Buy Low, Sell High, Go Short & Cover
Continuation From Yesterday…...(The Gospel Of Goldman Sachs)
- Growth Investing: For the most part, growth investors are not concerned with finding undervalued securities. In fact, in most of the cases and for a lot of the growth investors’ valuations become somewhat irrelevant. Only the growth of the underlying business is all that matters. This approach presumes that if the underlying business continues to grow fast, the stock price will continue to appreciate much faster than the overall market. Yielding market beating results. Yet, this approach carries inherently more risk when compared to value investing. For instance, should the company disappoint in their growth trajectory, investors can find their stocks tumbling down 20-50% or more in a matter of days, if not hours.
- Active Trading: This particular approach to the market is inherently more difficult to define as it contains millions of different strategies. Everything from simple day trading to using supercomputers to run complex algorithms to trading based on planetary movement. It is highly probable that each individual trader who is serious about participating in financial markets will have his or her own strategy. Developed though years of experience and trial and error. Understandably, the amount of risk each trader takes depends entirely on the strategy used. Yet, one truth reigns supreme in this category as well. Most traders fail to outperform the market. What’s more, a high percentage of people who attempt to make a living through this craft get washed out in the first few years. Due to losses, inexperience and unwillingness to improve on their skill.
So, which investment approach is the best for our newly enlightened investors?
We’ll get to that in a second, but before we do there is yet another intricacy that you should be aware of. Whether it is the mutual fund industry mantra of buying and holding forever or any of the investment approaches above, they all have one thing in common. Most investment approaches are Long Centric. In other words, most investors invest only in anticipation of rising markets or higher stock prices. Completely disregarding the other half of the equation. That stocks do fall. Sometimes substantially so and sometimes they do so over extended periods of time.
A bear market of 1966 to 1982 gives a perfect opportunity to see just that. The Dow topped in 1966 at around 1,000. Over the next 16 years the market proceeded to oscillate up and down, yielding negative results and at least three gut wrenching sell offs of 30-50%. When a bear market ended in 1982 most investors had nothing but a 25% loss to show for their efforts.
Yet, this devastating loss of time and capital could have been entirely avoided if investors concentrated on both sides of the equation. Long and short. Instead of sitting and waiting for the stocks to appreciate over the long-term, investors should have moved with the market. Going both long and short as the market oscillated during that time.
The problem is, the same mutual fund industrial complex has drilled a certain thought into investor’s minds. That short selling the market or individual stocks is not only inherently more risky, it is darn un-American. In fact, every single time the market sells off or corrects, just as it did in 2000-2002 and 2007-2009, there are loud calls to either curb or outright ban short-selling. Mostly due to the misinformation that short sellers are causing the underlying collapse. In fact, financial medial oftentimes portrays short sellers as outright criminals who should be grouped together with murderers and be shipped off to prison. Better yet, Siberia.
To Be Continued Tomorrow……
Should Putin Short The Dow Jones?
9/3/2014 – Another mixed day with the Dow Jones up 10 points (+0.06%) and the Nasdaq down 26 points (-0.56%).
The parade of bulls continues. Yet, they are all beating the same drum. 1. Any market decline will be caused only by a recession Only a recession will end this bull market and 2. This is the most hated rally….like ever.
I have already argued to death that recessions do not cause bear markets. Instead, bear markets cause recessions. Look at any market top and you will find your proof there.
Now, to the point of so many, as ISIS calls them, Market Unbelievers…..aka Bears. Where are they? Everyone I know is super bullish. Even the perma bears like Peter Schiff have thrown in their towels over the last few months. Perhaps this chart can tells us.
There is your proof you god damn bears!!! Wait a second….WTF? That’s right ladies and gentleman, the Bull/Bear ratio is now 30% higher from where it was at 2000 and 2007 tops. Making it not the most hated rally ever, but the most loved rally…….LIKE ever. At least since 1989. Do I really have to spell out what happens next?
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. September 3rd, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
How Human Body Recharges Itself When You Sleep
Continuation from yesterday…….(Why You Should Fall In Love With Stress)
You can think about it in the following fashion. If you are in your car it is highly probable that you tend to switch radio stations fairly often by pushing buttons on the dashboard. By doing so you switch between a range of various radio wave frequencies. Let’s simply call this wave frequency range a “Radio Wave”. So, it is not the change in the “Radio Wave” but the change in frequency that creates a wide range of seemingly separate radio stations available in your car. Yet, they are all coming out of one unified radio field. It is their frequency that separates them.
Your internal energies work in exactly the same fashion. You have only one internal reservoir of energy. Think of it a giant energy storage tank in your belly. The reason you cannot see it or feel it is because it is located at a higher dimension. The same reason our scientific community is having such a difficult time identifying Higgs Boson or “God” particle. It is because such particles cannot be perceived in our 3-Dimensional reality. They can be theorized, but they cannot be attained on a physical level. A quantum jump into a higher dimension of perception is necessary.
Anyhow, your energy reservoir supplies you with the energy you need throughout the day. To support all of your bodily functions as well as some of your more intricate processes such as thinking, feeling and emotions. When you trigger STRESS energies or STRESS thought patterns/feelings/emotions, the energy stored within your tank simply takes the form attributed to STRESS. In other words, this unified energy field begins to vibrate at the frequency of STRESS. Yet, it doesn’t have to. If you understand how your internal energies work you can immediately transform your STRESS energies into love energies, into bliss energies, into joy or whatever else it is that you want.
The energy in your reservoir gets replenished through two channels. Through your daily diet and more importantly, thought sleep. That right….sleep. Have you ever wondered why your body can go over 40 days without food and 5-10 days without water, yet it begins to literally fall apart if you don’t sleep for more than 3 days? In fact, most people will find themselves on the death’s door step if they go without sleep for more than 3-5 days.
This has to do with what happens when you fall asleep. Traditional measures aside, when you fall into the state of deep sleep all of your thought process come to a screeching halt. When that happens the true YOU is able to connect directly into the state of Universal Consciousness. In other words, it is able to connect to the source. This process recharges your internal being or your internal energy reservoir. And that is why sleep is a necessity that is more valuable than food, water or all the gold at Fort Knox. You can think of this as recharging your cell phone battery. Except in this case, instead of connecting your phone to a power outlet you connect your being (the real YOU) to the source of all. Storing just enough energy needed for all of your daily functions.
Back to STRESS. Again, STRESS energies come out of this unified energy reservoir within you as pure energy. That is before assuming the form or the rate of vibration associated with STRESS.
How does that happen?
If you are unaware of how the process works, your unconscious thoughts, feelings and emotions will transform this energy immediately into STRESS. Without you even realizing the fact. Bringing all of the negative connotations associated with it along for the ride.
Investment Grin Of The Day
When It’s Time To Dump Your Business Idea
Continuation from yesterday…..(How Test Your Service Business)
The steps above will help you determine if people love your cooking and/or your food items. If they do, you are free to move to the next stage. If you are unable to get traction it might be time to adjust your recipe until you do or it might be time to shift to the next idea.
With your initial in-depth idea scan and minimal level idea implementation stages now complete, it is time to make a decision on what to do next. In reality and based on the results above, you will have three alternative options.
- Both of your test stages went incredibly well. People love your product or service and they can’t get enough. Orders are rolling in and you are getting repeat business. You can now see a clear picture of how you will go about growing your business.
If that is the case, it would be prudent to go ahead and to jump into your new business venture head first. Perhaps on a full-time basis if your immediate income from the business can support all of your needs. What that future business development cycle means is different for everyone. The rule of thumb is as follows. Attempt to grow your business as fast as possible, for as long as you maintain a fiscally responsible stance. Never forget, the primary cause of business failure is financial mismanagement or overextension/overexpansion during the growth cycle. In other words, grow only as fast as your finances allow. Everything else will take care of itself.
- Your product or service did OK, but nothing to brag about. This is where you might have gotten somewhat of a positive response, but not what you have expected. Perhaps a few orders and a few positive reviews. Yet, the response was not nearly as good as what you have anticipated. You have tried to twist your product offering and your marketing campaigns in a million different ways, but that didn’t improve the outcome. Now, you are unsure of what to do next.
If that is the case, it is difficult to give advice without first knowing the details of the underlying experiment. With that said, ask yourself the following question.
Do you love this project? Are you ready to dedicate at least the next 10 years of your life to this project on a full time basis….all while going though failures, setbacks and disappointments?
If your answer is YES: Figure out a way to make it work. Keep adjusting your product or service offering until you hit the mother lode. Keep changing your sales and marketing until you figure out what works and what doesn’t. It is there, in one form or another; you just have to find it. Remember, it took James Dyson over 15 years to perfect his vacuum cleaner. It might take you just as long to find your final solution. Yet, if you love your project, that sort of a time investment shouldn’t be a problem.
If your answer is NO: It is time to move on. It is as simple as that. If you do not have a clear solution to your problem and if you are not willing to make a sacrifice, shut the project down and concentrate on identifying the next BIG idea.
- Your tests failed and you don’t know what to do next. This scenario represents a trap where a lot of Entrepreneurs get stuck. They try for years to make a success of a project that cannot possibly get any traction. Don’t be a fool. Cut your losses and move on. Whether you love this project or not is irrelevant at this stage. If you cannot get any traction at all, shut the project down immediately and concentrate on finding your next BIG idea. This step alone will save you a tremendous amount of time, money and frustration. Keep repeating the process until you find the idea that works.
To Be Continued Tomorrow…...(Why Am I Seeing This On A Financial Website?)
The Gospel Of Goldman Sachs
BUY LOW, SELL HIGH, GO SHORT & COVER
Are You Sure?
Starting in the late 1960’s the mutual fund industry picked a simple truth to shove down investor throats. To buy stocks for the long term and to keep adding money to their coffers month after month and year after year. And according to most people in the investment industry, this simple strategy should outperform the market over the long term, yielding you just enough moolah to fully enjoy that awesome retirement in Boca Raton. And if you play your cards right you might even have enough investment gains to be able to afford early bird dinner specials until you are 100. Today, so very few people question this investment approach that the “truth” above might as well be recorded in the New Testament as the Gospel of Goldman Sachs.
As accurate as this investment premise might be, it is a well known fact that most investors fail to beat the market on the consistent basis. Mutual fund or not. Plus, the stock market history does not support the premise above. Did you know that between 1899 and 1949, a 50 year period of time, the Dow went up just 185%. That would yield an annual compounded rate of return of just 2%. The same thing happened between 1790 and 1860. A 70 year period of time. Between 1966 and 1982 the market declined 25%. Hell, we don’t have to go further than today to see how inadequate the strategy above is. With the market facing another bear leg (as of August 2014), the Dow is up just 45% since its secular bull market top in January of 2000. The Nasdaq is still in the negative territory.
Don’t get me wrong, for most passive investors; the strategy above is a fairly good one. Yet, investors investing in such a fashion over the long-term shouldn’t expect to earn much more than a rate of inflation or the yield on a 10-Year Treasury. In other words, the mutual fund industry will never make you any money. They will make a ton of money for themselves through various fees, but they will never make you rich. If you want higher returns you have to take risks by dismissing the gospel above and by venturing outside.
And what will you find out there in the wilderness? Three primary investment dogmas and a million different offshoots of each one. They are….
- Value Investing: The idea of value investing is a fairly simple one. To find and purchase stocks that are selling well below their intrinsic value. Minimize the risk as the risk of the value stock going lower diminishes due to its general undervaluation. If you play your cards right and identify stocks that are not only undervalued, but those that are growing fast or turning around, the return on your investment should beat the market by a large margin. For most value investors long-term holding periods are a must.
To Be Continued Tomorrow……
The Shocking Truth Behind Forecasting
9/2/2014 – A mixed day with the Dow Jones down 31 points (-0.18%) and the Nasdaq up 18 points (0.40%).
While the S&P can barely hold on to its newly minted 2,000 level, it’s not good enough for Morgan Stanley. Here’s Why Morgan Stanley Says S&P 500 May Near 3,000 Their reasoning?
- The U.S. economy, which began recovering in July 2009, may continue growing for five years or more, making it the longest period of expansion.
- “Equities should benefit from a scenario where the probability of a cycle peak remains low for some time,” Adam Parker, chief U.S. equity strategist at Morgan Stanley, and economist Ellen Zentner wrote in the note. “As the prolonged expansion becomes more visible, we’d expect a materially higher U.S. stock market.”
- If earnings for S&P 500 companies increase about 6 percent every year from 2015 to 2020, profits will be close to $170 a share, Morgan Stanley said. Should the equity index trade at 17 times its companies’ reported earnings, its peak level could near 3,000, the bank said. The gauge currently trades at a multiple of 18 times, data compiled by Bloomberg show.
Very well. At least it is not your typical bull chest bumpers who claim that the Dow is going to 40,000 by the of 2015….no matter what. There is only one problem with the thesis above. Why would the US Economy grow at 6%? It is already pumped up on so much credit that that any more growth “stimulus” will OD the poor thing.
Plus, I keep outlining the cycles that clearly show that we are NOT in a secular bull market. In fact, a secular bear market of 2000-2017 is not even over yet. And 2009 was not the bottom. It was a mid-cycle bottom. Identical to those in 1908, 1937 and 1974. Finally, just because everything SEEMS alright, doesn’t mean that it will continue to be so.
I can give you a million examples, but I don’t have to go further than 2007 top. The US Economy was on fire on October 11th, 2007. And the bulls were hyping up the same nonsense you see above. Yet, the market simply topped out, turned around and headed lower. Erasing 50-60% of market’s value in 15 short months. It will not be different this time around.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. September 2nd, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Why You Should Fall In Love With Stress
Continuation from yesterday…..(How Care Triggers Stress)
That’s how cunning the mind is. If left unchecked it will destroy you from the inside out. In this particular case, as we become aware of the mind’s inner workings we can begin to understand how desire and care work. How they bring STESS into our realm of consciousness. Then, by turning them off we can eliminate STRESS from our daily lives.
Investment field presents us with another perfect example. For instance, you might have done a tremendous amount of research on a company that manufactures guillotines, Guillotine Inc (HEAD) and you believe that their stock price is about to surge. You make an investment and in doing so you project a state of a successful outcome well into the future. You believe, care and desire for this stock to go much higher. So much so that at least in your mind no other outcome is possible. Simply put, a different outcome would challenge your intelligence and would turn you into a failure. That is why when the stock or your investment thesis begin to fail, STRESS is not that far behind. As our Jimmy J’s example above so clearly showed.
Again, simple awareness is the answer here. By being aware of how desire and care bring STRESS into your life, you will be able to avoid them. There are a number of things to consider here.
- Be aware of how desire and care work. Watch your thoughts and desires very carefully. While it will take some time, fairly soon you will be able to catch most of them with ease. What’s more, given enough time you will begin to understand how the mind works and how cunning it can be.
- Observe your thoughts, desires and cares. Do not fight them. Do not suppress them. That would actually be counterproductive. Simply observe them and try to understand where they are coming from.
- Dissociate yourself from your desires and cares. At the very least do not project them into the future. Shift into the state of NOW and understand that the desires and cares your mind is trying to generate are pointless. They are not real. They are imaginary outcomes.
As you do all of the above, most of your cares and desires will vanish. Taking STRESS associated energies along with them. More importantly, as you continue to carefully watch your thought patterns you will gain a deep understanding of how your mind really works and how it tries to undermine your overall being on the consistent basis.
FALL IN LOVE WITH STRESS
As crazy as it sound, this approach to STRESS elimination can work miracles. While only a general introduction to the subject matter will be provided, it is a truly powerful way to eliminate all STRESS from your life.
As was suggested earlier, everything in the Universe and its dimensional architecture is made out of energy. As above so is below. That includes your body, mind, thoughts, feelings, emotions and even your beliefs. Further, different feelings and emotions within your body and mind architecture are represented by this same energy. Technically, there is no difference between fear, anger, stress, jealousy or a million other different emotions or thoughts. They are all represented by one energy field. The difference stems from their rate of vibration within the machines.
To Be Continued Tomorrow……(Why Am I Seeing This On A Financial Site?)
How Test Your Service Business
Continuation from yesterday…..(How To Test Your New Product or Product Idea)
Once you have completed all of the steps above, you will have a fairly good idea if your product is ready for mass market. If it is, move into full scale business development model. If you are still not sure or if the product is not performing very well, don’t give up. Keep playing around with your product and sales channels until all options are exhausted.
Service Business:
Service businesses are a little bit different. Depending on the kind of service business you are trying to offer, only a small investment might be necessary. That is unless you are trying to open up a physical location such as a hair salon or perhaps a spa. Plus, they are much easier to setup. And if you already have experience in the field, chances are, it is likely that you will already have everything needed to get it going. Fast. Just pick a business name, register your business with local authorities and get to work.
If that is the case, sales and marketing become your primary concerns. To get traction fast, follow these steps…
- Advertise your business in yellow pages. Plus, find what publications (newspapers and magazines) serve your target market audience in your area and advertise with them. Don’t be cheap. Put together a great introductory offer to attract new customers. Something that blows the competition out of the water. That should get the traffic in the door.
- Create a professional looking website as outlined in “Online Business” section.
- Tell everyone in your sphere of influence about what you are doing. Offer them and their referrals a once in a lifetime deal to get new business in the door.
- When not working or servicing clients, spend the rest of your time on generating new business.
Generally speaking and depending on what kind of a service business you have, it will take some time to build a clientele base. Yet, after completing the steps above you should have a fairly good understanding if your service business has a future. If you are getting traction, keep moving forward. If not, either adjust immediately by trying different approaches and marketing strategies or shut it down.
Food Business:
Another popular category is food related. Whether you would like to open your own restaurant, run a catering company or sell millions of peanut butter infused hot dogs, the idea is the same. Start small, test, adjust and figure out if you have a legitimate business on your hands. That means not trying to open up a restaurant or buying $500,000 worth of catering equipment or renting a large warehouse to set up your hot dog manufacturing facility. Remember, one step at a time.
- Find out if people actually like what you are trying to sell. Just because your mother thinks that your secret meat loaf is the best thing since the Regan administration, doesn’t mean that others will pay for it. Start small and test. See if your friends and family will be willing to buy your “food products”. See if you are getting repeat orders. See what kind of a feedback you are getting. Are you getting referrals, are people asking for your recipe, do people love your food, etc…?
- If you are getting great response in step #1, it is time to expand to local fairs, farmers markets and online. Plus, you can begin to approach local mom and pop restaurants to see if they would be interested in getting daily or weekly deliveries of the food items you are trying to sell. Repeat business is a must.
The steps above will help you determine if people love your cooking or your food items. If they do, you are free to move to the next stage. If you are unable to get traction it might be time to adjust your recipe until you do or it might be time to shift to your next idea.
To Be Continued Tomorrow...(Why Am I Seeing This On A Financial Website?)