Ticker Monkey

The Global Catharsis

Matt — Fri, 03 Apr 2009 18:50:35 +0000

Newspapers are on the way out. Dinosaur auto companies are on the way out. Poorly managed and overpriced retail stores are on the way out. Malls are history. Hedge fund scams are being exposed. Predatory lending has been exposed. Overinflated home prices are being corrected. This is a long overdue shakeout of the economic dead wood; an evolution of our economy.

In this painful purge, it’s the little guy that gets hurt. The companies that deserve to live, will, but the individuals and families are left out in the cold.

The only way for those individuals to survive is to realize that we now live in a new America, and that the playing field has changed drastically. We are in transition from a fossil fuel burning, centralized economy, to a solar/alternative energy harvesting, distributed economy.

By “distributed” I mean, locally grown foods, Internet based everything, and energy collection on a neighborhood scale. So don’t mourn the lose of obsolete businesses, instead, welcome the advent of a new era.

Matt

Watch my stock trades live, for free at www.tickermonkey.com
The good, the bad, and the stupid.

10 Trading Rules for Swing Traders

Matt — Mon, 23 Mar 2009 17:29:04 +0000

A “Swing Trader” falls somewhere between the day traders and the long term traders. They usually sell in a matter of days or weeks based on fluctuations in the market. Swing trading is more about pattern recognition and short term trends than who’s going to be on top in ten years.

Here are my simple rules for Swing Traders (revised):

1. Don’t Panic. Panic when appropriate. Before 2008 the “Don’t Panic” rule made perfect sense, now I’m wishing I had panicked in January of 2008. Cashing out when things are good but a little sketchy is OK. However, if you are short term, stick to your plan and rely on your safety net.

2. Always place conditional limit trades. Use a conditional order that will automatically sell at a set price above what you bought at, or sell at a set “trailing percent”. This is your safety net in case you’re scuba diving in the Bahamas when your stock tanks. (be careful to give the stock enough room for normal fluctuations so you don’t accidentally dump a stock on a dip)

3. Turn your TV off. The people commenting on CNBC don’t care about you. They’re entertainers filling the gaps between commercials. Do your own homework and have your own strategy. TV is just monkey chatter.

4. Never look back. Don’t regret taking a loss, just move on.

5. Evolve a strategy. Let your mistakes and successes guide you. Keep track of what went wrong and why. Leave emotions in your therapy session.

6. Take profits without mercy. Remember what you’re in this for. Set a minimum percentage that you can live with and cash out. If you’re doing well, don’t forget to send yourself a check to cover the bills.

7. Always do your homework. The Internet gives you so much information. Use it to your advantage and know the facts before investing. Use Bollinger bands and other averages to help you in short term investments. Stock screeners are great tools to help you find strong companies.

8. Don’t get too technical. If you can’t explain what your doing to your non-trader friend in a couple of sentences, then you probably shouldn’t be doing it. Don’t miss a good trade because you were inflexible on price.

9. Don’t wait for a bad stock to improve before selling, just get out. It will make more money elsewhere.

10. Get your affairs in order. Do some basic personal finance before risking money in the market. Pay off debt and make sure you have enough to support your family for several years no matter what happens. Create a stable platform before you do anything risky, and never risk more than you can afford to loose.

Matt

See my trades for free at www.tickermonkey.com

The good, the bad, and the stupid.

Piping Hot Dish of Revenge

Matt — Thu, 19 Mar 2009 03:01:34 +0000

We would all be justified in staging a revolution right now complete with torches and pitchforks; if only we had fuel for torches and the pitchfork company was still in business. However, a more constructive outlet for your revenge could fill your empty pockets.

Now don’t get your panties in a knot when I say this, but I’ve been recommending BAC (Bank of America) for about a week now. Yes, they are the enemy, and yes, they are part of the Evil Empire if not the Death Star itself.

You should buy before April 20th when the new earnings come out. Wait for a pull back and buy under $6 per share, or just jump in. Then maybe you can afford your new ATM fees. Why?

1. Everyone is afraid to buy financial stocks because they listen to CNBC’s potted plants, I mean commentators. But that’s where the smart money is going to be made when the fear subsides.

2. It’s taking free money from the government and lending it out to the world at interest. Do the math. Also, it’s ready to pay back the $45 Billion it borrowed, and the CEO claims that they will be making at least $30 Billion a year after taxes by 2011.

3. The government won’t let it fail.

4. The worst of the news is over, it’s profitable again, and it’s the largest financial services company in the world. They are still in recovery, but look at some of the numbers:

52wk Range: $2.53 – $43.46

P/E Ratio: 11.35 PEG Ratio: 3

Market Cap: 45.3B Net Profit Margin: 5.51%

Enjoy your personal bailout and sweet revenge.

Matt

P.S. – I’m posting my trades live at www.tickermonkey.com - the good, the bad, and the stupid. For free.