Now that Mexico has decriminalized marijuana, LSD, heroin, methamphetamine, and cocaine in small quantities, investors are taking a closer look at companies that may benefit from the increased Mexican tourist trade. On Monday, August 24, laws were passed in Mexico to very little fanfare which eliminated crimes for possession of small amounts of these substances. Now individuals can possess up to a half-gram of cocaine and 40 grams of marijuana. The reasoning behind this change was that crackdowns didn't seem to reduce the violence and deaths from the war on drugs.
Back in January of this year, we featured an article about all the various publicly traded companies that are involved in the marketing of marijuana or its cannabinoid-based pharmaceutical products. Since that time, a couple of new publicly traded stocks have appeared on the horizon with marijuana or cannabis in their name. These may be interesting yet speculative very low cap plays if California and other states change their laws to legalize or decriminalize marijuana.
One stock sector worth checking out might be the Mexico based companies. An example would be Fomento Econmico Mexicano, S.A.B de C.V (FMX), also known as FEMSA, which is the largest beverage company in Mexico, and for that matter, all of Latin America. They produce many popular beers including Carta Blanca, Tecate, Tecate Light, Superior, Sol, Dos Equis Lager, and Dos Equis Ambar.
A more general way to play the Mexico stock market is through an ETF, iShares MSCI Mexico Investable Market Index Fund (EWW). There are also a couple of closed end funds such as the Mexico Fund, Inc. (MXF) and the Mexico Equity & Income Fund Inc. (MXE).
However, the stock play from this change would probably be in the travel industry, stocks that might take advantage of the "Spring Break" effect. For example, there are a couple of cruise lines with trips to Mexico that include Carnival Corp. (CCL) and Royal Caribbean Cruises Ltd. (RCL). The Mexican airline industry might benefit also, especially if fuel prices soften, since there seems to be recovery taking place from the swine flu outbreak. A couple companies in that sector include Grupo Aeroportuario del Centro Norte S.A. de C.V. (OMAB) and Grupo Aeroportuario del Pacifico (PAC).
It will be interesting to see how this significant change in Mexico's laws will affect travel and the economy south of the border.
Author does not own any of the above.
By Stockerblog.com
Friday, August 28, 2009
45 Banks have Failed this Summer
Since June 1, the FDIC has reported that 45 banks have failed. In other words, more banks have failed in the last three months versus all the bank failures for last year, at 28 failures.
Stock Market Music
Now I've heard everything. Music that features audio compositions based on patterns found in the stock market and in economic data. The music is called Playing the Market by Emerald Suspension.
A Use for your Old General Motors Certificates
Have some old General Motors stock certificates? Here's what you can do with them.
Boeing 787 Dreamline will Fly Before New Year
The 787 Dreamline jet which has been subject to a number of delays, manufactured by Boeing (BA) which trades on the NYSE, will start flying by the end of the year. Boeing said that they had 850 orders for the plane already.
Tuesday, August 25, 2009
Colonial BancGroup Filed for Bankruptcy
Colonial BancGroup (CBCG.PK), which had a banking division that was shut down by the government and sold to BB&T Corp., has just filed for Chapter 11 bankruptcy. Colonial Bank is the largest U.S. bank failure so far this year, and it is the sixth-largest in American history.
Latest News from Warren Buffett's Berkshire Hathaway: Extends Expiration of Registered Exchange Offer
Berkshire Hathaway Inc. (“Berkshire”) and Berkshire Hathaway Finance Corporation (“BHFC”) today announced that they have extended the expiration date of a registered exchange offer to August 28, 2009. The offer is to exchange up to $1,000,000,000 of BHFC’s newly registered 4.000% Senior Notes due 2012 (the “2012 Exchange Notes,”) for an equal amount of its privately placed 4.000% Senior Notes due 2012 (the “2012 Original Notes,”).
The 2012 Exchange Notes are substantially identical to the 2012 Original Notes, except that the Exchange Notes have been registered under the Securities Act of 1933, as amended, and will not bear any legend restricting their transfer. As of 5:00 p.m. (Eastern Time) on Friday August 21, 2009, the expiration date of the exchange offer, approximately $980,000,000 of the aggregate principal amount of the 2012 Original Notes have been tendered for exchange.
Berkshire and BHFC will accept for exchange any and all 2012 Original Notes validly tendered and not withdrawn prior to the expiration of the exchange offer at 5:00 p.m., (Eastern Time) on August 28, 2009, unless extended. Berkshire and BHFC do not currently intend to extend this exchange offer any further.
The terms of the exchange offer and other information relating to Berkshire and BHFC are set forth in a prospectus dated July 17, 2009. Copies of the prospectus and the related letters of transmittal may be obtained from The Bank of New York Mellon Trust Company, N.A., which is serving as the exchange agent for the exchange offer.
The 2012 Exchange Notes are substantially identical to the 2012 Original Notes, except that the Exchange Notes have been registered under the Securities Act of 1933, as amended, and will not bear any legend restricting their transfer. As of 5:00 p.m. (Eastern Time) on Friday August 21, 2009, the expiration date of the exchange offer, approximately $980,000,000 of the aggregate principal amount of the 2012 Original Notes have been tendered for exchange.
Berkshire and BHFC will accept for exchange any and all 2012 Original Notes validly tendered and not withdrawn prior to the expiration of the exchange offer at 5:00 p.m., (Eastern Time) on August 28, 2009, unless extended. Berkshire and BHFC do not currently intend to extend this exchange offer any further.
The terms of the exchange offer and other information relating to Berkshire and BHFC are set forth in a prospectus dated July 17, 2009. Copies of the prospectus and the related letters of transmittal may be obtained from The Bank of New York Mellon Trust Company, N.A., which is serving as the exchange agent for the exchange offer.
Book Review: Full of Bull Updated
Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
is the updated book by Stephen T. McClellan, which gives extensive coverage to the analysis of stocks by Wall Street, and why you can't trust the professionals. The book has been updated from the original that came out in 2007. He discusses Wall Street secrets and strategies for looking for great investments. He also talks about how you can tell whether a stock is good or not by the way the executives act.
McClellan knows his business. He is a CFA who worked for 18 years as First Vice President at Merrill Lynch and 8 years as Vice President at Salomon Brothers. He is also in the Wall Street Journal's Analysts Hall of Fame. If you want information from an expert, check out Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio.
is the updated book by Stephen T. McClellan, which gives extensive coverage to the analysis of stocks by Wall Street, and why you can't trust the professionals. The book has been updated from the original that came out in 2007. He discusses Wall Street secrets and strategies for looking for great investments. He also talks about how you can tell whether a stock is good or not by the way the executives act. McClellan knows his business. He is a CFA who worked for 18 years as First Vice President at Merrill Lynch and 8 years as Vice President at Salomon Brothers. He is also in the Wall Street Journal's Analysts Hall of Fame. If you want information from an expert, check out Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
.
Stocks Going Ex Dividend During the First Week of September
The stock trading technique called 'Buying Dividends' is becoming more and more popular. It is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets.
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next week. wsnn.com came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield.
There is everything from real estate companies to drug companies to banks.
Merck & Co., Inc. MRK ex div date: 9/2/2009 market cap: $69.1B yield: 4.7%
Valley National Bancorp VLY ex div date: 9/2/2009 market cap: $1.7B yield: 6.4%
Weingarten Realty Investors WRI ex div date: 9/2/2009 market cap: $2.3B yield: 5.3%
The rest of the ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the September link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next week. wsnn.com came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield.
There is everything from real estate companies to drug companies to banks.
Merck & Co., Inc. MRK ex div date: 9/2/2009 market cap: $69.1B yield: 4.7%
Valley National Bancorp VLY ex div date: 9/2/2009 market cap: $1.7B yield: 6.4%
Weingarten Realty Investors WRI ex div date: 9/2/2009 market cap: $2.3B yield: 5.3%
The rest of the ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the September link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
The Bernie Madoff Scandal Keeps on Going
Sheryl Weinstein claims that she is the mistress of Bernie Madoff, and has decided to write a book called Madoff's Other Secret: Love, Money, Bernie, and Me
. She claims that he was a good kisser, and she called him winkie-dink.
If you want to know all the juicy details, get the book Madoff's Other Secret: Love, Money, Bernie, and Me.
. She claims that he was a good kisser, and she called him winkie-dink.If you want to know all the juicy details, get the book Madoff's Other Secret: Love, Money, Bernie, and Me
.
Friday, August 21, 2009
San Francisco Money Show
On my way to the San Francisco Money Show at the SF Marriott on 4th St. It runs throughout the weekend. See you there.
Wednesday, August 19, 2009
Stocks Going Ex Dividend during the Last Week of August
The stock trading technique called 'Buying Dividends' is becoming more and more popular. It is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets.
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next week. They came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield:
Limited Brands, Inc. LTD ex div date: 8/26/09 market cap: $4.7B yield: 4.1%
Bank of Hawaii Corporation BOH ex div date: 8/27/09 market cap: $1.9B yield: 4.4%
The rest of the ex-dividend stocks can be found at wsnn.com. If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next week. They came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield:
Limited Brands, Inc. LTD ex div date: 8/26/09 market cap: $4.7B yield: 4.1%
Bank of Hawaii Corporation BOH ex div date: 8/27/09 market cap: $1.9B yield: 4.4%
The rest of the ex-dividend stocks can be found at wsnn.com. If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
Sunday, August 16, 2009
Zimbabwe Dollars Now Out of Business
Zimbabwe has had the the worst inflation in the world, with an inflation rate well above a million percent. Inflation was so bad that the country issued $100 trillion bills. But recently, the country's currency was replaced with the U.S. dollar and the South American rand in order to provide some stability to the country. This has turned the Zimbabwe $100 trillion bill into a popular collectors item.
Top 10 Box Office Hit Movies and the Stocks that Benefit
The summer is almost over, kids will be going back to school soon, time to get to the air conditioned movie theaters to see the latest blockbuster hits during the hot month of August. Number one for this weekend is District 9, a movie which just came out about aliens from outer space who are refugees on Earth. It has a weekend gross of $37,000,000, far outperforming G.I. Joe: The Rise of Cobra at $22.5 million. District 9 is distributed by TriStar Pictures, a film subsidiary of Columbia Pictures, itself a subdivision of the Columbia TriStar Motion Picture Group, which is owned by Sony Pictures (SNE) and G.I. Joe has distribution through Paramount Pictures, owned by Viacom (VIA) (VIA-B).
Here are the top ten:
1 District 9 $37,000,000 TriStar Pictures, a film subsidiary of Columbia Pictures, itself a subdivision of the Columbia TriStar Motion Picture Group, which is owned by Sony Pictures (SNE)
2 G.I. Joe: The Rise of Cobra $22,500,000 Paramount Pictures, owned by Viacom (VIA) (VIA-B)
3 The Time Traveler's Wife $19,205,000 Warner Bros. Pictures Distribution, Subsidiary of Time Warner (TWX)
4 Julie & Julia $12,400,000 Sony Pictures Releasing (SNE)
5 G-Force $6,908,000 Buena Vista Pictures Distribution, owned by the Walt Disney Co. (DIS)
6 The Goods: Live Hard, Sell Hard $5,350,000 Paramount Vantage, owned by Viacom (VIA) (VIA-B)
7 Harry Potter and the Half-Blood Prince $5,155,000 Warner Bros. Pictures Distribution (TWX)
8 The Ugly Truth $4,500,000 Sony Pictures Releasing (SNE)
9 Ponyo $3,506,000 Walt Disney Pictures, Buena Vista Pictures Distribution (DIS)
10 (500) Days of Summer $3,025,000 Fox Searchlight Pictures, a film division of 20th Century Fox, a subsidiary of News Corporation (NWSA)
By Stockerblog.com
Source of Box Office Gross: Yahoo! Movies from Box Office Mojo, LLC
Here are the top ten:
1 District 9 $37,000,000 TriStar Pictures, a film subsidiary of Columbia Pictures, itself a subdivision of the Columbia TriStar Motion Picture Group, which is owned by Sony Pictures (SNE)
2 G.I. Joe: The Rise of Cobra $22,500,000 Paramount Pictures, owned by Viacom (VIA) (VIA-B)
3 The Time Traveler's Wife $19,205,000 Warner Bros. Pictures Distribution, Subsidiary of Time Warner (TWX)
4 Julie & Julia $12,400,000 Sony Pictures Releasing (SNE)
5 G-Force $6,908,000 Buena Vista Pictures Distribution, owned by the Walt Disney Co. (DIS)
6 The Goods: Live Hard, Sell Hard $5,350,000 Paramount Vantage, owned by Viacom (VIA) (VIA-B)
7 Harry Potter and the Half-Blood Prince $5,155,000 Warner Bros. Pictures Distribution (TWX)
8 The Ugly Truth $4,500,000 Sony Pictures Releasing (SNE)
9 Ponyo $3,506,000 Walt Disney Pictures, Buena Vista Pictures Distribution (DIS)
10 (500) Days of Summer $3,025,000 Fox Searchlight Pictures, a film division of 20th Century Fox, a subsidiary of News Corporation (NWSA)
By Stockerblog.com
Source of Box Office Gross: Yahoo! Movies from Box Office Mojo, LLC
Supermodel Stock Index Update: Celebrity Models Outperform the Dow
Two top modeling celebrities, Gisele Bündchen and Heidi Klum, both of which had celebrity stock indexes created by Stockerblog.com, have had their indexes updated and compared to the Dow Jones Industrial Average. The one thing that these women have in common, other than the fact that they are wealthy, successful supermodels, is that both of their indexes have outperformed the Dow over the last two and a half years.
Their indexes are based on the companies that they are connected to in some way, such as acting as celebrity spokesperson. Since January of 2007, the Gisele Bündchen's index was down 6.7% and the Heidi Klum's index was up 1.1%, and both were significantly better than the return on the Dow which was down 26.1%. The stocks in their indices are as follows:
Gisele Bundchen
Volkswagon (VLKAY.PK)
Polo Ralph Lauren Corp. (RL)
Vivo Participacoes (VIV)
News Corp. (NWSA)
Sony (SNE)
Procter & Gamble (PG)
Disney (DIS)
Heidi Klum
Limited (LTD)
McDonalds (MCD)
Volkswagon (VLKAY.PK)
Target (TGT)
Procter & Gamble (PG)
Nike (NKE)
Jones Apparel Group Inc. (JNY)
Hennes & Mauritz AB (HNNMY.PK)
Assumptions:
These are price-weighted indexes, similar to the Dow Jones Industrial Average.
Dividends were included.
Check out additional details on Gisele Bundchen, Heidi Klum, and Angelina Jolie.
Author owns DIS, MCD, and TWX.
By Fred Fuld at Stockerblog.com
Their indexes are based on the companies that they are connected to in some way, such as acting as celebrity spokesperson. Since January of 2007, the Gisele Bündchen's index was down 6.7% and the Heidi Klum's index was up 1.1%, and both were significantly better than the return on the Dow which was down 26.1%. The stocks in their indices are as follows:
Gisele Bundchen
Volkswagon (VLKAY.PK)
Polo Ralph Lauren Corp. (RL)
Vivo Participacoes (VIV)
News Corp. (NWSA)
Sony (SNE)
Procter & Gamble (PG)
Disney (DIS)
Heidi Klum
Limited (LTD)
McDonalds (MCD)
Volkswagon (VLKAY.PK)
Target (TGT)
Procter & Gamble (PG)
Nike (NKE)
Jones Apparel Group Inc. (JNY)
Hennes & Mauritz AB (HNNMY.PK)
Assumptions:
These are price-weighted indexes, similar to the Dow Jones Industrial Average.
Dividends were included.
Check out additional details on Gisele Bundchen, Heidi Klum, and Angelina Jolie.
Author owns DIS, MCD, and TWX.
By Fred Fuld at Stockerblog.com
Friday, August 14, 2009
Guest Article: Preserving Capital a Priority in This Risky Market
Preserving Capital a Priority in This Risky Market
By Stephen T. McClellan
Author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
This is a tricky, confusing, and difficult to predict stock market. The debate rages between bulls and bears, the S&P 500 some 36% below the high of October 2007 but 47% above the trough last March. Wall Street is no help. It is a giant marketing machine and always plays the role of cheerleader. Given its congenitally favorable bias it is accentuating the recent rally. It pays no attention to risk or preservation of capital. The Street never tells you that it requires at least double the percentage gain to offset a given loss. At this point, it will necessitate a 131% upside move for the S&P 500 to get back to even following the 57% drop through early March, a long way to go even after the 47% surge since March.
In my book, Full of Bull, I emphasize it is never too late to focus on protection of capital. But don't turn to Wall Street for assistance. Consider its sorry record during 2007-2008 and its own holdings of toxic assets such as subprime loans and collateralized debt obligations. Inattention to risk led to the capitulation of Lehman Brothers, Bear Stearns, Merrill Lynch, AIG, Fannie May, and Citibank. If the Street is not protecting its own capital, do you think it is paying heed to yours?
Protection of capital is a paramount investment objective far ahead of gains and returns. There are no excessive returns without commensurate risk. Think of Long Term Capital Management, the Internet bubble, the toxic asset financial debacle, the housing bubble, etc. Brokerage firms and research analysts rarely indicate the worst-case downside risk in a stock, only the upside price objective. Amid a bear market in the first half of 2008, during the crisis of confidence when the financial sector was being decimated, a major Street firm advised investors to purchase growth stocks, emerging market stocks, and international stocks. There was little reference to cash or how to avoid losing money in its outlook report. Investors are already taking enough risk by owning common stocks. A conservative approach is warranted.
California's largest pension fund, Calpers, incurred an almost $60 billion loss in its investment portfolio amidst the state's current financial crisis, similar to many college endowment funds, investing billions in high-risk private equity, hedge funds, emerging markets, real estate, and toxic assets. But in Calpers case, it seems to have learned nothing about risk from that debacle. In appointing a new head of investments, its strategy now is to pursue further high-risk investments, such as junk bonds and California real estate, to seek higher returns in order to make up the loss. Calpers is not humbled or taking a more cautious approach as the strategy should have been all along. It is still not focused on protection of capital.
The goal here is don't lose, the secret of superior investing. Charles D. Ellis makes the point in a Financial Analysts Journal article that "large losses are forever -- in investing, teenage driving, and fidelity . . . and are almost always caused by trying to get too much by taking too much risk." He discusses the excitement of "the big score," which causes the investor to put too much emphasis on offense, with little regard to defense.
So forget the 57% bear market dive through early last March, and the subsequent 47% upsurge. That's history. Take the attitude that it does not matter what your stock or investment has done up until now -- whether it is ahead from where you purchased it or underwater. When I recommend selling a stock that has plummeted far below the purchase price, people often retort: "I can't do that; I'll lose too much money." They think the loss is not real until they sell, that it exists only on paper, and are frozen to a past decision. Consider what is in store for the stock going forward. The only aspect you can control is today's investment decision. You cannot alter previous mistakes, especially by being stubborn and refusing to reassess the prospects.
A low risk portfolio contains a material amount of cash equivalents. There should be good balance between stocks and more secure investments like bonds. Stocks should be value-oriented carrying modest PE ratios and strong balance sheet financials. Dividends are key and almost always go together with value stocks. Dividends usually connote reasonable profits, cash flow, financial strength, and balanced, appropriate management principles.
Currently, the stock market outlook seems fraught with risk. Is this a bear market rally, are stocks overvalued, will deficits, deflation, unemployment, consumer devastation, falling housing prices, and a weak dollar cause yet another market dive? Or is the wall of worry a tonic, the negatives already discounted, federal monetary policy providing huge liquidity, and the trillions of dollars on the sidelines an underpinning to funds inflow to the market? It's always about risk. This element should be the core of any investment strategy or, like Calpers, you've learned nothing from the bear market.
©2009 Stephen T. McClellan, author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
Author Bio
Stephen T. McClellan, author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio, was a Wall Street investment analyst for 32 years, covering high-tech stocks as a supervisory analyst. He was a First Vice President at Merrill Lynch for 18 years until 2003, and ranked on the annual Institutional Investor All-America Research Team 19 consecutive times, The Wall Street Journal poll for 7 years, and has a place in the Journal's Hall of Fame. From 1977 to 1985, he was a Vice President at Salomon Brothers and before that held a similar position at Spencer Trask for 6 years. Before commencing his Wall Street career, he was an industry analyst with the U.S. Department of Commerce. From 1964 to 1967, the author served as an operations officer aboard the USS Suffolk County (LST-1173) in the U.S. Navy.
Mr. McClellan has a Chartered Financial Analyst (CFA) designation, is a member of the New York CFA Society and the CFA Institute, was President of the New York Computer Industry Analyst Group, and was President and Founder of the Software/Services Analyst Group. He has made television appearances on Bloomberg TV, FoxBusiness News, CBS, CNN MoneyLine, CNBC, and Wall Street Week. He has conducted several radio interviews on such programs as Bob Brinker's Moneytalk and given presentations to numerous organizations, at conferences, and to companies. Mr. McClellan has published articles in the Financial Times, The New York Times, Forbes, and other publications. His MBA in Finance is from George Washington University and his BA is from Syracuse University.
Reprinted with permission of the publicist.
By Stephen T. McClellan
Author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
This is a tricky, confusing, and difficult to predict stock market. The debate rages between bulls and bears, the S&P 500 some 36% below the high of October 2007 but 47% above the trough last March. Wall Street is no help. It is a giant marketing machine and always plays the role of cheerleader. Given its congenitally favorable bias it is accentuating the recent rally. It pays no attention to risk or preservation of capital. The Street never tells you that it requires at least double the percentage gain to offset a given loss. At this point, it will necessitate a 131% upside move for the S&P 500 to get back to even following the 57% drop through early March, a long way to go even after the 47% surge since March.
In my book, Full of Bull, I emphasize it is never too late to focus on protection of capital. But don't turn to Wall Street for assistance. Consider its sorry record during 2007-2008 and its own holdings of toxic assets such as subprime loans and collateralized debt obligations. Inattention to risk led to the capitulation of Lehman Brothers, Bear Stearns, Merrill Lynch, AIG, Fannie May, and Citibank. If the Street is not protecting its own capital, do you think it is paying heed to yours?
Protection of capital is a paramount investment objective far ahead of gains and returns. There are no excessive returns without commensurate risk. Think of Long Term Capital Management, the Internet bubble, the toxic asset financial debacle, the housing bubble, etc. Brokerage firms and research analysts rarely indicate the worst-case downside risk in a stock, only the upside price objective. Amid a bear market in the first half of 2008, during the crisis of confidence when the financial sector was being decimated, a major Street firm advised investors to purchase growth stocks, emerging market stocks, and international stocks. There was little reference to cash or how to avoid losing money in its outlook report. Investors are already taking enough risk by owning common stocks. A conservative approach is warranted.
California's largest pension fund, Calpers, incurred an almost $60 billion loss in its investment portfolio amidst the state's current financial crisis, similar to many college endowment funds, investing billions in high-risk private equity, hedge funds, emerging markets, real estate, and toxic assets. But in Calpers case, it seems to have learned nothing about risk from that debacle. In appointing a new head of investments, its strategy now is to pursue further high-risk investments, such as junk bonds and California real estate, to seek higher returns in order to make up the loss. Calpers is not humbled or taking a more cautious approach as the strategy should have been all along. It is still not focused on protection of capital.
The goal here is don't lose, the secret of superior investing. Charles D. Ellis makes the point in a Financial Analysts Journal article that "large losses are forever -- in investing, teenage driving, and fidelity . . . and are almost always caused by trying to get too much by taking too much risk." He discusses the excitement of "the big score," which causes the investor to put too much emphasis on offense, with little regard to defense.
So forget the 57% bear market dive through early last March, and the subsequent 47% upsurge. That's history. Take the attitude that it does not matter what your stock or investment has done up until now -- whether it is ahead from where you purchased it or underwater. When I recommend selling a stock that has plummeted far below the purchase price, people often retort: "I can't do that; I'll lose too much money." They think the loss is not real until they sell, that it exists only on paper, and are frozen to a past decision. Consider what is in store for the stock going forward. The only aspect you can control is today's investment decision. You cannot alter previous mistakes, especially by being stubborn and refusing to reassess the prospects.
A low risk portfolio contains a material amount of cash equivalents. There should be good balance between stocks and more secure investments like bonds. Stocks should be value-oriented carrying modest PE ratios and strong balance sheet financials. Dividends are key and almost always go together with value stocks. Dividends usually connote reasonable profits, cash flow, financial strength, and balanced, appropriate management principles.
Currently, the stock market outlook seems fraught with risk. Is this a bear market rally, are stocks overvalued, will deficits, deflation, unemployment, consumer devastation, falling housing prices, and a weak dollar cause yet another market dive? Or is the wall of worry a tonic, the negatives already discounted, federal monetary policy providing huge liquidity, and the trillions of dollars on the sidelines an underpinning to funds inflow to the market? It's always about risk. This element should be the core of any investment strategy or, like Calpers, you've learned nothing from the bear market.
©2009 Stephen T. McClellan, author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
Author Bio
Stephen T. McClellan, author of Full of Bull (Updated Edition): Unscramble Wall Street Doubletalk to Protect and Build Your Portfolio
, was a Wall Street investment analyst for 32 years, covering high-tech stocks as a supervisory analyst. He was a First Vice President at Merrill Lynch for 18 years until 2003, and ranked on the annual Institutional Investor All-America Research Team 19 consecutive times, The Wall Street Journal poll for 7 years, and has a place in the Journal's Hall of Fame. From 1977 to 1985, he was a Vice President at Salomon Brothers and before that held a similar position at Spencer Trask for 6 years. Before commencing his Wall Street career, he was an industry analyst with the U.S. Department of Commerce. From 1964 to 1967, the author served as an operations officer aboard the USS Suffolk County (LST-1173) in the U.S. Navy.Mr. McClellan has a Chartered Financial Analyst (CFA) designation, is a member of the New York CFA Society and the CFA Institute, was President of the New York Computer Industry Analyst Group, and was President and Founder of the Software/Services Analyst Group. He has made television appearances on Bloomberg TV, FoxBusiness News, CBS, CNN MoneyLine, CNBC, and Wall Street Week. He has conducted several radio interviews on such programs as Bob Brinker's Moneytalk and given presentations to numerous organizations, at conferences, and to companies. Mr. McClellan has published articles in the Financial Times, The New York Times, Forbes, and other publications. His MBA in Finance is from George Washington University and his BA is from Syracuse University.
Reprinted with permission of the publicist.
Thursday, August 13, 2009
No More Recession for Germany and France
Both Germany and France are now out of their recession since both their economies grew by 0.3% during the second quarter of the year. Hopefully, we will see the same thing for the United States. Otherwise, we will be in a depression. Check out the article, The Exact Day This Recession Will End.
Book Review: Fooled by Randomness
I almost didn't read this book. I normally read a book cover-to-cover, all the way down to the copyright date. However, I had a hard time getting through the table of contents, the preface and the prologue. But once I started Chapter 1, I was hooked. I recommend that you start right in with Chapter 1 after you get a copy of Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
by Nassim Nicholas Taleb. It is about how we perceive luck in like, from the standpoint of an investment trader and investor. As a matter of fact, all traders should read this book.
If there are two traders, one is very successful and very rich but very conservative, and the other one is extremely successful and rich but takes substantial risks, who is better off? If you guess the extremely successful one, you would be wrong. Taleb uses real life examples and explains in easy-to-understand detail how he comes up with his conclusions. As a quantitative trader in New York and London, so he knows what he is talking about. If you are trader or investor, check out Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.
by Nassim Nicholas Taleb. It is about how we perceive luck in like, from the standpoint of an investment trader and investor. As a matter of fact, all traders should read this book.If there are two traders, one is very successful and very rich but very conservative, and the other one is extremely successful and rich but takes substantial risks, who is better off? If you guess the extremely successful one, you would be wrong. Taleb uses real life examples and explains in easy-to-understand detail how he comes up with his conclusions. As a quantitative trader in New York and London, so he knows what he is talking about. If you are trader or investor, check out Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
.
JetBlue Offering 'All You Can Fly" Tickets
For only $599, you can fly anywhere JetBlue (JBLU) flies, as much as you want. However, all the flying must be done between Sept. 8 and Oct. 8. Tickets are available until Aug. 21 or while supplies last. JetBlue trades on NASDAQ.
Author owns JBLU.
Author owns JBLU.
Stocks Going Ex Dividend during the Third Week of August
The stock trading technique called 'Buying Dividends' is becoming more and more popular. It is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets.
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next. They came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield:
Consolidated Edison, Inc. ED ex div date: 8/17/09 market cap: $11.1B yield: 5.8%
Microchip Technology Inc. MCHP ex div date: 8/18/09 market cap: $5.0B yield: 5.1%
Sonoco Products Company SON ex div date: 8/19/09 market cap: $2.6B yield: 4.1%
The rest of the ex-dividend stocks can be found at wsnn.com. If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the next. They came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield:
Consolidated Edison, Inc. ED ex div date: 8/17/09 market cap: $11.1B yield: 5.8%
Microchip Technology Inc. MCHP ex div date: 8/18/09 market cap: $5.0B yield: 5.1%
Sonoco Products Company SON ex div date: 8/19/09 market cap: $2.6B yield: 4.1%
The rest of the ex-dividend stocks can be found at wsnn.com. If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author doesn't own any of the above.
By Stockerblog.com
Wednesday, August 12, 2009
Guest Article: Has the ‘Gold Bull’ finally arrived?
Has the ‘Gold Bull’ finally arrived?
Is this the Gold move we’ve all been waiting for?
Is the big move finally here? With so many stops and starts in the gold market, it’s hard to know which way is up.
http://www.ino.com/info/428/CD3111/&dp=0&l=0&campaignid=3
We’re only going to leave this online for a short time. Given the state of the current economy, things move quickly. If the video isn’t watched soon, it won’t be of any use to you. So I urge you to take a few minutes to watch the possible outlooks for gold on the upside.
There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.
Enjoy the video:
http://www.ino.com/info/428/CD3111/&dp=0&l=0&campaignid=3
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Is this the Gold move we’ve all been waiting for?
Is the big move finally here? With so many stops and starts in the gold market, it’s hard to know which way is up.
http://www.ino.com/info/428/CD3111/&dp=0&l=0&campaignid=3
We’re only going to leave this online for a short time. Given the state of the current economy, things move quickly. If the video isn’t watched soon, it won’t be of any use to you. So I urge you to take a few minutes to watch the possible outlooks for gold on the upside.
There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.
Enjoy the video:
http://www.ino.com/info/428/CD3111/&dp=0&l=0&campaignid=3
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Guest Article: Want to See Neighborhoods that Beat the Bust? Take a Walk
Want to See Neighborhoods that Beat the Bust? Take a Walk
By John F.Wasik,
Author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
You want to find a neighborhood that will hold its value and may even appreciate once the housing recession ends?
Take a walk.
Communities that have amenities and services within walking distance and don't require a car may win out over time and may even reward you with equity gains.
Although we're seeing some moderation in the home-value free fall of the past three years, the value of walkability may be difficult to measure as U.S. home prices continue to show signs of distress in most markets.
Yet it's worth trying to envision the other side of this pernicious slump. If you're choosing a place to relocate, retire to or reinvent yourself in, the most walkable cities offer plenty of options.
Pedestrian-friendly cities can make huge personal economic sense. If you don't need a car, you can save thousands a year on financing, leasing, insurance, maintenance, gas and parking fees -- especially if you own more than one vehicle.
Living where there's ubiquitous and reliable public transportation and services within a mile or less also means fewer worries about traffic jams, accidents, wasted money and time. And walking is good for you, so you could improve your health and lose weight.
Best Neighborhoods
Almost without exception, the most walkable neighborhoods are within older, established cities and suburbs and not sprawling, car-dominated communities, or what I call "spurbs," according to research I did for my new book The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream.
According to Walkscore, a service that rates 40 cities and more than 2,500 neighborhoods, San Francisco, New York, Boston, Chicago, Philadelphia and Seattle rank as the most walkable cities.
Within those cities, areas such as New York's Soho; San Francisco's Chinatown; Boston's Back Bay; Chicago's Loop; Philly's City Center and Seattle's Pioneer Square rank highly as the most pedestrian-friendly neighborhoods in the country.
Having walked these neighborhoods and most of the other top-rated cities, I concur that these areas meet Walkscore's criteria of being mixed-income, mixed-use, amenity-packed and densely populated.
Christopher Leinberger, a fellow at the Brookings Institution and a director of Walkscore's board, noted that long-term trends favor these neighborhoods because "Millenials,” or the children of baby boomers, prefer them over suburbs. Their retiring parents may eventually favor them as well.
"Millenials are saying 'why do I have to invest in a fleet of cars?'" Leinberger says.
Values Rising
In the face of a national housing downturn, does it make sense to invest in the most-walkable neighborhoods (or stay put if you're already there)?
According to Leinberger's research, he surmises that each additional point on the Walkscore scale -- 100 is the highest walkability rating -- may translate into from $1,000 to $3,000 more per square foot of housing value.
A superficial analysis bears witness to his observation. You'll pay a lot more for housing in New York's Tribeca, which is rated 100, than in Charlotte, North Carolina, which is rated 38.
I know that's not a fair comparison. New York, San Francisco, Boston and other older cities will always be more expensive due to scarcity of land, jobs and general desirability.
Still, I can argue that prices overall have held up better in the walkable cities relative to the S&P Case-Shiller 20-city index.
New York home prices, for example, gained 4 percent over the past five years through March 31, versus a decline of about 10 percent in the 20-city index for that period. Seattle was almost 28 percent above the multi-city average. Boston was about a half a percentage point better.
Declines Still Ahead
In contrast, a relatively pedestrian-hostile city like Atlanta lagged the national average by about 2 percentage points. And walkability isn't everything. The highest-priced, foreclosure-wracked but very walkable San Francisco trailed the national benchmark by 17 points.
I'm not saying that walkability is the sole reason for picking a place to live, nor does it guarantee affordability or appreciation.
For a better deal in housing, you'll definitely have to look outside of the most walkable cities.
Places like Hinesville, Georgia; Farmington, New Mexico; or Lebanon, Pennsylvania; might be better places to look for better prices and lower risk of losing equity, according to Homesmart Reports, a home investment risk-rating service.
In the meantime, home prices will not be a random walk. The cities where there was rampant overbuilding, speculation, over leveraging or foreclosures will still continue to decline. Even places not hit most directly by the bust will be hurting. Unemployment will continue to ravage even the best-planned urban settings.
But keep in mind that taking a stroll and real estate investing still have two things in common: You have to be patient to reap the long-term benefits.
©2009 John F. Wasik, author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
Author Bio
John F. Wasik, author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream, is a personal finance columnist for Bloomberg News and the author of several books. His most recent book, The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis
, was praised by Studs Terkel and well reviewed by the New York Times. Wasik has won more than fifteen awards for consumer journalism including the 2008 Lisagor and several from the National Press Club. He has appeared on such national media as NBC, NPR, and PBS. He lives in Chicago.
Reprinted with the permission of the publicist.
By John F.Wasik,
Author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
You want to find a neighborhood that will hold its value and may even appreciate once the housing recession ends?
Take a walk.
Communities that have amenities and services within walking distance and don't require a car may win out over time and may even reward you with equity gains.
Although we're seeing some moderation in the home-value free fall of the past three years, the value of walkability may be difficult to measure as U.S. home prices continue to show signs of distress in most markets.
Yet it's worth trying to envision the other side of this pernicious slump. If you're choosing a place to relocate, retire to or reinvent yourself in, the most walkable cities offer plenty of options.
Pedestrian-friendly cities can make huge personal economic sense. If you don't need a car, you can save thousands a year on financing, leasing, insurance, maintenance, gas and parking fees -- especially if you own more than one vehicle.
Living where there's ubiquitous and reliable public transportation and services within a mile or less also means fewer worries about traffic jams, accidents, wasted money and time. And walking is good for you, so you could improve your health and lose weight.
Best Neighborhoods
Almost without exception, the most walkable neighborhoods are within older, established cities and suburbs and not sprawling, car-dominated communities, or what I call "spurbs," according to research I did for my new book The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
.According to Walkscore, a service that rates 40 cities and more than 2,500 neighborhoods, San Francisco, New York, Boston, Chicago, Philadelphia and Seattle rank as the most walkable cities.
Within those cities, areas such as New York's Soho; San Francisco's Chinatown; Boston's Back Bay; Chicago's Loop; Philly's City Center and Seattle's Pioneer Square rank highly as the most pedestrian-friendly neighborhoods in the country.
Having walked these neighborhoods and most of the other top-rated cities, I concur that these areas meet Walkscore's criteria of being mixed-income, mixed-use, amenity-packed and densely populated.
Christopher Leinberger, a fellow at the Brookings Institution and a director of Walkscore's board, noted that long-term trends favor these neighborhoods because "Millenials,” or the children of baby boomers, prefer them over suburbs. Their retiring parents may eventually favor them as well.
"Millenials are saying 'why do I have to invest in a fleet of cars?'" Leinberger says.
Values Rising
In the face of a national housing downturn, does it make sense to invest in the most-walkable neighborhoods (or stay put if you're already there)?
According to Leinberger's research, he surmises that each additional point on the Walkscore scale -- 100 is the highest walkability rating -- may translate into from $1,000 to $3,000 more per square foot of housing value.
A superficial analysis bears witness to his observation. You'll pay a lot more for housing in New York's Tribeca, which is rated 100, than in Charlotte, North Carolina, which is rated 38.
I know that's not a fair comparison. New York, San Francisco, Boston and other older cities will always be more expensive due to scarcity of land, jobs and general desirability.
Still, I can argue that prices overall have held up better in the walkable cities relative to the S&P Case-Shiller 20-city index.
New York home prices, for example, gained 4 percent over the past five years through March 31, versus a decline of about 10 percent in the 20-city index for that period. Seattle was almost 28 percent above the multi-city average. Boston was about a half a percentage point better.
Declines Still Ahead
In contrast, a relatively pedestrian-hostile city like Atlanta lagged the national average by about 2 percentage points. And walkability isn't everything. The highest-priced, foreclosure-wracked but very walkable San Francisco trailed the national benchmark by 17 points.
I'm not saying that walkability is the sole reason for picking a place to live, nor does it guarantee affordability or appreciation.
For a better deal in housing, you'll definitely have to look outside of the most walkable cities.
Places like Hinesville, Georgia; Farmington, New Mexico; or Lebanon, Pennsylvania; might be better places to look for better prices and lower risk of losing equity, according to Homesmart Reports, a home investment risk-rating service.
In the meantime, home prices will not be a random walk. The cities where there was rampant overbuilding, speculation, over leveraging or foreclosures will still continue to decline. Even places not hit most directly by the bust will be hurting. Unemployment will continue to ravage even the best-planned urban settings.
But keep in mind that taking a stroll and real estate investing still have two things in common: You have to be patient to reap the long-term benefits.
©2009 John F. Wasik, author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
Author Bio
John F. Wasik, author of The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream
, is a personal finance columnist for Bloomberg News and the author of several books. His most recent book, The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis, was praised by Studs Terkel and well reviewed by the New York Times. Wasik has won more than fifteen awards for consumer journalism including the 2008 Lisagor and several from the National Press Club. He has appeared on such national media as NBC, NPR, and PBS. He lives in Chicago.Reprinted with the permission of the publicist.
Thursday, August 06, 2009
10 Under 10: Low Share Price, Debt Free, Lots of Cash
Investors are always looking for bargains, especially stocks that trade for less than $10 per share. WallStreetNewsNetwork.com has turned up ten of these low priced debt free stocks with lots of cash per share and strong revenue growth. All of them have market caps above $100 million, however, they are still low cap stocks and should be considered very speculative.
The Medicines Comp. (MDCO) trades a little less than $8 per share, and has $3.56 in cash per share. This provider of medicines for the treatment of critical care patients has a market cap of $426.2 million, a forward PE of 11.8 and a sales growth rate of 29.6%.
Citizens Inc. (CIA), with a very interesting stock ticker symbol, trades for less than $7 share has $1.32 in cash per share. This life and health insurance company has a market cap of $ 341.0 million, a forward PE of 21.1 and revenue growth of 12.3?
To see the rest of the low priced debt free stocks, go to wsnn.com.
Author does not own any of the above.
By Stockerblog.com
The Medicines Comp. (MDCO) trades a little less than $8 per share, and has $3.56 in cash per share. This provider of medicines for the treatment of critical care patients has a market cap of $426.2 million, a forward PE of 11.8 and a sales growth rate of 29.6%.
Citizens Inc. (CIA), with a very interesting stock ticker symbol, trades for less than $7 share has $1.32 in cash per share. This life and health insurance company has a market cap of $ 341.0 million, a forward PE of 21.1 and revenue growth of 12.3?
To see the rest of the low priced debt free stocks, go to wsnn.com.
Author does not own any of the above.
By Stockerblog.com
Tuesday, August 04, 2009
Domain Name Stolen, Resold for $100,000
A New Jersey man allegedly stole the domain name web site address P2P.com, then listed it on eBay (EBAY), whereupon the name sold for over $100,000 to professional basketball player Mark Madsen of the Los Angeles Clippers. The charges include theft by unlawful taking or deception, identity theft, and computer theft.
How About a $100 Million Bonus?
Commodities trader, Andrew J. Hall , is entitled to a $100 million bonus the the successful trading he has done in the oil trading market. But whether he will be paid that amount, remains to be seen, since his contract was with Citigroup (C), which trades on the New York Stock Exchange. Since Citigroup is a recipient of government bailout money, there could be some issues there.
Sunday, August 02, 2009
Gadgets for Nerds on the Beach
It's summertime, which means that it is time to hit the beaches at least once, no matter how far you live from the ocean. Gizmodo has come up with a list of ten items that can make a nerd look cool while laying on the beach. These include everything from a drivable beer cooler to a pair of sunglasses that turns into a USB drive to a beach tent for your laptop.
Question: Why is Stockerblog's Prediction of the Real Estate Bottom So Different from Jim Cramer's Prediction? Answer: It's Not So Far Apart
Jim Cramer moved up the date on his prediction of the bottom of the real estate market from the end of June and called the bottom on June 16 of this year. I made a prediction in September of last year that the bottom of the real estate market will be November 25, 2009. It may seem that we are far apart on our prediction day, but we're not. First, we both called the bottom in the same year. Second, our predictions are only five months apart, and this big ship called real estate takes a long time to turn. Five months in real estate time is equal to about only five days in stock market time.
When I made my prediction for the real estate bottom, I was looking at it primarily from the standpoint of the individual homebuyer and residential real estate investor. I was also looking at it from a psychological standpoint; trying to determine when the best time of the year would be to find the best bargains. I chose November because there are very few buyers out there compared to the summer months, the weather is not conducive to open houses, and sellers at that time of the year are more desperate and willing to take lower prices.
Now I'm going to move up my prediction by a few days, to Sunday, November 1, the day after Halloween. Hopefully, when you go around looking at open houses that day, you can find a few bargains with a couple of rotten egg stains on the front door and maybe the mailbox blown up. Make lowball offers and the seller and realtor will be very happy.
Obviously I am being a little facetious but I think that if you make a real estate purchase around the early November time frame, you can't go wrong. You won't make a quick profit but if there is any additional drop in real estate prices after that time, it will be minimal.
Interest rates are still low, banks are now releasing foreclosed homes on a systematic basis without flooding the market (banks have this down to a science, surprisingly), housing starts are increasing, and the hardest hit areas seem to be bottoming out. This summer should show a little bump in activity, sales, and possibly prices, then a drop after kids are back in school.
I don't think it is time to start buying the homebuilder stocks yet, but it you are looking for a single family residence to buy, start looking in October.
When I made my prediction for the real estate bottom, I was looking at it primarily from the standpoint of the individual homebuyer and residential real estate investor. I was also looking at it from a psychological standpoint; trying to determine when the best time of the year would be to find the best bargains. I chose November because there are very few buyers out there compared to the summer months, the weather is not conducive to open houses, and sellers at that time of the year are more desperate and willing to take lower prices.
Now I'm going to move up my prediction by a few days, to Sunday, November 1, the day after Halloween. Hopefully, when you go around looking at open houses that day, you can find a few bargains with a couple of rotten egg stains on the front door and maybe the mailbox blown up. Make lowball offers and the seller and realtor will be very happy.
Obviously I am being a little facetious but I think that if you make a real estate purchase around the early November time frame, you can't go wrong. You won't make a quick profit but if there is any additional drop in real estate prices after that time, it will be minimal.
Interest rates are still low, banks are now releasing foreclosed homes on a systematic basis without flooding the market (banks have this down to a science, surprisingly), housing starts are increasing, and the hardest hit areas seem to be bottoming out. This summer should show a little bump in activity, sales, and possibly prices, then a drop after kids are back in school.
I don't think it is time to start buying the homebuilder stocks yet, but it you are looking for a single family residence to buy, start looking in October.