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Stock Market Research Could Pay Off In The Coming ...

It’s only a couple of days before President Bush leaves office and Barack Obama takes over. Typically the stock market have improve to some extent when the new President takes charge, but what are we to expect when it’s Obama’s turn? If you follow this blog on a regular basis, you’d know that doing some stock market research will help you prepare for what’s to come in the next month.
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Obama has been working on his stimulus plan for when he takes office. He’s spoken about the infrastructure needs to stimulate the economy. When a politician talks about infrastructure, he basically is referring to roads, public transportation and things of that nature. It seems that Obama’s plan is more in line to boost the green energy sector to help remove our dependency of foreign oil and to reduse green house gases.
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If that’s the case, then we need to focus on some stocks that could benefit from that type of stimulus plan. From what I can tell he hasn’t really spoken to T.Boone Pickins for some advice on what this country needs to do to remove that dependency. I’m incline to think that Natural gas may not be something the Obama is looking towards to help that along. I will say though that Natural gas has made some nice gains in the last week or two. I have been invested in natural gas for sometime and have prospered from those gains and taken some profits in it, but I do hold some interest in a company that should continue to grow.
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What about solar, wind and nuclear energy? I think in each of these areas that there are some stocks that will benefit from the stimulus plan that will most likely pass once Obama is in office. My advice is to look at the leaders of each of those areas and do your research to see if they can make some gains from the plan.
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The only stock that I will recommend at this time would be a company that I’ve spoken about before on this blog. The company has basically bottomed in the last month or so and I have jumped in and out of it a few times with some good gains.
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The company is Quanta Services Inc. This company will prosper from the plan in couple of different ways. It’s a infrastructure construction company that focuses on alternative energy. It has a strong balance sheet as well as some good guidance for the coming quarter and fiscal year. It’s presence in the alternative energy sector is also strong.
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As always, I will tell you to do your own research to see if this trade is right for you. Later this week I’ll have another suggestion for you portfolio.
Happy trading.

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What A Way To Start The Year

Last Monday I stated that the markets would finish up for the week. Well the DOW was at 8516 on Friday December 26th at the close. Wouldn’t you know it that the DOW finished this week’s short trading session at 9034.
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What a day Friday was to start off the year. It open up, dropped down and went up from there all day long. It looked like everyone couldn’t wait to start a new trading year. Who knows where the coming week is going to take us. I’m hoping that it will finish in the 10,000 range, but of course that’s asking too much, or is it?
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We have about two weeks before Barack Hussein Obama takes office and there’s a lot of uncertainty about what his administration will do in the few few days of office. He’s been working on a stimulus package while vacationing down in Hawaii. It’s reported to be in the $750 Billion range. Quite a bit of focus on the infrastructure of the country, but we’ll just have to wait and see.
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As for what I have in mind for the coming week. I’m going to take profits where I can and wait for some new buying opportunities to get back in on the stocks I took profits in already. In the Month of December, I gained 25% and I don’t want to lose any of it to the uncertainty in the markets. Good luck to all that are out there and happy trading.

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A List Of Penny Stocks

Everybody wants to trade penny stocks. The reason for that is that they have the reputation of having big percentage gains (or losses) in any given day. You can make (or lose) a load boat load of money real quick.
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A list of penny stocks can be found almost anywhere on the internet. Why not, these companies need to raise capital so they can expand their business or even to buy the needed equipment so their company can grow one day be one of the big dogs. There are so many penny stocks out there that are traded everyday, but where are they list? On which board do they trade?
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Most of these stocks are traded on the secondary boards, OTCBB (over the counter bulletin board), Pink Sheets and a few others.
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The main reason that they are so popular is because they are cheap enough where the average person can afford them. How cheap? Well, a stock is considered a penny stock when it’s price per share is less than $5. Many of them are actually less than $1 (they really are penny stocks).
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Just because they are that cheap doesn’t mean that you’ll make a ton of money. Some of these stocks will sit at those levels for months and in a few cases, years. Many amateur traders or newcomers feel that these stocks are on their way up and also feel they can’t get any cheaper. That can’t be further from the truth. If you look around on some of these lists of penny stocks, you will see some even trade in what is referred to as sub-penny. Stay away from these types of stocks. Only one out of thousand will ever get out of this range.

If you want a list of penny stocks, go to Yahoo Finance and type in pink sheet or OTCBB, you will get a list of stocks that you can pick through. Be careful and do your due diligence on the company before investing.
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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

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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

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You Can Make Fast Money With Dividends

With the way the stock market has been moving in the last few weeks, it may be wise to look for solid companies that provide a great dividend. Unless you’re a day trader and can play the volatility of this market, you really need to take positions in these types of stocks.
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I’ve been looking at dividend paying stocks for some time. It’s been profitable during these days and since my career is trading in the stock market, I’ve had the time to look into when these dividend payouts will occur.
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Typically dividends are paid out 4 times a year, just around the time that the company announces their last quarter performance. In this month alone I’ve taken advantage of over a dozen stocks that pay out dividends. Be aware though that just because the company has stated that they will paying out dividends, it doesn’t mean they’ll be paying out what you may see on a website like Yahoo Finance or TheStreet.com
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Let’s take a look at what I mean by that comment. A perfect example is Atlas Pipeline Partners LP (NYSE:APL). If you were to take a look at what was reported on Monday October 27th, Atlas reported that there will be a payout of $0.96 of common limited partner unit. In yesterday’s news Atlas stated that there will be a cash payout of $0.05 per share. After further research I found that the $0.96 per common share has been confirmed. As for the $0.05 I haven’t been able to find out if this will be a one time “extra” pay out for each share on top of the $0.96 per share.
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My point is that there are different types of stocks for some companies and if you’re not careful in your research you may be buying into the wrong one. Just for those who maybe thinking of catching some good dividends, Atlas Pipeline Partners LP (NYSE:APL) might be one that you would want to get into. The execution date (aka ex-dividend date) is for shareholders who have stock in the company on November 10th, 2008. Just for your information, at the current price of $17.00, the yield for this stock is almost 24%.
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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

*DISCLAIMER* At the time of this post, Billy is long APL

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On Your Mark, Get Set… Go Buy

That’s right, the world is coming to an end and my advice is to go buy shares of the companies that you have confidence in. Confidence? Who the hell has any confidence in any company? Remember what I’ve said in the last few weeks, having confidence in a company is different from have confidence in the stock.
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As we’ve seen in the stock market lately, no one has any faith in the economy, the government as well as the stock market itself, but that doesn’t mean that there aren’t any companies out there that are doing the right thing while the rest of the world crumbles.
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Overnight there were major declines in most of the markets. Japan taking a 9.6% fall, Germany’s DAX took a 10.8% dive, France shaved off 10% also, while Britain’s FTSE lost 8.7% after the report of it’s third quarter GDP fell 0.5%. All this news caused the U.S. markets to go into panic mode. The DOW was down over 500 points in pre-market trading. Trading was actually halted in pre-trading hours because of the fact that the DOW fell 500 points (which is the maximum that is allowed).
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Now for the good news. The markets at the present time (11:00am) have somewhat leveled off and are in the range of being down 350 point, but I don’t expect it to stay there by the time 4:00pm comes around. There will be some major selling off going on again before we get to the weekend. When that happens you need to be ready to buy the stocks you want. If you are like me, you’ve been sitting on the sidelines with a good portion of you money. Well this is the type of day that we are waiting to take advantage of.
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In some cases, you might be one of those people who have years to wait before you will need that money. Others might not have the time to wait, either way a day like this can help you get some of your loses back. Keep an eye on the market today and you just might get the deal of a lifetime.

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I’m Glad That This Week In The Stock Market ...

What a week we had in the stock market. On Monday the DOW fell 733 points to start off the week and dropped another 127 points on Friday to end the week. The good news is that the the Dow is up over 4% for the week. Go figure.
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That’s right, some how the markets were up even with all that going on. This past week has shown us the intensity of volatility in the markets. I have to say that this was a great week for people who rode out this roller-coaster ride in one of two ways.
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If you were one of the many that didn’t know what you should do with all the “The Sky is falling” news and figured that you don’t need any of your investment money. You decided to just let your money sit where it was at and ride it out. If you were properly diversified you most likely did pretty good. Most of the sector and different markets came out ahead for the week (Friday to Friday). Being diversified is what it’s all about if you want to stay afloat for the rough times so you can maximize your return over the long haul. I commend those of you that are prepared.
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The other way is if you knew what you were doing throughout this period of six trading days and saw the writing on the wall each of those days and at different times of the day. You most likely made a killing. The volatility was off the scale. With days that had over 500 point swings, it was easy to be able to pick up some broken stocks (of not-broken companies) and watch as the investors got back into them after they were oversold. Waiting for those quick returns of 5-10% gains. In some cases, there were returns of 30% a better.
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Throughout the week there was a lot of news as well as action to keep one busier more than one would care to be, but I found it very educational. I do have to say that I’m glad that it’s over.

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Confidence In The Stock Markets Are Down

Yesterday was one of those days that I’ve been talking about. The Dow fell 733 points, NASDAQ dropped 150 and the S&P 500 lost another 90 points. After Monday’s rally, I knew this would happen once again. I do expect more of the same for the rest of the week. How much? I don’t know, but I will say that it will go in the direction that would rather not see.
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The markets don’t have the confidence it needs to go forward. I myself don’t believe in them and have sold out of 90% of my holdings around lunch time yesterday. What I’m still holding on to are two stocks that have great yield and will be paying out within this month. the average yield on these stocks are 6%. One is in the pharmaceutical sector and the other in consumer goods.
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Dividend paying stocks are the only thing that I would invest in at this time. If the price of these shares go down before the ex-date, I’ll pick up some more. These two sectors are the area that we as investors need to look at. In a recession these sectors hold up quite well and as Jim Cramer from Mad Money and TheStreet.comsays, “if you can drink it, smoke it, eat it or medicate yourself with it, it’s the stock you will want to own in these times.
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If you are in any stocks that don’t fit that criteria, you need to sell and hold on to your cash until the markets come down another 5-10% from where their at right now.

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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.

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The Bull In The China Shop

stock trading
photo by mvhargan

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What a difference a weekend makes. Last week the stock market fell over 20% with Friday having the most volatile day of the week. Now it’s Monday morning and the markets are starting the week off with a bull attitude. Opening up over 300 points with the financial sector leading the way.
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Last week we were hearing that we are entering a bad time in our economy. It was being said that this is just the being to what’s to come. The best way to describe it would be “The sky is falling” syndrome.
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Now for the last couple of hours I’ve been hearing the opposite of it a (well sort of). the past day or so, “people-in-the-know” have been basically saying that they don’t know, that there is too much uncertainty with the world economy to really make a clear call on what we can expect from the markets.
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This past weekend the European countries are now having their governments announcing that they too will be injecting capitol into their own economy to avoid similar issues that the U.S. is facing. Let me in on something…you’re too late, you’re already there.
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I don’t know about you, but I’m not expecting anything positive from the markets except the volatility will be high and the trading if done correctly will be profitable. Yes, this morning’s trading is looking good, but that’s the picture for now and we all know how that could change in a heart beat.
I’m not looking at this as the “bottom” as some are wanting to call this, but historically the markets don’t turn around this quickly. We still have sometime to wait before we see the markets level off and turn around. I’ve said it couple of times before and I’ll say it again…”Don’t believe the hype”.

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