Penny Picks Blog

Penny Stock Trader

noreply@blogger.com (Unknown) — Wed, 10 Aug 2011 00:39:00 +0000

Becoming a penny stock trader is an interesting investment decision. The gains or losses can be spectacular, but overall the gains historically outperform traditional stocks by almost a 10:1 margin.
Many people have become millionaires after becoming penny stock trader. At the end of this article you'll find out how I started, and how you can too. Yes, you can too. You'll learn how.
Because of the huge potential gains does that mean everyone should be a penny stock trader, or that your portfolio should be made up of nothing but micro cap stocks? No.
Does the volatility mean you should avoid these stocks altogether? No, not at all. Penny trading can be very profitable, and there's a smart way to get started to mitigate risks and choose stocks with high potential.
The best solution is to learn about micro cap stocks and how to trade them. Then, make a portion of your investment portfolio dedicated to micro cap stocks; roughly 10% - 20%. You'll be tempted to do more, but you only need a few good micro cap stocks to make a lot of money.
If micro cap stocks can produce great gains as well as losses, how do people become millionaires as a penny stock trader? Well, you probably won't like my answer, but here it is... the answer is finding the right stocks, and knowing when to take a position in those stocks.
Ok, sounds too easy. How do you do that, you ask? I'll get to that in a second. But first realize that these micro cap stocks are typically young emerging companies in emerging markets. The potential gains can be enormous because these stocks start-off literally at pennies a share, and then climb to dollars a share, producing gains of 200%, 300%, 400% and more.
Microsoft, Walmart, Dell, Southwest Airlines, and many others started off as micro cap stocks, making millionaires out of the early penny stock traders in these companies.
But getting enormous gains assume a financially solid and growing company with great prospects in their market. Which leads me to the secret of being a winning penny stock trader... knowing how to find the right stocks (solid companies poised for growth).
The reason why people "make" millions as a penny stock trader is because they learned how to research financially sound stocks and when to buy and sell them, including "how" to buy and sell them to mitigate losses, and maximize gains... and I'm talking BIG gains.
The reason why most people "lose" money is because their approach is too cavalier, with little research. Instead, they pick stocks about as well as they do all their other stock and mutual fund investments; they pluck stocks from air, based on what sounds good, or someone's advice, often with very little research. They choose shortcuts and hope for the best.
Wouldn't you rather "know" you have a winner, rather than hope? I don't know about you, but I hate losing money. I like to know my money is invested wisely.
Becoming a highly successful penny stock trader means doing just a little bit of research, knowing exactly what to look for, and then knowing when to buy and sell. It's easy once you know how.
There is an incredible Penny Stock Investment Guide that teaches how to become a winning penny stock trader in just one evening, using the same techniques as the pros, and it's free!
I found you can use the investment guide on "any" stock purchase, not just micro cap stocks. It's helped me tremendously. Now I know a good investment when I see it. I can even spot hidden gems before everyone else.

I highly recommend this FREE Penny Stock Investment Guide. It's packed with inside secrets of the pros, and gives you incredible knowledge on selecting winning stocks and increasing your gains.
If you want to be a successful penny stock trader, or any stock trader for that matter, this is a must-have investment guide. You'd be foolish to pass up the information.
For even more information on being a successful penny stock trader, I found a lot of free info on this excellent website: http://BuyingPennyStocksSite.com/
Warren Stanley

Making Money With Options

noreply@blogger.com (Unknown) — Fri, 29 Oct 2010 23:55:00 +0000

Options are a tricky game in the stock market. Many people would love the chance to invest in this very lucrative yet very scary investment. Some people have an idea that they offer large payouts but can't seem to figure out the damned things.
Well, be easy many have tried many have failed and im here to tell you it is hard but impossible? NO! Let me first start out explaining an option. An option is simply you buying a contract with the option to buy the stock at the strike price. You usually pay a premuim for this contract. Just like with any type of investment when you leverage there is sometimes a premuim for the good ones just think of it that way. Every options contract is 100 shares of XYZ company, whatever that company maybe. When you buy one contract you are buying the option to buy 100 shares if the strike price is hit and if not the option expires worthless. What does this mean for you the investor? Simply that you are buying into the stock for $1000 instead of risking $10000. All it is is leverage. You are only required to pay for the premuim up front(commisions and options contract fees also) but besides that you still benefit from the up and down swings in the securities movement for less. Honestly this is a basic run down of the options game. The best thing is that because of the movement in the share price of stocks usually the price of the premuims move also and this means you never really have to be out any money. Why? Because when the stock moves so does the price of the premuim so you can make out like a bandit. Remember though trading options is like swimming with sharks have a plan stick to it. Get more knowledge then this small article and try it. Limit you losses always and maximize your gains.

The 3 Things You Need To Start Trading Online

noreply@blogger.com (Unknown) — Wed, 27 Oct 2010 01:07:00 +0000

The ability to trade stocks online is one that give virtually any person anywhere in the world the opportunity to buy and sell stocks in some of the world's most prolific markets. Traditionally its been one of the top investment vehicles and over the last 10 years its averaged some of the best returns - despite 2 major market crashes and numerous fluctuations that caused the critics to proclaim that the sky id falling. The truth is that the stock market has more risks than many other investments out there but its also got the most opportunity for profit. Trading online is relatively easy in terms of its execution but the real skill and the true challenge is in learning the in's and out's of trading. To get started, there are 3 very important things you need. 1. Computer Set-up Trading online requires a very robust computer set-up and I would suggest you buy a new PC with a duel screen set-up. This would allow you to analyze a lot of data side by side and it really works much easier. You will also need a very good internet connection and I would suggest you always have a backup somewhere - even if its just a dial up. If you have to make urgent buy or sell trades then you cannot afford the downtime. Timing is everything - especially if you do day trading. 2. Capital Arguably the most important aspect and the heart of your trading business will be your capital. Its often referred to as the principal and its the amount of money you have in your trading account. This is the money you use to trade with and its the money that is supposed to make you more money. You need to protect is all all costs and make sure that you never borrow money to trade with. Its called scared money and it never makes money. 3. Education If you run into online trading blindly then you absolutely will burn your fingers. Its not for the feint-hearted and requires a lot of experience, knowledge and expertise. Although you will pick most of it up over time, its really important that you start with a base education. Poor trading decisions usually result in traders losing money and poor decisions is often the result of a lack of skill and knowledge. Do you want to start online share trading? See my blog to learn more about internet stock trading.

Trading High Volume Penny Stocks

noreply@blogger.com (Unknown) — Fri, 06 Aug 2010 16:04:00 +0000

Trading high volume penny stocks offers you the opportunity to buy and sell large amounts of shares without influencing the price of the stock. Large orders for a stock with low volume would move the price, making it hard to fill your entire order at the price that you have set your limit at. In contrast, high volume stocks offer enough volume to swallow up any reasonable trade without changing the price. Also as the volume increases for a penny stock more market makers join the action and set their own bid and ask [buy and sell price] for the stock. The competition between market markers is beneficial to investors since they are competing to buy your shares and sell you shares. The competition between market makers forces the price they are willing to sell you shares at down and the price they are willing to buy your shares at up. They know that if they offer you less than the other market makers for your shares your broker will route your trade to the higher paying market maker. The same process takes place with y our buy order; the order goes to the cheapest market maker. A low volume penny stock usually only has one market maker handling the trading since there is not enough business to convince other market makers to make a market in the stock. Therefore, if you are looking to trade high volume, hot penny stocks, you'll be able to take larger positions without having to worry about whether your order will be filled or not. And often is the case that you can trade the same stock many different times over several months or years. About StockProfessors.com - StockProfessors.com is a website that profiles stocks of interest. We are not licensed brokers or financial consultants. Please be advised that the information contained may or may not be complete and is solely for informational purposes only. This is not to be construed as an offer to sell, hold or the solicitation of an offer to buy. Investors are encouraged to seek opinions and to perform extensive due diligence. For additional information: info@stockprofessors.com, or http://www.stockprofessors.com. Article Source: http://EzineArticles.com/?expert=Chad_Kettering

Technical Chart Reading For the Simple Traders

noreply@blogger.com (Unknown) — Wed, 30 Jun 2010 00:52:00 +0000

How many times have you wondered how to make heads or tales of technical read outs? Or that the pros make it look so simple? Well myself I have wondered and wondered. I at times in my early trading career saw patterns and recognized head and shoulders but I also lost money. So what did I do? I broke down the process to keep it as simple as possible for this simple trader. First thing I did was I found out that many things were just too technical for me. I couldn't sit there and analyze the charts for hours and see every little candlestick pattern. I couldn't find Doji's, evening stars and every other thing consistently.What was my first step to ending the paralysis I had? I broke it down I looked for the trend. As most traders say the trend is your friend and make the most out of good trades and keep your stop loss tight. So I did that. I would look at a 5 min and 15 min candlestick chart to find the best trading opportunities. I found that this combination helped me in the intraday and making daytrades. I also look at the big picture a daily chart see the overall picture of the security I was trading or for me I loved the gold market so to see the overall health for possible swing trades. Step two if the market was hard for me to see a trend I would look for simple support and resistance lines. Find the support and resistance lines in the security and you will be able to find the opportunity much better. If it breaks through my resistance then I know its headed up and if it moves down through support then I know that the security has a good likelihood of moving the other way. I know you maybe thinking how though do I find the support and resistance? Well find the levels on a chart the the high bounced off of twice and the low never crossed lower. Take a 50 day moving average and lay that in there as well it will help to see movements in the share price. If the candlesticks move above the 50 day then likely it is moving up and the opposite is true for this as well, it shows you the momentum in the share price. After plugging in the data that fits if you see a movement in the share price bounce above or below the support and resistance lines then you have a good trade. If you see the share price trending up then you know that you can have a good shot at making money of that movement. In conclusion this is a very simple way to keep profits in your pocket and to use technical analysis in a very simple way. Understanding basic technical patterns will help in any investing you do in the future. Keep profits high and loss' low and you will be the successful trader that you want to be.

How to Make Ginormous Returns in the Penny Stock and Micro Cap Trading Environments

noreply@blogger.com (Unknown) — Sun, 16 May 2010 02:30:00 +0000

The penny stock and micro-cap trading environment gives investors the opportunity to make enormous returns on their capital often within a week or less. The excitement that an investor can feel after analyzing a penny stock or micro-cap stock and riding the crest upwards as the emerging company grows in profits and stock price is exhilarating. The challenge created by this very rewarding endeavor is to receive keen fundamental and technical advice, and use practical and robust risk management techniques. Finding an undervalued gem in the emerging penny stock arena is easier said than done. There are many stocks available that are low in price, but that does not mean that they are undervalued. To determine if a stock is undervalued, an investor needs to perform a good amount of homework to evaluate the fundamental value of the company on which he or she is doing diligence. To mitigate the time and effort needed to find a good company that is undervalued, many investors rely on trustworthy investment analysts that concentrate on the penny stock and micro-cap equity markets. As an example, SmallCapInvestor.com, Investopedia.com, MotleyFool.com, WallStreetReporter.com, and CNBC.com, are but some of the reputable companies and sites that offer excellent in-depth analysis of numerous publicly traded companies. There will be times when an investor and/or stock trader receives solid information discussing a stock that is ready to move quickly. For example purposes only (the author holds no position in any stock mentioned in this article), Med Careers Group, Inc.(OTC BB:MCGI), after recently receiving positive research reviews, popped up in March, 2010, on a significant volume spike. The stock price then retraced back to reasonable levels prior to a recent announcement that it had entered into a strategic alliance with Premier Healthcare Professionals, Inc. (PHP) to pursue acquisitions in the healthcare staffing industry on behalf of MCGI. The news release was highly beneficial for MCGI's stock price, which saw its stock price jump 35% at the opening of the trading session on the day of the announcement in May, 2010. Trading volume on the stock also increased significantly as investors rushed to position themselves in the stock. Beyond the excellent research and analysis that an investor could expect from a reputable research firm, knowledge of the expenses related to trading a stock is also very important. MCGI is a stock that trades with a very tight bid/ask spread. This means that the price that a market maker is willing to purchase the stock is only 1 cent different than the price at which market markers are willing to sell the stock. This allows an investor to enter into a trade without having to experience a large rally in the stock price just to break even. A good research firm will understand the importance of recommending companies that trade with tight bid/ask spreads and avoid steering their clients or subscribers to stocks that need enormous moves just for their members to break even. Investors also need to be cognizant of good risk management practices. This means that in addition to finding an undervalued stock that has a tight bid/ask spread, an investor needs to pick robust entry and exit levels prior to entering a penny stock or micro-cap stock trade. Both entry and exit prices can be determined by using technical analysis, or 50 day and 200 day support and resistance levels. In viewing a chart of MGCI, a stock trader could place a "stop loss" on a position below support, which in this case was near $1.00. There are many different ways to manage risk, but a stop loss level is imperative because it will allow an investor to avoid losing everything and live to trade another day. Additionally, an investor needs to determine prior to entry where he or she will take profits. This price could be a multiple of the initial price, or a technical price level, or a trailing stop. The key to success is to determine your exit points and stick to a sound risk management plan. About The Company: http://www.PennyBreakouts.com/ PennyBreakouts.com is a nationally recognized early provider of penny stock alerts and newsletters. The company's main focus is to deliver real-time reports that give its subscribers the necessary tools and information to better time their entries into emerging growth stocks. We devote many hours to comprehensive research and due diligence in order to identify stocks with high yield potential. To learn more about PennyBreakouts.com, follow the links found at: http://www.pennybreakouts.com/ For More Information and your Free eBook, Visit: PennyBreakouts.com 228 S.E. 9th Street Hallandale Beach, FL 33009 Telephone: (305) 445-4646 Article Source: http://EzineArticles.com/?expert=Hal_Porcelain

Profiting with Penny Stocks - A Case Study

noreply@blogger.com (Unknown) — Fri, 11 Apr 2008 15:06:00 +0000

This case study looks at the dramatic effects of a stock promotion that increased the price of a penny stock by over 400% in a short period of time. While most investors rely on traditional analysis to make investment choices, stock promotions are little-known indicators of 100%+ price gains. For penny stock and small cap investors, having good information on stock promotions is essential to making huge profits on these stocks. One of the secrets of Penny Stock investing is that of all the stocks that rise 100% or more in a short time frame, 7 out of ten of them are driven by something that you can't identify with technical analysis or by doing company research. That "something" is a coordinated, well-funded stock promotion. And this is the key that you need to understand in order to make the best penny stock picks. You may not have heard about the effect of stock promotions and how they can drive an inexpensive stock price higher in a matter of weeks or even days. But it works. And a penny stock promotion is a smart investment for a company wanting to drive their market cap up. So let's look at one case study of a stock promotion from early in 2008 and you'll see why having information on stock promotions is critical to your success at Penny Stock investing. The stock is CVSC, Cardiovascular Sciences, Inc. Throughout the latter part of 2007, this stock was flat with volume in the 0 to 5,000 shares per day range. The stock price was also flat and predictable. But in January, 2008, the company would begin a stock promotion in order to build volume and move the stock price higher. Essentially, the goal of a stock promotion is to increase the awareness of the stock and its growth prospects. If done successfully, this will expand the market of buyers, increasing the demand for the stock, which increases its sales price over time. For this stock promotion, the company hired an outside firm that specializes in this type of campaign. While every promotional campaign for a penny stock will have a unique combination of activities, in general, a promotional campaign can include mass communication tactics such as direct mail to peoples' homes, fax blasts, email newsletters, press releases, ads on financial websites. Some may even include TV commercials. Looking at CVSC during the promotional period beginning January 1is an example of a successful stock promotion. More importantly, it is an example of a stock that investors would do well to invest in when the promotion is in its early stages. On Jan. 2, 2008 when the stock promotional campaign kicked off, CVSC opened at $0.51, had a high and a low of $0.5. It closed at $0.51 on a volume of 800 shares. Not very interesting. Obviously, this stock was desperately in need of a promotion or anything to generate a buzz about why an investor should give it a second glance. On Feb. 1, after nearly one month of running promotional activities, CVSC opened at $0.76 and closed at $0.75 on volume of 17,400 shares. Over this time, the stock had risen $0.24, or a gain of 47% and with substantially more shares traded. On Feb.12, the stock broke through resistance at $0.81 and began a sharp climb lasting several weeks. On March 3rd, with the stock promotion still in full swing, CVSC closed the day at $1.77 on volume of 245,400 shares. This is a remarkable change from the stock we saw at the beginning of the year. For the lucky investor who bought the stock on January 2, he would have netted a gain of $1.26 per share, or 247%. The stock finally peaked on March 11 at $2.70 a share on volume of 1.53 million shares! Over the period, the stock price rose $2.19 from $0.51, for an overall gain of 429%. All in all, this dramatic rise occurred in less than two and a half months. This stock is just one example of one successful stock promotion. But if you are trying to make money with Penny Stocks by picking the best small cap stocks, you must be aware of the effects of stock promotions. You might be very good at technical analysis or researching the fundamentals, yet miss the huge opportunities that a stock like CVSC presents. Every day, there are stocks that are undergoing this same kind of price driving activity. It is worth any investor's time to learn about these stock promotions and find the sources that you can use to get information on stock promotions in time for you to make smart investments and show a consistent, highly profitable return. Daniel B. Johnson is vice-president of a wireless company based in Dallas. He successfully trades penny stocks and other small cap stocks on a part-time basis. For information sources on identifying stock promotions that drive large increases in the price of penny stocks, visit his web site at http://www.PennyStocksRising.com Article Source: http://EzineArticles.com/?expert=Daniel_B._Johnson

What Are the Day Trading Indicators You Should Look for?

noreply@blogger.com (Unknown) — Wed, 09 Apr 2008 01:26:00 +0000

Trading on the stock market requires that you have some kind of strategy so that your losses do not exceed your wins. Without having some indicators to go on, you can almost be sure that you will not make the profit you want because you will be continuously picking the wrong stocks. Here are some tips about selecting the indicators you want to use. Choosing Your Own Indicators Reliable indicators, or what you think are reliable indicators, can only be selected carefully if you have a real familiarity with the stock market and how it works. This makes it very important to read and study as much as you can about it. Once you know the techniques that others choose to use, you can add or eliminate them one at a time from your own list of day trading indicators. Find A System That Works Some one may ask, Why would this point be in an article that is supposed to be telling you about what to look for? The answer to that question needs to be answered by you. Everyone has slightly different ideas of what they are looking for in the way of information needed to make a wise stock trading decision. This means that any ideas that you actually receive in the way of good indicators are only valid if they help you to make better trades. Your particular system may call for different tools and indicators than someone else's system. The next time someone tells you about indicators that he or she watches, be sure to ask the follow up question, Are you making money from your system? Remember that a couple of wins do not indicate a reliable indicator. Develop Your Strategy with Testing Your chosen indicators for the stock market need to be watched and understood. This should give you a plan of buying or selling when the stock you are watching makes an increase or decrease within a certain time frame. Learn not to go on instinct, however, because this will often mislead you. This will help you to eliminate making any decisions based on emotions alone. Set limits on how much the stock is to move in any direction from a set point before you decide to buy or sell. Then, watch your stock and its actions. Another way that you can trade stock, which is much simpler, would be to choose to let your stock build over the long haul. This means that after you have picked it, that you just let it take the rise and fall of the stock market. Let the averages bring profit to your stock. Of course, if the stock takes a serious dip in value, that would be a good time to trade it before you lose all of your investment. A lot of market wisdom is out there, along with valuable trading principles from those who are well-known successful day traders. Part of the reason that they are well known is because at least some of their advice has paid off. Research Before You Invest Valid stock market indicators need to be chosen by you because it is your investment that is at stake. You should take the time to follow track records of stock and even get financial information about a company before you invest. Check the news, too, about that company, which can easily be found on the Internet. For more information on getting a good investing strategy, go to http://www.investingstrategy.freedvd.com.au James McInnes is a professional share market trader and investment entrepreneur, with many years experience trading the Australian Share market. You can visit his site at http://www.investingstrategy.freedvd.com.au for further information on trading the Australian Share Market Article Source: http://EzineArticles.com/?expert=James_Mcinnes

Amazing Results with Technical Analysis and Option Trading

noreply@blogger.com (Unknown) — Wed, 09 Apr 2008 01:25:00 +0000

The understanding of how to trade options effectively does not typically include the subject of technical analysis. Information like this could be an important addition for the options trader since different market conditions warrant different spreads. In this essay, I will wade through the reasons why a trader would prefer to incorporate this genre of support into their option trading. More advanced options traders can use the options pricing model to focus on certain elements of risk. But, the market's direction sometimes plays a role in the risk associated to trading certain option spreads. If the trader employs and options spread that uses call options, a bullish move would cause a delta of the call to increase. So, if a trader understands technical analysis he can select the spreads of a perform best under certain market conditions. There are some advantages that are usually derived by looking for chart patterns when doing the type of technical analysis that the trader needs to perform when trading options. The head and shoulders, wedge and flag patterns typically fall under this heading. Patterns like the Gartley 222 and Elliott Wave can also fall under this heading. This can surely offer an advantage to those involved in option trading. These patterns are helpful because they assist the trader in determining the current mode of the market. Once a trader understands the current mode or direction of a market they can choose the strategy that will perform best under those conditions. So, a chart that is showing a bullish bias would be better suited for a bull call or bear put spread. However, directionally based debit spreads can lose money if the market does not move much due to the time decay of the options used. Looking at a price chart in this way can prove very helpful to traders because it helps them to see the area of support and resistance. From among the many option spread candidates that a trader may consider, he can include in his analysis to break even this of the spreads and how they correspond to the areas of support and resistance on the securities price chart. When learning how to trade options effectively, traders may wish to also understand how they can effectively combine their new knowledge with technical analysis. While this may add a level of complexity to the many topics that traders already consider for their trading, they may find that it helps them in understanding why some trades are more successful than others. Once the trader has acquired this understanding about his results, he can better position himself to trade with more consistency. Finally, the trader has an additional holistic appraisal which enables him to associate option methods with technical aid for his option trading. Sam Perdue has been actively trading the markets for over 13 years. He has written a computer program that helps traders analyze the stock, Forex, commodities and options markets using Fibonacci ratios, Elliott Wave, option pricing and nonlinear programming algorithms. For more information, please see our option trading software. Article Source: http://EzineArticles.com/?expert=Sam_Perdue

Hoarding Silver Kookaburras

noreply@blogger.com (Unknown) — Mon, 17 Mar 2008 09:57:00 +0000

Collecting silver coins can be an enjoyable, affordable and lucrative pastime. You do not need a fortune to get started yet you can build a hobby into a respectable, profitable business if you avoid the potential pitfalls and stick to some basic valuation rules. I wrote this article when my personal collection of silver coins started to build. Although there are a plethora of numismatic books covering all manner of specialty subjects I have yet to locate one that deals with the collection of all coins with a high silver content for pleasure and profit. Hopefully that imbalance is at now redressed. For our definition an average "silver bullion coin" consists of 1 troy ounce of pure (.999) silver. Unlike other coins, which may contain silver in part, the fact that these coins are, effectively, solid silver gives them a unique investment advantage. We can instantly obtain the base metal value of the coin simply by checking the world's spot silver price at any time on a website such as Kitco.com. Silver bullion coins make a great investment and many have beautiful and unique designs. Some - such as the Australian Kookaburra - are also legal tender. Popular examples of recent silver bullion coins include the Somalian African Monkey, The Canadian Maple, The Mexican Libertad, The Australian Kookaburra, the Chinese Panda and the American Silver Dollar Eagle (and variants of all these, including special editions and collector's sets). The British Britannia bullion coin contains marginally less silver, at 95.8%. Gold bullion coin collecting offers even greater opportunity for profit, and exactly the same principles apply. The ownership of gold is proving a popular and lucrative investment proposition. With world currencies in a state of flux, gold is also seen as the perfect hedge against inflation. Whilst the prices of any precious metal can go down, a cursory glance over a gold chart will show an inexorable rise over the years. This trend is likely to continue, possibly even escalate due to the current currency weakness created by the global "credit crunch". One option to obtain maximum exposure to gold value is to own an EFT (Exchange Traded Fund). One such vehicle which tracks the actual price of physical gold (as opposed to owning a gold mining stock, for instance) is PHAU. Many share dealers will allow you to trade this ETF which you can buy and sell online like any share. Check with the broker for terms and conditions. In a nutshell it has never been easier (or more affordable) to own gold without having to have a kings ransom worth of bullion (and the associated security risks) lying around your house. Duncan Rosslair makes a living trading precious metals. For further free tips, free gold, and collecting strategies visit http://www.TheProspector.co.uk Article Source: http://EzineArticles.com/?expert=Duncan_Rosslair

Are Commodities The Next Investment Bubble?

noreply@blogger.com (Unknown) — Mon, 17 Mar 2008 09:54:00 +0000

I have heard it said that in a bubble, the price of the hot item affects the economy more than the economy affects the price of the hot item. While this was true during the past two bubbles (internet/technology stocks of the late 1990's and early 2000 and housing) does this hold up with the current sector shift into commodities? Could we be witnessing the formation of the next bubble? Before we get ahead of ourselves, it is a good idea to determine what classifies a "bubble." A bubble can be loosely defined as when excess resources, capital and financing are being poured into a specific hot investment as compared to other capital investments. There are differing types of bubbles, but James Montier did a good job of categorizing them: 1. Greater fool theory - higher prices are willing to be paid as long as there is someone else to buy it from them - speculative 2. Fundamental analysis - investors err by extrapolating that past returns will continue indefinitely into the future 3. Fads - investors succumb to pressure to conform to the majority's view (social and psychological factors) 4. Informational - prices deviate from the fundamentals because investors assume they have hidden information that supports higher prices Additionally, if you take a look at both of the most recent bubbles mentioned above, you can see a consistent pattern emerging from their formation to the eventual bursting: - Bubbles usually start because of rotational investment shifts; investors seeking "the next big thing" move money into these investments in an attempt to improve returns - Hype and over-promotion become rampant - The word "new" is usually always bandied about by the pundits and used by investors to rationalize why this time is different than the past - Institutional investors are usually leading the charge into the hot investment - Individual investor follows the institutional money - The non-investor feels they are being left out and follows the herd, believing they must not miss out - Speculation follows - leverage and margin are used in excess - Bubbles seem to be always tied to loose credit policies or easy money - Bubbles tend to initially fund unsound business, and promote over-investment - Bubbles invariably start slowly and gradually build over a period of years - At the peak of a bubble misrepresentation and fraud flourish - After the peak, prices fall precipitously and then partly recover - After the recovery there is usually another protracted period when prices stay stagnant or drift lower - Bubbles are often followed by economic recessions The inevitable bursting of a bubble can be very painful and has the tendency to redistribute wealth, as the early adopters who cash out take the money from the late arrivers. Sadly, the late investors then usually get saddled with an investment rapidly declining in value that frequently becomes illiquid, and as such they lose out even more. However, even with the associated pain bubbles are good for a free economy. Daniel Gross points out in his book, "Pop," that bubbles leave behind a new commercial and consumer infrastructure. "The stuff built during infrastructure bubbles - housing and telegraph wire, fiber-optic cable and railroads - don't get ploughed under when its owners go bankrupt," he reasons. "It gets reused - and quickly - by entrepreneurs with new business plans, lower cost bases, and better capital structures. So where does this leave us with our original questions? As an investment advisor I am in a unique position to be able to see the trends of a bubble develop. I see when institutional money begins its shift into other markets. I see the promotional machine begin and when it ramps up to a furious pace in an attempt to lure investors' money. I see when clients begin to take abnormal interest in their portfolios and start calling to make sure they have some exposure to the current "hot" investment. Finally, my clients let me know it's time to take some profits off the table because the phone rings continuously requesting a change in their portfolio to heavily skew it away from a successful, less risk, diversified strategy to one of putting the majority of their eggs in one basket. While the timing may not be spot on, every time we have had bubbles my clients turn out to follow that consistent pattern mentioned above, which is a great forecaster of things to come. So when clients started calling and asking about their exposure to commodities, it raised a red flag for me. Without question, commodities could be the next technology or housing bubble. Many of the patterns seen in past bubbles are present today. Based upon my clients' activity level I would put us mid-stream into the bubble. From a fundamental standpoint as well it seems only mid-stream because some of the imbalance in commodity prices is due to the current imbalance in supply and demand and is therefore justified. Upward price adjustments can also partially be contributed to the weakening US dollar (e.g. oil's mercurial rise - the largest component of a commodity index - which is pegged to the US dollar). With the dollar continuing to fall, some of the price increase is exacerbated. The rest is due to world economic expansion and, my cause for concern, speculation. Because the majority of the rise is not speculative, at this time it is a little different than previous bubbles and therefore makes it harder to gauge. Of course, the greater the speculation, the closer we approach a true bubble. When it comes to bubbles recognition is only half the challenge. The other half is what to do and when to do it with regards to your investments. It is recommended that investors manage their risk exposure by never investing more than 5-10% of their assets into any one sector. This approach always limits potential losses so if a bubble does occur, while you may have some minor pain (a 10% loss) you have not been wiped out. Another prudent practice is to regularly review your asset allocation and rebalance your portfolio to insure that any investments that have become out-of-balance are readjusted (i.e. partially sold off) to within the risk tolerance you have set for your portfolio. The advantage of this is that during bubbles, those investments will rise, and regular rebalancing will bring this investment back to an acceptable risk level, thereby reducing exposure and locking in some profits. While this may not maximize gains it unmistakably minimizes losses, which are a major concern if the potential for a bubble exists. As the hype surrounding commodities continues to build, the chances are increasing that we are moving closer to a true bubble, which is terrible news considering we have yet to recover from the previous one. The effects of another bubble so soon after the last could be devastating to the US economy. However, the good news is that it's not too late to turn it around. Even with the excess capital flow into commodities continuing unabated, I feel we are still months, if not a few years, away from this situation turning into a full-fledged bubble. This gives the forces that could slow it down or reverse the trend a chance to take hold. In the meantime, be aware that the signs are there, because you don't want to end up as one of the late arriver's. Article Source: http://EzineArticles.com/?expert=Chuck_Gibson

Trading Strategy - Give Your Stop Orders Room To "Wiggle"

noreply@blogger.com (Unknown) — Mon, 17 Mar 2008 09:53:00 +0000

A simple stop order is an order to buy or sell stock, once a predetermined price is traded at or through. Buy stop orders are placed above the current price of the stock and sell stop orders are placed below the current price of the stock. Once the stop price is hit the buy or sell action becomes a market order, enabling the trade to be executed at the current market price. There are as many ways to determine the position of your stop orders as there are traders in the marketplace. Most stop orders are placed according to a specific price, dollar move or percentage move, with 8% being one of the most common. When placing a stop order it is important that the order be placed close enough to the current price to prevent a loss but far enough away to stay out of the stocks current range. The goal of the stop order is to prevent losses during major market swings, not to keep pulling you out of your trading strategy on simple trading range swings. A good rule of thumb to remember is to place your sell stop orders below current support levels so that you will have multiple levels of protection in place. When buying, you will want to place your buy stop orders above current resistance levels so that the stop is only activated if the stock is making a strong upward move. Placing your stop orders will require a certain amount of study of the stocks current trading range. Exactly where to place your stop orders will mostly be a matter of personal choice, based on your current analysis of the stocks trading range. Stop orders should be an integral part of every trading strategy. When used correctly the sell stop order can be a useful and powerful protection tool when profit is involved. It can also be used to safeguard your positions in the event of a strong price reversal of your position. If becoming a DartThrow Trader, so that you can quickly, easily, and intuitively determine how and where to place your sell and buy stop orders, is something that naturally appeals to your trading strategy; then we would like to invite you to visit http://www.dartthrowtrader.com and enroll in our free - successful investing and money management weekly newsletter. Jimmy Slagle - The Dart Throw Trader is an 18 year trading veteran, market insider and former national trading seminar instructor and invites you to discover for yourself if you have the skills, tools and knowledge to literally throw darts and make money. To see what it takes to become a Dart-Throw Trader point your favorite browser to http://www.dartthrowtrader.com and get our free report - The Trading Education Industry's Dirty Little Secret and we will also send you our weekly newsletter successful investing and money management. Article Source: http://EzineArticles.com/?expert=Jimmy_Slagle

Learn to Invest Money

noreply@blogger.com (Unknown) — Mon, 17 Mar 2008 09:53:00 +0000

How can you learn to invest money? Well you could sign up for some expensive courses and hope to learn some special secret investment tips that will make you rich overnight. Unfortunately learning to invest money is not that easy. The tried and tested method to success is often a lot cheaper but more time consuming. The first choice you need to make is how much time and money you have free to invest your money in. Obviously if you are short on time then trying to research and learn a completely new area of investing (for example futures trading). Instead you may be better of simply investing in a fully managed investment fund. Obviously you should only invest money that you can afford to lose. If you cannot afford to lose the money you are planning to invest then you should seriously consider the riskiness of the investments you will make. If you cannot afford to lose the money then very low risk such as savings deposit account or a government bond may be the best option. On the other hand if you have spare cash kicking around that you can afford to lose and don't know what to do with it then maybe investing in shares in the latest in fad technology stock may be the right investment for you. The easiest way to learn to invest money is to simply read around the subject. The more you read, the more you'll learn. The more you learn, the better investment decisions you'll be able to make. If you want to learn to invest money or making financial investments please visit the authors website. Article Source: http://EzineArticles.com/?expert=James_C_Kerr

Position Sizing and Risk Management

noreply@blogger.com (Unknown) — Mon, 17 Mar 2008 09:51:00 +0000

With the recent horribly tragic events of real estate and debt instrument investment experiences, some public information on risk management deserves attention. Position sizing deals with the portion of total asset exposed to risk/reward. Putting it all on the line or "betting the ranch" tends to carry exceptionally high risks of ruin, since it leads to large losses as soon as the underlying event goes south. It would make more sense to allow many different "bets", all with positive statistical expectancies, to occur at once. As the law of large numbers kicks in, a positive return will eventually follow. Luck determines the speed of it. Quick example- Basic trend following stock investment strategies carry approximately 33% winning rate on average. (Many still come out profitable after long strings of trades, because the average winners carry much larger size than the limited losing trades.) This basically implies that out of each 10 lowly correlated positions, one would expect 2-4 winners at best, but those home-run winners will bring all the money home. To execute this and lower the risk of total loss, many professional traders commit (i.e. risk) 1-5% of capital per trade/investment unit. Strings of losing trades occur from time to time, and this scheme remains the only method of surviving them before the large winners ensue. The more probabilistic trials, the probability of the statistical edge kicking in becomes much larger. All said and done, you want to run the investment like a casino, where the edge sits on your side. Luck determines whether an individual investment unit ends profitably or negatively. Study and gain that positive expectancy. Plan the position sizes meticulously. The money will follow. Rocko Chen http://matdays.blogspot.com/ http://rocko.blogsavy.com/ Article Source: http://EzineArticles.com/?expert=Rocko_Chen Rocko Chen - EzineArticles Expert Author

Man Investing is Tough Websites Even Tougher

noreply@blogger.com (Unknown) — Tue, 23 Oct 2007 23:44:00 +0000

I'll tell you investing is a tough thing. It takes a lot to find the right stocks to invest in that one fit your investment plan and two if they simply will go up in price. It's a hard gig. But if you can succeed most of the time picking winners your in good shape. Best thing for noticing stocks that are good for you and picking the winners are simple time. Let time in the market sharpen your instinct and your timing and your price evaluation. Let time be your friend.

Please Vote In polls

noreply@blogger.com (Unknown) — Thu, 11 Oct 2007 04:36:00 +0000

Just give a quick pick how you invest. Neat little feature and see how many are the same and different in there investment plan.

Bottles and cans

noreply@blogger.com (Unknown) — Tue, 18 Sep 2007 03:08:00 +0000

We are an investment club that wants to earn a big bang for every penny we invest. We even want our bottle's and can's to count! We have a low cost load fee and we even have a small Admin. Fee. We want true buying power without a huge chunk out of our paychecks. Like i said before we are an investment club that wants to earn a big bang for every penny we invest. We have a low cost load fee and we even have a small Admin. Fee. We want true buying power without a huge chunk out of our paychecks. We came up with a great way to invest our money without putting up huge amounts of our paychecks. We invest can's and bottle's. Thats right we dont care if you send us $5.00 worth of cans we take it and invest it. We want your pennies to make dollars. We found that this is the way to make investment capital. Its a great way to be a green business and a great Investment of the deposits. All this going back into your wealth. Everytime you drink soda or any carbonated beverage your adding to your wealth. So just a first time investment load fee then just Can's that can be deposited.

Definitions:Technical/Fundemental Analysis

noreply@blogger.com (Unknown) — Sat, 15 Sep 2007 05:47:00 +0000

Deference Between the two lies i guess in the def. so here is the definitions of the two. Although Me personally use a mix of both to invest. Fundementals to pick'em and technicals to see which we they seem to be moving or if a trend is coming making quick profits and the like. **Technical Analysis** Unlike fundamental analysis, technical analysis ignores the company underlying the stock and instead tries to predict price changes by studying the market itself. We examine technical analysis concepts like moving averages, support and resistance, advance/decline lines, relative strength, momentum, and volume. **Fundamental Analysis** This investment strategy involves evaluating a stock by examining the company, especially its operations and its financial condition. Here we look at several valuation methods, factoring in price/earnings ratio, PEG, dividend yields, book value, price/sales ratio, and return on equity

Solid Idea For getting $$$$

noreply@blogger.com (Unknown) — Sat, 15 Sep 2007 05:02:00 +0000

This is a solid grass roots type of investing that only someone like me and a another poor man would think of. My new project is to try and ivest my bottle and can money and try and drive folks into joining the, Invest w/ Bottles & Cans Investment Club. I wanted to start a investment club to draw in a younger crowd who may not have the initial investments and the like to start there own account. I also wanted to position trade and do some swing trading. ***I want the buying power to be able to trade some stocks and pull profit from smaller uptrends and breakouts.*** Instead of having to sit on the stock for years before realizing any gains(although i will put a side money for that too). All in all with an investment club, the initial investment would only be $100 and after that people can send cans to us and we use them for investments in the future. I thought it was a nifty idea. But ya want in? Or Just are interested send mail to spiderwire29@hotmail.com Investing Investor

Link

noreply@blogger.com (Unknown) — Fri, 14 Sep 2007 10:14:00 +0000

Heres a good article on MSN Money to look at.

Fundamentals

noreply@blogger.com (Unknown) — Fri, 14 Sep 2007 09:42:00 +0000

Hi, I would just like to talk about trading w/ the fudementals of a stock. This is my investment method. I invest with the knowledge that the company I invest in is a sound company w/ good prospects of picking business up or staying on a good course. I also want to see there bottom line. You have to remeber that it's not the stock you invest in it's the company. So if you invest in a sick company, then you might be putting money into a stock that will drop and will in turn lose you money. Just some of the things I like to look at when investing: Cash Flow Assets Debt Profit/loss You can usually find everything that you need (pretty much anyway) on sites like MSN Money or Yahoo! fianance. Look arounnd these sites with your picks or the ones here. Make a plan on what you look for in your investment portfolio. That is key never invest until you've done your due diligence. Which means your studying up investments. Next post will be technicals. Till then. Investing Investor

Dirt CHeAp!!!! PENNIES OTB Pink Sheets Picks!

noreply@blogger.com (Unknown) — Thu, 06 Sep 2007 22:01:00 +0000

Got Dirty Cheapy Stocks on the OTC:BB or Pink Sheets.

Small-Cap Pick Em List Em!!

noreply@blogger.com (Unknown) — Thu, 06 Sep 2007 22:00:00 +0000

Pick em list em if ya want or discuss.

Mid-Cap's Pick em list em!

noreply@blogger.com (Unknown) — Thu, 06 Sep 2007 21:58:00 +0000

Here if you have any pickers in the Mid-Capitalization