Posted by Martin November 26, 2008
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The stock market: promises and wishful thoughts

The stock market: promises and wishful thoughts

When the [tag]stock market[/tag] started rocketing last Monday, I was very suspicious about it. I truly wished the [tag]market[/tag] would turn already, finish its bottoming and start moving up, even slowly, carefully, but with confidence. Then I have realized that all this move is based on a fake power. The news that the Government is going to bail-out CitiGroup by pouring 20-something billions of inflationary [tag]dollars[/tag] into another [tag]company[/tag], which doesn’t deserve it at all, Obama’s picks of people in his future administration and some others, are just promises and wishful thoughts, which won’t do anything good to the market in a long run. I would like to be wrong however. The truth is that the stock market is [tag]oversold[/tag] and it needs some impulse to boost its growth. Maybe these “news” will help it grow. We may see what would happen in the stock market next week. All the rise could be a pre-holiday rush, which will fade next week.

[tag]Dow[/tag]
+247.14 +2.91% 8,726.61
[tag]Nasdaq[/tag]
+67.37 +4.60% 1,532.10
[tag]S&P[/tag]
+30.29 +3.53% 887.68

However when you take a look at the chart we can see a turnover, which was missing last time. The OVB indicator turned sharply up and the Dow index raised 4th day in a row. However the only negative point is declining low volume.

Dow Jones chart

I am changing the market status to “Rally Attempt” even though the low volume and the sources of this attempt are weak and may cause another failure next week.

Tip: There is still nothing to do than waiting. This attempt may fail as a few attempts ago. Use this time for studying the market and stocks, save money, do not open any new positions, create [tag]emergency account[/tag] if you still do not have it, build a [tag]watch list[/tag] and wait for the market to tell you when it is the best time to start [tag]buying stocks[/tag] again.


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Posted by Martin November 26, 2008
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Protect your money: timing the market


I wrote about [tag]timing the market[/tag] in my previous post to emphasize this approach and to show that it is a [tag]good strategy[/tag], which every [tag]individual investor[/tag] who wants to manage his own [tag]portfolio[/tag] actively and [tag]make money[/tag] consistently should learn and practice as long as he or she becomes a pro. This strategy can help you to survive [tag]bear markets[/tag] like this one with the peace of mind while protecting your own [tag]money[/tag] you already have made during your [tag]investing[/tag] career.
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Posted by Martin November 22, 2008
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Picks 11/17 – 11/21


No [tag]new picks[/tag].

There is nothing to buy out there.

Existing holdings:

100% CASH


Contribution this week: $0

Starting account value = $1,903.78

Account value = $1,809.80 (without margin)

Buying power = $1,809.80

[tag]Portfolio Gain/loss[/tag] this week = -4.94%

[tag]Portfolio[/tag] Gain/Loss for NOVEMBER 2008 = -5.74%

Portfolio Gain/loss since inception = -19.19%

[tag]Annual Return[/tag] (CAGR): -19.19%

Now the portfolio is 100% cash, waiting for the new confirmed rally. I transferred all money to a savings account and I will be saving more money for the new upturn, study the market and wait.


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

[tag]Subscribe[/tag] to [tag]Hello Suckers[/tag] today!




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Posted by Martin November 21, 2008
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AFAM sold


Here we go, AFAM hit my stop loss and has been sold.

11/21/2008 10:57:50 Sold 10 AFAM @ 38.1306
Now I am 100% in cash and waiting for the market to provide new opportunities. Until then I will be saving money and wait.


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Posted by Martin November 20, 2008
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AFAM dragged down by the stock market weakness

AFAM dragged down by the stock market weakness

Stocks
This is the post from Hello Suckers.
The stock market sank by 445 points again. Leading [tag]stocks[/tag] such as AFAM headed south pulled by the market without mercy and became a proof that [tag]trading[/tag] against the market is [tag]fools’ play[/tag]. Do not buy any new positions and wait for the market.
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Posted by Martin November 19, 2008
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Stock Market diving

Stock Market diving

This is the post from Hello Suckers

[tag]Dow[/tag]
427.47 -5.07% 7,997.28
[tag]Nasdaq[/tag]
-96.85 -6.53% 1,386.42
[tag]S&P[/tag]
-52.54 -6.12% 806.58

The [tag]stock market[/tag] suffered another huge [tag]sell-off[/tag] today. Volume was light, however Dow ended below psychological level of 8000 points and erased all gains since April 2003. The path to lower levels is now open. Tomorrow we may expect some recovery, but it seems like we are heading more south.

DOW JONES

If you are thinking, that this would be the best time to [tag]start buying[/tag] [tag]cheap stocks[/tag], I would warn you. We still didn’t reach the bottom or at least we do not know whether we did or not. All major [tag]stocks declined[/tag] today even though it seemed that they couldn’t go lower anymore. They could and they would go as bad news would reach this [tag]volatile market[/tag].

Tip: There is nothing more to do than waiting. If you are good in [tag]shorting stocks[/tag] (I do not short yet due to lack of experience), you can consider shorting stocks. Otherwise the best we can do now is to [tag]save more money[/tag] to be ready for next rally, study [tag]stocks[/tag] and market, create [tag]emergency account[/tag] if you still do not have it, do not open any new positions, build a [tag]watch list[/tag] and wait for the market to tell when it is the best time to start [tag]buying stocks[/tag].


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Posted by Martin November 15, 2008
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Investor’s checklist II.


This is a post from Hello Suckers.

[tag]Wall Street[/tag]

In my previous post of [tag]Investor’s checklist[/tag], I tried to emphasize how an [tag]investor[/tag] can prepare himself for [tag]investing[/tag]. Now (November 2008) we have the best time for such preparation. The [tag]market[/tag] is in correction and nobody knows when this decline stops, so the best to do now is to wait, [tag]save money[/tag], study and work on preparing yourself for next rally. If you are a beginner who has decided to start investing or you are already on the market, you can prepare yourself by:

  1. Saving money
  2. Creating your [tag]emergency account[/tag]
  3. Studying
  4. Creating your [tag]investing journal[/tag]
  5. Creating your investing and [tag]money management plan[/tag]
  6. Open your investing account

In this post I would like to continue explaining [tag]trading basics[/tag], how the [tag]stock market[/tag] works, how you can trade yourself and what [tag]investing tools[/tag] you may consider to use.

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Posted by Martin November 14, 2008
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Picks 11/10 – 11/14


No [tag]new picks[/tag].

There is nothing to buy out there.

Existing holdings:

Symbol Qty Last Gain($) Gain(%)
[tag]AFAM[/tag] 10 46.53 50.84 12.27

Contribution this week: $0

Starting account value = $1,953.16

Account value = $1,903.78 (without margin)

Buying power = $1,438.48

[tag]Portfolio Gain/loss[/tag] this week = -2.53%

[tag]Portfolio[/tag] Gain/Loss for NOVEMBER 2008 = -0.85%

Portfolio Gain/loss since inception = -15.00%

[tag]Annual Return[/tag] (CAGR): -15.00%


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

[tag]Subscribe[/tag] to [tag]Hello Suckers[/tag] today!




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Posted by Martin November 12, 2008
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What can we do to save our economy?


This is a post from Hello Suckers

dollarbills As the president-elect Barack Obama said; “It will not be any quick easy fix…” he was very right about it. [tag]FED[/tag] took some not easy, but wrong steps at the beginning of this crisis, which prolonged this agony and started the drop-down spiral, the exact same way as what Japan did in 90’s.

This is exactly what Jim Jubak was saying in his paragraph Is US entering Japan’s nightmare? in January 2008. At that time everybody believed that the FED’s effort would help to fix the problem quickly. I was wrong too. I believed the [tag]economy[/tag] is strong enough to overcome troubles and get back on track. In January 2008 it has been about 12 months since the [tag]crisis[/tag] started. Books say that the average [tag]bear market[/tag] takes 14 to 18 months. Now it is obvious that we are not in an [tag]average bear market[/tag]. So why would I be so pessimistic as Jim in his article, right?

What can we do as common citizens of this country to help fix it? Some say stop purchasing products from abroad, stop buying products made of [tag]crude oil[/tag] we have to buy from countries which do not like us. These people mean stop burning oil in cars and use [tag]alternative fuels[/tag] such as [tag]ethanol[/tag]. This segment of the economy is not the majority which would save the it. If we want to stop buying products which uses crude oil, it is not only our fuels in our cars and heating our homes. All plastics – computers, keyboards, cosmetic products – almost everything from soap to even lipsticks, outfit and clothing products – all synthetic fibers and many, many other products are made from crude oil. It is nice to be patriot, but this is not the way we want to go.

What can we do to fix our economy? This economy stands on [tag]consumers’ spending[/tag], so we should start spending again to boost the economy. Easy said, difficult to even think about it. A lot of people are scared to spend money in these bad times. You never know when you loose your job so everybody is trying to save instead of spend money.

We cannot do much about this situation except pushing our congressmen to help. When you take a look at the [tag]interest rate[/tag], do you think that everything is alright? How many of you could get a [tag]loan[/tag] recently with an interest rate at 3% or even 2%? How many credit card companies decreased their interest rates from 14% – 22% to 5% – 11% for example? I haven’t seen any. My recent fixed mortgage rate was at 6.1% or so. Financial system gets money from FED at 1% rate, so except on some loans “interest only”, I haven’t noticed any changes in banks’ behavior, have you? Banks are reluctant to lend you a penny these days. So what can we do about it?

We live in capitalism and it is not a hippie paradise of love. We cannot expect banks and other financial sharks to change themselves and start doing something different from making a lot of money. You don’t even want to change their behavior either, because on the other hand you may be a small stock holder and you want “your company” making you money. There shall be some equilibrium however. If the banks are taking federal money, these shall be used not to fix their own balance sheets by buying bonds, but providing more loans to support consumers’ spending and start the market turning again. Unfortunately the Government is now the only authority which can set those rules and enforce them. I am not a big fan of a strong Government involved in economy regulating it too much (just one step to socialism and communism or dictatorship), but in this occasion I must agree that temporary regulation (until taxpayers money are used) needs to be enforced.

Unfortunately Americans mostly do the right opposite from what they should do: save money in good times and spend them in bad times to support economy. There are many other aspects in this mess and I am not an economist able to tell you the right way. The issue is not just black and white and it will not be an easy quick fix.


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