If you’re freaking out — calm down

If you’re freaking out about now with the market taking a plunge today, while nervously anticipating what the market is going to do next with the jobs reports about to be released, I have two words for you — calm down.

Try this experiment:

Close your eyes and breath easily.

Relax.

Now pretend the year is 2012.

Now imagine that the market has been in full bull-run mode for months.

You can’t catch a break to get in on a dip — and fear that you’ll end up buying at a peak and your stock will suddenly plunge has only led to being left on the sidelines as names you’ve been dying to own have kept going up-up-up in value.

Man, if only the market would pull-back and give you a buying opportunity.

If only you had a chance to start loading up on some names at good prices.

You’ve got a couple of annoying good friends who boast about the stocks they bought way back in the uncertain market in 2010 for dirt cheap prices that have since doubled, if not tripled, in value.

And you think “Oh man, if only I knew then what I know now.”

Okay, open your eyes.

Today is your future.

But before you mis-read my message to mean you should take your life-savings and randomly toss it all into the market — STOP!

I’m not saying that at all.

What I am saying is that there is quite possibly a good chance to buy some names in these full-market pullbacks for companies that are going to weather the storm and be standing strong whenever the market does start to have that steady bull-run once again.

Although I refuse to ever tell anyone what names I think they should be buying, as I’m a firm believer that everyone must do their own due diligence and not only pick a name to buy — but insure they buy it on the correct day for the right price — I realize there are a group of you who are absolutely paralyzed on the sidelines and the wet finger you’re sticking in the air looking for direction is just leaving you doing 360s in the wind.

So here’s about as far as I’m willing to go to at least give you a starting point with some names you might want to start rolling up your sleeves and deciding if you’d like to own any of these names. If so — choose for yourself what price level it is worth buying at. That could mean that right now is the perfect buying opportunity; it could mean that you think the stock had a little more room to drop and you’re willing to sit back and wait for that drop to occur — or it could mean that it’s already treading higher, and you need to set a limit price on what’s the most you’re willing to pay for it.

Sometimes — actually, more often than not — I’ll begin with a list of names I want to do research on — and end up not wanting to buy any of them — but the research might lead me to a competitor or a different supplier for one of the names that I have more of an interest in owning.

That’s the beauty of doing your own homework.

Before you buy a single share, you know precisely why you are buying a company, and you know what price you want it at.

Never-ever-ever buy a single share of a company just because you heard someone else is planning to buy it — or owns it.

You need to know precisely what it is about the company that makes them want to buy it, whether they’re buying it with options expecting to make a gain when the stock actually plummets in price, and what price they are buying it at.

And there’s a darn good chance they’re not going to call you first to tell you when they sell it, either, which could lead you holding the short end of the stick.

So let me get down to it. I still like my longtime names on my list, such as McDonald’s and Walmart.

Were you paying attention back in August when I told you that I viewed pullbacks in McDonald’s as a great buying opportunity? 

If so, then you had the opportunity just a few weeks later to snatch some up at $54 — and just over four months later, you would now be looking at a $10 profit per share.

I still like the name — but with the company having been on a somewhat steady climb lately — I wouldn’t necessarily be looking to add to a position right now.

How about Walmart? Did you pay attention to my column last June when I said it was a long name on my due diligence? Did you roll up your sleeves and find a reason to like the name as well, and then jump on the opportunity to scoop some up a few weeks later with a little pullback around $47? 

If so — good for you — as you just had an opportunity to take a little profit on this name that’s been treading around the $55 mark since last November. That’s a nice little $8 a share profit you just made.

And last April I told you I had added Wells Fargo, which was then trading around $15 to my due diligence list. If you did your own homework, liked it as well, and bought some shares — congratulations — you’ve just about doubled your money on that name in less than a year, as it is currently trading around $27.

By listing these examples, that doesn’t mean that I believe I’m some golden child and whatever names I choose go straight up and keep on climbing.

Of course not.

These names have pullbacks, as well.

The only difference is you must learn to recognize when a stock is having a pullback based on the overall market — and not because that individual company’s fundamentals have changed.

If a name you like has a pullback not related to its fundamentals — consider jumping at the chance to buy some more.

If the actual company is getting beaten up — then take emotion out of it — don’t fret over having made a bad decision to buy a company — it’s just business — so get out of it as quickly as you can and put your money to work in a better name.

For so long I’ve just listed the longstay names on my due diligence list — so it’s only fair that I now give you some new names that I’m looking at. These names include Hershey, Proctor & Gamble, CVS, Campbell’s, Unilever and Allergan.

Now don’t rush out and buy any of these names just because I have it on my DD list to do homework on.

How about rolling up your sleeves and doing your own homework — and see where it leads you?

You might like one of the names — you might not like any — or your research may lead you to an entirely different name.

The list is just your starting point — so get going.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything your read here. Do your own due diligence, or at least enough research to pick the right professional to do it for you.

How can I buy thousands of McD ketchup packets?

(Update: Problem solved — I now have all the ketchup I need.)

Changing gears a little bit today, does anybody have any ideas how I can get hundreds, if not thousands, of McDonald’s ketchup packets?

I have a nephew, along with his good friend, who are serving in the Marines overseas, and I’d like to include lots of these packets in each shipment of necessities & goodies that I send to them every two weeks.

Since neither myself, nor those close to me, happen to be frequent McD patrons, and they ration the amount they allow you to have with each order, I’ve already tried the usual routes of asking the managers of local franchises if I can buy a big box outright, as well as writing letters to their HQ’s and to Golden State Foods in Irvine, Calif., who make the ketchup — to no avail, yet.

In the interest of safety precautions, although I appreciate that some of you may wish to start a collection on your own to send me — that won’t work — as I have no intention of sending my nephew any items that could possibly be tampered with by people on the worldwide Web.

My nephew isn’t a Heinz or Hunt’s fan — just prefers this brand.

Send me your suggestions by leaving a post here. Even though I block posts from showing up, in order to prevent the pros from throwing the newbies here off track by hyping or dissing particular stocks (and yadda-yadda-yadda — I know none of you would ever do something like that) — I’ll still be able to see your comments.

Do you have what it takes to be a trader?

Here’s a pop quiz to figure out if you’re cut out to be a trader:

For all those people who have followed me to this forum or EAM since my former days a year back at Cathleen’s Corner, who consistently tell me all the time that you really-really want to be a trader — here’s a quick pop quiz you can take to see if you’ve got what it takes.

When you heard about the earthquake in Haiti, what were the first three things that popped into your head?

I’m hoping the first thing was to say a prayer for all those affected by this disaster.

Followed by a decision to make a donation.

Followed by an urgency to figure out which publicly traded companies stand to make the biggest profit as a result of the disaster.

It’s not crass — it’s just business.

Donations are coming in.

They’re talking about raising hundreds of millions of dollars for the cause.

So what are they — and will they be — buying?

Construction supplies to raze the area?

Infrastructure building materials?

Transportation to transport the goods?

Medical supplies?

Water?

The list of possibilities is infinite — now do your due diligence.

Read the papers and watch the news for specifics.

Do research on what companies soared as the result of similar disasters.

Do your homework, and then answer the million dollar question…

Are you cut out to be a trader?

The usual disclaimer: Do not base any of your investment decisions on anything you read here. Do your own due diligence — or at least enough research to pick the right professional to do it for you.

Newbies need to learn when to hold ‘em & fold ‘em — & when to take half off the table

 

The two most important decisions every investor makes is deciding when to buy and when to sell.

A lot of times it’s the latter question that most newbie investors mess-up on the most.

In some ways, it’s easy to make to the decision when to buy. You simply do your due diligence and make an informed decision about an investment you like — and buy it.

But selling…. that’s a whole new animal unto itself.

It doesn’t matter whether the stock is up or down — newbies wrestle with the inability to make a decision and stick to it.

If they made a decision to buy a company, and the fundamentals change, and the stock starts to plunge — they can’t stand to bite the bullet and take a loss.

Which often leads to even greater losses.

Yet, they know in their core that it’s not just a momentary blip in the stock profile causing a pull-back — so they recognize it’s not a great buying opportunity, either.

Bottom line: If you own a stock, and it pulls back, and you’re not rushing to buy more because you know the fundamental reasons you bought it have changed — bite the bullet, take the loss, stand-up, and put your money into a company whose fundamentals you currently love.

On the other hand, I see just as much indecisiveness from newbie investors when they buy a stock, and it soars.

Let’s take Ford, for example.

If you read my column last May when I went against the grain where many on Wall Street were hinting that GM was going to be a great stock to snatch up because the government was talking about bailing out the auto giant — I told you that I preferred Ford.

If you liked Ford, too, and snatched some up for the $5.69 it was trading at and held on to it — you’ve doubled your investment.

Good for you.

But what are you going to do now?

Are you getting lazy and thinking about just leaving it there with a grand illusion that you just need to sit back and it will continue to soar?

I hope not.

Even if your due diligence tells you that this baby still has room to fly — you need to adhere to the golden rule “Buy low & sell high.”

It doesn’t mean “sell at its very highest.”

The very best traders on the Street know it’s a fool who tries to sell at a peak.

In other words, doubling your investment is good — don’t get greedy.

I’m not saying you should sell your full position — but what some of the best investors will do is to take half off the table.

In other words, let’s say they invested $10K in Ford back in May, and it’s now worth $20K. They’ll sell half it’s current worth — taking back their full out-of-pocket expense — and the $10K they’re still trading is “free” money that’s all profit.

But that’s just my personal choice — each investor has to find their own comfort zone.

As a sidenote to those asking why their posts don’t show up — I do not allow responses to be posted, because I don’t want anyone using this forum to hype or diss stocks. This forum is to encourage everyone to do their own due diligence.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence, or at least enough research to pick the right professional to do it for you.

Happy New Year!

Happy New Year everyone!

As most of you know, I’ve been spending most of my time on EAM, but I still check in here from time-to-time.

But let’s just cut to the chase, and talk about this market.

I refuse to get caught up in guesstimating.

While nothing is ever guaranteed in the market — I am sticking to my guns that the best way to play this market is to take advantage of solid companies when they are at their lows.

It’s the same old buy-low & sell-high philosophy I find my comfort zone in.

The companies I keep on my due diligence list are Google, Apple, Verizon, T, WMT, Intel, MCD and KO.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence — or at least enough research to pick the right professional to do it for you.

Waddle your tootsies carefully.

Okay, so for all those who decided to play it safe during the last couple of weeks of earnings reports by pulling their money out and tucking it under their mattresses while we figured out which way the wind was blowing on Wall Street, you have my blessing to waddle your tootsies back in the wading pool once again.

Just do so wisely.

Remember, the jobs reports keep getting worse, and earnings reports need to be scrutinized now moreso than ever before.

Personally, I plan to continue doing my due diligence on names I’ve liked for a long time, the McDonald’s, Walmarts, Pepsi’s, AT&T’s and Verizons of the world.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence, or at least enough research to pick the right professional to do it for you.

Sharks! Sharks! – Get out!

For all those who have listened to me over the past few months and dipped your tootsies into the water and made some nice profits — it’s now time to consider pulling your money out for a while and staying safe on the sidelines — especially if you aren’t a more seasoned investor buying options to let the puts and calls protect you.

I feel like a mother watching my kids swimming in the water and a lifeguard comes by and whispers “There’s some sharks out there — but don’t worry — we don’t think they’re going to come too close to the shore.”

My instinct then and my advice to you now is — Get the hell out!

Look, here’s the situation:

No one, but no one, knows what the heck is going to happen on Wall Street over the next few weeks — or months — and here’s why:

We have a jobs report coming out tomorrow, and my gut tells me it’s going to be even worse than most estimates.

If my gut is right — and it usually is — that could easily lead to a huge sell-off on Wall Street.

Not to mention in a couple of weeks the earnings reports will start coming out.

If those aren’t good — and I suspect many will not be — on top of a bad jobs report — this market could see a sharp sell-off.

It may not.

No doubt about it.

Many are likely going to try to do some bottom picking on some pullbacks — or try to ride it out.

Not me.

I’m a safety kinda girl.

There will be some — especially options traders — who will take full advantage of the volatility and make some money.

But if you’re not a seasoned trader — then just as I warned everyone over a year ago — get out!

I’d rather miss a little uptick and know my money is safe at night, than try to maneuver in the unchartered territory we’re about to go into over the next few months.

Let me make this very clear — I am not in panic mode — nor should you be.

But it’s time to get out smartly — just for a little while — and let the market settle down.

The lifeguard may be right — and the sharks on Wall Street might not circle and attack — but why risk it?

If you’ve been playing some of the names I’ve been mentioning here over the past several months — you’ve made some nice profits — take them!

I’ve said it before, and I’ll say it again — good ol’ Gordon was wrong — greed is not good.

Again — I am positively not saying to stay out of the market over a long period of time, as I do think volatile markets can sometimes create the best buying opportunities — but I’d prefer any newbie investors to get their money on the sidelines until the seas calm a bit.

In any market, there’s always a risk — I just prefer to lower the downside risk as much as possible.

For those who feel compelled to stay in and do some bottom-picking, make sure your homework is complete and you also have a good handle on what your company’s earnings report will look like around the corner.

Another good idea for those wishing to keep some money in this market is to do some homework on oil or commodities.

In the meantime, remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligience, or at least enough research to pick the right professional to do it for you.

Get off the fence & jump into the wading pool – NOW

I sometimes struggle with the fact I block all the messages in this forum, because some of you are really great investors who have phenomenal track records, which could really benefit novice investors.

But because this is the worldwide Internet, and I really want to keep this forum as a place where newbie investors know they can come and get some no-spin sincere opinion/advice on the market, I also see the occasional devil in disguise spammer who would have painted such Eve-like temptations for newbies, which likely would have resulted in them rushing into bad investments for the spammer’s personal gain, that I’ve decided to keep posted messages blocked.

I simply spend the majority of my Internet time doing IRC interactive webisodes for Let’$ Talk Money and Spotted In Boston!, and  I don’t get to this forum often enough to weed out the riff-raff in a timely manner.

And, frankly, I’d rather see a newbie miss out on a prime opportunity to make some cash, than to get sucked into a tidal wave the first time they dip their toes into the wading pool.

So now that I’ve addressed the “why aren’t my messages showing up?” question again, let’s get down to business and take a look at the market we have today, this pre-bell opening Tuesday morning after Labor Day:

We’ve all read the stories over the holiday weekend about Amgen’s new drug and Kraft’s bid for Cadbury, and I’m sure we’ll be hearing lots more about those companies this week, so let’s take a look at the shape of this market.

The global markets are up across the board, which is a nice sign — but, as we all know, no guarantee of anything.

For those who have been reading along, but are still sitting on the fence, despite my on-going urgings that you’ve got to start getting back into this market, as opportunities to buy low and sell high just don’t get much beter than this market — let’s see how my names have been performing:

On July 13 I wrote about Pepsi, Walmart, Dollar Tree and TJX all being on my due diligence list.

From that date to today, Walmart is up $4, Pepsi is up $2, TJX is up $3 and Dollar Tree is up $6.

This means anyone who did some hard due diligence on those names and picked up even 1,000 shares of each would have just made $15,000 on those four names alone.

Okay, so if you’re a real newbie and you only picked up 100 shares each — you made $1,500.

Not too shabby.

But I know there are those still sitting on the fence, who ignored my pleas a year ago to move your money out of the market and keep it on the sidelines to avoid a meltdown on Wall Street, and ended up getting burnt — I feel for you — I really do.

I’m honestly not sitting here saying “nah-nah nah-nah-nah — I told you so” — because we’ve all been knocked down — but the trick to making money in the market is all about how well you pick yourself up, learn from your mistakes and move forward.

And though I would never advise someone to just put all their money into the market again, especially using the wornout “buy & hold” strategies that once worked in their parents’ and grandparents’ generation — if you don’t start rolling up your sleeves and doing some due diligence on this market right now — you’re missing out on some great opportunities to take advantage of the volatility in this market by trading it — not holding on for the longrun.

Again — this a volatile market.

Again — stay the hell out of it, if you’re planning a lameduck buy & hold strategy.

Again — this is a trader’s market — you’ve got to stay on-point to precisely what your investments are doing at all times.

Because — as the title to this site says — this ain’t your daddy’s market anymore, baby!

 

The usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence, or at least enough research to pick the right professional to handle it for you.

I may not post every day – but you should still be doing your due diligence

While patronizing a smalltown New England library last week, a librarian approached me to ask if I was interested in purchasing a raffle ticket for a community fundraiser.

As I gave her my $5 and filled out the required name/address info where they can contact me in case I win something, she said, “I’ve heard you talking about stocks before,” and then added with a teensy-bit of disdain detectable in her voice, “So are you a daytrader, or something?”

I hear that a lot — and in my experience, that question is usually posed with a similar inflection by women.

And 99 percent of the time, those women know very little about their own investments — if they have any.

I hate to sound like a sexist — and this is only my own personal experience — but it’s true.

On the other hand, I often find men approach me with a completely different attitude.

They’ll feel around the subject for a little while to see if I’m going to make them feel like losers, if they don’t know as much as me.

Then they’ll slowly begin to ask a question or two.

And before I know it, I have friends and friends of friends all becoming faithful readers of this forum.

Sometimes I’ll cast aside the women’s attitudes, knowing it’s coming from a place of fear, and I’ll try to give them a bit of coaching.

Other times, like last week, I’ll just hit them with a quick response:

“I don’t define my investment style. Unlike many, who have no clue what their investments are doing from one day, week, month or even year to the next — I prefer to do my homework and know precisely what’s going on with my money. Unlike some, who believe in cliché’s that the market is always going to recover and just ride the highs and the lows — I prefer to get a good sense for when the market is about to take a dive — and pull my money out — and then put my money back in when my homework shows it’s going to rebound.”

She gave the typical, “Oh, I guess I can’t argue with that” response.

Then she began to linger — she wanted to know more.

Her silly “attack first — ask questions later” manner had turned me off, so I wasn’t in the mood to start breaking things down.

But I did suggest she begin reading this forum, as well as books about investing from some authors I respect.

Just as homework requires a lot more than just reading a company’s balance sheet and quarterly reports — in today’s market, a smart investor incorporates a lot of different strategies to make money — or at least, to keep it safe.

As most of you realize, I don’t spend a great deal of time posting here, as quite frankly, I feel I’ve already laid-out the basics in other postings in this forum.

There’s only so many times I can tell people to do their homework, cost leverage their way into a position, take profits when they present themselves and to get the hell out of the way when you just can’t get a good gage on what the hell the market is doing — as in cases like those, as we had last year, I preached that I’d rather see people earning a 3% return in a CD that was keeping their money safe, than leaving it in a market that was in freefall mode and no-one-but-no-one really knew where the hell it would land.

At the same time, I sure hope many of you jumped-in a couple of months back when I began preaching that the market was, at least for the moment, in full recovery mode, and the time was right to start dipping your toes back in.

If you read my July 13 column and snapped up some Target at $37.80 — good for you — it’s closed yesterday at $44.32.

If you’ve been following the longs on my list, such as Walmart, that baby has also had a nice move up since July 13 of $47.83 to close yesterday at $51.36.

If you were buyers of those names at their lows — I sure hope you took some profits when they presented themselves.

If, on the other hand, you’ve been following my feeling that I still like McDonald’s, and predicted its recent pullback — you should have been hailing “Come to me, baby!” the lower it went, eyeing it as a great opportunity to buy at lows in preparation for that day that could very well be right around the corner when it begins to soar once more.

So, while I’m hanging my head more often these days on my Chat Live About Investments site on EAM and having fun with our TMZ-style Spotted In Boston! Site, also on EAM — I do promise to check in here from time-to-time.

Just heed the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence — or at least enough research to pick the right professional to do it for you.

Sure hope you’re trading this market

I haven’t been updating here as often as I should.

A big part of the reason is because I don’t want to rub salt in the wounds of those who’ve ignored my pleas over the past couple of months to get into this market,

So let me instead focus on those who have heeded my advice in recent months with the names I’ve liked:

You’ve gotta love that move on my mainstay Pepsi this week — hope you didn’t miss the boat on that one.

And for those who read my July 13 column mentioning the addition of TJX to my DD list — I hope you liked it, too, as you just seen a nice steady rise to the tune of $3 a share since then.

And I’m not too surprised with the sudden pullback on McDonald’s — as it’s gotten a little bad PR lately — but I still like it as a long and with its valuations, I am looking at it as another opportunity to snap up more and keep cost leveraging.

And I sincerely hope you heeded my advice when everyone was chiming months ago about trading GM — and I told you that Ford was my pick — as that baby has just been driving straight up.

If you do your honest to goodness due diligence — this is the perfect market for trading in.

Remember — there are no shortcuts.

For members of my EAM site, we’ve got an awesome line-up for the next few days.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence, or at least enough research to pick the right professional to handle it for you.