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Stock Market Scams


photo by azrainamn

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In these trouble times of the stock market no one is really sure what stock is going to break out and post some beautiful gains. Of course there are many out there that will offer you their services. I’m here to tell you, beware of wolves on sheep’s clothing.
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When you go ahead and type “stock market” or anything similar to that in Google search, you will get several million returned pages. The results are astounding as to the different types of sites you will find. many of them are site designed to get you to buy into their program or at least to leave your e-mail.
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The one and only purpose to these site are to make money off of you not to help you make money in the stock market. In some cases you will find that they offer you “tips” after you subscribe to their service. Sometimes it’s a monthly service, but mainly it’s by the year. The reason why many of them don’t do it by the month is because after the first or second month you would cancel once you see that you’re not making gains in your portfolio.
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The other way these sites will make money off of you is a little more shady that the other. These are the sites that will go ahead and say that they will send you daily notices for no charge. You only have to give them your e-mail. The way that they make money is that they will send you “tips” on stocks that they are already in or that they’ve just recently pumped up. Showing you graphs and charts showing that the stock is at the break out point. What they don’t tell you is that they are the ones pumping it.
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If enough people jump into the stock it will cause the price to rise, at which point they start dumping their position leaving you and others hold the bag.
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There is one stock right now that I’ve been watching because of one of these services. I learned about it through Twitter. I will not disclose the person or the stock for obvious reasons, but I will tell the rest. The person posts on Twitter the the particular stock has moved X amount on X amount of volume. This stock jumped 66% that day, the next day it jumped 125%. In the last week it dropped 95%. With these moves the stock now sit 56% below from where the person started hyping it.
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Just in case you were wondering what type of stock has movements that big in percentage. Penny stocks move like that all the time. That is why you shouldn’t invest more than 10% of your portfolio to penny stocks. You can lose all that you invest in these kinds of plays.
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To make matters worse, the Bid price never rose above the starting price until two days ago where it went to the height of the hype just long enough for one entity to dump several thousand shares. That is also why the stock is now down more than it was in the beginning.
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In the mist of all these types of people out there, there are those that are legitimate and very helpful. The only one that I would at this time recommend is Jim Cramer from TheStreet.com

Because of who he is and the influence that he has, he is not allowed to invest in the stock market himself. Instead he has a portfolio that the money goes to charity. We have an affiliate program with him that offers you a free
two week trial. I suggest that you give it a try. What the heck, it’s free.

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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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T Boone Pickins Is Behind Natural Gas And Wind Pow...

stock market
photo by Kevin Dooley

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Alternative energy has been in the forefront of the news lately, even with the price of oil dropping more than 50% in the last three months. The issue has become so important that more needs to be done. The problem is that any talk about it has it not making a good enough dent until 2018 or later. Why is it that something that everyone believes to be important isn’t being pushed harder to accomplish it?.
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T Boone Pickens is been putting his money where his mouth is, into alternative energy. Mainly in wind energy as well as natural gas. The plan is to build new wind generating facilities that will produce 20% of this country’ electricity and allow the use of natural gas as a transportation fuel source. He says that these domestic energies can replace over one third of our dependency on foreign oil imports. The best thing is that he said it can be done in ten years.
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I have been a big believer in alternative energy well before it became the “in thing”. When I first started trading in the stock market I invested in alternative energy stocks. Which was a good thing because they have grown into a powerful force in the stock markets. When the idea of alternative energy stocks started to really catch on it helped propel my portfolio by leaps and bounds. One of my best trades of all time was getting in and buying stock in First Solar Inc. (NASDAQ:FSLR) when it was at $35 per share.
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Now that the stock market has taken a nose dive into oblivion, it has caused these stocks to come down from their highs by more than 50% (in most cases). That is exactly what I wanted to see for me to make a more of a foothold in this sector. I have always kept a position in alternative energy stocks over the years and look forward to major gains in this sector. I want to bring some stocks to light that I feel will benefit from the Pickens Plan.
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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

Quanta Services Inc. (NYSE:PWR), a company that I’ve spoken about before here and have been a investor of the stock for some time. They are a contracting service company that offers many different solutions to electric power, gas as well as many other areas. These guys I feel will be the ones who get the most of the contracts for installing the transmission cables for the wind turbines.
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Kinder Morgan Energy Partners LP (NYSE:KMP) is a major player when it comes to natural gas companies. They are based in Houston Texas, which is in the heart of the wind corridor that Pickens speaks of and most of their pipelines branch out from that region. The Natural Gas Pipelines segment gathers, transports, stores, treats, processes, and sells natural gas through approximately 14,700 miles of natural gas transmission pipelines and gathering lines, as well as natural gas storage, treating, and processing facilities. On top of everything else that this company can do, their stock at it’s current price offers a 8% dividend yield.
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Linn Energy, LLC (NASDAQ:LINE) is an independent oil and gas company. The company has oil and gas, and natural gas reserves in Mid-Continent, which includes the operating areas Texas Panhandle and Oklahoma; and Western region comprising the Brea Olinda field of the Los Angeles Basin in California. They are also based in Houston Texas. To make this a more attractive stock to own at this time is that their dividend yield at it’s current price is 15.6% and it’s ex-dividend date is in the first week of November.
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Composite Technology Corporation (OTCBB:CPTC.OB) at the moment they’re the new kid on the block (relatively speaking). The company operates through two segments, CTC Cable and DeWind. Between the two areas they cover the cables and the turbines that will be needed. The ACCC conductors can handle a higher temperature than most to help reduce burnouts and blackouts. This stock is my speculative stock and should be treated as such by anyone looking to invest in it.
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Of course there are many more companies that will benefit for the growth of alternative energy in this company, but I don’t want to have this post go on forever. This sector will have great gains in the next few years and if you have the time to wait you can make out big with your gains.
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*DISCLAIMER* At the time of this post, Billy is long Kinder Morgan and Linn Energy.
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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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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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What Happen Today in the Stock Market

investing
photo by azrainman

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During Wednesday’s trading the markets were very volatile which was something that was expected. Unfortunately the day ended down, the good news (if there is any) is that the DOW fell only 29 points. As I said the other day, I did expect the markets to come back down from their two day rally of Thursday and Friday and with the talk of the bailout, I don’t see it going up anytime soon.
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The President spoke on national television Wednesday night stating that something needs to be done for the American people not Wall street. If that’s the case then Hank Paulson and Ben Bernanke need to redirect the way they’re selling this plan.
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As with what to trade in the markets this week, it’s pretty hard to find what’s hot and what’s not. Take a look at Goldman Sachs today. News came out on warren Buffett buying $5 billion worth of shares and other assets, but when the markets opened the move was minimal then dropped down. At the end of the day it was up $8 per share only to drop $3 in after market trading. The financial sector was a mixed bag today and the alternative energy sector was up on news of the bill that was passed for tax breaks.
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Oil lost a little ground and the dollar held strong throughout the day. We will have to see what the next two days will hold for us, so hold tight and happy trading.

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Is Warren Buffett Confident Of The Financials

News came out today that Warren Buffett has invested $5 billion into Goldman Sachs. Warren was on the CNBC’s Squawk Box, speaking about his decision to invest in the company. But is he really confident in the financials or not?
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Mr. Buffett has been talking about how he doesn’t invest in anything that he doesn’t understand. He avoids things that might have a hidden trap because he didn’t know it all. I heard him talk awhile back say that he’s not sure what to do about investing in the financial sector and continued by saying that he would not get into anything that wouldn’t be a sweetheart of a deal.
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Most of it is in the preferred stock as well as some in the common shares. His strike price for the common is $115 per share, which is $7 less than what it closed at last night. He can exercise those shares anytime over the next five years. Just in case you’re wondering how many shares all together he received for his $5 billion, It was 43 million shares. There were a lot of other perks in the deal for Mr. Buffett and that’s why he got in Goldman Sachs.
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The media is having a field day stating that Warren Buffett is confident in the condition of the financial sector and that can’t be further from the truth. When you have $5 billion to invest, believe me people will sweeten the pot for you has much as possible to make sue that deal goes through. Mr. Buffett deserves the deal he’s recieved, but to watch the open market flock to the financials is just a little too much. The media will always hype it up to have something to talk about, but to think this parade is going to continue is just too weird. If he was confident about the sector then why didn’t he invest in the whole sector? I’ll tell you that that isn’t the case, he’s confident about Goldman Sachs and only Goldman Sachs to make him money. To think otherwise is foolish.

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Lehman Brothers (NYSE: LEH)

In the past week there has been a lot of talk about Lehman Brothers in the news. With the issues going on in the financial sector, it’s no surprise that Lehman would be the week’s star. Lehman’s price per share has dropped 61% since June when it received $4 billion in raised capitol. Now it seems that they are out trying to get more capitol for save the company. Last month it was a Korean development fund that they were trying to convince. At this point all indicators are showing that Lehman is ripe for a hostile takeover. The stock is trading at $13 at a time when Lehman’s book value is at $34. An analyst from Ladenburg Thalmann Dick Bove, upgraded Lehman Brothers to “buy” because of the fact that the firm has become a candidate for a hostile takeover.

It is also expected that they will have more losses in this quarter again. Most likely it will be below the street’s expectations. One Goldman Sachs analyst expects write-downs to the tune of between $2.5 billion and $3.5 billion during its fiscal third quarter

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The financial sector has been riddled with one bad news report after another and I believe that the time for picking up shares of certain banks and brokeage firms is just about here. I’m looking at a few of them right now and because of the last few days of news on Lehman Brothers I moved them to the top of this list of “stocks of interest”.

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Remember when I wrote about the Fannie and Freddie on 7-14-08 on the infusion from the Feds, the stocks of both companies jumped 30%+two days later. I have that same feeling on Lehman as I did with the other two. I’m waiting to see some more news on them this week, but I fell that decision needs to be made before the close on Wednesday. If you have any insight on this trade or just some news that I may have missed, please leave me a comment.

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Drybulk Shippers

I’m still continuing my deeper look into this sector. Well it actually it started out with me looking just at Dryships Inc. They are down over 30% in the last three months. I started buying into them about a month ago when I thought it was a pretty good size dip (I guess I was wrong). While I was digging deeper into the sector I noticed that these four shippers are down by a least 25% (Star Bulk) to as much as 40% (Dryships) since mid-May.
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The world economy is growing by leaps and bounds. Yes there has been a slow down, but it’s only a speed bump. Commodities, grains, and other dry bulk materials are still needed throughout the world. America is slowing down in growth, but these guys do business all around the globe. China and India are in need of commodities no what the hype is. They are expected to grow at a rate of 10% or better, at a rate like that they will need imports to get it done.
Here is a brief summary of the four dry bulk shippers that I wanted to share with my readers. If you guys and gals out there have any insight or opinions, please feel free to do so.
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Eagle Bulk Shipping (EGLE): Eagle is one of the major bulk shippers of iron ore, coal, various gains, other ores, cement, and steel . Delivered by their 17 Supraships, 3 Handymax and two more ships (one will be the largest in their fleet) to be completed before the end of the year. It has an extremely young fleet of ships (average age of 5), meaning that Eagle won’t be affected by increases in commodity prices for some time.
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Dry Ships Inc (DRYS): Dry Ships is the leading shipper of iron ore, coal and grain. DryShips currently owns a fleet of 46 dry bulk carriers, with an aggregate carrying capacity of approximately 4.2 million deadweight tons, which consists of five capesize, 31 panamax, two supramax and eight new-building dry bulk vessels. Since the company’s inception, Dry Ships has had 113% return on equity, with profit margins of 80%.
The company also has a very hot sub-company, mainly focused in the ultra-deep drilling market. Dry Ships is looking to ship this stub, which it is looking to spin off in the coming months.

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Star Bulk (SBLK): Star Bulk’s vessels transport major bulks, which include iron ore, coal and grain and minor bulks such as bauxite, fertilizers and steel products. Currently, Star Bulk has an operating fleet of twelve dry bulk carriers, plus definitive agreements to acquire one Capesize dry bulk carrier and sell its Panamax dry bulk carrier. The total fleet consists of four Capesize, one Panamax and eight Supramax dry bulk vessels with an average age of approximately 10 years and a combined cargo carrying capacity of 1,184,835 deadweight tons.
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Diana Shipping Inc (DSX): Diana Shipping is a global provider of shipping transportation services, and specializes in transporting dry bulk, including such commodities as iron ore, coal, grain and other materials. Their fleet include 13 panamax, 6 capesize and 2 more in construction.

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