|Stocks & Mutual Fund Information|
Overvalued & Underbought
With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?
The SEC (Securities and Exchange Commission) has just set up new guidelines for core earnings. No more proforma computations. You know what proforma means - the company CEO or Treasurer waves his magic wand and says this is what I expect to appear as soon as I let the genii out of the bottle. And pigs can fly. These imaginary numbers may give his company a Price/Earnings ration of 20 which is pretty good by today's standards.
Now those mean guys in Washington have said you must reevaluate your earnings but this time figure in your stock options, pension costs and any restructuring charges. Holy Cow, that makes the P/E ratio 37. And that ain't no bargain when you are buying stock. The 100 year average has run about a 14 P/E. If the company has not been paying any dividends then this is a stock that must be suspect for any long term holding.
Because of these new guidelines the entire S&P Index P/E has gone from a 33 to 49. That is much better than it was in January 2002 when it reached 69. This number makes the entire market overvalued and still leaves me with the question of how can the market advance using these high P/Es?
There are a couple of answers and neither may be the right one.
The market has become severely oversold. The bear people have been riding it down until the news media finally recognized we have a long-term bear market. There have become too many traders who think there is no bottom and are willing to sell anything and everything. Enter the trading bargain hunters. It will now be the bears turn to be punished.
It takes money to put the market up. Where is that coming from? Our white knight, Sir Greenspan, has come in with his bags of money this past week. Look past our borders and you will see stock exchanges in every major country in the world that look sicker than ours. Foreign investors want a new home for their money and it seems the U.S. market looks darn good. As that money has started buying you may begin to see pension plan and mutual fund managers coming into the market.
The talking heads on TV and radio will give many other reasons that can be fueling the market advance and they may also be correct. Our market may be overvalued as we see it, but to others it looks like a bargain. Money is always looking for the greatest return and with wire transfers billions of dollars can and does move in a matter of hours. Oversold to the foreign market traders means underbought. It seems they have put on their buying clothes and want a piece of the action as our market is headed up - at least for a while.
Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.
Stock Investment Advice
Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe. And many of us have lost a lot of money to these people. So, how can you avoid some of these pitfalls?
Historical Briefing: Stocks, Finance and Money
The World Bank claims that some two billion of the world's citizens live on $1 per day or less! That fact absolutely shocked me. With this statistic in mind it becomes important to focus on all of the things that have served as money over the history of civilization. Aztecs used Cocoa beans, Norwegians used Butter and dried cod, many Indian tribes used animal skins and some of the early colonists used grains. It's worth thinking about this the next time you pick up your paycheck. The word "salary" is derived from the word SALT, which is what was the key currency of the North Africans for hundreds of years. SALT was a key commodity substance used for preserving food.
The recent criminal fiasco in the mutual fund industry is being used by Wall Street to persuade investors that market timing is a bad thing. The late trading by Janus, Bank America and several other well known mutual funds is falsely being called market timing.
What is the Most Important Indicator of All?
Most stock market traders have a favorite technical indicator.
Is Active Trading The Answer?
One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. While there are several strategies to invest, is active trading one of the ways to become a millionaire?
There are formulas for just about everything, but it has been shown that the simpler the formula or method of doing a particular task the better it works. It has evolved down to KISS ? Keep It Simple Stupid.
You have a lock on your house. You have a lock on your car. You have a lock on your tool shed. Do you have a lock to protect your stock market investments?
Its A Bull, Its A Bear, Its Suptertrader!
The higher the market goes the more confusing are the "experts". In the September 14 issue of Investor's Business Daily newspaper we find the great prognosticators such as:
Small-Cap Stocks: The Beginning of the Journey
When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector.
When will the stock market stop going down and start up again? If we knew that we'd all be jillionaires. So what do you do now while stocks are going down and stealing away your money every day?
This Market Is Different
All of the talking heads have been telling us that this market is different. You are going to have to be patient and soon (hopefully in your lifetime) the DOW and the Nasdaq will be back at their old highs. They cite all the statistics about how the economy is improving - consumers are spending, the consumer confidence index looks OK, unemployment is getting better, blah, blah, blah.
Even if you don't own any of their stock or any stock at all you will want to read this.
Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing
Have you ever thought of investing? Do you have a family that you would like take care of? Does the idea of making money with stocks, bonds, mutual funds and real estate interest you?
It's about time someone spoke the truth concerning outsourcing. The politicians sure won't. They prefer to do finger-pointing saying it is "his fault". It is those greedy manufacturers who want to make bigger profits by having cheap labor in Asia perform your task for less money.
Stocks & Oil, Sat Jun 18th, 2005
Both the stock market and oil prices rallied recently, which seems to be a paradox, because high oil prices are negative for earnings (i.e. a higher production cost and a higher consumer tax). However, the stock market was worried about another "soft patch," of slower economic growth, and the sharp rise in oil prices suggest the U.S. economy is still expanding at above trend growth.
Stock Options Trading Strategies - Lean
Professional stock options traders use the term lean to refer to one's perception about the directional strength of the stock. When you own a stock option and intend to hold it for a period of time, you are aware that you will probably be holding it while it goes up and while it goes down.
Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke
Are you attracted to the idea of being in control of your financial future, but confused about how to start investing in the stock or share market, while avoiding costly mistakes?
Boiler Room 7/17/00
On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see. It is called "Boiler Room".
Why the Majority Fail at Stock Investing
The gleam and bright lights of Wall Street lure in many new investors each year, only to send them home crying to their friends and family. Why do so many people fail when it comes to the stock market? The reason is very simple: Hard work! Most people are looking for a quick buck or a fast path to riches. This is not the case when it comes to investing in individual stocks. If you wish to invest in stocks, treat it like a business, NOT A HOBBY. For example: A retail outfit can't make money if it doesn't have goods to sell, the same goes for investors, without cash, you can't invest. What do I mean? All investors need rules and you need to follow these rules or money WILL be LOST. If you lose your initial investment, you are out of business (just like the retail store). I don't necessarily care what your rules are but they need to be proven and then followed to a "T".
How to Read an Annual Report
Every publicly traded company is required by the SEC(Securities and Exchange Commission) to provide annual reports to it's shareholders, and the general public as well. These annual reports contain very important financial information, as well of summaries of the companies progress made by the CEO, board members, etc. I use annual reports to decide whether or not im going to buy stock in that company.
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