A Few Obvious Reactions

Institutional Buyers Of Bank And Thrift Stocks - The Gold Book















Get out of all of those bank stocks that were bought for dividend (as soon as you can break even on them). They slashed your payouts to nil. I think GE will be fine (very long term) with a dividend increase. Don't press your profit on DD (TAKE IT NOW!) Russia will be hot for awhile yet. I always like defensive tobacco (with an advancing high-yield dividend). People will have their cigs.

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Warren and Me

I'm still a guy who thinks five grand is a lot of money. I can't carry much more than that to the hereafter in my pockets. I think Warren Buffett feels the same way. He don't need a billion dollar house, even though he can.

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It's Not a Secret

Buy dividend producers with good P.E.s and payout ratios.

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Just a Thought- Check the Daily Volatility

Here's how to do that. Check the market's numbers an hour before the close. Then how much did it move in the last hour? Sell-off, buy-in, or steady as she goes? We want steady, no 100 point swings in the last hour + or -. Remember, it's a big money man's game. We don't want him over exuberent or crazy scared as we ride along.

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How's Your Volatility Tolerance Index?

Don't be in volatile situations if it curdles your stomach. Stay in Income and G & I. If you were stuck in a volatile holding, it went down 70-80%. (Unless it was a short.) Did you freak-out? If so, you sold it low. You lost double because it's up 100% since March! Some of my volatile stuff is +200% since then. That doesn't mean I'm even yet. Unless I cost-averaged, I'm still way down from where I bought in at the top. But 200% increases get you well eventually. Know your stomach for risk.

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Balancing Your Financial Research

I like to use some of the most aggressive "wizards" in conjunction with some of the more conservative analysts to come up with a modicum of sanity. For instance, Pitbull Investor's "Stock Report Card" is extremely aggressive. So I use them with fool.com (Motley Fool) for consensus. Also, tradingmarkets.com (Power Ratings, short term & aggressive) gets used with finance.yahoo.com; powerratings.net (Power Ratings, long term & somewhat aggressive) with moneycentral.msn.com. You get the idea, get a consensus. Guess what, if everyone likes a stock (yeah, even Cramer, with old numbers), it's probably alright. But don't over-analyze, thereby missing a boat. Gut-instinct is often a good thing if you are investing experienced.
For mutual funds disregard the last statements. smartmoney.com and morningstar.com are the definitive experts. If they agree, it will be a winner.
For foreign investing, pay heed to Wikipedia's "List of Countries by Public Debt". Stay away from (by populace) highly indebted nations.

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It's All the Same

Don't worry about if your gains come in principal or distributions. With a strictly growth instrument, the original stock price must multiply to realize gain. In growth and income or income instruments, gains will be reflected in distributions as well as stock price growth. So, in theory, a long term position in an income holding can gain a lot even if the face value of the stock or mutual fund price remains stagnant.

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Finance Is Not So Hard, Folks

Assets must recover expenses plus gain position.
Recessions cause the opposite to occur.
The only way to survive hard times: see sentence #1 during productive times.
A diversified mutual fund mix will do it.
A proper allocation thereof does not have to be monitored.
You don't have to do anything except add 15-20% of your income to your assets.

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RUMINATIONS ON 06-01-2009 or )^_)!_@))(

It is not your stock broker's job to watch your portfolio. It is your job. Or it is the job of your high dollar investment consultant, who you pay a lot more than a broker.

Strive to outperform the benchmark (in bull and bear markets). YOU DON'T HAVE TO DOUBLE THE MARKET. If the market has returned 1.7% for the week and your portfolio has returned 1.8% you have done your job. If the market has returned -47% for the year and your portfolio has returned -40% you have done a fantastic job!

IT'S WORKED FOR SEVENTY + YEARS (the market)! Have you? Or do you know anything else that has?

Never be afraid to take a gain (even if you could have done sooo muuch better).

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Out of the Pool Please

Looks like the NASDAQ is going to end 9 or 10 straight weeks of gains. The Dow is going to have it's second losing week in the same time span. SELL ALL GROWTH STOCKS! (That means non-dividend payers.) Good gains are over until November.

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Frustration

Here's the most frustrating thing about market gains and losses: selling investment positions. If there is a gain recorded there is a tax liability. If there is a loss there is a loss. Can't win! There are no losses or gains until there is a liquidation. But how to lock in gains without liquidation? That is impossible.
Still, the stock market has worked for 75 years. What else has done that? Not I, for one.
I think that the only answer is an unlimited time horizon, (or) perpetuation of lineage (or species, therefor).

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Whoopee Cushion

Hey, don't get carried away yet. Sure, buy good dividend (sustainable dividend) stocks which are cheap but...
Remember when we were going to freak-out if the Dow went down to 10,000? Now everyone is pleased as punch to see it at 8300. Strange animals we are. You've still been punched as pleased since late 2007. Remember that and use prudence. September or October will tell the true story.

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Stock Market Bliss?

6 straight weeks of gains! That hadn't happened in 10 years! You believe that? Well it's a lie. Actually we haven't had 6 straight weeks of gains since the 1930's. Post- Depression obviously.
Granted three of the weeks were less than a 1% gain. The other were a 9% gain, a 7% gain and a 3% gain. Still- is there light at the end of the tunnel?

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A Pictorial Perspective on the Last 18 Months in the Stock Market

=KISS YOUR $ GOODBYE
I started with nothing & have most of it left.

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April (Stock Market) Fools

Before I start, I want to admit that I won't take my own advice.

The bottom will drop out of the stock market by the end of April. History says so. November to April are historically the best market months. After April, things will disintegrate toward a crash in September or October. (September is the worst month historically.) At best the summer and early fall are usually stagnant or flat. So the latest so-called good months went like this: November, 2008 was one of the worst, scary months ever. December was a normal rebound month. January and February, 2009 were garbage, and that is ominously unusual. March, at the end of the month, was good. April's going to be grrreat! LET'S GET FULLY INVESTED!

STOP
This year especially the market lies. The good months may linger through May, then watch out. I think that the DJIA will see 5000 in September or October. I hope that I'm wrong because I will still be 70% invested in September. I'm a dummy. What does Monk say? "I could be wrong but..." I hope the market is the 6 month precursor but...
SELL YOUR FEW GROWTH WINNERS BY NO LATER THAN THE END OF MAY.

So now we have a dilemma. Can't go all in cash because there's no interest accrual in money markets right now. I have to recommend Growth & Income Funds. They are selling very cheaply and they try to buy dividend (or Value) stocks and Growth stocks. Bank of America was once a value stock. Now it's a Growth stock. Your Growth & Income Fund didn't know that was going to happen. Who has good Growth & Income Funds? There are none right now statistically. American Funds is a good option if you don't mind "loaded" funds. Vanguard and Fidelity don't have many front loads. Those are the three largest (by assets) fund companies. They all have good expense ratios. I use SmartMoney.com to check mutual fund performances. A word of caution though. Don't pay attention to the 1-5 year performances. They are all bad (except Income funds) right now. I wish Smart Money showed 20 year stats. Another option might be a good corporate bond with a "make whole" provision. They want to tie your money up for so long though.

I wish I had some better options. Oh well, I was raised in the Chicago area. I know how to wait 'til next year (see Chicago Cubs baseball history).

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