How are you trading Toyota?
February 19, 2010

Oh boy, every time I read all the responses some of you have tried to post here, I feel guilty that I haven’t had the time to get back here more often, especially for those who missed getting into my Let’s Talk Money forum on EnterActive Media before we capped membership there in 2009.

But, I’m here now, so let’s get down to business.

How are you trading the news surrounding Toyota?

I know people on both sides of this trade — with some literally on both sides of this trade — with options puts and calls on it.

But for straight-traders, some are of the thinking that this is just a momentary bump in the road for Toyota, and they feel it’s an opportune time to snatch some up and sit on it for awhile.

While others have bells and whistles chiming in their heads, where as soon as they heard about a large recall, they immediately reached for research reports telling them what cars Toyota loyalists would likely be reaching for if the recalls soured them on their loyalty to T for the time-being.

I know some have been eyeing Honda and Hyundai with this idea in their mind.

As you know, my role is never to take you by the hand and tell you what you should, or shouldn’t, buy.

My goal it to simply inspire you to roll-up your sleeves, do some research of your own, and decide what play is best for you — even if it means you don’t want to play the Toyota news at all.

Same names as usual on my due diligence list.

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.

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Newbies need to learn when to hold ’em & fold ’em — & when to take half off the table
January 12, 2010

 

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!
January 2, 2010

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.

Sharks! Sharks! – Get out!
October 1, 2009

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.

Due Diligence on AK Steel
June 10, 2009

I’ve been doing my due diligence on AK Steel this week — have you?

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.

Take advantage of the volatility in the market to make some $$$$
June 9, 2009

It’s like taking candy from a baby — I love this market.

If, like me, you dumped out of the majority of your “play money” position in McDonald’s last week to take your profits to “sell high” when it shot-up over $1 — I sure hope you jumped on the opportunity to “buy low” as part of a cost leveraging when it dipped below $1 yesterday.

This is a day trader’s dream market.

Meanwhile, keep an ear open for what banks the U.S. government announces today will be able to pay back some of the TARP money. Goldman Sachs? JP Morgan? Amex?

My guesstimate is all three — and more — will get the green light today.

We’ll see….

P.S. Did you notice LDK yesterday — and if so — what did you do about it?

Just remember my 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.

What does a new president mean for stocks?
January 22, 2009

So here we are, just a couple of days into the Obama administration.
 
Anyone who is preaching this means the market is going to do “this” or “that” simply because someone new is sitting in the Oval chair, has no clue what they’re talking about.
 
The only thing most people can agree with is that we’re in uncharted territory here.
 
The new administration is talking about another stimulus package for the people — but the one Bush did didn’t reinvigorate the economy.
 
And now we see banks that already got a huge piece of the first bailout package holding their hands out again for another big piece of the second-round of bailouts.
 
What a mess.
 
So while the big-wigs in D.C. do whatever it is they plan to do, let’s focus on our own personal finances and investments.
 
To that end, since I’ve been MIA — at least to those who aren’t EAM members — here’s a re-cap of what’s making headlines:
 
I don’t care at all about all the speculation that Caroline Kennedy with all her “ya know’s” is being rumored to be dropping out of her bid for Hillary’s Senate seat, but I do care that Sony is warning of a possible $2.9 billion loss, with plans to step-up its restructuring;
 
And the fact that China’s economy is sharply slowing down is definitely worth noting;
 
Of course, the street could not stop yapping yesterday about Apple’s amazing earnings driving a steep climb in its stock — even though I personally do not like the guidance report on Apple, and it’s a big “IF” on how the street will ultimately respond to Steve Jobs LOA;
 
At the same time we learn of Intel’s plans to cut up to 6,000 jobs;
 
Then there’s Citigroup appointing Parsons as its new chair,
 
And how about good ol’ Jamie doing the “see how much faith I’ve got in my own company” dance by buying lots of shares of his own JP Morgan Chase;
 
I’m probably putting myself smack in the middle of the unpopular list by saying it turned my stomach to see the U.S. hand-over $5.4 billion to GM — because my feeling is that some companies need to fail and go through some form of bankruptcy restructuring before they are ever going to be solvent — and mark my words — GM will be back for more money from its Uncle Sam;
 
And, most of all, while everyone is thrilled with the Dow surging yesterday — keep in mind that it’s still down 32.94 percent from this time last year — so curve the enthusiasm a bit.
 
So what does that mean for me?
 
Not much.
 
It means I’m still doing my due diligence on McDonald’s, which traded-up yesterday, while looking for it’s fourth quarterly report in a few days; 
 
Walmart remains on my list, despite (or perhaps because of) some analyst downgrading the stock because it posted a smaller December sales gain than the Street expected and cut its outlook on earnings for the fourth quarter this month, causing the stock to take a little pullback of $1.42;
 
Verizon, which I also like for its dividend play, and also traded-up yesterday;
 
And Family Dollar, which also traded-up yesterday.
 
Just heed my usual disclaimer: Don’t base any of your investment decisions on anything you read here — do your own due diligence — or at least enough homework to pick the right professional to do it for you.

My 2009 due diligence list
December 26, 2008

The retail news isn’t pretty this morning after Christmas. Consumers played a game of chicken with the retailers during the Christmas buying season — and the retailers lost big. Afraid of getting stuck with too much merchandise during low traffic trends, the stores marked down prices in many cases some 60 to 70 percent before Christmas — but consumers who are worried about the economy and their jobs, still didn’t part with their dollars freely. According to CNBC, retailers saw a decrease from one to eight percent this year. Even online saw a decline. Gift cards even took a hit. And stores expect to see a higher rate of returns than normal.
 
So, with the ringing-in of 2009 just a week away, it’s time to “take stock of our stocks.”
 
At the risk of sounding like that obnoxious kid on the playground going “nah-nah nah-nah-nah” as I know many took major hits in your 401ks and individual stocks during 2008 — I’m very happy — and grateful — that I didn’t take any losses and finished ahead of the game.
 
Because, in the end, that’s what the market really is — an adult game of Risk.
 
With one significant difference. In the real world we can hedge our risks by doing our homework, watching the trends, reading the news and placing our stock bets very wisely.
 
 
But just as the Kenny Rogers song goes, you need to know when to hold ’em, know when to fold ’em and know when to walk away and count your money.
 
No matter how many columns I’ve written over the past year warning people that this is not their daddy’s market anymore — and they really need to get over the old-style of investing in which they sock their money into a stock and keep holding on to it all the way down because of some fairytale they heard over the years that made them believe if they keep holding it and wishing long enough — it will magically rebound to highs again — many people just couldn’t force themselves to take a loss and run.
 
And they got burnt.
 
In some cases, they were scorched.
 
Many will likely stay out of the market, or on the sidelines in intensive care, for a very long time.
 
Meanwhile, those like myself, who jumped onto the sidelines early in the game in 2008, are now starting to smack our lips at some great bargains awaiting us in 2009.
 
I don’t say this to rub salt into any wounds, but rather, many who got badly damaged, will likely miss the turnaround my best guesstimate believes will start coming around the end of the second quarter of 2009.
 
That doesn’t mean I’m about to run full-thottle into the market — it just means my due diligence on the market never stops –so when I see a good bargain, I’m always going to be in the market to make some profit on my money.
 
So starting off 2009 I’m turning away from financial stocks, until we have a clearer picture of how they will be restructuring.
 
Instead, I’m eying companies like McDonald’s, Dollar Tree and Wal-mart, which I’m guessing will be the type of places cash-strapped consumers in 2009 will be turning to more and more, if only for the essentials and the occasional Happy Meal.
 
But if you got beaten-up in 2008, then don’t feel bad about being on bed rest for awhile, as I’d rather see you lick your wounds and take time to recover, than risk jumping back into the ring too early in the game and taking another beating.
 
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 hire the right professional to do it for you.

This market is simply irresistible, baby!
November 14, 2008

For over a month, I have given you the names of companies on my due diligence list — Bank of America, Citgroup, Wells Fargo, Goldman Sachs, Heinz, Campbells, Johnson & Johnson and Proctor & Gamble.

With many of these now trading at very nice lows due to the pullback in the market, I’m finding some of these names somewhat irresistible to snatch-up a piece of — even though I have an eye towards mid-February next year as being a prime buying time.

But you know the score …

Don’t base any of your investment decisions on any of my ramblings — do your own due diligence — or at least enough research to pick the right professional to do it for you.