunna hurt.
Let's say you had a few days to lose. Do you do it all on red, and turn the wheel? If so, that is gunna leave a mark. No people, the way to win this game is from day to day, and stick to a discipline. You do not double down on a losing trade, you will lose more. You do not wear your desperation on your head like a big silver badge. You stick to your plan.
We have seen too many people get hurt by doing stupid things. Really good traders have packed up and gone home broke by getting too much ego, or getting too much despair. You can not have both. Every day is a new dawn. It does not matter if you've won in a row, this is a new day tomorrow. Tenfold All those victories mean jack when the bell rings.
Do not deviate from a well constructed plan for people. Please losses for what they are losing. A part of the game. Do not blame the loss of yesterday stupid actions today. If you have a stop in place, try it and honor it. Not making excuses for a bad game, but shake your head and move on.
People tell us all the time, "boy you play it close to the vest." Yes, we do, and because of it, we do not get too many "home runs" where we doubles and triples. But again, our average loss is a percent or two, while our profits on average 4 to 6%. We can live with it and so can you. Unless you are one of the truly happy people, and yes we know they exist, it is better to sell your own basic plan. Do not understand, do not reach, let a small loss turn into a big one.
In baseball, the man who occasionally can get at times is the most sought after player. As much as we all like to see a monster home run and we worship the boys a 500 footer can crush, the fact is the home run man strikes out many many times more than he hits a home run. But his only punishment is a few boos and a lonely walk to the dug out. But in our game, go for the fences carries a dear penalty. We're going broke.
Be the consistency guy. Be the man that makes a lot of singles. Along the way you get double and even your home run. But do not focus on them. Focus on the basics, day after day. It works for the major league and it will work for you. Stay disciplined.
Increased trade and investment tips on:
Have you ever been in something, saw it fall and then made all kind of excuses for it, now it's every day item lower? Sure you have. Have you ever won a few in a row, and then immediately turn you into some kind of god stock, and buy bigger and heavier the next time, only to see it all go down the drain? Sure you have.
Many times what separates a good investment from a wish, it is discipline. We've all made stupid mistakes in the past, but we have learned enough to change? Our roads In many cases, the answer is no. But therein lies the key people. If you learn to be disciplined, you will be. Much better investor
Let's say you buy 100 shares of XYZ and it's about spending a few hundred dollars. Then the next trade 100 shares of ABC, and it goes on to create a few hundred. That human nature is to get. Braver Out of the box you buy 400 shares of ABC and the "tree" the next time it is acid and erases all your previous winnings. Why do you have to buy as many shares Because your previous two victories strengthened your ego. You have pride. You thought you had it all figured out. That's gunna hurt.
Let's say you had a few days to lose. Do you do it all on red, and turn the wheel? If so, that is gunna leave a mark. No people, the way to win this game is from day to day, and stick to a discipline. You do not double down on a losing trade, you will lose more. You do not wear your desperation on your head like a big silver badge. You stick to your plan.
We have seen too many people get hurt by doing stupid things. Really good traders have packed up and gone home broke by getting too much ego, or getting too much despair. You can not have both. Every day is a new dawn. It does not matter if you've won in a row, this is a new day tomorrow. Tenfold All those victories mean jack when the bell rings.
Do not deviate from a well constructed plan for people. Please losses for what they are losing. A part of the game. Do not blame the loss of yesterday stupid actions today. If you have a stop in place, try it and honor it. Not making excuses for a bad game, but shake your head and move on.
People tell us all the time, "boy you play it close to the vest." Yes, we do, and because of it, we do not get too many "home runs" where we doubles and triples. But again, our average loss is a percent or two, while our profits on average 4 to 6%. We can live with it and so can you. Unless you are one of the truly happy people, and yes we know they exist, it is better to sell your own basic plan. Do not understand, do not reach, let a small loss turn into a big one.
In baseball, the man who occasionally can get at times is the most sought after player. As much as we all like to see a monster home run and we worship the boys a 500 footer can crush, the fact is the home run man strikes out many many times more than he hits a home run. But his only punishment is a few boos and a lonely walk to the dug out. But in our game, go for the fences carries a dear penalty. We're going broke.
Be the consistency guy. Be the man that makes a lot of singles. Along the way you get double and even your home run. But do not focus on them. Focus on the basics, day after day. It works for the major league and it will work for you. Stay disciplined.
Increased trade and investment tips on:
Tuesday, 17 December 2013
Volume Is Key
When a stock rises or breaking out of a bullish formation must have an increase of 50% or more by volume to validate the move. This works just like the thrusters of the space shuttle. The larger the volume, the greater the thrust a higher floating stock! You always want to increase buying in a stock to see. It validates your opinion that it is a stock that you want to manage, because it is clear that everyone wants to own it. This upward movement to a higher volume creates momentum which pushes the stock high and in turn brings in more buyers.
The same is true for the market. The only way to confirm if the price action you see is real is to see if you have a huge increase in volume to confirm.
According to Bill O'Neil, the founder of IBD, you want a 1% or more puts the market averages show an increase in the volume of the previous trading day. This is called a 'followed by day. "All the major market movements have started with this kind of price and volume action.
Part confirms price action .... IT is just common sense.
Do not panic in those first few minutes when your stock opens underwater. Keep your cool and know that the first half hour is often bizarre. If an hour of trade goes by and your stock has not done squat, it's time to consider alternatives, but if it makes it way back to the top, it is usually best to keep it in the game.
The same is true for the market. The only way to confirm if the price action you see is real is to see if you have a huge increase in volume to confirm.
According to Bill O'Neil, the founder of IBD, you want a 1% or more puts the market averages show an increase in the volume of the previous trading day. This is called a 'followed by day. "All the major market movements have started with this kind of price and volume action.
Part confirms price action .... IT is just common sense.
Do not panic in those first few minutes when your stock opens underwater. Keep your cool and know that the first half hour is often bizarre. If an hour of trade goes by and your stock has not done squat, it's time to consider alternatives, but if it makes it way back to the top, it is usually best to keep it in the game.
Sunday, 15 December 2013
The Difference Between Down and Out
As turnaround investors, I prefer to invest in companies that are down but not out. This is important because a lot of times, investors understood the two. Often times, these two types of companies are trading near or at their 52 week low. But the similarity ends there.
Company that is down. This is the company that is experiencing problems and it looks like it could be the problem again. It just needs time to right the ship and get back on track. How can we be sure that the company can withstand the storm? The final guideline is to look at the balance sheet of the company and the profit and loss account. The company has a positive net cash? Is the company is expected to post a profit? If the answer is yes to both questions, then the company in question is most likely just go down, but not out.
Company is Out. This is the company that is experiencing problems, but its existence could be in doubt. It might right the ship, but by then it might be too late. As a result, shareholders will be wiped out and lose 100% of their investment. How can we be sure the company is out? Again, we have the ultimate guide, which is the balance and control. Profit and loss account of the company The company has a negative net cash? Is the company is expected to qualify for the near future? Losses If the answer is yes to both questions, then the company in question has the high probability of being out of business.
Using analogy be confusing without illustrations in my opinion. Therefore, I will choose for every situation a business. Do this please do not treat it as a buy or sell recommendation. This is just my observation as someone who these companies had looked for a while.
Pfizer Inc. (PFE) may be regarded as the company that is down. Share price slumped to 8 year low this week due to weak sales of its drug franchises and tepid guidance. The management has refused to work for 2006 and beyond due to uncertainty guidance. So, let's look at Pfizer balance, shall we? The latest information on Pfizer shows that the company has $ 15 billion in cash and equivalents and $ 5.517 billion in long-term debt. In other words, Pfizer has $ 9.5 billion of positive net cash. What about profits? Pfizer is expected to post a loss? Nope, it is expected to earnings of $ 1.95 per share for 2005 of $ 14 billion in net profit post. Profit is enough, while the balance sheet is solid. Pfizer clearly is a company that has only a small bump in the road.
What about AMR Corp. (AMR)? This is an excellent example of a company that is out. Looking at the balance sheet, AMR has a negative net cash of $ 9.5 billion. What this means is that the $ 9.5 billion more in the long-term debt then the money. AMR is profitable? Not a chance. It is expected a loss of $ 4.36 per share for 2005 places or $ 714 Million. It does not look nice. High amount of debt and big loss is the recipe for a company that is down. If AMR not to put on any time his ship could be forced to file bankruptcy quickly.
To make money consistently, investors should be able to the company that is down and out company that is differentiated. Weed out the company's and your return on investment will be so much better.
Company that is down. This is the company that is experiencing problems and it looks like it could be the problem again. It just needs time to right the ship and get back on track. How can we be sure that the company can withstand the storm? The final guideline is to look at the balance sheet of the company and the profit and loss account. The company has a positive net cash? Is the company is expected to post a profit? If the answer is yes to both questions, then the company in question is most likely just go down, but not out.
Company is Out. This is the company that is experiencing problems, but its existence could be in doubt. It might right the ship, but by then it might be too late. As a result, shareholders will be wiped out and lose 100% of their investment. How can we be sure the company is out? Again, we have the ultimate guide, which is the balance and control. Profit and loss account of the company The company has a negative net cash? Is the company is expected to qualify for the near future? Losses If the answer is yes to both questions, then the company in question has the high probability of being out of business.
Using analogy be confusing without illustrations in my opinion. Therefore, I will choose for every situation a business. Do this please do not treat it as a buy or sell recommendation. This is just my observation as someone who these companies had looked for a while.
Pfizer Inc. (PFE) may be regarded as the company that is down. Share price slumped to 8 year low this week due to weak sales of its drug franchises and tepid guidance. The management has refused to work for 2006 and beyond due to uncertainty guidance. So, let's look at Pfizer balance, shall we? The latest information on Pfizer shows that the company has $ 15 billion in cash and equivalents and $ 5.517 billion in long-term debt. In other words, Pfizer has $ 9.5 billion of positive net cash. What about profits? Pfizer is expected to post a loss? Nope, it is expected to earnings of $ 1.95 per share for 2005 of $ 14 billion in net profit post. Profit is enough, while the balance sheet is solid. Pfizer clearly is a company that has only a small bump in the road.
What about AMR Corp. (AMR)? This is an excellent example of a company that is out. Looking at the balance sheet, AMR has a negative net cash of $ 9.5 billion. What this means is that the $ 9.5 billion more in the long-term debt then the money. AMR is profitable? Not a chance. It is expected a loss of $ 4.36 per share for 2005 places or $ 714 Million. It does not look nice. High amount of debt and big loss is the recipe for a company that is down. If AMR not to put on any time his ship could be forced to file bankruptcy quickly.
To make money consistently, investors should be able to the company that is down and out company that is differentiated. Weed out the company's and your return on investment will be so much better.
Friday, 13 December 2013
Year-End Rally
The stock market fell in October after the end of the quarter window dressing and the inflation peak revealed in the data in September Consequently, the market did not believe that the Fed's tightening cycle will end this year, and was afraid of stagflation. However, the third quarter earnings so far generally beat expectations, in what was expected to be a weak quarter, due to high energy prices.
Both monetary and fiscal policy remains stimulating. The FOMC raised the Fed Fund Rate from 1% to 3.75%, 25 basis on small movements over the past 16 months, along with a steady policy of "jawboning" to keep inflation expectations. Layer A neutral attitude may be higher than 5%. So, the FOMC continued good hone in next year. The Bush tax cuts are still intact, and the damage caused by Hurricane Katrina will increase public spending.
Oil prices fell below $ 60 a barrel last week, for the first time in about three months, and closed at $ 60.63 Friday. Economic growth has slowed to a more sustainable rate of approximately 3% real growth. The summer driving season and the worst of the hurricane season over. Heating oil prices will largely depend on winter weather in the Northeast. The price of oil can in the coming weeks to stabilize at just over $ 50 per barrel.
The chart below is a weekly SPX year-to-date overview. SPX was down for the year, in the lower range of a trading range, and somewhat oversold. The tolerances and CCI indicators, in particular, suggest the market will gather at the end of the year. It seems, SPX will continue to consolidate in the short term, over a number of strong (multi-year) support levels around 1165 (explained in previous articles) and then rally.
The recent high inflation data, a temporary phenomonen caused largely by transportation bottlenecks in the Gulf region after Hurricane Katrina. Also production and employment should pick up, temporarily, with a boost in government spending. Moreover, the lower energy prices shift consumption of energy in non-energy products and lower production costs.
It seems likely SPX will trade between roughly 1170 and 1200, short-term, and then retest the high (for the third time) at about 1250 later this year. However, a final "wash-out" in late October it is possible, where SPX closes the open holes in 1143 and 1138, before staging a strong rally. So, unless SPX drops below 1165, it may be best to volatile trading range with a stop at 1165.
Tickets available at PeakTrader.com Forum Index Market Overview section.
Arthur Albert Eckart is the founder and owner of Peak Trader. Arthur has worked for commercial banks, eg Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds 1999-00. Arthur Eckart has a BA and MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.
Mr Eckart has to maximize a comprehensive trading methodology using economics, portfolio optimization, and technical analysis and minimize risks at the same time and developed over time. This methodology has resulted in excellent returns with low risk over the past four years.
Both monetary and fiscal policy remains stimulating. The FOMC raised the Fed Fund Rate from 1% to 3.75%, 25 basis on small movements over the past 16 months, along with a steady policy of "jawboning" to keep inflation expectations. Layer A neutral attitude may be higher than 5%. So, the FOMC continued good hone in next year. The Bush tax cuts are still intact, and the damage caused by Hurricane Katrina will increase public spending.
Oil prices fell below $ 60 a barrel last week, for the first time in about three months, and closed at $ 60.63 Friday. Economic growth has slowed to a more sustainable rate of approximately 3% real growth. The summer driving season and the worst of the hurricane season over. Heating oil prices will largely depend on winter weather in the Northeast. The price of oil can in the coming weeks to stabilize at just over $ 50 per barrel.
The chart below is a weekly SPX year-to-date overview. SPX was down for the year, in the lower range of a trading range, and somewhat oversold. The tolerances and CCI indicators, in particular, suggest the market will gather at the end of the year. It seems, SPX will continue to consolidate in the short term, over a number of strong (multi-year) support levels around 1165 (explained in previous articles) and then rally.
The recent high inflation data, a temporary phenomonen caused largely by transportation bottlenecks in the Gulf region after Hurricane Katrina. Also production and employment should pick up, temporarily, with a boost in government spending. Moreover, the lower energy prices shift consumption of energy in non-energy products and lower production costs.
It seems likely SPX will trade between roughly 1170 and 1200, short-term, and then retest the high (for the third time) at about 1250 later this year. However, a final "wash-out" in late October it is possible, where SPX closes the open holes in 1143 and 1138, before staging a strong rally. So, unless SPX drops below 1165, it may be best to volatile trading range with a stop at 1165.
Tickets available at PeakTrader.com Forum Index Market Overview section.
Arthur Albert Eckart is the founder and owner of Peak Trader. Arthur has worked for commercial banks, eg Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds 1999-00. Arthur Eckart has a BA and MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.
Mr Eckart has to maximize a comprehensive trading methodology using economics, portfolio optimization, and technical analysis and minimize risks at the same time and developed over time. This methodology has resulted in excellent returns with low risk over the past four years.
Wednesday, 11 December 2013
The Scalp
This term familiar to anyone who has bought prime tickets to a big game or a concert at the last moment by making a deal with a man who screams his "Got two here!" in the stadium parking lot. The man in the party previously bought tickets at the lowest possible price. He has no desire to attend the event. His goal is to negotiate a deal at a higher price of a desperate fan and pocket the difference as profit. It is a common practice, despite the local laws governing the seller, and sometimes the buyer can send to the pokey.
This is the essence of the "scalp." The same happens in the markets, more or less, and the scalper not have to worry about a cop slapping handcuffs on him. Traders scalp by during the session in the hope of making a series of small profits jump in and out of positions. They are not interested in owning some of the stock, futures contract or commodity. They are interested in timing and momentum. It is the typical "buy low, sell high" tactics.
Say, for example, ABC Company announces good news for the open. The best scalpers will get ABC when news hits and floor before trading starts. When the stock shows up in the first few minutes, will sell for a profit of a point or two. Scalper quickly
Later in the morning the momentum usually turns on the news-driven stock as other traders take their profits. That's when the scalper sells ABC short, watches it fall with perhaps a point and then cover the short for another winning trade. If the news is strong enough, ABC will begin to move higher again and the long scalper will go for another quick gain. This can stay all day.
If the momentum in ABC tails off, will find the scalper to another target of opportunity.
There is another similar term, "scalping", which refers to the practice of obtaining shares of stock for an Initial Public Offering or IPO, at a low price before they are released to the market. If the IPO is received by the market, the price will jump well. That's when this variety of scalper takes his money and runs.
This is the essence of the "scalp." The same happens in the markets, more or less, and the scalper not have to worry about a cop slapping handcuffs on him. Traders scalp by during the session in the hope of making a series of small profits jump in and out of positions. They are not interested in owning some of the stock, futures contract or commodity. They are interested in timing and momentum. It is the typical "buy low, sell high" tactics.
Say, for example, ABC Company announces good news for the open. The best scalpers will get ABC when news hits and floor before trading starts. When the stock shows up in the first few minutes, will sell for a profit of a point or two. Scalper quickly
Later in the morning the momentum usually turns on the news-driven stock as other traders take their profits. That's when the scalper sells ABC short, watches it fall with perhaps a point and then cover the short for another winning trade. If the news is strong enough, ABC will begin to move higher again and the long scalper will go for another quick gain. This can stay all day.
If the momentum in ABC tails off, will find the scalper to another target of opportunity.
There is another similar term, "scalping", which refers to the practice of obtaining shares of stock for an Initial Public Offering or IPO, at a low price before they are released to the market. If the IPO is received by the market, the price will jump well. That's when this variety of scalper takes his money and runs.
Monday, 9 December 2013
Pairs Trading: What Is That?
Quite a few companies are involved in "pairs trading" get and we thought
we might just take a moment to explain what the term means.
Pairs trading means that while you go long a stock in a sector
and you're short one. At first glance you might think, "why
would anyone do that? "Well, for a few reasons.
First, in just about every sector there are a few leaders and everyone
otherwise a laggard. For example, in the tech field, IBM consistently
surpassing others, in general. In the financial sector, GS can rack up points
better than most. So, leaning long the leaders when the time is ripe
you pay often generous.
Also, some companies often produce even more good news than others. Some
is "produced" and some of it is real, but the street tends to pay
attention to the news generators and they often push them higher. So if
long a stock you put out good news to go, while short
their competition, you will often see something like this happens:
The stock put out the good news attracts higher the sector. However, in one day
or two, the others in the sector often fall back while starting the news
generator means, or even continues to rise. If you are long the stock news,
and short the weakest competitor in the sector, it is likely that both
will win plays.
This is not a new concept, but one that lost peace in the 90s, as everyone
just went long. Now it is the idea of the pairs trading to turn again and
it's worth doing some homework on it as it sounds intriguing to you.
we might just take a moment to explain what the term means.
Pairs trading means that while you go long a stock in a sector
and you're short one. At first glance you might think, "why
would anyone do that? "Well, for a few reasons.
First, in just about every sector there are a few leaders and everyone
otherwise a laggard. For example, in the tech field, IBM consistently
surpassing others, in general. In the financial sector, GS can rack up points
better than most. So, leaning long the leaders when the time is ripe
you pay often generous.
Also, some companies often produce even more good news than others. Some
is "produced" and some of it is real, but the street tends to pay
attention to the news generators and they often push them higher. So if
long a stock you put out good news to go, while short
their competition, you will often see something like this happens:
The stock put out the good news attracts higher the sector. However, in one day
or two, the others in the sector often fall back while starting the news
generator means, or even continues to rise. If you are long the stock news,
and short the weakest competitor in the sector, it is likely that both
will win plays.
This is not a new concept, but one that lost peace in the 90s, as everyone
just went long. Now it is the idea of the pairs trading to turn again and
it's worth doing some homework on it as it sounds intriguing to you.
Saturday, 7 December 2013
When To Buy And Sell
The mechanism of buying and selling is quite simple. It is as simple as pressing a button on the front of your computer screen. The question of when investors should buy and sell warrant a more detailed analysis.
When to sell: Ideally, we sell when a stock reaches its fair value. There are nine other reasons to sell, but I will not cover here. So, what is a fair share value? I have covered this time enough. But in general, a stock reaches its fair value when it is yielding 3% above the current risk-free interest rate. I use 10 year treasury bond as a proxy for free risk-free rate. Currently, the 10-year bond yield 4.46%. Fair value of a share is therefore when it is thus 7.46%. Invert output, then we got the Price Earnings Ratio. Commonly used Yield of 7.46% corresponds to P / E ratio of 13.4
Where to buy: This is an easier question to answer. We, of course have to buy less than we sell shares. If we sell the stock at a P / E ratio of 13.4, then we need to buy when the P / E ratio is less than 13.4. How much lower? It depends on how many times you strive for. If, say, you're aiming for 50% efficiency, then your purchase price when the stock is trading at a P / E of 8.93. If you are aiming for a 34% return, then your purchase is at a P / E of 10.
In short, we have to buy at a P / E of 13.4, correct on a P / E of 8.93 and then sell? Yes, but with many pitfalls. I have those concerns addressed in five common abuse of P / E ratio. To emphasize, the P / E ratio used here is not P / E ratio backlog, do not ignore the value of cash in the balance sheet, not an event not ignore and not ignore the change in interest rates. At this point I'm ignoring earning growth simply because the calculation of the fair value for a company with 0% growth.
You might be wondering where you might find stocks that are trading at a P / E of 13, let alone 8.93. Here's a few candidates to help you get started. Seagate Technology (STX) has a forward P / E of 7.5 and $ 2.30 per share of net cash on the balance sheet. Western Digital Corporation (WDC) has a forward P / E of 9.75 to $ 2.65 per share of net cash. OmniVision Technologies Inc. (OVTI) is trading at a forward P / E of 10.3 with $ 5.30 per share in net cash. Magna International (MGA) is trading at a forward P / E of 9.72 to $ 4.58 per share in net cash.
Please note that this is not a buy / sell recommendation. You would do very well if you own homework.
When to sell: Ideally, we sell when a stock reaches its fair value. There are nine other reasons to sell, but I will not cover here. So, what is a fair share value? I have covered this time enough. But in general, a stock reaches its fair value when it is yielding 3% above the current risk-free interest rate. I use 10 year treasury bond as a proxy for free risk-free rate. Currently, the 10-year bond yield 4.46%. Fair value of a share is therefore when it is thus 7.46%. Invert output, then we got the Price Earnings Ratio. Commonly used Yield of 7.46% corresponds to P / E ratio of 13.4
Where to buy: This is an easier question to answer. We, of course have to buy less than we sell shares. If we sell the stock at a P / E ratio of 13.4, then we need to buy when the P / E ratio is less than 13.4. How much lower? It depends on how many times you strive for. If, say, you're aiming for 50% efficiency, then your purchase price when the stock is trading at a P / E of 8.93. If you are aiming for a 34% return, then your purchase is at a P / E of 10.
In short, we have to buy at a P / E of 13.4, correct on a P / E of 8.93 and then sell? Yes, but with many pitfalls. I have those concerns addressed in five common abuse of P / E ratio. To emphasize, the P / E ratio used here is not P / E ratio backlog, do not ignore the value of cash in the balance sheet, not an event not ignore and not ignore the change in interest rates. At this point I'm ignoring earning growth simply because the calculation of the fair value for a company with 0% growth.
You might be wondering where you might find stocks that are trading at a P / E of 13, let alone 8.93. Here's a few candidates to help you get started. Seagate Technology (STX) has a forward P / E of 7.5 and $ 2.30 per share of net cash on the balance sheet. Western Digital Corporation (WDC) has a forward P / E of 9.75 to $ 2.65 per share of net cash. OmniVision Technologies Inc. (OVTI) is trading at a forward P / E of 10.3 with $ 5.30 per share in net cash. Magna International (MGA) is trading at a forward P / E of 9.72 to $ 4.58 per share in net cash.
Please note that this is not a buy / sell recommendation. You would do very well if you own homework.
Thursday, 5 December 2013
Bank Foreclosures a Profitable Investment?
Bank Foreclosure Investing
Several people, especially those new to real estate investing, the bank foreclosure prefer a different type of property to buy because they think they are safe to buy properties. Their understanding is that the bank owns the property and therefore are free of all debt and other negative charges. Although a bank foreclosure may be safe, the bank never owns the property. The property is only as collateral, which means that pay in the event of default of the loan, the property should be removed to resolve the loan.
Bank foreclosure property many not cheap
Many people also believe that the bank foreclosure is cheap, whatever happens. It is held that the bank took the property as much so these prices should sell shares. Strongly marked Many people who hold may be in for disappointment, this idea because if the lender is the successful bidder on this auction, then the propeerty can be sold at any price. The bank also wants to profit, it needs to stay in business by operating on big profits.
Still, buying bank foreclosure is still the most popular way method of buying property. The process is quite simple and a lot of risks associated with other forms of purchase are abolished or reduced in bank foreclosure.
How to assess properties for sale
To bank foreclosure buying scout for notices or announcements in the newspapers or the courts. You can also contact a broker for such announcements or use a listing service. In your search, you need to be guided by a set of criteria for the best deals. To do a great investment you need to determine your own investment properties and get close to you. You should also consider the price. Are they reasonable? Look at the architectural design. Will it be a good buy if you are planning to sell it? If you plan to take the place itself, consider nearby. Is it a well-developed area with full services? It has got enough room for you and your children?
Several people, especially those new to real estate investing, the bank foreclosure prefer a different type of property to buy because they think they are safe to buy properties. Their understanding is that the bank owns the property and therefore are free of all debt and other negative charges. Although a bank foreclosure may be safe, the bank never owns the property. The property is only as collateral, which means that pay in the event of default of the loan, the property should be removed to resolve the loan.
Bank foreclosure property many not cheap
Many people also believe that the bank foreclosure is cheap, whatever happens. It is held that the bank took the property as much so these prices should sell shares. Strongly marked Many people who hold may be in for disappointment, this idea because if the lender is the successful bidder on this auction, then the propeerty can be sold at any price. The bank also wants to profit, it needs to stay in business by operating on big profits.
Still, buying bank foreclosure is still the most popular way method of buying property. The process is quite simple and a lot of risks associated with other forms of purchase are abolished or reduced in bank foreclosure.
How to assess properties for sale
To bank foreclosure buying scout for notices or announcements in the newspapers or the courts. You can also contact a broker for such announcements or use a listing service. In your search, you need to be guided by a set of criteria for the best deals. To do a great investment you need to determine your own investment properties and get close to you. You should also consider the price. Are they reasonable? Look at the architectural design. Will it be a good buy if you are planning to sell it? If you plan to take the place itself, consider nearby. Is it a well-developed area with full services? It has got enough room for you and your children?
Tuesday, 3 December 2013
5 Common Misuse of P/E Ratio
Price Earning (P / E) ratio is the ratio most commonly used in investing. Searching the term 'P / E ratios in Google will yield 2.3 million results. Quite simply, P / E ratio is the ratio of stock price divided by earnings per share (EPS). If a company A is trading at $ 10 per share and earns $ 2.00 per share, then A has P / E ratio of 5. This means that it takes 5 years to pay for your initial investment. For the profit of the company If you invert P / E ratio, we get E / P ratio, which is the return on our investment. In this case, a P / E of 5 is equal to a yield of 20%.
P / E ratio is convenient and very easy to use. But that is why so many investors abuses. Here are some common abuse of P / E ratio:
Using trailing P / E. Trailing P / E is the price earning ratio of a company for the past 12 months. For cyclical companies from a peak in earning, P / E ratio is misleading. Trailing P / E ratio may seem low, but its forward P / no. E Forward P / E is calculated using the expected earnings per share of a company. Use Forward P / E is more important than the trailing P / E. After all, it is the future that counts.
Earning negligible growth. Low P / E ratio does not necessarily mean that the stock is undervalued. Investors should take into account the growth of a company. A company with a P / E ratio of 15 and 0% earning growth may not be as attractive as Company B money with a P / E ratio of 20 and 25% of growth. The reason is if both stock prices remain the same, after 3 years, P / E ratio of company B decrease to 10.3, while A will still have a P / E ratio of 15. The moral of the story here is to P / E ratio alone can not be used to assess. The value of an asset
Ignoring One-Time Event. P / E ratio is always included one-time event, such as restructuring costs or downward adjustments to goodwill. If that happens, the "E" appear in the P / E ratio is low. As a result, this event blows P / E ratio. Investors will do well ignore this one-time event and look beyond the high P / E ratio.
Ignoring Balance. That's right. Investors often ignore the cash and long-term liabilities embedded in the balance sheet in the calculation of P / E ratio. The truth is, companies with higher net cash on their balance sheets usually get higher P / E valuation.
Ignoring Interest Rate. Only as P / E ratio for our investment decisions will produce disastrous results. As explained earlier, if we invert P / E ratio, we get E / P ratio. E / P ratio is essentially the return on our investment. Stock with a P / E ratio of 10 is thus 10%. Stock with P / E of 20 is to give 5% and so on. If interest rates rise to 6%, than on shares in P / E of 20 will be appreciated, everything else remains the same.
As with other financial ratios, P / E ratio can not be used solely to the value of a company. Rate fluctuates, earnings per share goes up and down and it does share. All these must be considered when choosing your potential investment into account.
You can have a lot of other comments on All resources are provided free find.
P / E ratio is convenient and very easy to use. But that is why so many investors abuses. Here are some common abuse of P / E ratio:
Using trailing P / E. Trailing P / E is the price earning ratio of a company for the past 12 months. For cyclical companies from a peak in earning, P / E ratio is misleading. Trailing P / E ratio may seem low, but its forward P / no. E Forward P / E is calculated using the expected earnings per share of a company. Use Forward P / E is more important than the trailing P / E. After all, it is the future that counts.
Earning negligible growth. Low P / E ratio does not necessarily mean that the stock is undervalued. Investors should take into account the growth of a company. A company with a P / E ratio of 15 and 0% earning growth may not be as attractive as Company B money with a P / E ratio of 20 and 25% of growth. The reason is if both stock prices remain the same, after 3 years, P / E ratio of company B decrease to 10.3, while A will still have a P / E ratio of 15. The moral of the story here is to P / E ratio alone can not be used to assess. The value of an asset
Ignoring One-Time Event. P / E ratio is always included one-time event, such as restructuring costs or downward adjustments to goodwill. If that happens, the "E" appear in the P / E ratio is low. As a result, this event blows P / E ratio. Investors will do well ignore this one-time event and look beyond the high P / E ratio.
Ignoring Balance. That's right. Investors often ignore the cash and long-term liabilities embedded in the balance sheet in the calculation of P / E ratio. The truth is, companies with higher net cash on their balance sheets usually get higher P / E valuation.
Ignoring Interest Rate. Only as P / E ratio for our investment decisions will produce disastrous results. As explained earlier, if we invert P / E ratio, we get E / P ratio. E / P ratio is essentially the return on our investment. Stock with a P / E ratio of 10 is thus 10%. Stock with P / E of 20 is to give 5% and so on. If interest rates rise to 6%, than on shares in P / E of 20 will be appreciated, everything else remains the same.
As with other financial ratios, P / E ratio can not be used solely to the value of a company. Rate fluctuates, earnings per share goes up and down and it does share. All these must be considered when choosing your potential investment into account.
You can have a lot of other comments on All resources are provided free find.
Sunday, 1 December 2013
Thinking About Investing? Think About This
People love to safe and in most cases they like to be able to predict things, at least to a minimum. At the same time, but they want to make profits, the more the better. And unfortunately high profits are usually associated with high risk. Feel the dilemma here? Of course, a solution to this dilemma is to just relax your money in a savings account, and just collect a little interest. If this sounds good to you, well, good for you, but do not bother reading the rest of this article.
Which means that if you're reading this, you're probably not satisfied with the meager income from savings accounts today and you want your money to work just a little harder for you. But you would still like to minimize your uncertainty right Let me make a prediction with a very high degree of certainty.
When you invest in the stock market you will inevitably:
- Make some times
- Lose money some times
That should at least cover the uncertainty factor. Maybe this sounds a little simplistic, and if so, well, it should. Because the point I'm trying to do is very simple. You just can not make money every time you make a transaction. Even Warren Buffet does not make money on any investment he has ever made money. The best investors and traders in the world to lose a certain number of their transactions money. So do not get hung up when it happens to you.
Fortunately, it is very difficult to get the time you invest to lose money. Maybe you can find some people who claim they lost on every investment they've ever made, but the likelihood is that they find not to tell the truth. They also made money on some of their transactions. But they probably re-invested that money in other stocks that end up losing money. It's a lot like the man sitting at the slot machines. After playing for a while the machine starts chucking out a whole bunch of coins resulting in a nice profit. But rather than call it a day and taking his money home, the man just keeps pouring money into the machine until the last coin. Then he goes home wondering why luck never comes his way.
It is important to lose the reality some money from time to time the face and right with her. This does not mean you should feel OK every time you lose money. Your goal should always be to make a profit. Just be aware of the fact that you can not realistically expect to make every time profit. This will relieve some of the anxiety of not, because to lose money on an investment does not mean you've failed as an investor. Many people never get started, just because they are afraid of losing money. And when they lose money, they feel that they have failed and withdraw from the stock market as a whole, never to return.
If this has not happened yet personal, just look around. Before Can you remember a time when either a colleague or a family member that you would inform their investments often? Just about every time you bumped they would tell you how good their stocks were doing and how much profit they make against them. And then, suddenly, they completely dropped the subject. You heard them never to talk about. And if someone asked them how their stocks were doing, they would either mumble something inaudible or utter a kind of defensive statement. What happened? They lost their money and withdrew from the activity in the market. They have essentially given up, and in doing so, they have lost. Not because they lost money because they gave up.
If you want to be a successful investor you can not be like that. The already giving may pop up in your mind when things do not seem to go your way, but you should never admit to it. When it comes to success in investing your attitude is more important than knowledge, as in many other areas of life. Now, I'm not saying you do not need knowledge. You should try to learn about investing, at least enough to have a basic understanding of how the stock market works to get. Nor do I say that it's OK to be an idiot and do not learn from your mistakes. You have to learn from them as much as you possibly can. Just realize that you will not be right 100% of the time and as long as you invest in stocks, you will not be able to avoid making mistakes.
So before you put your money in the stock market or any other investment for that matter, remember this: You win some and you will lose some.
Eri Rahman is the owner of , a fine free resources for training and education in stock trading. He also maintains , a very useful resource for savvy traders.
Which means that if you're reading this, you're probably not satisfied with the meager income from savings accounts today and you want your money to work just a little harder for you. But you would still like to minimize your uncertainty right Let me make a prediction with a very high degree of certainty.
When you invest in the stock market you will inevitably:
- Make some times
- Lose money some times
That should at least cover the uncertainty factor. Maybe this sounds a little simplistic, and if so, well, it should. Because the point I'm trying to do is very simple. You just can not make money every time you make a transaction. Even Warren Buffet does not make money on any investment he has ever made money. The best investors and traders in the world to lose a certain number of their transactions money. So do not get hung up when it happens to you.
Fortunately, it is very difficult to get the time you invest to lose money. Maybe you can find some people who claim they lost on every investment they've ever made, but the likelihood is that they find not to tell the truth. They also made money on some of their transactions. But they probably re-invested that money in other stocks that end up losing money. It's a lot like the man sitting at the slot machines. After playing for a while the machine starts chucking out a whole bunch of coins resulting in a nice profit. But rather than call it a day and taking his money home, the man just keeps pouring money into the machine until the last coin. Then he goes home wondering why luck never comes his way.
It is important to lose the reality some money from time to time the face and right with her. This does not mean you should feel OK every time you lose money. Your goal should always be to make a profit. Just be aware of the fact that you can not realistically expect to make every time profit. This will relieve some of the anxiety of not, because to lose money on an investment does not mean you've failed as an investor. Many people never get started, just because they are afraid of losing money. And when they lose money, they feel that they have failed and withdraw from the stock market as a whole, never to return.
If this has not happened yet personal, just look around. Before Can you remember a time when either a colleague or a family member that you would inform their investments often? Just about every time you bumped they would tell you how good their stocks were doing and how much profit they make against them. And then, suddenly, they completely dropped the subject. You heard them never to talk about. And if someone asked them how their stocks were doing, they would either mumble something inaudible or utter a kind of defensive statement. What happened? They lost their money and withdrew from the activity in the market. They have essentially given up, and in doing so, they have lost. Not because they lost money because they gave up.
If you want to be a successful investor you can not be like that. The already giving may pop up in your mind when things do not seem to go your way, but you should never admit to it. When it comes to success in investing your attitude is more important than knowledge, as in many other areas of life. Now, I'm not saying you do not need knowledge. You should try to learn about investing, at least enough to have a basic understanding of how the stock market works to get. Nor do I say that it's OK to be an idiot and do not learn from your mistakes. You have to learn from them as much as you possibly can. Just realize that you will not be right 100% of the time and as long as you invest in stocks, you will not be able to avoid making mistakes.
So before you put your money in the stock market or any other investment for that matter, remember this: You win some and you will lose some.
Eri Rahman is the owner of , a fine free resources for training and education in stock trading. He also maintains , a very useful resource for savvy traders.
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