The reason Grandcolumbia was dismissed was that he brought nothing but ridiculous ad hominems to the discussion. He didn't refute any of Headingsouth's points, he merely assumed things about him, as an individual, based upon the reasoned positions he has taken, and through out a bunch of senseless insults. Of course he was ignored.

It's a great time to be on the sidelines, gentlemen, unless you are a shortseller. Anyone care to wager on how low the indexes will drop before the coming July 3 panic selloff?

Kendricks,

Insults are GC's forte'. Good natured ball busting is one thing. I caught some of his shit a few weeks back. Pretty lame.

I offered to buy him a beer and get to know him better but he didn't take me up on it. We should start a thread for his posts. Call it the recycle
bin.

As for me back to tree hugging.

Did you finish Siddhartha?

Yes, I did, that was a great read. Definitely a classic. Interestingly, I had previously thought about the distinction between knowledge and wisdom, and the futility in believing the teachings of others. This story had many great things to say.

Agree about Siddhartha. It got me interested in "flow".

Regards,
RickFeliz
"happily flowing with the river"

I believe I'll flow in the river with the baby seals and yes I admit I've got some gay friends.
I know I hugged one once but I did have ALL my clothes on.

In fact I like Homos'. Just means more chicks for me . Once you get real clear on your masculinity/sexuality, gays are kind of a non-issue, at least for me.

Interestingly, in Thailand upper class families often choose ladyboys as maids and personal assistants in their homes. I asked my wife about this. She simply said, "We like them they are more fun than a regular maid". Go figure, "Vive le
differance"

I would also like to buy Jesse Jackson a beer after buying one for GC. I think they both could really use a "good beer".

Oops I think I've gone off topic. Or have I?

Is it true that gay men give better head and hand jobs than most women?

I guess I left myself wide open for that. Hey wait a minute that didn't come out right. Wait, wait that didn't come out right either!!! LOL

Of course, I was only kidding, my friend. It should go without saying but the way things have been lately, you never know...

I knew that...

And the marvelous slide continues - 1357 for the Nasdaq, and 9007 for the Dow. How low can they go???

It should go w/o saying. LOL.

I have a question about stock brokers / investment firms for y'all experts. Besides consulting this venerable site, where do all youses whoremongers go to for advice, etc? Who do you trust with your hard(ly)-earned (trust)funds?

It seems to naive me like there's no shortage of sharks out there, not to mention mass movements of suckers who do business with them. Sheez. Just found out the other day that a bunch of my pals were tagged by an insurance-company-based "financial planner"...

But what about the dudes who work for "reputable firms?" (e.g., Merrill Lynch, PaineWebber, Dean Witter, etc). Is it my imagination, or do these dudes take an unusually hefty commission? If they receive commissions for every sale, isn't there an incentive to churn and burn your investments to generate additional income for themselves? Isn't there an incentive to sell the items that yield especially high commissions? How is it possible for even the most upstanding of these dudes to combat the highly lucrative scuzz factor?

What about "discount brokerage" dudes, who supposedly take a lower cut? What about the claim that they have fewer conflicts of interest, given that they are salaried, and not commissioned for each sale? Isn't this less scummy? Your opinions?

Columbo... errr... Dogster

I'm not really an expert, but here are my two pesos:

I would never trust anyone to trade for me or manage my account, and I wouldn't take advice from anyone earning commissions off of my trades.

Educate yourself. I personally recommend "The Intelligent Investor" by Ben Graham, and "Value Investing Made Easy" by Janet Lowe. If you are serious, regularly read the Value Line (most public libraries get it every week, or pay $600 a year for the subscription).

Only invest in companies that have been around for a long time, have little or no long term debt, are selling at approximately the total of their assets (when stock price is multiplied by the number of outstanding shares), and have reasonable price/earnings ratios.

Before putting real money in, try picking some stocks, making mock trades, and following them on paper.

Others may have more advanced ideas, but most of what you see and hear is completely unsound. Trust no one.

Another beautiful day!

Invest in what you know. Do you work for a good firm? They make good investments if they are good employers with a good business. How about their suppliers and competitors?
Cheap stocks are OK but there is usually a reason they are cheap and they often get cheaper. Check Barrons market section, look at the valuations on the markets (DowJones and S&P5000 and look at stocks that are valued lower than the markets with prospects much better than the economy. Avoid companies with large exposures to volatile currencies.

Nothing but blue skies...

K - I ordered those two books. I suppose that it is high time I familiarized myself with that approach. 69... Thanks.

Actually, being Dogster and all, I'm just trying to get any stock brokers on this site to defend themselves, their seemingly overblown ability to prognosticate, and their apparently corrupt system of commissions.

When I look at the personal investment industry, I mostly smell sewage, and I'm looking for the stone tablets of investment wisdom. I'm hoping that the discussion will either (a) teach me something, (b) degenerate into WWIII, or (c) both.

I'm no expert on personal finance, either, and I have TONS to learn. But I've done pretty well investment-wise over the years, I think. I strive to invest long-term in a diverse portfolio of healthy companies, like many people. But I try not to follow the pack regarding investment purchases, as I really do believe that the market zaps sheep. (As in, "it does what it must to maximize the number of people who are wrong". Years ago, an ivestment dude I knew made that observation to me, and I've come to believe it. I kinda like it when the prognosticators predict bad times...). Of course, the market also zaps gambling fools.

I've always been amused by the observation of some "discount" brokerages (e.g. Schwab, etc.) that, in the long haul, inexpensive, simple index funds outperform most investment packages put together by various financial gurus. I mean, the research backs up that claim, if I understand correctly. Of course, masses of middle-class sheep are flocking to discount brokerages and their cookie-cutter products. Therein may reside the makings of a beautiful disaster.

Gotta go invest in a chica
=Dogster=

Commissions have very little to do with making money in the market. If you invested $10,000 in Enron and paid $29 or $150 commission to make the investment, who really cares at this point.

I had a few clients inquiry about Enron when it was a darling of wall street. I advised against it for many reasons, but the biggest reason was I have a retired oil exec. from Colorado who knew/knows Ken Lay(CEO) and told me 2-3 years ago that the guy was crook. If you had lost say $10,000 in Enron and I charge an average of $200-$300 commission per trade that covers 40 trades.

If you instead, had a wise, intelligent, incredibly experienced broke get you into say FNF or BAC a year ago. A broker that recommended LMT and other defense stocks last October and
had you buy LUV at under $12 the first day the market opened after 9-11-01 and put a stop loss on LUV at $19 when it reached $20 you would probably not care about his commission charges.
If you had a broker that had you sell half your 4400 shares at QCOM at $150(tried to get the client to sell it all when it was above 100) and put the money into CA Muni Bbnds two years ago you didn't care about his 1 percent commission..

I could go on and on.

Clients who have a long trusting relationship with there broker don't object to the broker getting paid.

I average 1.5%-2.0% on all stock trades with my clients and I have found that people with large amounts of money generally seek help and are willing to pay for it.

I have also found that people with small amounts of money to invest generally bitch the most about commissions and I usually regret spending any time with them.

Hey, I don't care at this point in my life if they trade through me or go read a book and trade through Charles Schwab. Its their money and they should do what they want as far as investing.

I also think that the mid 90's was a period when people with no investment experience thought investing was easy. It should be apparent to most, after the last couple years, that they probably can find good value by using an investment advisor. One who charges for his knowledge and experience.

Benwhowantsnonewclients

Ben, I'm sure it's a different game with large investors and their seasoned trusted advisors, and small investors who are viewed as grist for the mill by some young broker trying to make his BMW payments.

It's just my opinion, and is not aimed at anyone in particular, but most small investors would be best served learning how the game is played, instead of placing blind trust in someone who makes his living off of commissions. These comments obviously aren't aimed at you.

Ivesting is kind of like law enforcement - not everyone involved is crooked, but those who are ruin it for the 3% who are honest and trustworthy.

Sweety Pie bitches about commissions?!

Muchas gracias, Ben. Oops, I think I forgot you were a stock broker for a brief instant. Damn. I was hoping one of the more ballistic, homicidal, steroidal members of this site was a stock broker. But instead Gentle Ben emerges from the woods. Ah, well. I wanted Hitler but instead I got Chamberlain. So much for WW-III.

I don't have a problem paying for good advice. Like I said, I think I've done ok, and I pay for advice (without bitching, even). I'm not an untrusting, cheap dude. If anything, I'm too gullible cuz I want to see the best in people (except for utter bozos)... As y'all of course have noticed.

In all seriousness, ladies and germs, at this point in my life, I'm trying to step my knowledge of investing up a notch. As I'm trying to get up to snuff, I'm realizing that I've dodged some bullets over the years, by sheer luck. At the same time, I'm realizing that I may have paid a price for my naivete at times. It does seem to me that there are many conflicts of interest and abuses regarding commisions and other financial incentives that probably serve to bias advice (e.g., pushing expensive or higher-commission products, and churning the account via frequent, unnecessary trades). It seems to me that the reinforcement and incentive contingencies at most brokerages are bound to shape broker behavior toward self-interest, not client interest. Am I missing something here? What, besides one's integrity, and competetive market forces, keeps brokers in check? How can a consumer tell the difference between a credible expert and someone more shark-like? Do tell. I gotta know.

I think I've figured out that it is generally rather dodgy to use newsletter predictions when buying stocks. Evidently, Hurlbert's Financial Digest generated risk-adusted performance rankings for a slew of investment newsletters. Nearly all newsletters' recommendations provided a lower rate of return than a simple index fund (Wilshire 5000). For instance, the Value Line Investment Survey's performance ranking was 82.2, nearly 20 percentage points below the break-even point (100). Now, am I missing something? Do the "good" newsletters offer valuable research or information besides the seemingly lame predictions?

Benster: It is an honest, legit question, not a bitchy one: where does one find good, reliable information and honest, proven investment managers?

Dog$ter

Actually, my understanding is that the Value Line stocks rated #1 for timeliness very convincingly beat the Dow by a staggering margin over time.

Indeed, http://www.forbes.com/global/2001/0122/062.htmlValue said that "Value Line is perhaps the oldest established exception to the once-dominant academic dogma that it is impossible to beat the market."

I am speaking of a survey used as a research tool, of course, not a throw away newsletter full of conclusory advice.

I have always enjoyed Value Line and find it very useful.

I have found my best ideas on investing are "My Ideas".

I read allot of newspapers and magazines, many such as Forbes and Barrons and then many that have nothing to do with investing, but allot to do with national and international news.Umm, yes like "The economist". When I read something I feel might be significant to our society or economy I then try to be very creative in thinking what products, companies etc. will benefit from this situation. I then look at industries that are in a good position to benefit. I write my ideas down I keep files and I start watching the companies and industries.
You have to try to be very creative in the beginning and try not to have any bias pro or con.
Many of my friends in the business, over the years, have laughed at me for trying to be more analyst and less sales oriented. Most brokers just follow the party line of their brokerage firms analyst and do little creative thinking.

I have always enjoyed doing this and i have picked up many good ideas and also stupid ones this way.
Another way is which companies do you do business with at work that you respect for their expertise and assumed profitablility. That is one place to start and then do research on the company and its competitors.

Fair enough, I'll keep an open mind about Value Line. The Hurlbert study covered a 15 year period up to 2000, I believe.

No, motherfucker, that is NOT fair enough. You are forbidden from using Value Line. I also demand that you provide a link to the so-called study that you dreamt up, so that it can be thoroughly refuted.

Oh, sorry - wrong thread. We are actually being civil in this one, aren't we...

Dogster,

So what?

I have no idea to the validity of your numbers dogster, but I would assume you are correct regarding Value line.

But I know no one that buys all of Value Lines recommendations and hopefully they picks more winners than losers out of their investment choices.

I don't use Value Line as a beginning but more of an ending on my search for good companies. One thing I like about Value Line it does put all companies of the same industry together and then rates them individually.

Oh, as far as finding good advisors.

Look for old gray headed guys, who are intelligent and have at least 30 years experience in investing. They have usually made lots of mistakes and hopefully learned by them.

Make sure they have a track record of happy clients. I would ask for at least five references.

Kendricks, I gotcher value line right here, pal. Subscribe to this, you bitch. Oh, sorry. That was off-color, if not off-topic.

I'll try again. Gentlemen, thanks for your input--just what I was hoping for. Benny and Kenny, you are upstanding chaps. Perhaps someday we'll meet in the ZN for bangers and mash (whatever that means).

Here's the link for Hurlbert's Financial Digest:

http://cbs.marketwatch.com/news/newsletters/overview.asp?siteid=mktw&Dist=
(Check out the Overview, and the FAQ.)

From Tyson's (2000) "Personal Finance":
"Mark Hurlbert tracks the performance of the recommendations made by newsletter writers. He shows how your portfolio would have done if you had followed the recommendations of given newsletters. If you had been so omniscient as to know in advance which 5 newsletters would give the best advice during the last 5 years (see table), you would have done worse in four of the five cases than the overall rate of return on the Wilshire 5000 index, the broadest measure of the overall performance of small, medium, and large companies' US Stocks. Hurlbert uses risk-adjusted returns, which are corrected for the differences in the amount of risk different newsletters took in their recommendations. For comparative purposes, the risk-adjusted return of the W5000 index is set at 1000. The best newsletter (see Table; Systems & Forecast), which has a rating of 108.4, has produced an 8.4 % higher return than expected given the level of risk it takes. Note that four of the five "best" newsletters over the past 15 years have a rating less than 100, implying that their recommendations, given the risk entailed, performed worse than teh Wilshire 5000 index... Dont waste your money subscribing to investment newsletters in hopes of beating the stock market's overall returns!"

Systems & Forecast 108.4
The Chartist 89.1
No-Load Fund X 86.7
Investor's World 82.2
Value Line Investment Survey 80.2

I get the point these newsletters serve a valuable function at some point in the search for good companies. And I also get the point that this isn't simple, especially for non-experts.

Dog$ter

"8.4 % higher return than expected given the level of risk it takes" does not equate to "beating the market by 8.4 %". Also, what was deemed a "Value Line Investment Survey recommendation"? A timeliness rating of 1? 1 and 2? All 1,700 stocks they rate, from 1 to 5?

Dunno, dude. This is new ground for yours truly. I'm dyin' to learn more about the assessment measures in general, and risk-adjusted measure in particular. To learn more, I'd have to subscribe Hurlburp's Financial Digest (that should be *Hulbert*). That's not gonna happen anytime soon, as I've just invested my Entire Life Savings in the Graham/Lowe books.

More Tyson (2000):
"Researching individual stocks can be more than a full-time job, and if you choose to take this path, remember that you'll be competing against the professionals who do this on a full-time basis. If you derive sheer extasy frim picking and following your own stocks or want an independent opinion of some stocks yoou happen to own now, probably the best research reports are available from Value Line Investment Survey. This superb publication provides concise, user-friendly, single-page summaries of thousands of stocks. Libraries with good business sections usually carry this publication. You can order a 10-week trial by calling Value Line at 800-833-0046. I would also recommend that you limit your initial stock picking to no more than 20 % of your overall investments."

Tip of The day:

ARXX


Cost
Date Description Price per share

7/5/2002 Bought 2000 Shares ARXX $13,370.00 $6.69

7/5/2002 Sold 20 September 5 Calls $(4,350.00) $(2.18)

7/5/2002 Net Cost Per Share $9,020.00 $4.51









If Stock Is Assigned September 20, 2001

Profit From Stock $(3,420.00)
Profit From Options $4,350.00
Total Return $930.00
Percent Return 10.31%
Annual Return 75 Days 49.49%

Please be aware that this has risk and you could lose all your money

Ben:

It looks like you have that time travel thing all worked out, no wonder you have all bucks to blow on chicas.

Your right in that I was looking at closing prices on July 3rd.

More an example of what you can do as a conservative investor with "in the money Call options".

Doesn't always work out, but in this market I have tried to be very conservative.

Maybe it is better with in the money calls than out of the money Example

I bought esio on 2/13 for 31.88 and sold the June 35 call for 2.55. I figured I had 2 1/2 points of downside protection on the stock and if called on the stock I would make 3.12 on the stock and keep the 2.55 premium. After deducting commissions I would net approx16% in four months, Like about 48% annualized return if the stock is called. As long as the stock stayed above 31.88 less 2.55 I would not lose money. However after approaching 35 esio tanked along with the market. Right now esio is up 2.05 to 24.08. My loss, about $5.25

I think I will get back to making money on the stock but the call kept me in the stock when I might have sold at a 5-10% loss. The option has expired so now I will look to sell the 35 again or maybe the 30 as my cost is about 29 and change,when there is some premium there. Also I was not forced to sell the stock so I can wait for a rebound

Just another point of view on the covered call strategy

You could have bought the calls back for less than you sold them for and sold your stock. I have never felt that writing a call locks me into holding the stock.

Funny you mentioned ESIO. I made some really good money on that stock. A few years(1999) it was a real value stock based on its PE, but earnings grew rapidly and it moved up into the 60's before it split. I wrote options on it several times and many times I bought the calls backs. I finally let the stock be assigned in the 50's. Boy were those the good old days

Ben is absolutely correct. My call writing lacks a worst case scenario exit strategy. One should look at the downside and determine an exit point to unwind the position. My feeling locked in the stock is a psychological barrier. One can exit at any point by buying back the calls.

I did make a good gain on that run up in esio in 99. I would take a look at the stock from time to time and in Feb. the call premium was too good to pass up.

Since the option premium is partly a function ot the volatility of the underlying stock I would try to use that as an indicator of potential appreciation. But since volatility can go both ways sometimes you win sometimes you lose(at least that holds true for me)

The Dow is down 344 points as I write this, and pessimism seems to have gripped the market (probably an understatement). The Dow seems determined to break 8,000 before long. Any commentary from some of our older, wiser and more experienced traders/investors?

Definitely Older

Oh yea of little faith.

Market (dow) was down over 300 points but has bounced back somewhat. Nas was down over 50 now down 15.

This is when you can make money in the market.

I bought Pfizer this morning at $27.45.

The CEO of PFE is very bright and did the Warner Lambert/Pfizer merger a few years ago which really boosted PFE stock and profits. This merger(PFE and Pharmcia) is all stock no cash and is a good deal for PFE, I THINK, of course you could lose your ass.

I am the same guy that bought Exxon last Friday at $36.45 and it is now down to $34.97 and going down as I watch!!!

My PFE up a $1.40 since this morning when I bought it. Now if we see $30 this week I will write the Aug. 30 calls.

Unbelieveable, Dow was down over 400 points at one point and now closed down about 45 points. Very unusually day.

I have had several clients cash out of the market over the last month which is a good indicator that market is consolidating and we might see a rally.

Earning will be reported over the next two weeks and that will determine allot of where the market is going.

A very unusual day indeed... I'm still on the sidelines, but intend to start buying very soon. All of the talk about how everyone has completely lost faith in a recovery is very encouraging to me.

Don't wait to long. Hard to get in right at the bottom

Ben:

"a good indicator that market is consolidating and we might see a rally"

You must be a broker.

If you look at the DOW curve, DOW should be at 6000 so bottom could be even lower than that. What to do???

What to do? I'm thinking about buying value stocks and writing covered calls, personally.

The market is easy! "Buy low, sell high".

The Dow is like an erection: eventually it's gonna go back up again.

A But don't take stock in what I say kind of guy,

Out-of-Towner

Explorer,

Yes I am and have been since 1968.

Seems like only yesterday.

1968??? I thought it was since October, 1929. Ah, the good old days.

Ben
You must be a lousy broker if you are not retired...just kidding

Famous line from Babe Ruth in 1929 on why he was asking for $80,000 which was more money than President Herbert Hoover was paid.

"I know, but I had a better year than Hoover."

benwhoignoresinsultsandonlysaysnicethings

Why should I retire?

I play golf 2-3 times a week.

I go to TJ 1 day a week. Ok maybe 2 days a week.

I don't seek or want new clients so no cold calling.

I still make a good income each month over and above my investments.

Besides if I retired, I might become a drunk.

Athos,

You must be a lousy gambler or you would be retired???...just kidding

Tanya and Candie must be lousy whores....

My great grandfather had a better year than Hoover, and he died 11/2/1929.

I'm not quite sure what my point is here. I hope that fatal reactions to stock market crashes are not gen e ttttttttttttttttttic.