Market Mood Swings: Capitalizing on Fear and Loathing on Wall Street.
Market Mood Swings: Capitalizing on Fear and Loathing on Wall Street.
by Natalie Pace.
Includes my Hot News on Cool Stocks List.
Track Record of our Reporting
The Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 15 companies listed below have performed well this volatile year, versus just five that went in the opposite direction of the reporting. Even during the flat year of 2007, our featured companies had outstanding performance between Oct. 2006 and June 2007! 4 out of 9 companies – almost half – doubled or more. 48% of the companies featured in my stock newsletter between 2002 and 2005 – 25 out of 52 companies -- DOUBLED from the time we listed them in our feature article to the time when I took the company off of the Hot News on Cool Stocks list, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from volume 4, issue 4, the April 2007 ezine, for a listing of companies.)
3 out of 5 Company of the Year selections more than doubled. My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively. MySpace, my 2006 Company of the Year, has been a large part of News Corp’s success with shareholders. Only OSI Pharmaceuticals, my 2005 Company of the Year, has lost money. So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street. (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)
Additionally, the market performance of the companies that are featured in my Hot News on Cool Stocks list has kept me at the top of over 830 A-list pundits on TipsTraders.com. I’ve repeatedly occupied the #1 position. TipsTraders.com listed me as a Highly Recommended Stock Picker, in 2006 and 2007. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%.
General Stock Market Performance
Gains 2-year 1-year 3 mo.
Dow: +14% -1% -6%
Nasdaq: + 2% -6% -12%
S&P: + 5% -6% -8%
Commentary: Trading Tips for Turbulent Time
We issued a 911 UPDATE ON THE HOT NEWS ON COOL STOCKS LIST on March 11, 2008, the morning after the markets dropped to their lowest point in years. This update is still available online at the Sharing Wisdom bulletin board in the topic of the same name.
As we indicated in the Hot News List this month, there is so much volatility in the marketplace that we may be providing updates to the list between the updates! So, even though most of the news on the individual companies remained the same (outside of the financial sector, which continues to be under extreme pressure daily), on March 11, 2008 the markets dropped to their lowest point since the beginning of 2006. Oil was over $100 per barrel and the financial markets were reeling.
March 2008 was your chance to own companies like Google for prices that haven't been seen for years. Imagine, if you bought Google for $411 on 3.11.08, you were buying at a discount of 45% from the high of $747.
So, read the Hot News updates on any of the companies listed below that you are interested in adding to your portfolio. What this note is intended to do is to alert you to the prices that these stocks are trading at today, so that you can decide if they should jump into your Stock Shopping Cart or stay on your Stock Shopping List. Remember that in your long term portfolio, you’re looking for a multi-year low price, so that you can hang onto the company for years to come (at an ever-increasing profit). In your short term trading portfolio (which should be a very small percent of your investment portfolio), it is important to take profits early and often when the markets are swinging 200 points in opposite directions day to day.
Some of the companies listed on the Hot News list are more appropriate to add to your long term portfolio, and others are more appropriate for you if you’re interested in short term trading. How can you tell the difference? If the company has a market capitalization that is under $1 billion then it is a "small cap" company with a higher risk of volatility in the share price.
In a market that swings as wildly as this market has in the past few months, that means that the share price is having dramatic fluctuations (something options traders love). If you don’t want the stomach ache or to monitor the position daily, and if you aren’t prepared to take your profits early and often, it’s best to avoid individual small cap companies. On the other hand, when you see companies that are valued at over $50 billion trading at multi-year lows, like Google, Johnson & Johnson and General Electric were in the first part of March, that might be a good time to add them to your long term portfolio. The markets can shake the price around, but over the long term – many years -- if you can buy for a 40-50% discount, that should pay off.
Note that the general market trends continue to be down-trending with very high volatility.
So, why did I think that share prices might go up again, when March 10th felt so awful? Because the Feds were expected to come riding to the rescue again with another dramatic rate slash. According to a report from Reuters on March 11, 2008, Goldman Sachs analysts were expecting the Fed Fund rate to fall to two by April. As you can see, the rate was slashed as they predicted and currently stands at 2 ¼ percent. There has been a very high correlation between these rate slashes and the markets getting stronger again.
Also, please note that some of our top performers are on the Cooling Off list. If you don't know options trading, you should consider coming to my May Retreat. This is where most of the money is being made in today's marketplace -- in puts. And because the downtrend has been so strong and dramatic, you can make quite a lot in a short period of time, even buying into options that don't expire until 2009. Of course, the commitment you MUST make when trading options is to keep the amount limited to a VERY small portion of your stock portfolio and equal to your experience. In other words, if you have never traded options before, do it in a fictitious portfolio for a year before putting your hard-earned cash on the line. And, because the market mood swings are daily, you have to commit to a daily awareness of whether your puts and calls are "in the money."
Options are very high risk and are only for the experienced trader. AND YOU SHOULD NEVER BE TRADING YOUR NEST EGG (not in options or individual stocks). Taking a long term view and letting the magic of compounding and religious investing each month (where you participate in various buy and sell moments) really does work over time. The average gains for the last 25 years were still 12.4% as of January 2008, and that includes 9.11.01, the Asian Crash of 1997, Black Monday 1987...
To learn "Trading Tips for Turbulent Times" and how to "Recession-Proof Your Portfolio," read the articles in the February 1, 2008 ezine, which is archived at NataliePace.com in the online magazines section.
by Natalie Pace.
Includes my Hot News on Cool Stocks List.
Track Record of our Reporting
The Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 15 companies listed below have performed well this volatile year, versus just five that went in the opposite direction of the reporting. Even during the flat year of 2007, our featured companies had outstanding performance between Oct. 2006 and June 2007! 4 out of 9 companies – almost half – doubled or more. 48% of the companies featured in my stock newsletter between 2002 and 2005 – 25 out of 52 companies -- DOUBLED from the time we listed them in our feature article to the time when I took the company off of the Hot News on Cool Stocks list, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from volume 4, issue 4, the April 2007 ezine, for a listing of companies.)
3 out of 5 Company of the Year selections more than doubled. My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively. MySpace, my 2006 Company of the Year, has been a large part of News Corp’s success with shareholders. Only OSI Pharmaceuticals, my 2005 Company of the Year, has lost money. So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street. (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)
Additionally, the market performance of the companies that are featured in my Hot News on Cool Stocks list has kept me at the top of over 830 A-list pundits on TipsTraders.com. I’ve repeatedly occupied the #1 position. TipsTraders.com listed me as a Highly Recommended Stock Picker, in 2006 and 2007. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%.
General Stock Market Performance
Gains 2-year 1-year 3 mo.
Dow: +14% -1% -6%
Nasdaq: + 2% -6% -12%
S&P: + 5% -6% -8%
Commentary: Trading Tips for Turbulent Time
We issued a 911 UPDATE ON THE HOT NEWS ON COOL STOCKS LIST on March 11, 2008, the morning after the markets dropped to their lowest point in years. This update is still available online at the Sharing Wisdom bulletin board in the topic of the same name.
As we indicated in the Hot News List this month, there is so much volatility in the marketplace that we may be providing updates to the list between the updates! So, even though most of the news on the individual companies remained the same (outside of the financial sector, which continues to be under extreme pressure daily), on March 11, 2008 the markets dropped to their lowest point since the beginning of 2006. Oil was over $100 per barrel and the financial markets were reeling.
March 2008 was your chance to own companies like Google for prices that haven't been seen for years. Imagine, if you bought Google for $411 on 3.11.08, you were buying at a discount of 45% from the high of $747.
So, read the Hot News updates on any of the companies listed below that you are interested in adding to your portfolio. What this note is intended to do is to alert you to the prices that these stocks are trading at today, so that you can decide if they should jump into your Stock Shopping Cart or stay on your Stock Shopping List. Remember that in your long term portfolio, you’re looking for a multi-year low price, so that you can hang onto the company for years to come (at an ever-increasing profit). In your short term trading portfolio (which should be a very small percent of your investment portfolio), it is important to take profits early and often when the markets are swinging 200 points in opposite directions day to day.
Some of the companies listed on the Hot News list are more appropriate to add to your long term portfolio, and others are more appropriate for you if you’re interested in short term trading. How can you tell the difference? If the company has a market capitalization that is under $1 billion then it is a "small cap" company with a higher risk of volatility in the share price.
In a market that swings as wildly as this market has in the past few months, that means that the share price is having dramatic fluctuations (something options traders love). If you don’t want the stomach ache or to monitor the position daily, and if you aren’t prepared to take your profits early and often, it’s best to avoid individual small cap companies. On the other hand, when you see companies that are valued at over $50 billion trading at multi-year lows, like Google, Johnson & Johnson and General Electric were in the first part of March, that might be a good time to add them to your long term portfolio. The markets can shake the price around, but over the long term – many years -- if you can buy for a 40-50% discount, that should pay off.
Note that the general market trends continue to be down-trending with very high volatility.
So, why did I think that share prices might go up again, when March 10th felt so awful? Because the Feds were expected to come riding to the rescue again with another dramatic rate slash. According to a report from Reuters on March 11, 2008, Goldman Sachs analysts were expecting the Fed Fund rate to fall to two by April. As you can see, the rate was slashed as they predicted and currently stands at 2 ¼ percent. There has been a very high correlation between these rate slashes and the markets getting stronger again.
Also, please note that some of our top performers are on the Cooling Off list. If you don't know options trading, you should consider coming to my May Retreat. This is where most of the money is being made in today's marketplace -- in puts. And because the downtrend has been so strong and dramatic, you can make quite a lot in a short period of time, even buying into options that don't expire until 2009. Of course, the commitment you MUST make when trading options is to keep the amount limited to a VERY small portion of your stock portfolio and equal to your experience. In other words, if you have never traded options before, do it in a fictitious portfolio for a year before putting your hard-earned cash on the line. And, because the market mood swings are daily, you have to commit to a daily awareness of whether your puts and calls are "in the money."
Options are very high risk and are only for the experienced trader. AND YOU SHOULD NEVER BE TRADING YOUR NEST EGG (not in options or individual stocks). Taking a long term view and letting the magic of compounding and religious investing each month (where you participate in various buy and sell moments) really does work over time. The average gains for the last 25 years were still 12.4% as of January 2008, and that includes 9.11.01, the Asian Crash of 1997, Black Monday 1987...
To learn "Trading Tips for Turbulent Times" and how to "Recession-Proof Your Portfolio," read the articles in the February 1, 2008 ezine, which is archived at NataliePace.com in the online magazines section.
posted by NataliePace.com at
11:03 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home