Sell-Off’s And Rallies

photo by petrick2008
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As we see with the way the stock market performed today, the sell-off kicks back into high gear. Investors are still concerned about the condition of the economy no matter who won the election.
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The rally that took place over the last week in alternative energy was erased today with the sell off. First Solar Inc. (NASDAQ:FSLR) which was up $70 in the past week gave back $24 (-13%) in today’s trading.
The rest of the sector did just as bad with Suntech Power Holdings (NYSE: STP) taking the biggest hit of almost 21%. Suntech was trading last week at $11 and gained almost 90% before today’s beat-down. The one stock in the sector that escaped the abuse of today was Biofuel Energy Corp (NASDAQ:BIOF) which gained just over 28%, take in mind though that this stock is a penny stock and gains like that are quite common.
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In the financial area of the stock market, the sector was another wash-out with nearly if not all of the stocks lost ground. Out of the ones that I really keep an eye on, the best performers still lost over 5%.
Federal Agricultural Mortgage Corp. (NYSE:AGM), a stock that I’ve talked about before here on this blog took the biggest hit, losing over 25%. Last week the stock traded as low as $2.85 (where I picked up 200 shares) and yesterday hit an intraday high of $8.40, a gain of almost 200% in just a few days.
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I’ve been saying it for some time now, but you need to be ready for when the stock market will turn (good or bad). If I didn’t sell out of AGM when I did, I would have lost some great gains. Don’t get me wrong, I did keep some shares (since I’m now trading with their money). When you get big gains like the one I just spoke about, you need to remember not to be greedy and SELL.
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*DISCLAIMER* At the time of this post Billy is long AGM and has no position in FSLR, BIOF and STP

Tags: Alternative energy, Buying penny stocks, Financials, Getting Started In The Stock Market, How to make fast money, Investments, NASDAQ, NYSE, Stock investments, Stock market for beginners, Stock trading

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The Sign Of Things To Come

Now that the election is over we can get back to what is really important, getting the economy back on track. From the looks of things that went on in the first half hour, it doesn’t look like the markets took the news very well.
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As it turned out in California yesterday, the clean energy bill didn’t get the support it needed to get passed. Which in my eyes doesn’t look too good since California is usually the leading state when it comes to clean and green type technologies for their environment. The alternative energy sector is getting driven downward in the morning trading hours. As I stated yesterday in my post, It does look good for wind, solar, and other alternative/renewable energies with Obama winning the Presidency, but for right now the sector is taking a little dip. This just be the time to get into the stocks of you choice in this sector. Buy your positions in increments and on the dips.
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As for nuclear power, McCain was for it, but at the moment Obama stated that he would have alot to look at in regards to nuclear power being used in the U.S.
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What does the future for the financial sector? It’s believe that stability will be brought back to the financial industry, but remember that could be just a false sense of security. It was announced today that the Federal Reserve has appointed a new risk manager and if their choice doesn’t put a little worry in your head, then I don’t know what would. Their choice is Michael Alix, the former chief risk officer from Bear Stearns, that’s right the man who made the decision to have Bear Stearns take on all that risk that eventually destroyed them. The only thing that I could think of is that they hired him to tell them what not to do.
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Hnag in there and take profits where you can. Happy trading.

Tags: Alternative energy, Economy, Federal Reserve, Financials, Investments, Stock Market, Stock market news

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What Will Happen To The Investor Class?

photo by joe shlabotnik

In this election year we have heard a lot about what will happen to the American people more than I can remember since I’ve been voting (which covers over 25 years). One of the major things being spoken about is taxes and yes it’s a topic that is discussed every election, but with the condition of the economy, it’s more important than ever.
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I’ve mentioned in an earlier post that I’m a Libertarian (a party that doesn’t get the recognition it deserves). I believe that our federal government has gotten too big, it spends way too much money than it should. The one true way to reduce taxes is to reduce spending.
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The reason why I bring this to light on a blog that deal solely with the stock market is that this year we could have our investments effected in ways that will hit us on many levels. If some of these ideas come to pass we may have more money pull put of the markets that will continue to cause the markets to fall.
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Take into consideration that if any one political party was to control the Presidency, the Senate as well as Congress, they would be able to mold the laws and pass bills that could take decades to change. At the present time the Democratic party controls the Senate and Congress. With the way Congress has been sitting on their a$$ for the last two years from all the filibustering that causes the delays in decision making, we can’t afford to let most of the candidates go back to Congress to serve this country again.
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Please be aware of the politicians that were involved with the issues that help cause the collapse of the housing market as well as the credit crisis. These candidates will most likely continue to do more of the same if they were to get re-elected.
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As for the Presidency, below is a link to help you think of a few other things that will be effected if the wrong person is voted in office. Remember Wall Street and Main Street are one and the same. Where does average Joe have his 401K plan? On Wall Street, that’s where we all have them.

Target the Investor Class in 2009

Tags: Economy, Financials, Foreclosure, Government spending, Investments, Security Exchange Commission, The Dollar, Treasury Dept.

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Not Another Manic Monday

What a day in the stock market. the day started with the big three markets in the green and continued that way throughout the entire trading period. I did expect the day to go quite different on the fact that Ben Bernanke and Hank Paulson were due to speak during the trading day. When that usually happens lately, the markets don’t react in a positive way. It was mentioned over the weekend that there will be continued international support for the financial system, with focus being on the effort to loosen the credit lending.
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The basic material sector had a great day today. It assumed that the sector was oversold over the past week and took back some of those loses. The entire sector started in positive territory and continued to tick upward.
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Oil also had a good day by moving up just over $4 during the day. It’s being said that the bottom is starting to show with this commodity. OPEC is expected to cut production after their meeting in a couple of days. As a matter of fact the latest news is now that they might not cut production since they need make up for the revenue from the drop in prices.National Oilwell Vargo Inc. Had a great day with a 24% gain. A stock that was beaten up for last few months after hitting a high of $92.70 back in July of this year and now after today’s gain is at $31.80 in after market trading.
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Early in the day Ben Bernanke spoke with Congress today on the condition of the economy. He did say that he sees the economy to be weak during the next couple of quarters. He also took the time to inform Congress that a second stimulus check is something that should be considered to help the economy. I do have to say that when Bernanke speaks (in english) I still need a translator to figure what he’s really saying to us average Joes.
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The markets looked quite strong today and continues to look that way through after market trading, but be aware that we are not out of the woods yet. Take you time and do your due diligence with any company that you want to jump into.

Tags: Commodities, Federal Reserve, Financials, Stock market news, Stock trading, Treasury Dept.

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Injection For The Financial Sector

Last night we were given a peek into what Hank Paulson and the Treasury Department have in their magic hat for the next stage of saving the financial sector. An injection of $250 billion to be distributed to U.S. banks.
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We are being shown that the government is standing by what they said in regards to supporting and saving the financial sector. The official announcement is to be given at 8:00am on Tuesday by Mr. Paulson, he outlined the plan Monday afternoon to nine of the country’s leading banking institutions. It didn’t seem that this plan is a voluntary one. Paulson’s advice is that they would have to accept the government investment.
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The banks that were involved and told how much of an injection they will receive. The breakdown is as follows: JP Morgan and Citigroup will receive $25 billion each, Wells Fargo and Bank of America each will get $20 billion (as well as another $5 billion for each of their acquisitions), Goldman Sachs and Morgan Stanley receive $10 billion each along with Bank of New York Mellon and State Street will receive $2 to $3 billion.
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There’s a lot more to the plan than I care to get into here and since I’m posting this just after midnight Monday night, there’s still quite a bit that is unclear at this time. The one thing I can say at this moment about the news, is that there will be another up day for the stock market, especially the financial sector. Which of course makes me a happy camper since I bought Morgan Stanley Friday afternoon after it fell below $10.
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Don’t get me wrong, I do expect the markets to go back down in due time, but there is positive news that will help the markets for the next day or so. At this time in this economic crisis, I will take advantage of any opportunity I can get my hands on. The name of this blog isn’t called beating the stock market for nothing and I will do it one stock at a time.

Tags: Economy, Federal Reserve, Financials, Getting Started In The Stock Market, Government spending, How to make fast money, Stock investments, Stock market for beginners, Stock market news, Treasury Dept.

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Hedge Funds In Trouble

It’s been rough for hedge funds in the first three quarters of this year. After the average hedge fund lost close to 5% in the first eight months and then to lose another 7% for the month of September alone (according to hedge fund research), It become deadly for many of them in the first week of October.
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At the end of last month, many funds were expecting more than the usual level of requests from their clients/investors to pull cash out. which makes it hard to work on their longer-term trades when they stand the chance of losing capitol to do so. In turn hurting other investors in the fund. The number one reason hedge fund managers have guidelines in getting withdrawals.
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Unless you’ve been living under a rock, you’ve now heard in the last week that many of these hedge funds are in emergency status trying to raise capitol for their clients that want to pull out their money. In the process they’re running in the negative zone. To make matters worse, hedge funds bolster their returns with lots of borrowed money, which makes it harder for them to do what they do best.
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These firms make up a good percentage of why we’ve seen the decline in prices in the last few days. As a matter of fact, if you were watching Quantas Services Inc. (NYSE:PWR) on Tuesday, you would have seen a spike sell volume of almost 4 million shares in a one minute time frame. It’s believed that that trade was a hedge fund liquidating assets.
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Some funds are also trapped in the Lehman Brothers London Unit, which is now a thing of the past. The volatility in the markets has been accelerated by the failures in the financial sector like Lehman Brothers, AIG and Wachovia bank. Let’s not forget to debacle that went on in Congress recently.
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It’s getting harder for hedge funds to make positive gains. Yes, there are some that have had some good returns this year, but they’re getting few and far between. Most of them are down and could start seeing the writing on the wall of their impending doom. With all that is going on in the industry, there will be less firms out there. Of course the big dogs will survive to fight again, but how much capitol will they be able to raise to invest with is another question.

Tags: Economy, Financials, Getting Started In The Stock Market, Hedge Funds, NYSE, Stock market for beginners, Stock trading

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Federal Agricultural Mortgage Corp. (NYSE:AGM)

photo by Bob Jagendorf
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I don’t know about you, but I didn’t see this coming. Federal Agricultural Mortgage Corp. (NYSE:AGM), the mortgage lender for farmers rolled out last week like one of those storms that you don’t get a chance to run for cover.
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On Monday the stock opened at $3.10 after taking a plunge into the abyss only to come back and hit the high of the week on Friday 1:05pm of $10.87. If you do the math, that is a gain of 350% in just 5 days. If you were lucky to catch it Monday afternoon at $2.61, you would actually be up 415% for the week.Those are the type of penny stocks that we dream of finding, unfortunately I missed the boat. I noticed the company on Wednesday afternoon after it jumped up 30% during the trading day.
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I didn’t take the time to research it since knew that it was a financial play as well as a agricultural one too. I thought that since the stock was trading in the $29 range in the middle of September, I missed the quick ride back up on the fact that it was oversold and with the “Invest In America” bill issue going on I didn’t want to take the chance.
On Wednesday it was trading in the low $6 range. If I jumped in at that point, I would have still made a cool 75% for two days of holding the stock.
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The reason I bring this stock to light is the fact that this turmoil in the stock market is something that the average Joe needs to steer clear of or you could be betting the farm on something you didn’t have time to research and do your due diligence on. Yes, we all want to hit it big on a penny stock or a established one like AGM, but it’s not worth it when you haven’t done your homework. The Stock closed for the week at $8.21 and in after market trading it went back up to $9.95, so who knows what to expect, especially in these trying times.

*DISCLAIMER* By the end of the day on Friday, I did buy a position in AGM. I presently own 100 shares.
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P.S. Want to learn more about the stock market? take a free two week trail with Jim Cramer from TheStreet.com

Tags: Diversified, Financials, Investments, Stock trading

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Worst Week In Stock Market History

Unless you’ve been living in a cave for the last week you know that the economy is in deep trouble and it looks like no matter what anyone does, it’s not going to do any better. This has been the worst week in stock market history. The DOW drops over 6% in this week alone, as the NASDAQ falls 9% and look what happened to the S&P 500, it dives 9.4%.
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The week started off bad on Monday (it was the worse of them all) by dropping 777 point on the DOW. Congress couldn’t leave their feeling at home that they went ahead and voted against the “invest In America bill (mostly because Nancy Pelosi can’t shut up) that would have help the American people and gave a little confidence to Wall Street. We heard all week from the politicians that Wall Street and Main Street are two different groups of people. Let’s see how different they are when the residents of Main Street get their 401K statements by November 3rd and realize that their portfolio has shrunk quite a bit in this quarter (which ended September 30th).
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We listened as Citigroup bids and signs the papers to acquire Wachovia, only to see Well Fargo came in with a better offer. Now Citigroup has filed a lawsuit against wachovia because of this issue. All the while the rest of the financial sector takes a slow ride downward all week long. To add insult to injury, when the bill was finally sign by Congress today, Wall Street, with it’s good solid gains for the day, took it all back and then some. For what reason, I don’t know. I guess Wall street lost that confidence they had while waiting so long for Congress to come back to the table.
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So what’s to come next week for the markets? More of the same, I would guess since it’s so evident that we are in a recession/depression period, the smart money is going to start moving their money into more stable vehicles (bonds and such). I myself think that’s a pretty good idea at this time. If you have capitol tied up in stocks, you may want to take good hard look them and see which ones are one that you shouldn’t have during a recession. I’ve read a lot of articles that say that the way to go right now is consumer staples (McDonald’s, Pepsi, Johnson & Johnson etc.). If you own any, hold on to them. If you’re in a stock that is sensitive to the price of commodities, then it might be time for you to sell into any rally you get. Remember, the old saying… “cash is king”. But then again, who knows what’s going to happen to the almighty “greenback”.

Tags: Diversified, Economy, Financials, Stock market for beginners, Stock market news, The Dollar

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The Credit And Housing Crisis Downfall

The stock market has taken a beaten for the month of September (as well as the last twelve months) and I do expect more of the same as the rest of the year. The main reason for it is the credit and housing crisis issues that have plagued us for some time now. I spoke about it before on this site and have voiced my opinion on it.
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I don’t know where many of my readers stand on many issues, but I’m pretty sure that most would agree that this issue came about from the greedy people in the business as well as irresponsible borrowers. Some people out there feel that this issue started in the last few years and the powers-that-be are to blame.
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What people need to do is to go and get the information for themselves because “knowledge is power”. Someone may be able to take your car or your money, but they can’t take away what you learned. Once you learn something, no one can take it from you. This is why I’m putting up this video for my readers. We as investors and traders should know the history that brought us to this problem, so we can reconize the pattern for the future.
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This video is meant to be politically related, but it deals with the history of the credit and housing crisis. (I will tell you that I’m a Libertarian, I don’t agree completely with either the Democrats or the Republicans. I’m an American that believes in a smaller government, and less government involvement in my life). For that reason you need to watch it. If there’s anything that you dispute or disagree with being truthful, then do as the video says and Google any of the information that’s in this video. The video is almost eleven minutes long, but very informative.
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Please feel free to voice your opinion on this video or if you want to vent, be my guest.
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P.S. Want to learn more about the stock market? take a free two week trail with Jim Cramer from TheStreet.com

Tags: Federal Reserve, Financials, Government spending, Investment property, Security Exchange Commission, Treasury Dept.

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De-Leveraging The Stock Market

Tonight the Senate will have their turn to vote on the “invest In America” bill. Of course it’s a little different then the one that was voted on by Congress Monday. How is it different? I don’t know. The politicians need to vote on this issue, one way or another. With further investigation into this mess caused by over extended credit, I don’t know if it’s really wise to vote for the bill, but I will say that if they vote on it, it would be no one’s fault but our own for letting the country get out of control. It’s about time that this country de-leveraged all that has been extended.
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The world can’t run without credit, but with everyone wanting to live the American dream of wanting their own home and drive nice cars, we lost sight of what’s really important. If you want to have nice things and live in a house that you own, you need to have the money to it. It’s not right that the people who have been responsible in their financial decisions and paid their bills should have to save the companies that took advantage of the system or even help the people who tried to live outside their means.
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In the 1990′s the politicians sold the American people on the idea that it’s possible to get that dream. Then Congress (actually it was the Democrats) refused to put regulations in place to protect the economy from the problems we’re facing now. Add on top the people who didn’t have the financial intelligence to read the paperwork that they were signing nor did they care.
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Now we’re at the point that we need to de-leverage the economy and pull back the reins on how business is done. The stock market is no different. The companies have done the same thing and as investor and traders we need to accept the fact that this will be done with or without the bailout plan. I hope that it won’t hit us as hard as they make it seem or as long that they predict.
We as a country have always come back and become stronger in the past and this won’t be any different.

Tags: corruption, Financials, Government spending, Stock market news, Stock trading

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