Sharks! Sharks! – Get out!

October 1, 2009 - Leave a Response

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.

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

September 8, 2009 - Leave a Response

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

August 19, 2009 - One Response

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

August 6, 2009 - Leave a Response

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.

Unless your first name is “Warren” and your last name is “Buffet” …

July 27, 2009 - Leave a Response

If you’re reading this, there’s a good chance your first name isn’t “Warren” and your last name ain’t “Buffet.”

So why in the world are you so intent on trying to ride the coattails of the big dogs?

That’s the last thing you should want to do.

If a stock was trading at $10 and Warren Buffet or some other major investor decided to swoop in and buy a big piece of it — there’s a good chance it’s now trading at $13 and up.

So let’s say you jumped in and bought it at $13, thinking “Gee, if it’s good enough for Warren, it’s good enough for me.”

Except, Warren likely didn’t buy at the $10 price, he probably either bought it using options (though he claims to detest them) or he bought it at a better price than market — for the sake of argument, we’ll say $8/share.

But thanks to all the idiots riding his coattails, the price drove up to $13.

Well, if I just bought a major piece of something at $8 and it suddenly jumped to $13 — you can bet I’d be unloading a major share to cash-in on those profits — and odds are any major investor would be doing the same thing, too.

Of course, unloading a huge piece of the pie can only mean one thing for a stock — it plummets in price when it’s unloaded in large volumes.

So there you’ll sit with your $13 stock that a day or two later is now worth $10.

Granted, Warren may not have been the best example to use here, as he is known for taking some long positions — but, hopefully, you get the idea.

I repeat this lesson, because whenever I disappear for a while to tend to my site on EAM, I inevitably come back to a slew of emails (actually, they’re just a bunch of messages people try to post that are blocked as don’t allow responses here) from people either panicking what they should do when the market is moving up or down.

Listen up — go back and read my previous columns about doing your due diligence and cost leveraging into a position.

It’s the only way to trade this market — or any market.

Homework really does pay-off.

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.

Still trying to ride those coattails? Don’t do it!

July 22, 2009 - Leave a Response

I told you so.

I know – as my mother told me since I was a kid — nobody likes someone who thinks they know it all.

But, I digress, that the more research you do about trading in this market — the better your odds are of making a profit — and avoiding a pullback.

So, if you didn’t heed my pleas over the last few months to get off the fence and start dipping your toes into this market and cost-leveraging into a nice position on some names you’ve done your research on — don’t blame me that you just missed making some nice profits recently.

But I’m really not writing today to rub in your face the fact you just missed out on some nice profits during what has been a great boost in the market as the result of some nice earnings reports over the past week or so from major companies.

Nope.

I’m really writing to those of you who are the eternal losers in the market — constantly trying to dodge doing any actual homework to know when and what to buy in the market — and then trying to ride the coat-tails of others.

How’s that worked out for you in the past?

Don’t write with your answers — I know — not so good.

Because around the time you get wind of the fact that your buddy just made a nice profit on a position and you get off your duff and decide you think you’ll try to get in on that action, the odds are that your buddy — and all the others who have been doing their homework — are about to dump their position.

So while you’ll likely be buying at the stock’s highest price, those who did their due diligence will be dumping it — and likely causing the stock’s value to plummet.

In other words — do your homework.

I still think people should be dipping their toes into the market and cost leveraging into a good position in some good solid companies — but beware of any short squeezes going on in the market.

As I’ve been saying for quite some time — this is a trader’s market we are currently in — not an investor’s market.

That means you should still stick with the solid companies you’ve done your homework on, but always be ready to either buy or sell to either take some profits while they present themselves, or buy even more of a position on a company you know is going to soar after a pullback.

And always 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.

The street “should” have a bullish day today

July 16, 2009 - Leave a Response

With a positive earnings report just released a moment ago from JP Morgan this pre-opening bell morning, put together with the S&P over 900 — the market should have a nice bullish day today.

“Should,” of course, is the operative word.

As we all know, if one shoe drops anywhere in the market — anything can happen.

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 your investments for you.

Bloomberg posts speculative story about CIT

July 16, 2009 - Leave a Response

Interesting Bloomberg story tonight “CIT Calls Bailout Unlikely, Fueling Speculation of Bankruptcy.”

The usual disclamer: Don’t base any 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.

With Wall Street acting more like a rotary — take a walk down Main Street

July 13, 2009 - One Response

Good early pre-opening bell Monday morning to everyone. I hope you had a phenomenal weekend of surfing, swimming, boating, bbq’ing, visiting artist studios, dancing by the ocean to a live band playing classics from the ’40s and ’50s and just enjoying the beautiful weather we’ve been having with family and friends — I know I did — I even bumped into Frank Sinatra, Jr. — but enough about that.

No crystal ball is needed to predict that most business news this week is going to be focused on earnings reports coming from Google, IBM, Goldman Sachs, JP Morgan, etc.

Although I will be paying attention to Goldman, which has been on my DD list for a while, I won’t be trying to predict what the reports are going to say — or how the street is going to react.

That’s a sucker’s bet.

Nobody knows.

We saw that last week.

A large company can come out with better than expected earnings and the street’s reaction can be a puny “eh” response.

I always like to fly a bit under the radar screen with names I like that the street isn’t obsessing over.

So in addition to my DD list regulars of McDonald’s, Walmart, Pepsi, etc. I’m also doing some DD on the Dollar stores and TJ Max.

Remember, there are two different streets you need to keep an eye open for — Wall Street and Main Street.

So while Wall Street has been acting more like a rotary — turn your attention to what’s going on down on Main Street and what places people aren’t just browsing in, but are actually carrying big bags out of.

While I’m lounging on the beach with friends, I always ask people where they bought this or that, and I’m hearing that a lot of people who used to go to the pricier mall stores have been frequenting the TJ Max’s and Marshall’s of the world — and are planning to make those type of places where they intend to bring their kiddies for back to school shopping.

I’ve also been hearing that people have been driving a few miles out of their way to visit Dollar stores, and are beginning to rave about the savings they’ve made with everything from paper towels to sunglasses — and these are the same people who thought nothing last year of buying two cups of Starbucks a day.

Heck, I even saw a lot more families packing their own peanut butter sandwiches at the beach instead of heading for the concession stands, which just might make me look at a few peanut butter companies, wondering if that just might play into people packing those same peanut butter sandwiches when their kids head back to school.

I’ll probably look at Campbell’s for the same reason.

So, newbies, that’s the type of buzz you should be looking for from Main Street to find names to put on your own DD list to see if the numbers match the buzz.

And always 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.

Did you take some profits today?

July 9, 2009 - Leave a Response

Just last month I mentioned here that I was doing my homework on Amgen.

I hope you did, too — because it had a nice 14% pop today.

If you jumped in — I hope you remembered this is a trader’s market — and you took some profits.

After all, you didn’t really make a profit, unless you turned it into cash.

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.