Archive for January, 2011
Smart Investing Daily – Get Your Share of Profits From TARP
Friday, 28 January 2011
You may or may not be pleased with the way the government handled the bailout of the banks and automotive sector, but perhaps I can offer you at least a little insight into how the Treasury (aka the citizens of the U.S.) is getting paid and how you can perhaps get a piece of the TARP payback. Of course there are caveats and risks, but I am sure you will find this interesting.
TARP in a Nutshell
As you may know, the Troubled Asset Relief Program, or TARP, was set up to insure or purchase up to $700 billion worth of “troubled assets.” These assets could be residential or commercial mortgages and/or any securities, obligations or other instruments that are based on or related to those mortgages, and was later extended to include the automotive sector.
Meaning that if banks owned mortgage securities that were faltering, the U.S. Treasury would step in, purchase them and assume the risk. It’s similar to owning a stock at $100 that paid a 5% dividend that was supposed to be stable. All of a sudden, the stock dropped to $75, stopped paying a dividend and was illiquid, which means that if you tried to sell it, there was no one there to buy. To compound the issue, you had minimal knowledge of the health of that stock. Would you be scared? Well, this scenario was occurring Read more
CNBC Fast Money Halftime Report Today
Smart Investing Daily – Food Prices Hurting McDonald’s, but Not This Stock
If you have been reading Smart Investing Daily, you know that food trends, demand and subsequent food inflation have been on our radar (and trade ideas) for some time, including my Thanksgiving notes as well as my concerns here in early October.
Consumer Price Index and Inflation
When I first started in the business and was learning how the “stock market” interprets data, I was told that when market players are evaluating inflationary pressures, they pay close attention to something called the “Core CPI”; I’ll get to that in a moment, but let’s talk consumer price index first.
Consumer price index (CPI), which measures monthly prices for the goods and services we consume. It measures everything from the price of canned fish and bread to laundry detergent, fuel, electricity and even the water and sewer costs of your home; even average rent rates are measured.
The goal here is to record and monitor the costs of living in America. If we pay 5% more for the same “stuff” (on average) this year than we did last year, one could make the assumption (generally) that prices have inflated about 5%, or that our dollar may be worth 5% less (on a very basic level).
Over the past year, the consumer price index increased 1.5% and the year prior the index saw a Read more
Smart Investing Daily – The Truth About ‘Leveraged ETFs’
Friday, 21 January 2011
Back in early October, after a visit to the Texas State Fair, I wrote about inflation and the global food “problem” and how you can take advantage. Every stock I mentioned in the report has seen substantial runs since then.
Keeping all of our greed under control, Sara recently detailed why commodities and the agri-stocks climbing with them needed a nap, and why maybe it was time to take profits.
What does this have to do with leveraged ETFs, you might be asking? Well, I thought I would use food as an intro, because it offers a great analogy for my views on leveraged ETFs (OK, and maybe I wanted to remind you how Smart Investing Daily keeps you ahead of the curve).
Both gluttony and greed are two of the “seven deadly sins,” but with food especially, some of us tend to eat more than we need to and with that, the very thing that brings us life and energy can also cause illness disease and death (in severe cases). I bring up these morbid reminders, not to scare you out of satisfying your hunger for food, but to remind (or inform) you that some investment vehicles (leveraged ETFs) might be just as unhealthy and perhaps even dangerous for your portfolio, forcing you to “eat” fees and expose yourself to risks you may not even be aware of. Too much of something Read more
Smart Investing Daily – Steve Jobs Is Leaving Apple Again — Is It Time to Sell the Stock?
Tuesday, 18 January 2011
Six sentences… That’s all it was. The “explanation” of Steve Jobs‘ illness, as he takes leave of Apple, Inc. (AAPL:NASDAQ) yet again, was only six sentences long.
That should leave more than a little concern in investors’ minds about the direction of Apple’s stock price. But Apple has never been just a “chart” and value stock. It’s been a Jobs stock, and he may be more important to the company’s overall performance than its latest earnings report.
Over the past seven years, Jobs has had to “leave” his position twice as CEO of the world’s most prized tech company to deal with health issues. Apple, which was founded by Jobs and his then partners Steve “Woz” Wozniak and Ronald Wayne, has been built on their pioneering spirit and ingenious designs and ideas.
The early days of Apple can be categorized as trend setting and industry changing in many regards. Apple can be attributed with the mass implementation and acceptance of the graphic user interface (GUI), which was one of the main catalysts, in my opinion, that brought computing to into the mainstream. Of course, the GUI had to Read more
Smart Investing Daily – With the Apple iPhone Coming, Is Verizon a Mobile Phone Stock to Buy?
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By the time many of you read my notes, chances are good that Verizon (Smart Investing Daily – Five Personal Strategies to Control Market Greed
Many of us (myself included) are drawn to the markets by the same force that can destroy our accounts: greed. While there are several ways in which greed can hurt us, there are five personal strategies that we can employ to control the market greed that is woven into our social fabric.
Personal Strategy 1: Be Aware That Greed and Fear Drive Price
Some may argue this über-simplistic view of the equity markets, but when you reduce that statement down to its purest form, it’s true! When someone is willing to pay a higher price for a stock, that person, most likely on some level, is satisfying his or her greed instinct, in that they want to profit from their belief that the stock is moving higher. This works the same when fear sets in and you are driven to sell a stock at a lower price because of whatever fear you may have at that moment.
The problem with the word greed is that it carries a negative connotation and most of us Read more
Smart Investing Daily – These Two Battered Stocks Could Shine in 2011
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