Saturday, January 13, 2007

Stock Trading Systems

Stock trading system software is getting increasingly popular among stock exchange traders. There are also handbooks and guides written by seasoned stock traders that can come in very handy. These are useful for professional traders as well as for amateurs looking to make some money in the stock market. A stock trading system is a software application that automates trade decisions. It is programmed with a certain set of rules and these rules govern trade decisions. A stock trading system takes the emotion out of trading. Traders do not need to speculate on a prospect. If the numbers are right, the stock trading system will prompt them to buy and sell. This prevents a trader from falling into greed or being swayed by misdirected instincts. Many traders have successfully adopted stock trading systems but you must consider the option carefully before purchasing a system of your own.

When buying one of the newer seats, people should look at the hardware package for two foam-and-epoxy washers. To fix the new toilet seat, they should turn the seat upside down, and center one on the bottom of each bolt-head housing. When the stage is set for the seat to be mounted, the protective tape must be peeled off to expose the bottom of the two washers. Once the epoxy is exposed on the bottom of each washer, turn the seat over, line up the holes, and set the hinge in place. Finally, the bolts may be pinned through the hinge and the bowl.

Stock trading system software is getting increasingly popular among stock exchange traders. There are also handbooks and guides written by seasoned stock traders that can come in very handy. These are useful for professional traders as well as for amateurs looking to make some money in the stock market. A stock trading system is a software application that automates trade decisions. It is programmed with a certain set of rules and these rules govern trade decisions. A stock trading system takes the emotion out of trading. Traders do not need to speculate on a prospect. If the numbers are right, the stock trading system will prompt them to buy and sell. This prevents a trader from falling into greed or being swayed by misdirected instincts. Many traders have successfully adopted stock trading systems but you must consider the option carefully before purchasing a system of your own.

When buying one of the newer seats, people should look at the hardware package for two foam-and-epoxy washers. To fix the new toilet seat, they should turn the seat upside down, and center one on the bottom of each bolt-head housing. When the stage is set for the seat to be mounted, the protective tape must be peeled off to expose the bottom of the two washers. Once the epoxy is exposed on the bottom of each washer, turn the seat over, line up the holes, and set the hinge in place. Finally, the bolts may be pinned through the hinge and the bowl.

Saifun -- Is It The Little Flash Company That Could?

NASDAQ: SFUN 26.88

Do you think the market for smart phones, digital audio (MP3) players, consumer solid state drives (SSDs), portable media players, digital video cameras, GPS devices, multimedia and music handsets, memory cards and USB flash drives are growing? All these products provided a disruptive position taking away market share from their predecessors.

One market segment that could see even stronger growth than these separate products we mentioned, and include other growth products, is the flash memory market. Flash is a root component used in all the above products and more.

Based on history we are forecasting that flash is the memory medium of choice for a plethora of devices in the consumer electronics in wireless devices and that flash will grow faster than the wireless devise market. It appears that in the past, memory for computing devices has grown faster than the device that utilizes the memory. Memory of the Personal Computer (PC) and the Internet has grown faster than their supporting platform. With the PC creating tremendous growth and history as our guide the demand for both memory and disc drives for the personal computer was often the impetus of many upgrade cycles. The Internet with the many millions of new web pages created a tremendous growth in storage. I’ve seen in many reports that forecasted storage of the internet has been one of the fastest growing subsets of the internet as a whole.

With a decrease in price per gigabyte (GB) of more than 80 percent over the past three years and with the high growth in wireless data the need for new and addition memory could exceed the growth of the hardware device market that uses flash for its memory. The current market in flash memory is about $25 billion annually and its forecast is about 40 billion by 2010.

With each new product cycle the advantages of flash have become more disruptive allowing it to become about 30-40% cheaper every year. Many experts are forecasting this disruptive curve to replace the disc drive market for PC’s. Flash has already replaced hard drives in most MP3 players.

Currently the flash memory is designed to support two types of flash memory. One type of memory supports your machines internal usage or operating system, the other type is for more external storage needs. The internal memory often uses the architecture of NOR, which has been established for years and Intel (NASDAQ:INTC) considered by many as the market leader. The NOR technology is a more complex technology and is starting to see the market mature.

Often you will find both NOR and NAND in the same mobile device.

The much faster growing market is for external memory market needs or NAND and the one of the leaders is SanDisk. SanDisk Corp. (NASDAQ: SNDK), founded and managed by president and CEO Dr. Eli Harari. SanDisk and Toshiba jointly launched the multi-level cell (MLC). This technology made it possible to divide the cell and store two bits of data on the same piece of silicon (x2, as it were), which significantly improved the profitability of manufacturers and fabs, basically doubling the price performance curve.

This process has become the leader and allowed NAND MLC to become disruptive to the predecessor NOR architecture and in 18 months penetration has been so great that MLC is becoming dominate force in flash.

We believe that this new curve of double captivity on a single cell technology will become the single most important factor for next generation flash memory, and it will become essential as flash is staring to see possible limits in the reduction of its die size as many experts are starting their forecasting. If flash is going to continue on its curve of lowering the price of a gigabyte by 80% over the next three years, it is my opinion they will need an architecture that’s designed specifically to establish this goal. There is a proprietary NROM architecture that has many advantages toward increasing capacity of bits per cell. The NROM is close to production of 4 bits of memory in each cell or quad flash.

The company we believe has a unique position and leads the NROM approach in the flash memory market is an Israeli based company called Saifun (NASDAQ:SFUN).

Saifun is an intellectual properties company which its revenues come in three forms: licenses, royalties and support. This type of model has been very successes for our model portfolios in the past. The three previous companies that had core business from intellectual property we investment into our portfolio’s were Qualcomm (NASDAQ:QCOM) in1997 at 3.31 per share and still holds a position. Arm Holdings (NASDAQ:ARMHY) in 9/29/1999 @ 9.60 and holds half a position and Rambus (NASDAQ:RMBS) in 1998 which appreciated about 350% in 2000 and we sold the position in the model portfolio when Intel stopped supporting the Rambus architecture late and 2000 and in 2001.

Even though it is very early is Saifun publicly traded history we are excited by its new form of flash memory architecture, it appears that Saifun’s approach has many advantages over the more established NAND and especially NOR. The single most important part is their technology curve. They have the ability to double the bits per cell allowing for a second compounding curve. The other architecture they are working hard on is to shrink their size and increase density, but we believe that Saifun with its simpler model should achieve a smaller die than the others but the real advantages with Saifun is the ability to allow 4 bits of memory in every piece of silicon (x4). Doubling again the events of MLC while at the same time reducing their size thus possibly leading the new flash architecture. Another advantage is NROM’s ability to work both as an operating system and memory component being able to supply both markets that individually NOR and/or NAND has target.

A second company has just announced that in 2007 they will start producing a 4 bit cell in NAND. The company making this announcement is M-Systems (NASDAQ: FLSH). They claim they will have a product on the market some time in 2007. Even though they have achieved this tremendous breakthrough we believe that because they use the whole cell instead of a fraction of the cell for this doubling process, the whole cell’s ability to double again may become geometrically tougher. On the last review M-Systems has not explained their business model to (make at own fabs or licenses) and delayed the secondary offering.

It is has been our opinion that companies that form successful royalty models resemble gutters and the fab companies have the appearance like shingles when looking at a roof. When it rains the gutter can create a stronger stream receiving income and achieve a much higher level of profitability. The delay of M-Systems secondary offing might reduce the chance of more fab developments.

Either way this looks like a marathon race and since this is such a very large market it will be about a $40 billion market when quad flash is widely available, that means that any of the top three or four should benefit.

Saifun already competes extremely well with NOR but early 2007 when it doubles the number of bits from 2 bits to 4 per cell it should be able to show advantages over MCL NAND currently the price performance leader. Saifun has a chance of repeating the same step that, in our opinion, allowed SanDisk to lead the last cycle.

There are many new technologies looking to replace flash but at this point there are a few that are close to achieving mainstream volumes. You should know the Saifun technology hibernated for about twenty years. This is very common, the Internet incubated for about 30 years and electricity for 100 years. New technologies often hibernate longer than people anticipate, and then it seems that they often almost explode onto the seen very quickly.

Even though Saifun’s approach is about 20 years old, the technology they have just started to achieve is commercial feasibility.

The true advantage is since they only use points in the cell versus in the more convention approach such as NOR or NAND that uses the whole cell. This simpler usage allows for higher data retention and also provides a faster response time, and hopefully more density, and less power.

This is a tremendous advantage having 4 times the bits in competitive cells. Saifun also believe future that future cells could expand to possible to 8 or even 16 bits per silicon.

NASDAQ: SFUN 26.88

Do you think the market for smart phones, digital audio (MP3) players, consumer solid state drives (SSDs), portable media players, digital video cameras, GPS devices, multimedia and music handsets, memory cards and USB flash drives are growing? All these products provided a disruptive position taking away market share from their predecessors.

One market segment that could see even stronger growth than these separate products we mentioned, and include other growth products, is the flash memory market. Flash is a root component used in all the above products and more.

Based on history we are forecasting that flash is the memory medium of choice for a plethora of devices in the consumer electronics in wireless devices and that flash will grow faster than the wireless devise market. It appears that in the past, memory for computing devices has grown faster than the device that utilizes the memory. Memory of the Personal Computer (PC) and the Internet has grown faster than their supporting platform. With the PC creating tremendous growth and history as our guide the demand for both memory and disc drives for the personal computer was often the impetus of many upgrade cycles. The Internet with the many millions of new web pages created a tremendous growth in storage. I’ve seen in many reports that forecasted storage of the internet has been one of the fastest growing subsets of the internet as a whole.

With a decrease in price per gigabyte (GB) of more than 80 percent over the past three years and with the high growth in wireless data the need for new and addition memory could exceed the growth of the hardware device market that uses flash for its memory. The current market in flash memory is about $25 billion annually and its forecast is about 40 billion by 2010.

With each new product cycle the advantages of flash have become more disruptive allowing it to become about 30-40% cheaper every year. Many experts are forecasting this disruptive curve to replace the disc drive market for PC’s. Flash has already replaced hard drives in most MP3 players.

Currently the flash memory is designed to support two types of flash memory. One type of memory supports your machines internal usage or operating system, the other type is for more external storage needs. The internal memory often uses the architecture of NOR, which has been established for years and Intel (NASDAQ:INTC) considered by many as the market leader. The NOR technology is a more complex technology and is starting to see the market mature.

Often you will find both NOR and NAND in the same mobile device.

The much faster growing market is for external memory market needs or NAND and the one of the leaders is SanDisk. SanDisk Corp. (NASDAQ: SNDK), founded and managed by president and CEO Dr. Eli Harari. SanDisk and Toshiba jointly launched the multi-level cell (MLC). This technology made it possible to divide the cell and store two bits of data on the same piece of silicon (x2, as it were), which significantly improved the profitability of manufacturers and fabs, basically doubling the price performance curve.

This process has become the leader and allowed NAND MLC to become disruptive to the predecessor NOR architecture and in 18 months penetration has been so great that MLC is becoming dominate force in flash.

We believe that this new curve of double captivity on a single cell technology will become the single most important factor for next generation flash memory, and it will become essential as flash is staring to see possible limits in the reduction of its die size as many experts are starting their forecasting. If flash is going to continue on its curve of lowering the price of a gigabyte by 80% over the next three years, it is my opinion they will need an architecture that’s designed specifically to establish this goal. There is a proprietary NROM architecture that has many advantages toward increasing capacity of bits per cell. The NROM is close to production of 4 bits of memory in each cell or quad flash.

The company we believe has a unique position and leads the NROM approach in the flash memory market is an Israeli based company called Saifun (NASDAQ:SFUN).

Saifun is an intellectual properties company which its revenues come in three forms: licenses, royalties and support. This type of model has been very successes for our model portfolios in the past. The three previous companies that had core business from intellectual property we investment into our portfolio’s were Qualcomm (NASDAQ:QCOM) in1997 at 3.31 per share and still holds a position. Arm Holdings (NASDAQ:ARMHY) in 9/29/1999 @ 9.60 and holds half a position and Rambus (NASDAQ:RMBS) in 1998 which appreciated about 350% in 2000 and we sold the position in the model portfolio when Intel stopped supporting the Rambus architecture late and 2000 and in 2001.

Even though it is very early is Saifun publicly traded history we are excited by its new form of flash memory architecture, it appears that Saifun’s approach has many advantages over the more established NAND and especially NOR. The single most important part is their technology curve. They have the ability to double the bits per cell allowing for a second compounding curve. The other architecture they are working hard on is to shrink their size and increase density, but we believe that Saifun with its simpler model should achieve a smaller die than the others but the real advantages with Saifun is the ability to allow 4 bits of memory in every piece of silicon (x4). Doubling again the events of MLC while at the same time reducing their size thus possibly leading the new flash architecture. Another advantage is NROM’s ability to work both as an operating system and memory component being able to supply both markets that individually NOR and/or NAND has target.

A second company has just announced that in 2007 they will start producing a 4 bit cell in NAND. The company making this announcement is M-Systems (NASDAQ: FLSH). They claim they will have a product on the market some time in 2007. Even though they have achieved this tremendous breakthrough we believe that because they use the whole cell instead of a fraction of the cell for this doubling process, the whole cell’s ability to double again may become geometrically tougher. On the last review M-Systems has not explained their business model to (make at own fabs or licenses) and delayed the secondary offering.

It is has been our opinion that companies that form successful royalty models resemble gutters and the fab companies have the appearance like shingles when looking at a roof. When it rains the gutter can create a stronger stream receiving income and achieve a much higher level of profitability. The delay of M-Systems secondary offing might reduce the chance of more fab developments.

Either way this looks like a marathon race and since this is such a very large market it will be about a $40 billion market when quad flash is widely available, that means that any of the top three or four should benefit.

Saifun already competes extremely well with NOR but early 2007 when it doubles the number of bits from 2 bits to 4 per cell it should be able to show advantages over MCL NAND currently the price performance leader. Saifun has a chance of repeating the same step that, in our opinion, allowed SanDisk to lead the last cycle.

There are many new technologies looking to replace flash but at this point there are a few that are close to achieving mainstream volumes. You should know the Saifun technology hibernated for about twenty years. This is very common, the Internet incubated for about 30 years and electricity for 100 years. New technologies often hibernate longer than people anticipate, and then it seems that they often almost explode onto the seen very quickly.

Even though Saifun’s approach is about 20 years old, the technology they have just started to achieve is commercial feasibility.

The true advantage is since they only use points in the cell versus in the more convention approach such as NOR or NAND that uses the whole cell. This simpler usage allows for higher data retention and also provides a faster response time, and hopefully more density, and less power.

This is a tremendous advantage having 4 times the bits in competitive cells. Saifun also believe future that future cells could expand to possible to 8 or even 16 bits per silicon.

Stock Market; I Hope You are Back In

Well the roller coaster seems to have hit bottom and could be testing another low, never the less with a Fed Rate hike today, Paulson Secretary Treasury confirmation, higher oil prices on news of Pennsylvania Oil Refinery flooded and Iranian conflict deadline, it is amazing that the stock market shot up 200 points of its bottom.

Even more stunning is that the re-adjustment period and previous low seemed to have tested twice and repeated. For those who watch the charts and technical analysts, well they believe that it is time to be all in. Interesting as even some of the major fund managers are not all in.

Even more interesting is the wait and see approach and the question of tomorrow being another huge rally during this pre-Forth of July Week Bonanza? So many are saying with regards to the Stock Market; I hope you are back in the game? Is it too soon warn others? Well typically the job of the market seems to be to fool the most amount of people and re-distribute the wealth to the sharks.

Meanwhile we did not see many huge Corporations buying back their own stock as they sit on hoards of cash? What gives, why are these companies not re-investing their capital? Are the Corporations waiting too, wait and see approach? Are they fed up with over regulation, government intervention and uneasy about World Markets prior to a War? Consider all this in 2006.

Well the roller coaster seems to have hit bottom and could be testing another low, never the less with a Fed Rate hike today, Paulson Secretary Treasury confirmation, higher oil prices on news of Pennsylvania Oil Refinery flooded and Iranian conflict deadline, it is amazing that the stock market shot up 200 points of its bottom.

Even more stunning is that the re-adjustment period and previous low seemed to have tested twice and repeated. For those who watch the charts and technical analysts, well they believe that it is time to be all in. Interesting as even some of the major fund managers are not all in.

Even more interesting is the wait and see approach and the question of tomorrow being another huge rally during this pre-Forth of July Week Bonanza? So many are saying with regards to the Stock Market; I hope you are back in the game? Is it too soon warn others? Well typically the job of the market seems to be to fool the most amount of people and re-distribute the wealth to the sharks.

Meanwhile we did not see many huge Corporations buying back their own stock as they sit on hoards of cash? What gives, why are these companies not re-investing their capital? Are the Corporations waiting too, wait and see approach? Are they fed up with over regulation, government intervention and uneasy about World Markets prior to a War? Consider all this in 2006.

Paulson Gets Confirmed Market Flies Up

New Treasury Secretary for the United States of America that was appointed by President Bush has now been approved by the United States Congress and the day after he was confirmed the markets went up 200 points and came off a low.

During the same time the Feds raised rates and the oil prices spiked but the markets still went up. Could this be some kind of an indication that the stock market really likes having an insider alongside the president of the United States in helping determine situations, which affect the financial community.

Treasury Secretary Paulson is definitely a Wall Street insider and perhaps this is good for the stock market and investors portfolios. The stock market has seen some rough times in the last few weeks and this break out from the bottom lows is a very positive sign even with all the turmoil of the massing flooding in the Northeast and the potential war with Iran. A war, which could be underway very soon since Iran has no intention of stopping its nuclear weapons manufacturing.

Paulson also brings to the table great insight as to what politicians should do as to not disrupt the markets and this should help with upward trend bias and that of course is very good for investors, corporations and American business please consider this in 2006.

New Treasury Secretary for the United States of America that was appointed by President Bush has now been approved by the United States Congress and the day after he was confirmed the markets went up 200 points and came off a low.

During the same time the Feds raised rates and the oil prices spiked but the markets still went up. Could this be some kind of an indication that the stock market really likes having an insider alongside the president of the United States in helping determine situations, which affect the financial community.

Treasury Secretary Paulson is definitely a Wall Street insider and perhaps this is good for the stock market and investors portfolios. The stock market has seen some rough times in the last few weeks and this break out from the bottom lows is a very positive sign even with all the turmoil of the massing flooding in the Northeast and the potential war with Iran. A war, which could be underway very soon since Iran has no intention of stopping its nuclear weapons manufacturing.

Paulson also brings to the table great insight as to what politicians should do as to not disrupt the markets and this should help with upward trend bias and that of course is very good for investors, corporations and American business please consider this in 2006.

Penny Stock Investing Guide 101

Penny stocks are also known small caps, micro caps and nano caps. Penny stocks are low-priced issues that are often highly speculative. Usually a penny stock sells for less than one dollar and is highly volatile.

Penny stock trading has its pros and cons. While the benefit is accruing of incredible profit minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.

• To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.

• A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don’t hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.

• When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company’s history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.

• Before investing any amount, take a look at your bankroll. Bankroll refers to the amount of money you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don’t.

• Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.

Penny stocks are also known small caps, micro caps and nano caps. Penny stocks are low-priced issues that are often highly speculative. Usually a penny stock sells for less than one dollar and is highly volatile.

Penny stock trading has its pros and cons. While the benefit is accruing of incredible profit minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.

• To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.

• A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don’t hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.

• When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company’s history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.

• Before investing any amount, take a look at your bankroll. Bankroll refers to the amount of money you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don’t.

• Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.

Friday, January 12, 2007

The Art of Picking a Penny Stock?

Should Wiley E. Coyote ever get into buying stocks, I have no doubt he would stack his portfolio with shares of ACME. I'm just not so sure any savvy penny stock investor should follow the economic advice of a coyote.

Investors of the two-legged kind, whether they're looking at a penny stock or a blue chip behemoth, tend to take a myriad of details into consideration before investing. And so they should.

But a recent study suggests that investors of every stripe take mental short-cuts when it comes to investing...at a time when they should be more rational.

Wall Street gurus and penny stock investors alike it seems, are more likely to purchase newly offered stocks that have an easily pronounceable name, say a pair of Princeton University researchers.

Adam Atler and Danny Oppenheimer found that a stock's performance immediately after an initial public offering (IPO) appears to be linked to how easily investors (penny stock or otherwise) can pronounce its name and stock ticker symbol.

Danny Oppenheimer, commented, "These findings contribute to the notion that psychology has a great deal to contribute to economic theory."

The two said the effect also extends to ticker symbols. For example, all things being equal, a stock with the symbol BAL should outgain a stock with the symbol BDL in the first days after an IPO.

"We looked at intervals of a day, a week, six months and a year after IPO," Atler said. "The effect was strongest shortly after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would earn $333 more than you would have had you invested in the 10 with the least fluent."

Oppenheimer acknowledged that their findings do not tell the whole story about the post-IPO success of a stock, not are they good indicators of long-run performance of a penny stock.

"You shouldn't make changes to your stock portfolio based on our findings. The primary contribution of this paper is to add a piece to the jigsaw of understanding how the markets operate," said Oppenheimer.

So, what does this mean for the green and seasoned penny stock investor? It means you should still take an exhaustive look at any company you're interested in. It also means that, in the early stages at least, it doesn't hurt to find a company with a catchy name and ticker symbol to boot.

Should Wiley E. Coyote ever get into buying stocks, I have no doubt he would stack his portfolio with shares of ACME. I'm just not so sure any savvy penny stock investor should follow the economic advice of a coyote.

Investors of the two-legged kind, whether they're looking at a penny stock or a blue chip behemoth, tend to take a myriad of details into consideration before investing. And so they should.

But a recent study suggests that investors of every stripe take mental short-cuts when it comes to investing...at a time when they should be more rational.

Wall Street gurus and penny stock investors alike it seems, are more likely to purchase newly offered stocks that have an easily pronounceable name, say a pair of Princeton University researchers.

Adam Atler and Danny Oppenheimer found that a stock's performance immediately after an initial public offering (IPO) appears to be linked to how easily investors (penny stock or otherwise) can pronounce its name and stock ticker symbol.

Danny Oppenheimer, commented, "These findings contribute to the notion that psychology has a great deal to contribute to economic theory."

The two said the effect also extends to ticker symbols. For example, all things being equal, a stock with the symbol BAL should outgain a stock with the symbol BDL in the first days after an IPO.

"We looked at intervals of a day, a week, six months and a year after IPO," Atler said. "The effect was strongest shortly after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would earn $333 more than you would have had you invested in the 10 with the least fluent."

Oppenheimer acknowledged that their findings do not tell the whole story about the post-IPO success of a stock, not are they good indicators of long-run performance of a penny stock.

"You shouldn't make changes to your stock portfolio based on our findings. The primary contribution of this paper is to add a piece to the jigsaw of understanding how the markets operate," said Oppenheimer.

So, what does this mean for the green and seasoned penny stock investor? It means you should still take an exhaustive look at any company you're interested in. It also means that, in the early stages at least, it doesn't hurt to find a company with a catchy name and ticker symbol to boot.

Wise Stock Trades

When you place a market order, you are essentially telling a broker to buy or sell a stock at the current market price. A market order is the way your broker normally places an order unless you give him or her different instructions. The advantage of a market order is that you are almost always guaranteed that your order is executed as long as willing buyers and sellers are in the market place.

Generally speaking, buy orders are filled at the ask price and sell orders are filled at the bid price. If, however, you are working with a broker who has a smart order routing system, which looks for the best bid you sometimes can get a better price on the NASDAQ or AMEX exchanges. Whenever the order involves the NYSE, you need a good floor broker. In most brokerage houses, market orders are the cheapest to place with the lowest commission level.

If you want to avoid buying or selling stock at a price higher or lower than you intend, you must place a limit order instead of a market order. When placing a limit order, you specify the price at which you will buy or sell. You can place either a buy limit order or a sell limit order. Buy limit orders can be executed only when the price of the stock you are buying is at the limit price or lower. A sell limit order can be executed only when the selling price is at the limit price or higher. In other words, you set the parameters for the price that you will accept. You can’t do that with a market order. The risk you take when placing a limit order is that the order may never be filled. Most firms charge more for executing a limit order than they do for a market order. Be sure that you understand the fee and commission structures if you intend to use limit orders.

When you place a market order, you are essentially telling a broker to buy or sell a stock at the current market price. A market order is the way your broker normally places an order unless you give him or her different instructions. The advantage of a market order is that you are almost always guaranteed that your order is executed as long as willing buyers and sellers are in the market place.

Generally speaking, buy orders are filled at the ask price and sell orders are filled at the bid price. If, however, you are working with a broker who has a smart order routing system, which looks for the best bid you sometimes can get a better price on the NASDAQ or AMEX exchanges. Whenever the order involves the NYSE, you need a good floor broker. In most brokerage houses, market orders are the cheapest to place with the lowest commission level.

If you want to avoid buying or selling stock at a price higher or lower than you intend, you must place a limit order instead of a market order. When placing a limit order, you specify the price at which you will buy or sell. You can place either a buy limit order or a sell limit order. Buy limit orders can be executed only when the price of the stock you are buying is at the limit price or lower. A sell limit order can be executed only when the selling price is at the limit price or higher. In other words, you set the parameters for the price that you will accept. You can’t do that with a market order. The risk you take when placing a limit order is that the order may never be filled. Most firms charge more for executing a limit order than they do for a market order. Be sure that you understand the fee and commission structures if you intend to use limit orders.

Thursday, January 11, 2007

Stock Market; I Hope You are Back In

Well the roller coaster seems to have hit bottom and could be testing another low, never the less with a Fed Rate hike today, Paulson Secretary Treasury confirmation, higher oil prices on news of Pennsylvania Oil Refinery flooded and Iranian conflict deadline, it is amazing that the stock market shot up 200 points of its bottom.

Even more stunning is that the re-adjustment period and previous low seemed to have tested twice and repeated. For those who watch the charts and technical analysts, well they believe that it is time to be all in. Interesting as even some of the major fund managers are not all in.

Even more interesting is the wait and see approach and the question of tomorrow being another huge rally during this pre-Forth of July Week Bonanza? So many are saying with regards to the Stock Market; I hope you are back in the game? Is it too soon warn others? Well typically the job of the market seems to be to fool the most amount of people and re-distribute the wealth to the sharks.

Meanwhile we did not see many huge Corporations buying back their own stock as they sit on hoards of cash? What gives, why are these companies not re-investing their capital? Are the Corporations waiting too, wait and see approach? Are they fed up with over regulation, government intervention and uneasy about World Markets prior to a War? Consider all this in 2006.

Well the roller coaster seems to have hit bottom and could be testing another low, never the less with a Fed Rate hike today, Paulson Secretary Treasury confirmation, higher oil prices on news of Pennsylvania Oil Refinery flooded and Iranian conflict deadline, it is amazing that the stock market shot up 200 points of its bottom.

Even more stunning is that the re-adjustment period and previous low seemed to have tested twice and repeated. For those who watch the charts and technical analysts, well they believe that it is time to be all in. Interesting as even some of the major fund managers are not all in.

Even more interesting is the wait and see approach and the question of tomorrow being another huge rally during this pre-Forth of July Week Bonanza? So many are saying with regards to the Stock Market; I hope you are back in the game? Is it too soon warn others? Well typically the job of the market seems to be to fool the most amount of people and re-distribute the wealth to the sharks.

Meanwhile we did not see many huge Corporations buying back their own stock as they sit on hoards of cash? What gives, why are these companies not re-investing their capital? Are the Corporations waiting too, wait and see approach? Are they fed up with over regulation, government intervention and uneasy about World Markets prior to a War? Consider all this in 2006.

Paulson Gets Confirmed Market Flies Up

New Treasury Secretary for the United States of America that was appointed by President Bush has now been approved by the United States Congress and the day after he was confirmed the markets went up 200 points and came off a low.

During the same time the Feds raised rates and the oil prices spiked but the markets still went up. Could this be some kind of an indication that the stock market really likes having an insider alongside the president of the United States in helping determine situations, which affect the financial community.

Treasury Secretary Paulson is definitely a Wall Street insider and perhaps this is good for the stock market and investors portfolios. The stock market has seen some rough times in the last few weeks and this break out from the bottom lows is a very positive sign even with all the turmoil of the massing flooding in the Northeast and the potential war with Iran. A war, which could be underway very soon since Iran has no intention of stopping its nuclear weapons manufacturing.

Paulson also brings to the table great insight as to what politicians should do as to not disrupt the markets and this should help with upward trend bias and that of course is very good for investors, corporations and American business please consider this in 2006.

New Treasury Secretary for the United States of America that was appointed by President Bush has now been approved by the United States Congress and the day after he was confirmed the markets went up 200 points and came off a low.

During the same time the Feds raised rates and the oil prices spiked but the markets still went up. Could this be some kind of an indication that the stock market really likes having an insider alongside the president of the United States in helping determine situations, which affect the financial community.

Treasury Secretary Paulson is definitely a Wall Street insider and perhaps this is good for the stock market and investors portfolios. The stock market has seen some rough times in the last few weeks and this break out from the bottom lows is a very positive sign even with all the turmoil of the massing flooding in the Northeast and the potential war with Iran. A war, which could be underway very soon since Iran has no intention of stopping its nuclear weapons manufacturing.

Paulson also brings to the table great insight as to what politicians should do as to not disrupt the markets and this should help with upward trend bias and that of course is very good for investors, corporations and American business please consider this in 2006.

Penny Stock Investing Guide 101

Penny stocks are also known small caps, micro caps and nano caps. Penny stocks are low-priced issues that are often highly speculative. Usually a penny stock sells for less than one dollar and is highly volatile.

Penny stock trading has its pros and cons. While the benefit is accruing of incredible profit minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.

• To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.

• A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don’t hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.

• When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company’s history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.

• Before investing any amount, take a look at your bankroll. Bankroll refers to the amount of money you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don’t.

• Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.

Penny stocks are also known small caps, micro caps and nano caps. Penny stocks are low-priced issues that are often highly speculative. Usually a penny stock sells for less than one dollar and is highly volatile.

Penny stock trading has its pros and cons. While the benefit is accruing of incredible profit minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.

• To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.

• A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don’t hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.

• When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company’s history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.

• Before investing any amount, take a look at your bankroll. Bankroll refers to the amount of money you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don’t.

• Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.

Penny Stock Picks Guide

To gain from the investments in Penny Stocks, which in itself is a very dicey investment option, you should be very careful about what to pick and what to avoid. Penny Stocks which boasts of converting small capital into big fortunes are primarily those publicly traded stocks that are presently trading under $5 per share. They attract both the traders as well as long term investors because of the small amount of capital required to make substantial gains.

Most of the Penny Stocks are traded on NASDAQ, Pink Sheets or on the Over the Counter Bulletin boards. However, the Penny Stock companies should not be considered inferior in any sense to those traded on major exchanges. In fact, many of them have better growth rates than some of the NYSE stocks and promise handsome returns on petty investments. Yet, you need to do your homework and gain knowledge about these companies to profit from them. Penny Stock picking sites and bulletin boards often assist traders in finding emerging companies but getting influenced merely by the impression created by these sites and getting entangled into the hype generated by the phone salesmen or professional promoters hired by some companies for this job specifically, can lead to disastrous consequences.

As a wise trader you should always avoid those penny stock picking sites which use false advertising and misleading statements which project unrealistic gains, such as, “this stock will go up 10000%” or “this is the greatest company ever”. Some sites even project a false history of their successful penny stock picks. Also, ignore the sites and advertisements that use appealing words like “guaranteed”, “for a limited time”, “we have insider information”, etc. Those Penny Stocks, which guarantee good returns usually never, perform well. This kind of false propaganda can also be witnessed in bulletin boards and chat rooms. More often than not this hype is created by novice traders attempting to make their stocks rise or by the paid representatives of the companies making misleading statements in order to keep the price per share higher while the company dilutes. Thus, it is recommended that you should personally collect all the information about these stocks from reliable resources and should invest in them only if you personally feel that they are a good investment.

Investing in tumbling Penny Stocks in the anticipation of gaining later when these stocks will start performing well should also be avoided, as many of them never recoil. Moreover, you should also ignore those companies that engage in low volume trade and those which offer you stocks without charging any commission. For the reason that it will be very difficult for you to buy or sell those Penny Stocks which trade in low volume, at desirable prices; and the commission free stocks are as a matter of fact, never commission free, as these companies charge their invisible commission either by selling you their stocks at an arbitrary amount or at asking price rather than at bid price.

To gain from the investments in Penny Stocks, which in itself is a very dicey investment option, you should be very careful about what to pick and what to avoid. Penny Stocks which boasts of converting small capital into big fortunes are primarily those publicly traded stocks that are presently trading under $5 per share. They attract both the traders as well as long term investors because of the small amount of capital required to make substantial gains.

Most of the Penny Stocks are traded on NASDAQ, Pink Sheets or on the Over the Counter Bulletin boards. However, the Penny Stock companies should not be considered inferior in any sense to those traded on major exchanges. In fact, many of them have better growth rates than some of the NYSE stocks and promise handsome returns on petty investments. Yet, you need to do your homework and gain knowledge about these companies to profit from them. Penny Stock picking sites and bulletin boards often assist traders in finding emerging companies but getting influenced merely by the impression created by these sites and getting entangled into the hype generated by the phone salesmen or professional promoters hired by some companies for this job specifically, can lead to disastrous consequences.

As a wise trader you should always avoid those penny stock picking sites which use false advertising and misleading statements which project unrealistic gains, such as, “this stock will go up 10000%” or “this is the greatest company ever”. Some sites even project a false history of their successful penny stock picks. Also, ignore the sites and advertisements that use appealing words like “guaranteed”, “for a limited time”, “we have insider information”, etc. Those Penny Stocks, which guarantee good returns usually never, perform well. This kind of false propaganda can also be witnessed in bulletin boards and chat rooms. More often than not this hype is created by novice traders attempting to make their stocks rise or by the paid representatives of the companies making misleading statements in order to keep the price per share higher while the company dilutes. Thus, it is recommended that you should personally collect all the information about these stocks from reliable resources and should invest in them only if you personally feel that they are a good investment.

Investing in tumbling Penny Stocks in the anticipation of gaining later when these stocks will start performing well should also be avoided, as many of them never recoil. Moreover, you should also ignore those companies that engage in low volume trade and those which offer you stocks without charging any commission. For the reason that it will be very difficult for you to buy or sell those Penny Stocks which trade in low volume, at desirable prices; and the commission free stocks are as a matter of fact, never commission free, as these companies charge their invisible commission either by selling you their stocks at an arbitrary amount or at asking price rather than at bid price.

Bear Market, Bull Market or Dead-Cat Bounce...It Matters Little to the Stalwart Penny Stock

Over the last eight weeks [June, 2006] I've been spending a lot of time reading articles describing the current market conditions...trying to figure if it really affects penny stock investors.

Are we in a bull market...are we wading into a bear market. Or is the recent rally just a dead-cat bounce?

The dead cat bounce refers to a short-term recovery in a declining trend. There's a (relatively) old saying in investing: even a dead cat will bounce if it's dropped from high enough.

No matter how you slice it...I'm not sure it even matters to penny stock investors like you and me.

For example...stocks surged in Japan this week as reports showed growth in manufacturing and exports. Markets rose across Asia as investors were encouraged by Wednesday's gains on Wall Street.

Strong earnings reports from two bellwether stocks gave penny stock investors hope that rising interest rates wouldn't kill profits. The recent sell-off, said one economist was "just turbulence."

The turbulence, it seems, is continuing on this side of the pond. U.S. stocks traded flat to lower Thursday as the market took a breather as higher oil prices and downbeat economic data curbed Wall Street's momentum. So, what are we to believe, is the market heading up...or heading down?

How does the market look in general terms? As far as stocks are concerned, the S&P index is up just 0.3 percent for the year, the Dow is up 3.4 percent and the NASDAQ is down 2.9 percent. Not sparkling data.

But for penny stock investors, the recent roller coaster ride that many seasoned blue chip investors are reeling over, is just par for the course. We know that a penny stock is often volatile and just as unpredictable.

While a penny stock may be more vibrant when the market is upbeat, in general, a penny stock marches to its own tune. Why? Few investors venture into the field of penny stocks because they are either unwilling or unable to do the work required to accurately predict what these shares may do.

By their nature, it is nearly impossible to know what price a penny stock share should be trading at, and conventional financial ratios and industry comparisons are rarely effective measures for realizing a penny stock's value. Large one-day percentage gains and losses are not an uncommon occurrence for penny stock investors.

So really, bull, bear or cat...it's just another day at the computer screen for penny stock investors. The work may be fun...but it's not easy. Of the 14,000 public companies in the U.S., about 3,300 are considered penny stocks that trade on the OTC Bulletin Board operated by the NASDAQ.

Their visibility is low, chances are you've never heard of their CEO and I doubt they have any institutional following. And while they're highly speculative, the more promising ones have a targeted business plans, and solid positions in niche markets. And for now, they're flying under the radar of Wall Street

So what do you do in an unpredictable market like the one we're in? Continue applying the same principles you've always used when searching for that untapped penny stock. And enjoy the volatility.

Over the last eight weeks [June, 2006] I've been spending a lot of time reading articles describing the current market conditions...trying to figure if it really affects penny stock investors.

Are we in a bull market...are we wading into a bear market. Or is the recent rally just a dead-cat bounce?

The dead cat bounce refers to a short-term recovery in a declining trend. There's a (relatively) old saying in investing: even a dead cat will bounce if it's dropped from high enough.

No matter how you slice it...I'm not sure it even matters to penny stock investors like you and me.

For example...stocks surged in Japan this week as reports showed growth in manufacturing and exports. Markets rose across Asia as investors were encouraged by Wednesday's gains on Wall Street.

Strong earnings reports from two bellwether stocks gave penny stock investors hope that rising interest rates wouldn't kill profits. The recent sell-off, said one economist was "just turbulence."

The turbulence, it seems, is continuing on this side of the pond. U.S. stocks traded flat to lower Thursday as the market took a breather as higher oil prices and downbeat economic data curbed Wall Street's momentum. So, what are we to believe, is the market heading up...or heading down?

How does the market look in general terms? As far as stocks are concerned, the S&P index is up just 0.3 percent for the year, the Dow is up 3.4 percent and the NASDAQ is down 2.9 percent. Not sparkling data.

But for penny stock investors, the recent roller coaster ride that many seasoned blue chip investors are reeling over, is just par for the course. We know that a penny stock is often volatile and just as unpredictable.

While a penny stock may be more vibrant when the market is upbeat, in general, a penny stock marches to its own tune. Why? Few investors venture into the field of penny stocks because they are either unwilling or unable to do the work required to accurately predict what these shares may do.

By their nature, it is nearly impossible to know what price a penny stock share should be trading at, and conventional financial ratios and industry comparisons are rarely effective measures for realizing a penny stock's value. Large one-day percentage gains and losses are not an uncommon occurrence for penny stock investors.

So really, bull, bear or cat...it's just another day at the computer screen for penny stock investors. The work may be fun...but it's not easy. Of the 14,000 public companies in the U.S., about 3,300 are considered penny stocks that trade on the OTC Bulletin Board operated by the NASDAQ.

Their visibility is low, chances are you've never heard of their CEO and I doubt they have any institutional following. And while they're highly speculative, the more promising ones have a targeted business plans, and solid positions in niche markets. And for now, they're flying under the radar of Wall Street

So what do you do in an unpredictable market like the one we're in? Continue applying the same principles you've always used when searching for that untapped penny stock. And enjoy the volatility.

How to Trade Stocks

Understanding how the economy works isn’t the only fundamental analysis tools that are important while trading stocks. You also need to read financial statements to understand the financial status of the companies you want to buy. A Company’s income statements on the other hand give you a look at the results of the most recent period and provide a basis for comparison with prior years and periods. You can use these statements to look at whether revenues are growing, and if they are by what percentage. You also can see how much profit the company is keeping from the revenue it generates.

The cash flow statement shows you how efficiently a company is using its cash and whether it’s having problems meeting its current obligations. The balance sheet gives you a snapshot of a company’s assets and liabilities and stockholders equity.

Buying a share of stock can be as easy as calling a broker and saying that you want to buy such and such a stock, but you can place an order in a number of other ways that give you better protections. Most orders are placed as day orders, but you can choose to place them as good till cancelled orders. The four basic type of orders you can place are market orders, limit orders, stop orders and stop-limit orders.

Understanding the language and using it to protect your assets and the way you trade is critical to your success as a trader. It is necessary to know the nuances of placing orders so you don’t make a potentially costly mistake by placing a market order when you intended to place a limit order. Putting a stop-limit order in place may sound like the safest way to go; however, doing so may not help you in a rapidly changing market.

Understanding how the economy works isn’t the only fundamental analysis tools that are important while trading stocks. You also need to read financial statements to understand the financial status of the companies you want to buy. A Company’s income statements on the other hand give you a look at the results of the most recent period and provide a basis for comparison with prior years and periods. You can use these statements to look at whether revenues are growing, and if they are by what percentage. You also can see how much profit the company is keeping from the revenue it generates.

The cash flow statement shows you how efficiently a company is using its cash and whether it’s having problems meeting its current obligations. The balance sheet gives you a snapshot of a company’s assets and liabilities and stockholders equity.

Buying a share of stock can be as easy as calling a broker and saying that you want to buy such and such a stock, but you can place an order in a number of other ways that give you better protections. Most orders are placed as day orders, but you can choose to place them as good till cancelled orders. The four basic type of orders you can place are market orders, limit orders, stop orders and stop-limit orders.

Understanding the language and using it to protect your assets and the way you trade is critical to your success as a trader. It is necessary to know the nuances of placing orders so you don’t make a potentially costly mistake by placing a market order when you intended to place a limit order. Putting a stop-limit order in place may sound like the safest way to go; however, doing so may not help you in a rapidly changing market.

Wednesday, January 10, 2007

Mutual Fund Alternatives – How To Easily Improve Your Portfolio Performance

In these uncertain times many investors are worried about there mutual fund performance and are looking for mutual fund alternatives for growth.

There is one simple investment (and we mean anyone can do it) that has on past performance exceeded gains of 50% per annum, and this looks set to continue.

So what investment are we referring to?

The investment is copper

Prices of copper have increased in price more than six-fold since late 2001!

These gains look set to continue and this investment is a great alternative to mutual funds in terms of performance and risk / return.

It’s easy to invest in copper.

This is a bull market and all traders need to do is to time their entry correctly and then sit back and enjoy the ride.

So why is copper so bullish

Quite simply, we have low inventories tight supply and huge demand as global economic demand soars, as the new economic super powers of China and India join the economic elite.

Copper is a barometer of economic growth and global demand overall is soaring, there is simply not enough copper to meet demand and this means higher prices.

Risk

When looking at mutual fund alternatives is copper more risky than mutual funds?

We don’t think so, at the end of the day, mutual funds are much more volatile than many believe and the investment performance of most fund managers is dire – if you make double digit gains your lucky!

Copper on the other hand is up 600% in just a few years and you can trade with unlimited profits and limited risk with options.

Diversification

Reduces risk of your overall portfolio and copper is therefore an mutual fund alternative investment that can compliment your existing portfolio and reduce risk.

Commodities buy and hold

If you are looking at commodities as a mutual fund alternative then you need to adopt a simple buy and hold strategy for long term gains – Keep in mind, your investing for the long term.

In these uncertain times many investors are worried about there mutual fund performance and are looking for mutual fund alternatives for growth.

There is one simple investment (and we mean anyone can do it) that has on past performance exceeded gains of 50% per annum, and this looks set to continue.

So what investment are we referring to?

The investment is copper

Prices of copper have increased in price more than six-fold since late 2001!

These gains look set to continue and this investment is a great alternative to mutual funds in terms of performance and risk / return.

It’s easy to invest in copper.

This is a bull market and all traders need to do is to time their entry correctly and then sit back and enjoy the ride.

So why is copper so bullish

Quite simply, we have low inventories tight supply and huge demand as global economic demand soars, as the new economic super powers of China and India join the economic elite.

Copper is a barometer of economic growth and global demand overall is soaring, there is simply not enough copper to meet demand and this means higher prices.

Risk

When looking at mutual fund alternatives is copper more risky than mutual funds?

We don’t think so, at the end of the day, mutual funds are much more volatile than many believe and the investment performance of most fund managers is dire – if you make double digit gains your lucky!

Copper on the other hand is up 600% in just a few years and you can trade with unlimited profits and limited risk with options.

Diversification

Reduces risk of your overall portfolio and copper is therefore an mutual fund alternative investment that can compliment your existing portfolio and reduce risk.

Commodities buy and hold

If you are looking at commodities as a mutual fund alternative then you need to adopt a simple buy and hold strategy for long term gains – Keep in mind, your investing for the long term.

Trading Vehicles

The best Trading Vehicles have two characteristics that are paramount: Price and Liquidity.

If you're trading stocks, look for good liquid trading markets that are tight and fluid.

Bid and Ask quotes are narrow and close to the last trade. The quotes have depth to them and can accommodate large orders without disturbing the price.

All this results because of the competition between large numbers of market participants.

The opposite situation is present in thinly traded markets.

Lack of large numbers of market participants means quotes are wider and smaller in size, resulting in huge "slippage", choppy markets, and disappointing order executions.

If you can't get in or out of a given market with ease, you're in the wrong market.

If the trading crowd is not interested in a particular market neither should you.

Go where the action is.

For instance, Exchange Traded Funds (ETF) are the closest you can get, in a single security, to being able to trade "the market".

In appearance they resemble an index fund, but they trade exactly like any other stock.

Index funds don't encourage short term in-and-out trading. They call such activity "disruptive". And, truthfully, they're right. It is disruptive, distracting, and annoying to the fund portfolio manager.

The ingenious way ETFs are put together, all the in-and-out trading in the world will not disrupt anything inside the unit portfolio. In fact, they were designed to accommodate and encourage such activity. Why? Because the public wanted it, that's why.

Traders and investors wanted a vehicle that they could buy-and-hold, collect dividends, trade, buy on margin, sell short (without that outdated "up tick" rule), options trade, and whatever else they wanted to do with it, and did Wall Street ever deliver the goods!

Broad based indexed exchange traded funds hit the ground running and never looked back.

They have had a profound effect on the way investors and the entire investment management industry think about investing.

In fact, they have proved so popular they spawned a universe of sector ETFs on industry groups.

All the requisites of an excellent trading vehicle are present.

Also, as a trading vehicle, Single Stock Futures (SSF) are a traders' dream come true.

In legal terms, an agreement between two parties where one party commits to buy a stock and one party to sell a stock at a given price and on a specified date.

The contract is completed at expiration or, in most cases, by offset prior to the expiration date.

The many advantages are:

(1) Greater leverage: Lower margins (20% vs 50% for stocks) and no interest to pay.

(2) Greater cash flow opportunity: Treasury Bills can be used as collateral.

(3) Easier and cheaper to sell short: No need to borrow stock, no uptick rule, no dividends to make up. SHORTS even earn the "basis" premium that the LONGS pay.

The best Trading Vehicles have two characteristics that are paramount: Price and Liquidity.

If you're trading stocks, look for good liquid trading markets that are tight and fluid.

Bid and Ask quotes are narrow and close to the last trade. The quotes have depth to them and can accommodate large orders without disturbing the price.

All this results because of the competition between large numbers of market participants.

The opposite situation is present in thinly traded markets.

Lack of large numbers of market participants means quotes are wider and smaller in size, resulting in huge "slippage", choppy markets, and disappointing order executions.

If you can't get in or out of a given market with ease, you're in the wrong market.

If the trading crowd is not interested in a particular market neither should you.

Go where the action is.

For instance, Exchange Traded Funds (ETF) are the closest you can get, in a single security, to being able to trade "the market".

In appearance they resemble an index fund, but they trade exactly like any other stock.

Index funds don't encourage short term in-and-out trading. They call such activity "disruptive". And, truthfully, they're right. It is disruptive, distracting, and annoying to the fund portfolio manager.

The ingenious way ETFs are put together, all the in-and-out trading in the world will not disrupt anything inside the unit portfolio. In fact, they were designed to accommodate and encourage such activity. Why? Because the public wanted it, that's why.

Traders and investors wanted a vehicle that they could buy-and-hold, collect dividends, trade, buy on margin, sell short (without that outdated "up tick" rule), options trade, and whatever else they wanted to do with it, and did Wall Street ever deliver the goods!

Broad based indexed exchange traded funds hit the ground running and never looked back.

They have had a profound effect on the way investors and the entire investment management industry think about investing.

In fact, they have proved so popular they spawned a universe of sector ETFs on industry groups.

All the requisites of an excellent trading vehicle are present.

Also, as a trading vehicle, Single Stock Futures (SSF) are a traders' dream come true.

In legal terms, an agreement between two parties where one party commits to buy a stock and one party to sell a stock at a given price and on a specified date.

The contract is completed at expiration or, in most cases, by offset prior to the expiration date.

The many advantages are:

(1) Greater leverage: Lower margins (20% vs 50% for stocks) and no interest to pay.

(2) Greater cash flow opportunity: Treasury Bills can be used as collateral.

(3) Easier and cheaper to sell short: No need to borrow stock, no uptick rule, no dividends to make up. SHORTS even earn the "basis" premium that the LONGS pay.

Tuesday, January 09, 2007

Potential SPX Overshoot

The most recent article "Lower Volume Trading Range" showed SPX held the cyclical bull market low, intermediate-term technical indicators may have bottomed, and an SPX 1,246 to 1,290 range may take place in July. However, the possibility of a rise above 1,290 should be taken into account.

The two charts below show daily SPX (right scales and candlesticks) and daily NYSE Oscillator (NYMO; left scales and green lines) in 2004 and currently with SPX 50 and 200-day MAs. NYMO closed above 72 on Monday, which is the highest level since early-June 2004.

The first chart shows SPX topped in March 2004 at 1,163 and began a volatile downtrend. The second chart shows SPX topped in May 2006 at 1,326 and also began a downtrend. The gray arrow in the 2004 chart may indicate SPX movements over the next month. The first two weeks of July tend to be bullish. So, it's possible, SPX may rally into earnings season, stay high, and sell on the FOMC anouncement August 8th. A short-squeeze may be triggered above 1,290 with upside potential to around 1,310.

However, there are major differences between the 2004 and current charts. When the 2004 NYMO rose above 80, it began below negative 100 (both the high and low were historical extremes), while the current rise began slightly below negative 50. Also, SPX rose above the 50-day MA on the first bounce after the top in 2004. However, SPX failed to reach the 50-day MA on the first bounce after the top in 2006.

Over the 2004 downtrend, SPX made lower highs. So, 1,290 continues to be major resistance, and the 1,246 to 1,290 range may take place in July. Nonetheless, a sharp rise above 1,290 should be taken into account. Also, the charts indicate SPX will be much lower within three months, and SPX may bottom in October or sooner, perhaps below 1,200.

The most recent article "Lower Volume Trading Range" showed SPX held the cyclical bull market low, intermediate-term technical indicators may have bottomed, and an SPX 1,246 to 1,290 range may take place in July. However, the possibility of a rise above 1,290 should be taken into account.

The two charts below show daily SPX (right scales and candlesticks) and daily NYSE Oscillator (NYMO; left scales and green lines) in 2004 and currently with SPX 50 and 200-day MAs. NYMO closed above 72 on Monday, which is the highest level since early-June 2004.

The first chart shows SPX topped in March 2004 at 1,163 and began a volatile downtrend. The second chart shows SPX topped in May 2006 at 1,326 and also began a downtrend. The gray arrow in the 2004 chart may indicate SPX movements over the next month. The first two weeks of July tend to be bullish. So, it's possible, SPX may rally into earnings season, stay high, and sell on the FOMC anouncement August 8th. A short-squeeze may be triggered above 1,290 with upside potential to around 1,310.

However, there are major differences between the 2004 and current charts. When the 2004 NYMO rose above 80, it began below negative 100 (both the high and low were historical extremes), while the current rise began slightly below negative 50. Also, SPX rose above the 50-day MA on the first bounce after the top in 2004. However, SPX failed to reach the 50-day MA on the first bounce after the top in 2006.

Over the 2004 downtrend, SPX made lower highs. So, 1,290 continues to be major resistance, and the 1,246 to 1,290 range may take place in July. Nonetheless, a sharp rise above 1,290 should be taken into account. Also, the charts indicate SPX will be much lower within three months, and SPX may bottom in October or sooner, perhaps below 1,200.

Penny Stock Research Guide

Penny stocks also referred to as small caps, micro caps and nano caps are low-priced issues, often highly speculative and selling less than $1 a share. Initially penny stocks were mostly a matter of derision but gradually over the years some of them have developed into investment caliber issues. “Penny stock is a high-risk stock that has a short or erratic history of revenues and earnings.”

A broader definition of penny stocks refers to the company’s market capitalization instead of its stock price. Market capitalization of a company is calculated by multiplying it stock price by the amount of shares outstanding. This number provides you with the total dollar value of all the shares in the organization at that instance of time.

A case in point can be Microsoft that has a market cap of around $300B and Dell that has a market cap of $70B. The classification of a company in small cap depends on the concerned broker. While for some organizations companies below $2b in market cap are considered to be small cap, for several others, small cap companies will only be under $1B.

Penny stocks have a great significance in the life of investors. With the help of penny stocks investors can incur huge gains in very short period of time as small as minutes and hours. Though the volatile market of penny stocks has many drawbacks yet the outweighing positive point is that investors can incur hefty benefits in nit just few days but in few hours.

Penny stocks are more enticing due to their cost-effectiveness. Unlike blue chip stocks the penny stocks demand less investment that can go a lot farther. For instance accumulating 10,000 shares of a penny stock can cost only $1000 dollars while same number of shares in a blue chip might cost as much as $10,000,000. Similarly penny stocks offer the advantage of occupying a large position in a company for minimum amount of money. For example a $5000 investment in a blue-chip company will provide the investor only a negligible share in the overall company whereas the same amount invested in penny stocks will offer you a complete 1% stake in the public company. Moreover if over the year that company expands and grows successful, your profits and shares can simply multiply.

However penny stocks too have quite a few shortcomings. The foremost disadvantage as is the volatility of the market. If on the one hand the volatility is beneficial for the investor on the other hand it can be fatal too. Investors can incur huge losses if the market fluctuates in an unwanted way. Due to the high-risk factor involved many investors completely stay away from investing in penny stocks and few others invest only a small amount of money in it.

Another drawback is that unlike stocks such as NYSE or NASDAQ, listed on more global exchanges, penny stocks have less financial disclosure requirements and release less reliable financial information in comparison to its other big counterparts. Moreover lack of easily accessible and trustworthy information about these companies provides space for temporary establishment of sham companies that can deceit and harm the investors.

Penny stocks also referred to as small caps, micro caps and nano caps are low-priced issues, often highly speculative and selling less than $1 a share. Initially penny stocks were mostly a matter of derision but gradually over the years some of them have developed into investment caliber issues. “Penny stock is a high-risk stock that has a short or erratic history of revenues and earnings.”

A broader definition of penny stocks refers to the company’s market capitalization instead of its stock price. Market capitalization of a company is calculated by multiplying it stock price by the amount of shares outstanding. This number provides you with the total dollar value of all the shares in the organization at that instance of time.

A case in point can be Microsoft that has a market cap of around $300B and Dell that has a market cap of $70B. The classification of a company in small cap depends on the concerned broker. While for some organizations companies below $2b in market cap are considered to be small cap, for several others, small cap companies will only be under $1B.

Penny stocks have a great significance in the life of investors. With the help of penny stocks investors can incur huge gains in very short period of time as small as minutes and hours. Though the volatile market of penny stocks has many drawbacks yet the outweighing positive point is that investors can incur hefty benefits in nit just few days but in few hours.

Penny stocks are more enticing due to their cost-effectiveness. Unlike blue chip stocks the penny stocks demand less investment that can go a lot farther. For instance accumulating 10,000 shares of a penny stock can cost only $1000 dollars while same number of shares in a blue chip might cost as much as $10,000,000. Similarly penny stocks offer the advantage of occupying a large position in a company for minimum amount of money. For example a $5000 investment in a blue-chip company will provide the investor only a negligible share in the overall company whereas the same amount invested in penny stocks will offer you a complete 1% stake in the public company. Moreover if over the year that company expands and grows successful, your profits and shares can simply multiply.

However penny stocks too have quite a few shortcomings. The foremost disadvantage as is the volatility of the market. If on the one hand the volatility is beneficial for the investor on the other hand it can be fatal too. Investors can incur huge losses if the market fluctuates in an unwanted way. Due to the high-risk factor involved many investors completely stay away from investing in penny stocks and few others invest only a small amount of money in it.

Another drawback is that unlike stocks such as NYSE or NASDAQ, listed on more global exchanges, penny stocks have less financial disclosure requirements and release less reliable financial information in comparison to its other big counterparts. Moreover lack of easily accessible and trustworthy information about these companies provides space for temporary establishment of sham companies that can deceit and harm the investors.

Monday, January 08, 2007

The Good & The Bad of Online Stock Trading

In order to get consistently positive results from the online stock trading system, you have to have a system of your own. You wont consistently pull positive returns from online stocks if you follow a rag tag system. To help with your investing, here are a couple methods that will give you some direction as to where to start with your online stock trading system.

One system you can use is to buy equal dollar amounts of the 10 DJ stocks that have dividend yields. Hold these companies for one year, and then adjust your portfolio to hold the current “Dogs on the Dow”. What you are doing is buying companies who have decreased in favor and their stocks have lowered. The goal is to buy companies that have a high hope of rebounding, and therefore you will gain money out of it. There is an element of risk though because sometimes the companies don't have substantial financial strength to pull them out of hard times and you could ultimately end up losing money.

Another method involves investing a fixed dollar amount monthly, or annually. If the prices increase, you will receive fewer shares for your money, while if they decrease you will receive more shares for your money. The price is up to you, and you will have to commit to not going over that price. Depending on the fluctuation of funds, you could lower the funds slightly. This strategy involves meeting a prescribed target by adjusting the amount invested, up or down. Dollar-cost averaging takes advantage of the 1/x curve non-linearity. Value averaging when the value is down goes in a little deeper and when value is up in a little less. But be careful because when you are dealing with a declining market neither approach will bail you out.

A last strategy is a system called “Hedging”. The most simple method of hedging, but also the most expensive, is where you buy stocks that you own a put in. To cover general market declines, buy a put option on the market, and sell financial futures to hedge.

The best, and least expensive, method of hedging is to buy stocks from one company, and then sell those stocks to the company's competitor. Futures are the cheapest way to hedge an entire portfolio. Remember that the efficiency of the hedge depends on the estimated correlation between the broad market, and your high-beta portfolio.

In order to get consistently positive results from the online stock trading system, you have to have a system of your own. You wont consistently pull positive returns from online stocks if you follow a rag tag system. To help with your investing, here are a couple methods that will give you some direction as to where to start with your online stock trading system.

One system you can use is to buy equal dollar amounts of the 10 DJ stocks that have dividend yields. Hold these companies for one year, and then adjust your portfolio to hold the current “Dogs on the Dow”. What you are doing is buying companies who have decreased in favor and their stocks have lowered. The goal is to buy companies that have a high hope of rebounding, and therefore you will gain money out of it. There is an element of risk though because sometimes the companies don't have substantial financial strength to pull them out of hard times and you could ultimately end up losing money.

Another method involves investing a fixed dollar amount monthly, or annually. If the prices increase, you will receive fewer shares for your money, while if they decrease you will receive more shares for your money. The price is up to you, and you will have to commit to not going over that price. Depending on the fluctuation of funds, you could lower the funds slightly. This strategy involves meeting a prescribed target by adjusting the amount invested, up or down. Dollar-cost averaging takes advantage of the 1/x curve non-linearity. Value averaging when the value is down goes in a little deeper and when value is up in a little less. But be careful because when you are dealing with a declining market neither approach will bail you out.

A last strategy is a system called “Hedging”. The most simple method of hedging, but also the most expensive, is where you buy stocks that you own a put in. To cover general market declines, buy a put option on the market, and sell financial futures to hedge.

The best, and least expensive, method of hedging is to buy stocks from one company, and then sell those stocks to the company's competitor. Futures are the cheapest way to hedge an entire portfolio. Remember that the efficiency of the hedge depends on the estimated correlation between the broad market, and your high-beta portfolio.

Stock Market Quotes 1

“ Most investors don’t even stop to consider how much business a company does. All they look at are earnings per share and net assets per share.” -Kenneth L Fisher, stock market guru.

" You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right-and that’s the only thing that makes you right.” -Warren Buffett, the world’s most successful investor.

There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” -Bernstein, William.

“ Investors must keep in mind that there’s a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .” -Richard Thaler.

“ Investment, if you like, is a math exam where the powers that be work out the answers based on new formulae they develop after your papers have been handed in.” -Dr Marc Faber, international stock market guru (famous bear)

“ The four most dangerous words in investing are, It’s different this time.” -Sir John Templeton, legendary investor.

"Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” -James Cash.

“ Most investors don’t even stop to consider how much business a company does. All they look at are earnings per share and net assets per share.” -Kenneth L Fisher, stock market guru.

" You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right-and that’s the only thing that makes you right.” -Warren Buffett, the world’s most successful investor.

There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” -Bernstein, William.

“ Investors must keep in mind that there’s a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .” -Richard Thaler.

“ Investment, if you like, is a math exam where the powers that be work out the answers based on new formulae they develop after your papers have been handed in.” -Dr Marc Faber, international stock market guru (famous bear)

“ The four most dangerous words in investing are, It’s different this time.” -Sir John Templeton, legendary investor.

"Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” -James Cash.

Sunday, January 07, 2007

Learn to Trade

The only way to learn to trade is by doing. Imaginary "paper trading" won't cut it.

There is nothing like having real money on the line to test ones' psychological reactions to fear and greed.

Learn to Trade is really about timing. Buying and holding a position over a period of years proves nothing. How one reacts in every sort of market is key.

Set up an "experience" fund consisting of 10% of your available risk capital but not more than $5,000 maximum.

Force yourself to trade in only one issue at a time; long or short. You can trade 100 shares of an average-priced stock, 50 shares of a high-priced stock, or 200 shares of a low-priced stock but only one issue at a time.

If a second issue looks attractive, force yourself to choose which one to go with.

Your goal is to always be long or short the most suitable stock at the moment. If you can't find one, stay in cash until one shows up.

Look only for situations that look to yield potentially large gains. You won't always hit "home runs" every time, but a lot of "singles" or "doubles" isn't bad either.

Your goal should be to always show an "absolute" net trading profit each and every month. You're not interested in performing "relatively" well compared to some market average.

There is only one trading rule that is always correct: Losses must always be "cut"!

They must be cut quickly, long before they become of any financial consequence.

It is impossible, in my opinion, to rack up an accumulation of net trading profits over a large number of trades, that includes both profits and losses, without being "good".

Learn to trade well enough and you just might be able to quit you're day job.

The only way to learn to trade is by doing. Imaginary "paper trading" won't cut it.

There is nothing like having real money on the line to test ones' psychological reactions to fear and greed.

Learn to Trade is really about timing. Buying and holding a position over a period of years proves nothing. How one reacts in every sort of market is key.

Set up an "experience" fund consisting of 10% of your available risk capital but not more than $5,000 maximum.

Force yourself to trade in only one issue at a time; long or short. You can trade 100 shares of an average-priced stock, 50 shares of a high-priced stock, or 200 shares of a low-priced stock but only one issue at a time.

If a second issue looks attractive, force yourself to choose which one to go with.

Your goal is to always be long or short the most suitable stock at the moment. If you can't find one, stay in cash until one shows up.

Look only for situations that look to yield potentially large gains. You won't always hit "home runs" every time, but a lot of "singles" or "doubles" isn't bad either.

Your goal should be to always show an "absolute" net trading profit each and every month. You're not interested in performing "relatively" well compared to some market average.

There is only one trading rule that is always correct: Losses must always be "cut"!

They must be cut quickly, long before they become of any financial consequence.

It is impossible, in my opinion, to rack up an accumulation of net trading profits over a large number of trades, that includes both profits and losses, without being "good".

Learn to trade well enough and you just might be able to quit you're day job.

Stock Market Update - Get the Secrets Revealed!

Talk about living in turbulent times! Have you noticed how the US stock market has been taking a beating of late?

If you wanted an example of a real yo-yo market, you only need have followed the Dow Jones over the last few weeks and this would have been a perfect example. Not that the Nasdaq was performing any better either!

With all this movement, it’s almost as if the market is desperately trying to establish a trend, but not quite settling into one.

Whenever this happens, our advice to any would be investor is to resist any temptations to jump in to make a quick kill, as the technical signals appear to be somewhat inconsistent and are not reliably leaning in one direction or another.

This is a typical sign that the market is in a yo-yo trading mode, with gains that are made in one week being given back the following. This is an expensive way to learn about market volatility.

It appears that a lot of the smart money is not convinced that the bottom is in place and therefore does not see an opportunity to buy good stocks cheap just yet.

Meanwhile there is lots of noise coming from market gurus and other would be “experts” on what stocks to buy and why, with many of them having conflicting views on what the market is doing at the moment.

Our advice? The market’s too unstable at the moment and some perfectly decent stocks are getting caught up in the general turbulence. Let things settle a little better before you even begin to think about diving in.

Talk about living in turbulent times! Have you noticed how the US stock market has been taking a beating of late?

If you wanted an example of a real yo-yo market, you only need have followed the Dow Jones over the last few weeks and this would have been a perfect example. Not that the Nasdaq was performing any better either!

With all this movement, it’s almost as if the market is desperately trying to establish a trend, but not quite settling into one.

Whenever this happens, our advice to any would be investor is to resist any temptations to jump in to make a quick kill, as the technical signals appear to be somewhat inconsistent and are not reliably leaning in one direction or another.

This is a typical sign that the market is in a yo-yo trading mode, with gains that are made in one week being given back the following. This is an expensive way to learn about market volatility.

It appears that a lot of the smart money is not convinced that the bottom is in place and therefore does not see an opportunity to buy good stocks cheap just yet.

Meanwhile there is lots of noise coming from market gurus and other would be “experts” on what stocks to buy and why, with many of them having conflicting views on what the market is doing at the moment.

Our advice? The market’s too unstable at the moment and some perfectly decent stocks are getting caught up in the general turbulence. Let things settle a little better before you even begin to think about diving in.

When to Sell

When to sell? There is no hard and fast rule, except one: Sell long positions immediately if the reasons for purchase prove themselves to be wrong by declining in price.

Good "buyers", that is to say, those who know how to recognize real bargains, are often weak "sellers" because they tend to sell too early or hold on too long.

They either become uncomfortable as soon as their positions reach "normal" valuations (sell too early) or tend to give their positions "the benefit of the doubt" when early signs of weakness begin to show up (hold on too long).

Periods of depression, bad business conditions, and public apathy are naturally followed by periods of overvaluation, good business conditions, and public over exuberance.

At such times as stock prices advance beyond the most optimistic expectations of those who bought very early and very low they begin to feel uncomfortable and unsure of their positions.

Intelligent liquidation is not simply the reverse of intelligent accumulation. Unwinding of long positions is not the same as initiating short positions. Stocks often make unsatisfactory long holdings without being clear-cut short sales.

Never allow a large unrealized gain to turn into a loss. If your commitment is large, scale out of the position in stages on the way up.

When to sell? There is no hard and fast rule, except one: Sell long positions immediately if the reasons for purchase prove themselves to be wrong by declining in price.

Good "buyers", that is to say, those who know how to recognize real bargains, are often weak "sellers" because they tend to sell too early or hold on too long.

They either become uncomfortable as soon as their positions reach "normal" valuations (sell too early) or tend to give their positions "the benefit of the doubt" when early signs of weakness begin to show up (hold on too long).

Periods of depression, bad business conditions, and public apathy are naturally followed by periods of overvaluation, good business conditions, and public over exuberance.

At such times as stock prices advance beyond the most optimistic expectations of those who bought very early and very low they begin to feel uncomfortable and unsure of their positions.

Intelligent liquidation is not simply the reverse of intelligent accumulation. Unwinding of long positions is not the same as initiating short positions. Stocks often make unsatisfactory long holdings without being clear-cut short sales.

Never allow a large unrealized gain to turn into a loss. If your commitment is large, scale out of the position in stages on the way up.