Wednesday, June 28, 2006

A Down Market for the Rest of the Year?

Research was done recently by the TradingMarkets.com website which showed that if the stock market was up for the first half of the year, then stocks went up for the last half of the year over 75% of the time. If the stock market was down for the first half, then the the stock market dropped for the balance of the year more than half the time. Check out the article at:

http://biz.yahoo.com/tm/060628/14461.html

Sunday, June 25, 2006

Can you really make money as a day trader?

Can day traders really make a lot of money? A day trader is generally defined as someone who trades stocks, options, and other investments very often (multiple trades per day) and generally closing out all their positions at the end of the day. I've heard lots of anecdotal information about day traders making or losing huge amounts of money, but what is the truth?

I decided to interview two friends who refer to themselves as 'day traders'; however, in reality, they don't meet the accepted definition. I would describe them more as short term traders, holding on to stock and option positions anywhere from one day to six months. They always have open positions at the end of the day. They both trade through online stock brokerage firms. This is their only 'job'.

How much do they make? Neither of them have ever had a down year. Both of them, on average, earn an amount equal to what they have tied up in the market, and both have about $100,000 invested. In other words, they double their money each year, or another way to look at it is they earn $100,000 each year from the $100,000 they use for trading.

Wednesday, June 21, 2006

Stock Options Scandal

In case you missed them, there have been numerous articles about companies changing the date or backdating the grant date of stock options for their executives to a day when the stock price is at one of its lowest points, which would guarantee the maximum profit for the optionholder. Claims have been made against several companies, with a significant portion being in the high tech industry. Accused companies include:
Monster
Xilinx
Asyst
Maxim
Trident
Broadcom
etc.
For a list of news article regarding the stock option scandal, check out:
eetimes.com

Saturday, June 03, 2006

More Wall Street Quotations

"Before you invest, investigate." William Arthur Ward (1921-1994) author, educator.

"With an evening coat and a white tie, anybody, even a stock broker, can gain a reputation for being civilized." Oscar Wilde (1854-1900) Poet & playwright

"Never invest in anything that eats or needs repainting." Billy Rose (1899-1966) Composer and entrepreneur

"Emotions are your worst enemy in the stock market." Don Hays, stock market commentator

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." Warren Buffett (1930- ) businessman and investor

"Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it." Peter Lynch (1944- ) money manager

"Gentlemen prefer bonds." Andrew Mellon, Businessman & financier (1855-1937)

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