Monday, December 14

Buy Stocks But Avoid Banks

Online Stock Trading - Buy Stocks says Ken Fisher, They are Cheap, But Avoid the Big Banks

Since March of this year the stockmarkets have basically only gone one way - up, so you may be thinking that this is not the time to buy stocks. The low in March on the DOW was around 6600 and famously on the S&P 666, as of this moment the DOW is at 10,500 and the S&P is at 1111, that is a big leap in just 9 months. Personally I have been putting buying stocks off for well over a year, expecting the stock markets to crash back down to the March lows for months now, and I was not alone - see - online stock trading and stock trading for beginners. But I have been wrong, which is probably why I would be well-advised to leave the stock picking to others.

There are plenty of stock market experts and analysts however, who say that even after the sharp rise since March stocks are still cheap ! Ken Fisher, who writes for Forbes, is one such person. He has been working in the industry for 37 years and one of the things he argues is that generally "the bigger and scarier bear markets have been, the bigger the floodgates have opened toward the view that the new problems are just too big and bad to overcome". But he says this is all nonsense!

Globally, stocks are very cheap he says, and they are also cheap when compared with bonds. Ken Fisher's advice is to be bullish but avoid the biggest U.S. banks, instead you should be looking at materials, industrials and technology. More importantly, invest overseas (i.e. outside the U.S. stockmarkets), where opportunities are the best.

The companies he recommends you take a look at are:-

AustralianAlumina Ltd. (AWC) one of the lowest-cost producers of aluminum ore and alumina in the world, via its 40% stake in Alcoa World Alumina & Chemicals. China keeps on adding capacity for bauxite and alumina, so Alumina will become even lower cost than it already is.

Braskem (BAK) which he recommended at 4.5 in his Apr. 27 column. Brazil's leading petrochemical firm. It sells at only 40% of annual revenue. One day he expects it to sell for three times that on higher revenue.

China's Semiconductor Manufacturing International (SMI), their largest silicon-wafer fabricator. It only has $1 bn in annual sales but this should grow quickly. It's losing money but the balance sheet is strong and sells at just 60% of book value and 1.2 times sales.

Emcor Group (EME) - involved in industrial construction and services such as electrical installation and air-conditioning and heating for commercial, government and industrial clients (in ther U.S.). It is selling at 13 times forecast for depressed 2009 earnings and 30% of annual revenue, which means you will be paying maybe 4 times 2011 earnings.

It has to be pointed out that the DOW is at a critical juncture at 10,500 and needs to get above this level and stay above it, as otherwise we would still be in a long-term bear market and a move back down in the stock markets is still not out of the question.

I personally am still not convinced the stockmarket is out of the woods but if the DOW gets above 10,500 and stays there then maybe I will finally join the bullish camp, by which time of course it will be too late and the markets will really crash! [UPDATE : The DOW did get above 10,500 but it didn't stay there very long and is now at 10,067 - Feb. 1 - so I'm still not convinced by this rally!]

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Sunday, December 13

Tiger Woods Dumped by Sponsor

Stocks and Shares - Accenture Dump Tiger Woods

Tiger Woods GolfAccenture has announced it has dropped Tiger Woods after the recent revelations concerning his personal life.

Accenture stated that "given the circumstances of the last two weeks ... the company has determined that he is no longer the right representative for its advertising." Despite the fact that he is still really good at hitting a ball around a field with a stick ! Are they nuts ?

Tiger Woods sponsorship arrangement with Accenture had been in place for six years.

Gillette also said on Saturday that it was "limiting" Woods' role in its marketing programs to give him the privacy to work on family relationships.

Woods himself has said that he is taking an "indefinite break" from professional golf.

Tiger Woods is said to have made a billion dollars from golf and sponsorship deals, which to my mind is just one more proof that the world is mad. Paying people millions to knock a ball round the field with a stick is totally crazy when there are people without jobs or people working very hard 50 and 60 hour weeks for very little pay, yet Tiger Woods and many others can become multi-millionaires for keeping people 'amused' and indirectly getting them to buy stuff.

Tiger Woods is described as a 'golf phenomenon' i.e. he is the best the world has ever seen at walking round a field with a stick and hitting a ball in a straight line, truly extraordinary gifts. Why don't they just teach these skills at school instead of all that useless guff about English, Maths, Science etc... ?

"After much soul searching, I have decided to take an indefinite break from professional golf. I need to focus my attention on being a better husband, father and person," Woods said. And to think that just a few short weeks ago his hitting a ball with a stick skills were so amazing he was an international hero and model father. Aaaaghh !

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Thursday, December 10

Stocks and Shares Analysis Video

Online Stock Trading - Stock Market Analysis using Candlesticks and a Sealion

The US stock market finished higher again yesterday but unless the DOW gets above 10,500 and stays there then it can be argued that the long-term downtrend is still in place.

Here is an interesting analysis of yesterday's US stock market action by Alan Posner at Sealionllc.com based on their reading of the candlesticks. He mentions that volume has been low since August except for a few interesting spikes and also mentions a doji formation if you don't know what a doji is, basically it's a candlestick that represents indecision - for a more detailed explanation see Doji Candlestick

Alan Posner also mentions something called the Keltner channel - this is "a series of envelopes that envelop price" there is a 5 period channel that is more sensitive and a 20 period that is less sensitive - they show the general direction of price over a period of time - when price crosses from outside the blue period into the period with the trend this is a good indicator - and if you are interested in online stock trading then indicators are always a help ! The second video makes it all clear ! But it is 25 minutes long so interesting but quite long.

Video analysis of stock market action 12 December.





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Saturday, December 5

Buy Stocks Online the Basics

Stocks and Shares - How to Buy Stocks and Shares Online

Buying stocks online is not complicated but there are certain basics to bear in mind. First, there are two types of online broker - Full Service Brokers and Discount Brokers.Wall Street DOW Online Stock Trading
If you have plenty of money full-service brokers such as Goldman Sachs will charge in the region of $150 per trade, and provide a whole range of services, the problem is their compensation depends on how often you trade, so unscrupulous brokers can encourage you to trade more often than you need to. They will also require you to have a lot of money to start with.

Discount Brokers on the other hand are cheap and cheerful, they take your order (usually online) and execute it more or less instantaneously. If you have never bought stocks or shares online before they make it very easy for you to get started and their systems are generally straightforward. They will charge a commission per order which is generally either low or very low i.e. between $2 and $15. So you log on type in the name or ticker symbol of the stocks you want to buy online and after you see the quote click on buy if you like what you see or cancel if you don't like what you see. And that's all there is to it. You buy your stocks online, hold on to them until the price rises and then sell them and you have made a profit online stock trading ! Easy peasy. Unfortunately you will find that buying and selling stocks online is easy, actually making money from online stock trading is a bit more complicated !

Commissions are low because discount online brokers offer no advice, although they do give you lots of information such as real-time quotes, charts, news etc...

There are plenty of online brokers that will show you how to buy stocks online, so which should you choose? Here is a list of some of the best online brokers.
  • TradeKing charges $4.95 per trade regardless of your account balance. They have won a whole load of awards - and have the top rank of 4 stars **** in Barron’s Survey for "Best Browser-Based Online Brokers".
  • Zecco - you get 10 free trades each month if you have $25,000 in your account or if you make 25 trades month, otherwise trades are $4.50 per transaction + 50c a contract.
  • E*Trade charges between $7.99 and $12.99 per trade depending on the number of trades per quarter, there are also inactivity fees of $40 per quarter. They do however offer some advice. They were chosen as number 1 online broker Smart Money for 2007 and 2008.
  • Firstrade costs $6.95 a stock trade and they get less fines from regulators for customer complaints !
  • OptionsHouse is just $2.95 a stock trade. They also have a system that lets you practice virtual trading and a range of Webinars.
  • tradeMONSTER is a newer online broker, they launched in 2008, but they have already won several awards. Price is $7.50 a trade. Their user interface allows you to customize it to your specific tastes. They have no additional charges or trading minimums, and offer streaming information so you don't need to continually refresh the page to get real-time prices.
TDWaterhouse also do a form of something that they refer to as online stock trading, but in my experience their service is very poor and best avoided, just my opinion of course, based on experience, but if you really want to buy stocks online you are better off using a more reliable broker. You would think that after being fined $225,000 back in 2001 by the New York Stock Exchange for online trading problems see - TDWaterhouse Fined - that their service would have improved, well, it's a free country so you are allowed to think what you like, but that doesn't make it right.
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Thursday, December 3

Google Planning UK Property Site

Online Stock Trading - Google to Launch UK Property Site

Real estate or property in the UK is very much seen as an investment and property prices are a national obsession, much more so in fact thatn the stockmarket and investing in stocks and shares, which is quite a minority activity. You must bear in mind that UK houses are the smallest in Europe (the largest are in Denmark) and yet we Google logohave amongst the highest property prices. Average wages are around £20,000 a year yet an average house costs around £350,000 in London so the property market is a right mess, yet people love it and property prices are starting to rise again allegedly. Plus of course banks don't like giving mortgages anymore as they prefer to keep all that money we have given them to pay themselves bonuses. Still what's all this got to do with Google and their impending foray into the UK property market ? Nothing.

According to reports in the UK press, Google is to launch an online property site in early 2010. At the moment in the UK 90% of properties for sale are listed with property portal Rightmove.co.uk, this has been bad news for newspapers of course as they saw their property ads shrink by around 60% last year. It now appears that Rightmove might have to suffer the same fate is the newspapers.

Rightmove currently charges estate agents on average £325 ($500) a month to list properties, the Google service will apparently be free, to start with at least.

Estate agents said they will welcome the site (hardly surprising really if they can advertise their properties for free).

For consumers,it sounds like a great idea, but maybe we should all spare a thought for Rightmove - hmmmm. Maybe estate agents will reduce their fees ! Maybe bankers will refuse to accept their unearned bonuses and hand all the money over to the worst off of their customers/tax payers owners that they like to lecture about good financing ? Or maybe they will buy a few houses with their millions and give them away to the homeless !(It's late and I'm delirious.)

Google's site will allow you to type in the area and a map will appear with balloons above listed properties.

Gogole already has an Australian property site so it must know what it's doing, but so far the Australian property market hasn't suffered overly.

Google has said : “We will not comment.”
What would be nice would be a mortgage site that offers 0% mortgages a bit like 0% credit cards that you can shift every 9 months !
Google has just published its earnings for 2009 - they were stronger than expected - Google earnings

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