Beating The Stock Market » Getting Started In The Stock Market

Stock Market Volatility

billy — Wed, 05 May 2010 02:29:16 +0000

Stock market volatility fluctuates all the time, some days more than others. Volatility in the markets grow as the gains increase along with those times when uncertainty rises.

Since the markets have risen as high as they did and the condition of the economy is still on shaky ground, I’m not surprised to see that the VIX (volatility index) jumped 20% in just one day. What does surprise me is the fact that it took so long for it to happen.

In the last fourteen months, the Dow Industrial Average (DJIA) has increased by nearly 80% and over 10% in the last three months. I’ve been saying for quite some time now about the fact that the DOW sitting at over 10,000 points has no real reason to be there. Of course many investors are still riding the wave as long as they can. Unfortunately many of them won’t see it coming when the markets take the next plunge.

Unemployment is at 12% (officially), but it is estimated to be at 17% since most people who were receiving unemployment benefits last year are no longer eligible. Many companies are holding off on hiring until they get a good look at the new tax laws that the present Administration has passed. Add on the fact that the foreclosures in the United States are not shrinking, instead they are holding steady in most areas.

The VIX is one of the indicators that should be watched on a regular basis as part of your stock market strategies. As the uncertainty in the markets rises, the VIX will climb. Many average investors lose money in the stock market as this happens because the price per share of most companies will rise and fall with large swings. If you are a veteran in trading stocks, most likely you’ve learned to read the VIX and play it accordingly.

For those who are not familiar with VIX, there are a few stock market books that will help you understand much better. In many of Jim Cramer books, you will find information about the volatility in the stock market and how to play it.

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Economic Recovery?

joanne — Thu, 15 Apr 2010 12:00:54 +0000

The Federal Reserve Chairman Ben Bernanke stated today that the economic recovery is sustainable. Along with the news of retail sales are up in the last month, one would think that this is the time to get in on the stock market. Well before you do, you need to be aware of a few things first.

The stock market (Dow Jones Industrial Average) has reached a new twelve month high after climbing 12% over the last two months and over 40 % year-to-date. Those are some great impressive gains, but does that mean that the markets will continue on this upward path? Well that’s anyone’s guess.

The last time the Dow was at these levels along with the S&P sitting at 1200, was in September of 2008. You have to ask yourself, “What was the condition of the economy in September 2008?” I did some research into this issue and found that this might not be the time to invest in the stock market.

In Sept., 2008, unemployment was at 6.2%. The foreclosure rate hasn’t slowed down. It’s estimated that 1 in every 538 homes are in foreclosure as of march 2010. The Federal reserve has printed so much more U.S. currency that it’s not even funny.

My point being that you should be waiting for a healthy pull back (8%-10%) before investing any capital.
You also have to look into the future of the economy too. Economics believe that the unemployment rate will still be at 8.4% at the end of 2011. Home prices will remain at near flat levels for the next two years. They also expect the economy to only grow 3% in 2010.

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Free Trial: Cramer’s Real Money Program

billy — Wed, 16 Sep 2009 16:23:03 +0000

The Host of Mad Money, Jim Cramer has been helping the average person learn about the stock market for a long time. He’s written several books on investing, as well as being the Chairman on TheStreet.com. I for one have made quite a bit of money listening to Jim Cramer.

One of the ways you can follow Jim and and the rest of the the staff is at RealMoney.com. You’ll find sound, unbiased advice you can count on.
No middle man, no B.S., no delays – just a direct line to people as they share their investment strategies, stock picks and market views, all in real time. They do have a basic no fee section of the website, but if you want to know the meat-and-potato off what’s going on on Wall Street, then this is the service you want.

I’ve been a member of The Street.com’s RealMoney program for a while and I’m not disappointed. Here’s an opportunity to try out RealMoney.com for a 14 day free trial. Click below to check it out.

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Stock Market Update

billy — Tue, 08 Sep 2009 20:29:36 +0000

The first day of trading after the labor day weekend has been very interesting. The three indicies finshed the day higher, Dow up 56 points while the S&P 500 closed at 1025.39 and the NASDAQ did the best of the three closing at 2037.77 (up 0.94%).

That wasn’t even the most worthy news of the day, that honor goes to the price of gold, which went above $1000 for the first time in quite some time. The U.S. Dollar lost value today and with that going on, the Commodity sector gained throughout the day.

This week will be a very telling sign of things to come in the near and distance future. Just to be on the safe side, I will be treading very carefully through it all. For those of you that want to try out a different trading technique but are afraid to do it in such trying times, here is a free fantasy stock market game that you can find out if those ideas will pan out.
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What can you lose? It’s FREE.

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Solar Power Stocks Take A Beaten

billy — Tue, 25 Aug 2009 15:58:49 +0000

In the last week or so the solar power companies have been getting down graded from several different analysts. The reasons vary from one another, but the message is still the same… stay away from the sector. The alternative energy sector has made some good gains in recent months, but then again almost everything has made gains since the lows of March.
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The leaders in the sector have really taken a turn down from where they were just a few months ago. First Solar Inc. (FSLR:NASDAQ) was as low as $100 in March climbing nearly 100% to it recent high of over $200 in May and has really taken a beaten since then.
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That’s not the only solar companies that has fallen out of flavor with the analysts. Typically when the price of oil starts to rise, the alternative energy sector gets some headwinds because of the fact that it makes cost effective sense to invest in the solar and wind power stocks. The problem here seems to be that the competitiveness of the sector has gotten really tight causing companies to cut back on their own pricing to compete with others in their market. Each of these companies are trying to get a bigger market share and to do so, pricing and profit will be taking a back seat at the moment.
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Here at Beating The Stock Market, I’ve been very positive about the alternative energy sector and have made plenty of money in trading these stocks. When news like this comes out from several different sources, I tend to stay away from the sector. Too much negative views on a sector does not sit well for me and I will wait and see before I jump back on board with solar or wind power stocks.

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Are You Ready To Take Adventage Of The Markets

billy — Wed, 19 Aug 2009 20:36:17 +0000

Typically the months of August and September are the two least to make gains. As people are going on their last minute vacation before the summer is over, the stock markets seem to take a break. The volume is lower than any other time of the year.

As you can see by the last couple of weeks, the markets have seen a stall in gains compared to the other four months. The overall markets are holding to their levels, but quite few good stocks have come down from where they were just a little while ago. I don’t expect them to stay there very long. At the present time, the markets are showing that they are at a good resistance level. I also see that it’s more of a bull than a bear scenario going on.

The correction in the markets seem to be happening on the individual stock levels, so I’m getting ready to go all-in. I see some of the companies that I’ve been recently coming down to levels I consider a good entry point. If the stocks do fall back after I start building a position, that won’t be a problem since I always buy in increments.

So my question to you is… Are you ready to get in (if you’re sitting on the sidelines), or build a bigger position in the companies that you own already? Do your research on those companies now, so when the time is right to get in, you will know which ones will be a great investment. If you are up more than 20% in a stock already, you might want to take profit now and get back in after the pull-back.

If you’re looking for some free advice or trading programs to help improve your trading, please check out the free trial of Jim Cramer’s Action Alert and/or Trading Solutions free trading program.
Due diligence and research is vital to surviving in the markets, so be disciplined in your trading style and remember… Happy Trading.

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Penny Stock Alerts

billy — Mon, 03 Aug 2009 15:56:00 +0000

If you spend any time researching the companies that you are thinking of trading stock in, I’m sure you’ve seen the advertisements, the pop-up windows and the e-mails informing you of different websites that will give you alerts on penny stocks that they believe that will make you some great gains.
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The only problem that I see with that is you really don’t know the person who is running the website. Quite a few of them are actually fund managers that use you to help pump up the price of the stock to help them make more money. Of course I’m not saying that all of them are like that but you need to be aware of you might be dealing with.
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I myself subscribe to many different alerts from websites just to see what is going on. In many cases I watch their picks to see if they are going to be right or wrong. Unfortunately many of the picks don’t really go anywhere after the initial jump. How I see it, many of these website/traders position themselves in a company, start hyping it up that it will do great for their readers/subscribers. As the price goes up they start scaling out their position. Most of the stocks that I’ve been watching over the last two months from these alerts would have lost me thousands of dollars. Don’t get me wrong, I would have made money on some of the picks, but not as much as I would have lost.
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The latest stock that I’ve seen being pushed is Biocentric Energy Holdings (OTC:BEHL.PK). I saw this being pushed by several different websites. I figured that this too would be another pump-and-dump fiasco as I’ve seen before. The stock price was $0.023 per share when I first received the alert, after three positive days where it went to $0.07 I was waiting for the price to fall. To my surprise, it still hasn’t started to lose momentum. As of this morning, the price per share was to to $0.14, a gain of over 500% in just a week or so.
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I’ve talked about it before and said that buying penny stocks can be very rewarding, but at the same time you can lose a ton of money. Be careful when you trade penny stocks, even more so than you would with bigger cap companies.

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Agnico Eagle Mines Ltd (NYSE:AEM)

billy — Thu, 30 Jul 2009 19:31:48 +0000

Agnico Eagle Mines Ltd is up and running again today after they reported their second quarter earnings report. I’ve spoken about them in the past in regards to having a position and using a technique referred to as channel trading..
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Well so much for that idea now that the company has posted some good results and given some (in my opinion) great guidance. It will be some time before I’ll know what their new trading range will be. On top of all the news that AEM released, there have also been several analysts that raised the target price for Agnico Eagle.
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Yesterday when I saw the price dropping I put in a limit buy order at $52 per share. Unfortunately the low of the day was $52.17. I figured that I’ll just get the shares today at even a lower price, but when I was watching Mad Money with Jim Cramer, he had the CEO of Agnico Eagle on to discuss the report. I knew at that point the shares would go up in the pre-market and continue to do so throughout the day. So I had to put in a limit buy in for 54.00 (hoping that it would be a good bid) before the market opened and was lucky that it did trigger. I think we’ll see some great thing from this company in the next few quarters and I expect to make some great gains with this stock.
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Their two newest mines, Kittila and Lapa have achieved commercial production as well as their other mine Meadowbank and will be operational in the first quarter of 2010. If you haven’t jumped into Agnico Eagle Mines Ltd., do your research and maybe this can be a winner for you and your portfolio.
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Second quarter 2009 highlights include:
- Record Production – record gold production of 119,053 ounces. First gold poured at Pinos Altos in July
- Good Cost Performance – LaRonde, Goldex and Lapa achieve good
minesite cost performance
- Commercial Production At Lapa And Kittila – commercial production
achieved as of May 1 at both mines
- Remaining Two New Gold Mines On Schedule – Pinos Altos and Meadowbank remain on schedule for initial production in third quarter 2009 and first quarter 2010, respectively
- Growth profile bolstered – expected after-tax internal rate of return (“IRR”) of 76% at Goldex expansion and 17% at Pinos Altos expansion at Creston Mascota
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Happy trading.

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Great Gains So Far For This Week

billy — Thu, 16 Jul 2009 20:12:28 +0000

I’ve been busy this week with many things, so keeping an eye on the stock market hasn’t been easy for me. Well this afternoon I’ve had the time to see the progress for the past few days and I’m amazed at the gains that have been made this week by the major indicies.
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I told you in a recent post that I jumped out of basically everything until the markets correct themselves again. We’ve had too much of a run up and I’m skeptical. Looking back on the past few days that I missed, I noticed that there were good opportunities to make money on stocks that I sold and they went on a roller coaster ride afterward.
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The one I want to talk about is Agnico-Eagle Mines Ltd. (NYSE:AEM), a stock that was as high as $62 only five weeks ago. I made the right choice to sell off my position. After it corrected by 10% I bought a small position back. I let it just sit there not bothering to pick up more as it continued to drop. Unknown to me, I wasn’t paying attention to what the stock did this week as it dropped down to below $47.50. If I was aware of the situation, I would have back the truck up so fast to grab shares at that price. That was Monday morning and now the price per share is $55 (as of 3:45pm). A 16% gain in just three trading days.
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In all the times that I’ve traded AEM, I’ve always made money. This would have been great to profit from, but I’m not going to drive myself crazy because I didn’t get into this play. There will always be more opportunities to make money, but if you want to stay sane while trading stocks, you can’t sit there and think of the “what if’s”.
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Agnico Eagle has been trading within a range of $45 to $60 (which is a nice swing gap) this entire calendar year. When the price drops below $50 I buy quite a bit, as it goes above $55 I prepare to sell. This week was a good opportunity to do exactly that and I’m OK with the fact that I missed it.
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Try to keep that in mind as you go through your portfolio.

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Research In Motion (NASDAQ:RIMM)

billy — Fri, 19 Jun 2009 13:30:45 +0000

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Yesterday I spoke about building a position in Research In Motion (NASDAQ:RIMM). My first buy-in was at $76.25 when the price dropped. Share price opened this morning at $77.86 and within the first five minutes of trading, it was up to $78.40. Unfortunately that was as high as it would go. Minutes later it fell to $76.13, where it would continue to bounce within that range.
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Research In Motion was scheduled to release their first quarter earnings report after the closing bell today. I was looking for some more upward motion from other traders getting on board in expectation of RIMM beating the street.
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Shortly after the bell, RIMM released their report. RIMM earned $1.12 per share for the first quarter on revenue of $3.42 billion, compared with $482.5 million or 84 cents on revenue of $2.24 billion a year earlier. Included in the results were non-recurring items. $96.4 million relating to certain employee tax liabilities along with a gain of 175.1 million primarily as a result of the enactment of functional currency tax rules. While the analysts were only expecting $0.94 on revenue of $3.43 billion, RIMM earned $0.98 per share.
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What I didn’t expect was after the company beating expectation by $0.04, the stock dropped more than 6% in after market trading. By the time after hour trading was done, the stock moved back up to $76.06, just off by 0.5% from where it closed at 4:00pm today.
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One thing that I wish I was able to do was to buy more shares when it fell to $73 shortly after the release. In April, Rimm beat expectation by 7% and since then the stock price has moved up 55%. Today they beat it by more than 4% and it moved no where today. Many investors and traders were looking for more and the knee-jerk reaction was to sell. The more they were looking for was in RIMM’s second quarter guidance. RIMM”S range for earning in the next quarter is $0.94 to $1.03 per share on revenue of $3.45-$3.70 billion. The mean analyst estimate is for 97 cents on revenue of $3.61 billion. After the conference call, I guess people realized it wasn’t as bad as it originally sounded.
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With the information I have on this company, I believe that RIMM is still fundamentlly sound and will continue to grow. I will continue to buy into RIMM under $80, after that I will sit back and watch the gains from this great company with a fantastic product. The BlackBerry is a great smartphone with many different applications to do the things you want to do. As a matter of fact RIMM just released their latest BlackBerry model, the Tour, earlier this week.
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Jim Cramer doesn’t call this company one of the four horseman of the tech sector for nothing.

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