Stock Picks For the Aggressive Investor

Trading Classes Offered

2011-11-28T13:23:00.000-08:00

For any of you reading this blog, you must be interested in stocks, bonds etc. If you wish to learn how to successfully trade these securities profitably in today's market, look no further. I am now offering free trading classes to any who may be interested in increasing their knowledge of trading. I will soon be posting these lessons to my blog and they will be very informative classes on trading as well as free. Stay posted and I will soon post my video trading classes.

Buy U.S. Bank Stocks After Thanksgiving

2011-11-24T14:22:00.001-08:00

The DOW Jones and S&P 500 have both posted horrific losses this past week. The market seems to have fallen into an irrecoverable death spiral that is safe for no investor. The death spiral, however, is headed for a bottom! The fall of Europe has already been factored into stock prices, and the fears of investors over Europe are far exaggerated. Bank stocks are headed below their 52 week low and it is almost time to begin buying financials hand over foot. The most undervalued stock of the U.S. financials is Bank of America. It recently reported earnings that are higher than they have been since 2008 and yet it continues to fall. With an upside of 70% on its 52 week high, it is a perfect value buy.

Budget Deficit May Cause a Meltdown

2011-11-21T13:10:00.000-08:00

As the deadline for the U.S. budget committee approaches, investors are asking themselves whether or not we're facing another meltdown. Back in August, a last minute deal was put in place in order to avert a total government shut down. Crisis was avoided, but S&P withdrew its coveted AAA rating from U.S. debt and stock tumbled relentlessly for days. This approaching deadline may not play out as well as the one in August. When the super-committee admits its inevitable failure to approve the budget cuts necessary, the world economy could be looking at a market implosion. The only smart way to play off of this is to remove your money from any volatile equities and wait for either the bottom of the abyss, or calm water in a best case scenario. If stocks crash after the admitted failure, a bottom will be within sight and losses can be regained. If the market amply survives the crash, the obvious choice is to buy back into any previous positions you may have had. Just remember that the market is already riding pretty low due to Euro speculation. This means that in the event of a crash, it won't fall very far. This could definitely play out as an advantage to the value weary investor.

Strong Buys for the Holiday Season

2011-11-19T12:59:00.001-08:00

Black Friday is approaching, and it is the threshold to the biggest retail earnings quarter of the year. The holidays will send people running to malls, outlets, and department stores in search of gifts to bestow upon their loved ones. This means fat earnings for companies like Apple, HP, LVMH, and other manufacturers of luxury and tech goods. The news in Europe is affecting the stock market, but it’s not affecting American spending. As soon as the large holiday earnings for luxury manufacturers and tech companies kick in, the prices of the stocks will sky rocket.

Another good buy for the holidays is UPS. The demand for private package delivery is escalating rapidly, and no one dominates this industry like UPS. They are taking advantage of this new demand for package delivery and hiking their rates up by 4.3%. This rate hike won’t stop people from using UPS and it will translate into large earnings for UPS this next quarter.

How to profit from European trouble

2011-11-18T19:30:00.000-08:00

The current market conditions we are all facing are very turbulent. A single headline out of Europe can spark a massive sell off or a massive rally. No investor feels safe with his or her money invested in these unpredictable conditions. Many have decided to take their money out of equities in an attempt to wait for the market to bottom out; allowing them to purchase high quality stock at a very cheap price. While this seems like a solid strategy fundamentally, in reality it may not be so lucrative. This is due to the fact that the market is not headed for an objective bottom. Following the market crash in 2008, many smart investors took advantage of the rock bottom stock prices and raked in a killing during 2009 and 2010. While on the surface this situation appears to be similar, it most certainly is not. The current market struggles we are facing are all based on speculation, not actual fact. In 2008, Lehman Brothers collapsed sending the markets into free fall. Today's market is struggling because investors are selling stock on the assumption that the European debt crisis will collapse and hurt the world economy. It should be apparent now that the two situations are completely different. After the 2008 crash, every large cap company was a value buy. But right now there are many pit falls for the trigger happy investor.

Please do not misinterpret the intent of this article. Everything I just explained may lead you to think the current market is too dangerous to invest in and should be left alone. On the contrary, there are 2 very profitable opportunities available and I will discuss them below.

1. Watching the VIX (Volatility Index)

The VIX (Volatility Index) is a beautiful way to track the way investors are feeling about Europe. Often referred to as the Fear Index, the VIX goes up when people sell large amounts of stock, and down when people purchase large amounts of stock. Whenever the VIX breaks 36, there is a large rally the next day. This is true roughly 99 out of 100 times. 36 is fundamentally a level that is unsustainable by investors unless Europe actually does default (extremely unlikely). A good amount of profit can be generated by simply buying a few stable stocks, such as General Electric, Exxon-Mobil, Halliburton, Berkshire Hathaway, etc., and selling them at the end of the next day.

2. Buying stock in the U.S. banks

The few stocks that are actually guaranteed value buys are the large U.S. banks. Many of them have fallen to low prices that are based on nothing but rumor and paranoia. Many believe that if Europe defaults, the U.S. banks would suffer because of their exposure to sovereign debt. In actuality, the exposure that U.S. banks have to sovereign debt is extremely small and would not greatly affect their equity holdings. On top of that, their earnings are completely healthy, and their P/E ratios are lower than they have been in decades. Buying a large diversity of U.S. banks such as J.P. Morgan-Chase, Goldman Sachs, Bank of America, Wells Fargo, and Morgan Stanley will definitely yield extremely high returns for the next two years or so.

The two profitable opportunities mentioned above are some of the only methods that can work consistently in the current market storm. Between following the VIX and investing in underpriced banks, any investor can continue to grow their wealth in a healthy manner.