Anyone who has ever done any amount of trading knows that the most money can be earned (or lost) through the stock market.

You may have heard of Google's success, however, it is not the most powerful equity in the market today. Google has only quadrupled in value since its IPO. One company that has gone up in value more then Google is Hansen's Natural. It started trading around 3-5 dollars in 2004 and now is up to 135. A $50,000 investment would have netted you 1.3 million in less than 2 years. Take that real estate!

Right now I am looking for ideas on companies to invest in. Im letting you be the pitcher, throw your ideas my way and I will look at them. Lets discuss what might be the next winner. If I like them, then I will add them to my personal porfolio. . .

Ironeagle,

More than a year ago I posted something like you just did; only I had already had a specific reccomendation. Forex or Foreign Currency Exchange. This investment was the worst decesion (fueled by greed) that I have ever made in my life. I lost the total investment in basically one day - all my 401K rollover and thousands more. I invested 1/3 of my networth in Forex because I was assured by a Broker it was a 100% sure thing. [I have the thick skin to weather laughes, go ahead] I had to decide if I was going to "cover the position" and put more cash in. Thank God my $$ at the time was in equity so I could not throw any more of my money. I went into depression and still over a year later am quite bitter about it. So my 2 cents is to KNOW WHAT YOU ARE INVESTING IN. I know Real Estate. I do not know foreign currency (Forex). The one saving grace that allows me to move forward (besides my Real Estate profits banked away) - is the saving grace of the tax laws. My loss is a legit TAX WRITE OFF of my future profits - as loosing money in stocks, forign currency, options, etc. is considered a passive loss caryover.

Well, good luck on finding a winner I am not bashing Forex or securities. Sorry for being long-winded and negative. But I got burned from securities and now only invest with what I have knowlege of. (End of Rant)

(Message edited by metalboots on April 28, 2006)

Metalboots,

The first rule to investing, whether it be real estate, stock market or any other vehicle, is to educate yourself thoroughly. In regards to the stock market, you should start off with the "Dummies" books. You can go to their website and they have many good books on the subject. You should read them all before investing. As well, another good book is Jim Cramer's Real Money.

If you were going to fly a plane, would you just jump in and have a go at it without any training or education? Playing the market is more complex then flying a plane. You should read as much as you can on the topic.

The Forex market is indeed a very profitable enterprise and millions can be made. I do know a person who lives in Manhattan and makes millions a year doing it. However, remember the first rule.

The second rule to investing is to trade in a simulated environment before you use real money. You wouldnt just jump into a plane and pilot it once you took all the courses? You would use a simulator first.

So instead of going full force with your cash. You should have traded in a simulated environment to see how you would fare.

Now let me test you on real estate. Can you tell me which bond drives mortgage rates and why is that bond used? When was the last big downturn in the real estate market? What do you feel caused that downturn? What is the historic rate of return for the overall US Housing market? etc.

We have been in an order taker's market since 2001. Actually, demand had picked up in 1997, but 9/11 drove down interest rates and fueled the fire. Now interest rates are going to pick up and gradually rise throughout 2006-2007 caused by quite a few factors. Money is no longer cheap.

The third rule to investing is not get involved with something you dont feel comfortable with. This is a Warren Buffet ideal and the reason why he doesnt buy tech stocks or dot.coms. I trade only equities as its what I am most comfortable doing.

So my advice when trading equities is the following. First, if it takes you less then three hours of time to come to a conclusion to trade an equity, obviously there is something you are missing. Before trading an equity, you need to do the following:

- Listen to the last conference call in regards to earnings. Listen to it a few times over and over and note down what the CEO is saying. The company usually webcasts the conference call on their website.

- Read all of the published reports especially the SEC filings. These are also available on the company's websites. Read the 10k all the way through. Print it out and highlight any areas of concern.

- Next, its time to look at the financials, the news headlines, analyst opinions, company profile, the competition, etc.

You should be able to write a thesis statement on why you would like to trade the equity. Then you should talk it out loud with someone to see if it actually makes sense and to collect any counter opinions.

For example, let me give you the following. Symbol DSPG. I listened to the conference call and apparently there are a few concerns. One of the analysts brought up the fact that one of the bluetooh headsets was not in stores yet. Senior management came up with a vague response. As well, senior management had commented that competition was getting fierce. I only listened to it once real quick, I could probably get more out of it with the actual transcripts.

I looked at the 10k and it appears their main customer is Panasonic. Without Panasonic, this company would basically go belly up. Thats a clear signal to you that you should now research how well Panasonic is doing. I noticed that part of this company is based in Israel. The place that Iran wants to junk, a bad sign in my book.

Next I looked a the financials. The P/E isnt particularly low, but it comes in under the S&P 500 average. I believe the S&P 500 average P/E is a little bloated however. The ROE appears to be a little lower then I would like. The ROE is the main measure of effective senior management. 0 debt, a good sign. A negative cash flow???

Then lets look at insider transactions. Looks like the insiders have been dumping heavy the last few months. In February, they cashed out millions of dollars in company stock.

Now lets look at the relationship with Panasonic. Panasonic sells consumer discretionary items. Items that people do not neccasarily need. Rates are rising and we are going into 6 notorious bad months. The consumer isnt going to buy that cordless phone when they have a high rate on their credit cards and no excess money.

So with all the data I have looked at so far, I would have to disagree with analysts that this is a strong buy. This company does have bluetooth type products, but there are other competitors. The company relies to heavy on Panasonic. I would say that someone should either hold or sell this equity, but not buy. Its just too risky.

http://ir.dspg.com./phoenix.zhtml?c=101665&p=irol-seccat

The fourth rule to investing is to diversify. Lets say you have 25000 to spend, then you allocate 5000 to 5 different equities in 5 different industries.

In regards to Forex, you should not have gone "all-in". You should have practiced first with no money, then after the practice period, used a small amount of money to trade with. As time passes, then you should have moved into it with more money as you built up your experience. At no time should you have used money set aside for retirement.

If you still feel uncomfortable with stock trading, then just turn your money over to a mutual fund like Vanguard. However, you should diversify between large, mid and small cap funds. For example, I would go with the following diverse portfolio in the vanguard series:
- Primecap Core- Large cap fund domestic
- Strategic Equity- Mid cap fund domestic
- Small cap Strategic Equity- Small cap fund domestic
- Foreign Value Fund
- Foreign Growth Fund
- Emerging Markets Fund

In regards to my original question, Im looking to identify companies that have an upward trend.

Lets say for example Hansen. Two years ago I started to see their drink on the shelves at service stations and in the supermarket. I thought nothing of it, but they sell for 2-3 dollars for a small can. Thats a HUGE profit margin considering most regular soda sells for a fraction of that. It became popular and so this equity has taken off, up 20 times.

So if you have any ideas on any trends, pose them now so I can look them up and analyze it. It could be anywhere, fashion, supermarket, etc.

I'm with IE-- excellent post. Athough I took a beating in 2001/2002, equities are the way to go for an informed invester.

IE: Mortgage rates are influenced directly by movement in the long term bond market/rate. The reason: Lenders sell the mortgages they originate to investors in the secondary market, so long-term mortgage rates have to be competitive with the long-term bonds that investors might purchase instead. The benchmark that lenders use for the 30-year fixed-rate mortgage is the 10-year Treasury bond.

The last RE downturn-- greatly depends on the locale. In NE it was 1989-1990 due to highly speculative buying and over credit over extension combined with a economic downturn that stymied demand.

IE, didn't you just get back from the Philippines? You'll get a kick out of this one. Check out PHI (Philippine Long Distance Telephone Co.), aka SMART. Financials (and a stock price) that are steadily climbing, and since '05 they've been paying nice dividends to boot. I'm letting the bargirls pay me for a change.

There are indeed some positive things happening financially in the Philippines. The positive thing is that the only way this place can go is up. Its like America during the Great Depression. Eventually, it will emerge from it and become a powerhouse. The question is when. 1 year 5 years 20 years 100 years?

I was looking at the stock exchange there and observing what the Filipinos were buying. It appears the two main things that they love are cellphones and fast food. Jolibee and Smart.

>the only way this place can go is up. Its like America during the Great Depression. Eventually,
>it will emerge from it and become a powerhouse

You may be right, but I wouldn't go so far as to make that assumption. Doing the job "just well enough to get by" seems to be the standard in the PI (sort of like Mexico in that regard). But I don't see cellphone usage going down in the PI any time soon . In any case, as long as they keep paying dividends, that's real money in my pocket.

Phoenix,

Doing the job just well enough to get by actually demonstrates some intelligence;) In no-where jobs, thats what I have found the best action to take. In the end, you dont go anywhere and it only benefits the person who manages you or the owner of the place.

Don Marco,

You would not have taken a beating if you had studied some of the major downturns of the stock market. The conditions in place then were a classic downturn scenario. High interest rates and high P/Es are a time bomb waiting to go off. However, if you had taken your money out of tech and then placed it into consumer staples or bonds then you would have made a killing.

A lot of people have turned to real estate and you see these people walk around bragging that their house has doubled in price. However, they refuse to sell their homes and will never make a profit. Their profit is unrealized, not realized. In fact, some people sold their homes then bought larger more expensive variations with larger tax, energy and maintenance bills to come with it.

All it takes is for one world event to send interest rates through the roof. For example, China dumping American bonds in favor of more aggressive foreign variations. At an interest rate of 8%, it will kill home prices just like it did in 1989.

However, people get to be pigs. They dont want to ever take any money off the table because they feel their investment vehicle will continue to go up forever. Which leads me to a tired old clique of the market that Cramer states all the time. . .Bulls make money, bears make money, pigs get slaughtered. . .

Although I'm all for carefully researching investments, it seems there is a limit to how far that will take you. Assuming we are talking about companies that are not entirely off the radar screen (e.g., some micro-caps), the price for the stock already takes into account the collective wisdom of the market, which is hard for an individual to beat. If there are vulnerablities or particular risks associated with a company, it is going to be very difficult for you to know this better than the collective market. And the same holds for particular strengths in a company.

This is why at least during certain periods of time, index funds do better than managed mutual funds. And when managed funds beat the market, it is usually not by much.

I should add I don't entirely buy everything I just said 100 percent; I would like to think I can pick stocks (although of late I have probably done better picking markets, such as Brazil's and Korea's, than picking individual stocks). But I also believe the impediments to beating any market are substantial.

I agree 100 percent about the need to diversify though (the NASDAQ crash certainly proved this).

The reason for my post on here is to ask the question what is out there that I am not seeing. Finding a perfect stock is not just about looking on the internet. Its also about getting out there on the ground and seeing the next big product.

I brought up the example of Hansens for a very good reason. In 2003-2004 I was living in Los Angeles and noticed these drinks on the shelves. They appeared to be a good substitute for coffee so I started buying them. Everyone around me was actually buying energy drinks and they were even creating drinks at the bars based on them. They were far from cheap, 2-3 dollars per small can.

Then Hansens goes public and, wow, it shoots through the roof.

So look around. The next big product could be anywhere and it may be right under your nose. My company just sent me a BlueTooth earphone. I used it and wow! Now I know why people are using these things and wearing them around like its a watch. That is one good example of a product. Another good example is the Blackberry and how Rimm shares have shot up. The ipod and apple, etc.

So Im asking what am I missing. What are the products out there that I am not seeing. . .

Great comments IE. However for Metalboots, or anyone else for that matter, I would suggest they start learning about ETFs (Exchange Traded Funds) instead of investing in mutual funds. Barclay's Global ishares and Vanguard in particular offer extensive lineups, with management fees a fraction of what you pay for any mutual fund.

I would also suggest they look seriously at several of the international ETFs. Like LAGuy mentioned, anyone in the Brazil ETF (like me) has been making a mint the past year, and that's just one of many international ETFs that have been outperforming. The bottom line is mutual funds are ultimately a ripoff.

Metalboots, it can't be stressed enough; never invest in something you don't understand, and always broadly diversify your portfolio. For me Hedge funds and FOREX are strictly no-no's, as I simply don't understand them. You also need to take anything a broker/advisor tells you with a grain of salt, especially if they are going to earn a commission off your investment.

IE,

Your crystal ball failed you...

"You would not have taken a beating if you had studied some of the major downturns of the stock market. "

A good part of my compensation then and now is options, which I have little control over-- especially when they are in the form of companies prior to IPO. I study plenty.

As far as "taking money off the table" in terms of single family homes and escalating prices, I have to strongly disagree unless one is planning a major relocation and/or are highly leveraged with ARMs (vs. fixed rate mortgages). If one were to follow that advice, they would be buying in the same bloated market they are selling in. If they are residences, any market correction will adjust with time. I certainly wish I bought my home in 1998 PRIOR to the crash-- the downturn was swift, but short lived when looking at the big picture.

I just bought shares of Valero Energy, and IMO, the shares are dirt cheap in the mid 60's. Valero just increased their dividend by 33%, and had a blowout 1st quarter earnings report. However, the President's energy speach caused shares to tumble last week. There is not enough refining capacity in this country, and demand for gasoline keeps increasing in spite of the higher prices. Supposedly we will have another very strong hurricane season. Valero's profits are going to skyrocket this year. I got in at 63 and think Valero's price could go into the mid 80's or higher by summer's end. If you are looking for a highly speculative play this is not it.

DD, no use talking conventional wisdom to the folks looking for the next Qualcomm circa 1st Q 1998.

DM,

Ahhhhh. I see your situation. I was thinking that you may have been one of those guys that didnt get off of Askjeeves in time. You are in a different ballgame.

DD,

Oil has had a nice run and it will go even higher. However, there is no problem with inventories. There are no shortages like in the 70s with long lines at the pumps. In fact, the inventory build is 5% higher then it was last year.

The largest pressure on oil is politics. Iran, Venezuela, etc. The Iranian President gets on TV and you can see that he is holding back a laugh. The Venezuela President gets on TV with his antics. Its almost as if the price of oil is directly related to their salaries as President. Then you see Bush on TV telling everyone that "all options are on the table".

The question is when the antics will be ignored and everyone starts to figure out that there is no real shortage.

Valero has a P/E of about 10 and it seems undervalued when compared to the S&P500. The low P/E is for good reason because traders know that the politics will eventually subside and the price of oil will come down.

My opinion is that oil will come down when Bush is out of office. The Democrats will be more effective at engaging countries like Iran and Venezuela. Bush sealed the deal with these countries when he started using his trash mouth. The Iranians will do the same thing with the Republicans that they did with Carter. When the Democrats are in power, oil will come down.

The energy secretary just came out and stated that he sees high prices in the next 3 years. Haha. What a surprise, thats about how long Bush is going to be in office for. . .

http://www.cnn.com/2006/POLITICS/04/30/bodman.gasprices/index.html

So is Valero a good deal? For now, I believe so, but I would clarify that with a word of caution that it wont last forever.

No Im not trying to find the next Qualcomm. Im trying to find the next Hansens. In my quest today, I believe I found the next best short and that is Jones Soda.

I went to several stores and found that only Starbucks was selling them. I bought a few bottles, it didnt taste spectacular, just like regular soda at $2/bottle. No one in any of the Starbucks was actually buying them. There were always so many on the shelves too left untouched.

I noted that this company has appeared in all the major website rags like TheStreet and Motley Fool. Cramer was crying about it for a while.

My conclusion that this company has been ramped up too much and would be a good short. This company is definately no Hansens.

You could have made money in Qualcomm if you simply went short. There were traders who rode the monkey all the way down.

Porker, I stopped looking for the next Qualcomm circa 1st quarter 1998. By the time you find out about it you are way to late to the party. Nutrisystems has had an incredible run in the last year and a half. Going from 4 to about 68. The next ten-bagger will might be an ethanol company(e.g. Pacific Ethanol) or alternative energy company(e.g. Zoltek Energy). Who knows.

Ironeagle- I have to disagree. Oil is going up regardless of who is in office. Developing countries will continue to increase their usage of oil. Imo, Valero will go up 30-40 percent in the short term. That is what I am looking for. Maybe I can do my first Asia trip.

Checkout this article by Jim Jubak.

http://moneycentral.msn.com/content/P150235.asp

Not to turn this into a political-bashing thread, but methinks all this presidential mention of alternative energy sources is strictly lip-service; when accused of using the office to further the family fortunes, he can point back and say he was an advocate of alternative energy. A real tree-hugger, that guy.
Should the price of oil dip drastically (which I don't find very likely, but still...) all the alternative fuel interest will disappear as quickly as the Chandra Levy story did on Sept. 11 2001.
Anyone else remember the "energy crisis" of the mid-1970s? That was the US's first reminder of the logistics of oil supply since WWII. There was some talk of alternative sources, but what was the first thing Ronald Reagan said when he arrived at the White House? He saw the solar cells Carter had installed and said "get that shit off the roof!" And then there was the hydrogen fuel project, which was scrapped in the early eighties. Like Tom Waits said "the only time I have a drinking problem is when I can't get a drink."

Anyway, my point is the alternative fuel concerns are half-hearted, at best. Might be worth investing a few bucks cautiously, but don't bet your 401k.

Due, check out cfw, small co. that figured out how to pull all the oil out of abandoned oil wells.

I've been looking into bio deisel companies of late... great idea, product, nice price point (around 15% cheaper than gasoline), etc-- just need some market penetration and a distribution channel.

Since this is a Brazil board after all, I again recommend Petrobras (symbol PBR) and CVRD (symbol RIO), two companies I have done well on and have recommended to hombres before. Both have risen a lot over the past 2 years but still have room to run IMO, and I follow their news daily. In the alternative energy sphere, I like two companies that produce key materials that go into alt. energy technologies. One is Zoltek (symbol ZOLT) and the other is MEMC Electronic Materials (symbol WFR). I think these are safer plays because the sales of wind turbines and solar PV systems (and thus the products these companies are making) is going up fast, but we don't know which wind turbine and solar PV manufacturers are going to be the big winners. BTW, I lost a decent chunk of change on Astropower, a solar PV company that went belly up (and not in 4x4 either!) a couple years ago. Do your own homework and buy at your own risk...kind of like shopping in Help!

Excuse me, did I miss something? This is now a BRAZIL board? Wow, I'll have to ask Hombre how he's dealing with the coup d'etat.

Murasaki: Maybe YOU need to face up to current REALities, get with the program and give Brazil a try. And I don't mean only by buying EWZ! (although that is a good start).

Well now that the Asian chat board is going to get shut down, and all the Asian content on Discus removed, I guess I will have to make some adjustments. Sheesh.

(Although I will say that EWZ has been my mostest favorite investment. I never complain about a 92% return in one year.)

It is serious question time for Murasaki and others. I am heavily invested in Brazil and so far I'm getting a very high return. However, from what I gather one of the reasons the real is so high is because the interest rates in Brazil are very high and therefore attract alot of foreign capital. I don't know if it is 1 to 1, but when the real strenghthens it has to have an effect on the Brazilian stocks I own that are listed on U.S. exchanges.

Soooo, how do you assess the risks going forward in owning Brazilian stock. Over the long term is it likely Brazil will dramatically lower its interest rates and, if so, will this have a ripple effect that will ream the value of Brazilian stocks listed in the U.S.?

It has to be a bit more complicated than above, and I would be interested in hearing any complications. But what do you think, stay in Brazil stock only short-term for the fast buck, or long term for potential economic growth in the economy?

My view is that there is a lot less risk if you buy Brazilian stocks with growing sales/production and growing profits, like PBR and RIO. Brazilian interest rates have been high to very high for many years if not decades, right? I think there is little to no chance that they will be dramatically lowered.

I shouldn't have implied this stream was on the Brazil board, apologies to all you Asia fanatics!

The safest way to invest in Brazil is through mutual funds. The Fidelity Latin American Fund seems like a good option. A 97% return in one year. 32% YTD return. Its portfolio is 52% Brazil.

http://personal.fidelity.com/products/funds/mfl_frame.shtml?315910844

However, if your looking to invest in individual stocks. Then its best to read the following book first.

http://www.amazon.com/gp/product/0471773778/sr=8-28/qid=1146950139/ref=sr_1_28/102-9133980-2415321?%5Fencoding=UTF8

Beware that no investment vehicle lasts forever. A lot of cash has been dumped in the foreign markets.

If you invest in individual equities on a foreign stock exchange, make sure you use trailing stops.

I've always had trouble with technical analysis. Right now, I am reading "Technical Analysis for Dummies". This is absolutely the best book I've ever read on the subject. I feel as if I can look at any chart and understand exactly what is going on. I've been pouring through charts for hours now and am amazed by the things I see.

I too once laughed at the Dummies books until I saw a foreign medical student study for the boards with them. They passed on the first shot where their American counterparts failed. I wasnt laughing after that.

i've been dabbling with tech analysis ever since suscribing to IBD a while back. Great stuff and it is powerful for trading. BTW, IBD is highly recommended

Looking at the markets today, does anyone still feel that energy or international investments are still worthwhile investments?

When I saw "Due Dilegence" and"Murasaki"s post, I knew it was over for both energy and the international markets. I then made a decision to cash out all of the international and energy holdings in my fund. Literally into 100% cash closing all of my positions. There were quite a few people at my work looking at me like I was a nut. I was even called into the managing director's office and quizzed as to my logic behind all this. I didnt tell him that my logic revolved around a few message posts on ClubHombre.

A few days after I cashed out, I too wondered if my thesis would be correct and kept questioning myself. Maybe I should have started packing everything up at work. Then, as of a few days ago, I had shorted out some of the energy stocks. Again, I wondered if I was going to incur a serious loss if my thesis wasnt correct. Shorting a stock is an advanced technique not for the small time investor. It requires a lot of diligence and there is substantial risk as you could lose more then your principal investment. It has been a white knuckling experience and I have been up all night on a few nights last week, but my thesis has proven to be correct and I have made significant advances in my fund where as others have lost.

Then the shit hit the fan today. Both the India and Russian exchanges had experienced a "limit down" moment. This is where their exchanges fall past 10% and then they shut down the entire exchange for a period of time to prevent a panic. I was glad that I was out of those international equities while my colleagues were rushing around in a panic.

History dictates that booms usually end somewhere between 3-5 years. Usually the end comes when the average retail investor tries to get in on the boom. When I saw some of the board members running around wondering where to put their cash, I knew it was over. The energy boom started in the later part of 2004 when oil was at $25 a barrel. There were some fundamental reasons for the initial boom, but then it got out of control.

Did the world suddenly run out of oil? Why did oil suddenly double in value? The answer revolves around a bunch of aggressive traders NOT in the fundamentals. The prices have now exceeded the fundamentals and we are in for a downfall. The world experienced a small decline in supply, but not anything to substantiate a doubling in the price per barrel.

I hope you guys didnt move forward and invest in Brazil or energy like you posted earlier.

I dont generally publicize my thesis or my portfolio. However, I believe oil will fall to $45 per barrel at some point. At the true low end, there is a probability of it going to $35.

As for real estate, there are way too many novices in the market right now. The real estate prices have exceeded fundamentals. Unfortunately, a person cant simply cash out his property as quickly as he can on an electronic trading platform. So there will be a long stagnant decline in property prices over the next 5-10 years much like a Japan scenario. The true loss will come when investors have to pay insurance premiums, taxes, etc. that are based upon those heavily inflated values. They will also be behind in mortgages.

The guy who cashed out early on his property and is now renting wont have to pay taxes or insurance. Those who live by certain coastal regions have already received their insurance cancellation notices will soon be paying double-triple in insurance premiums.

Ivana Trump closed down her real estate project in Vegas and refunded the investor's cash. Real estate has come to an end in Vegas.

"Never will a man penetrate into error than when he is continuing on a road that has led him to great success" -Friedrich von Hayek

hate to say it but it's real easy to sound like you know what your talking about after the fact...

"Real estate has come to an end in Vegas"


Really? What time horizon? Wanna place a little friendly wager that property values continue to rise in vegas for the next year? Perhaps not at their furious clip, but appreciation nevertheless.

Hehe Don Marco, you always seem to have a negative spin and have this pension for questioning things, especially when things seem to be going right for someone else and not yourself.

I have analyzed the Vegas market and the key factor is that its overwhelmed with novice investment. It has come too far, too fast. There are a few other key factors that compound my worries.

The golden rule of investment is to always hold a vehicle suspect if it has come too far too fast. Are you naive enough to believe that an investment vehicle is exempt from gravity? Are you naive enough to believe that it will just keep going up and then at some point just level out?

Timing is very difficult. If I could be confident in a prediction, then I would go to the CME and bet against it on the futures market.

No one can say for certain when. However, the question is not if, but when. In this case we have a vehicle that has undergone obvious speculation in which prices have been run up way past fundamentals. Fortunately we have many vocal people out there issuing warnings. These warnings will delay or soften the inevitable. In the past, there have been no warnings. In fact, usually we see these commercials on television encouraging us to keep going into the investment vehicle right before the bust.

I loved how Ivana Trump was so confident on CNBC a few months ago about her vegas condos. Now her operation has been shut down and deposits are being returned to investors. What happened to the confidence, bravado and attitude so displayed on CNBC? Now the doors are being shuttered and the property sold off for other purposes.

This is an odd post. Earlier in this thread, you touted some of the fundamental basics of investing, such as: diversify your portfolio, and invest for the long haul. Yet in your post today, you question both of these fundamental tenets. Now why is that?

“Looking at the markets today, does anyone still feel that energy or international investments are still worthwhile investments?”
Anyone in the market with a long investment horizon should not be concerned about the market’s correction this past week. Corrections happen. Always have and always will. Long term investors need to keep their eyes on their ultimate goal, which is usually decades away. This correction will be forgotten in a matter of months. Those truly impacted by it are day traders and shorters. And over that long term, of course it is quite wise to diversify one’s portfolio into energy and the international arena.

“When I saw "Due Dilegence" and"Murasaki"s post, I knew it was over for both energy and the international markets.”
“Usually the end comes when the average retail investor tries to get in on the boom. When I saw some of the board members running around wondering where to put their cash, I knew it was over.”

So nice of you to be quite arrogant about using my statements to build up a strawman that fulfills your preconceptions of the novice investor. However, it doesn’t quite work out that way. First of all, the international markets haven’t all gotten wiped. I just completed a full portfolio checkup, comparing my prices now to where they were a month ago. I am mostly down in the emerging markets of Latin America and Asia, but the numbers aren’t bad and I’m not concerned. And guess what? In Europe, I’m still up practically across the board. They bucked the trend from my US stuff. That’s what diversification is all about.

And second of all, it’s kind of... Well you should be careful about making assumptions about people’s backgrounds on this board. Thanks for calling me a novice. Although I’m not an analyst, a fund manager, or a trader, I do work in the financial services industry, and have for many years. I am definitely a fairly well-informed, experienced investor. Thank you for pigeon-holing me.

“I hope you guys didnt move forward and invest in Brazil or energy like you posted earlier.”

I never said I was thinking about investing in Brazil. I said I was already invested in Brazil. Have been for some time. It’s been a great investment. If this correction does mark the end of the party for the Brazil stock market for a while, so be it. I‘ve made a huge profit. I didn’t just buy last week.

"This is an odd post. Earlier in this thread, you touted some of the fundamental basics of investing, such as: diversify your portfolio, and invest for the long haul. Yet in your post today, you question both of these fundamental tenets. Now why is that?"

Haha. That is not a simple question to answer. The popular answer to that question, when investing on a personal-retail level, is it depends upon your age and responsibilities. The younger you are the more risk, less diversification, you should be able to stand.

My opinion is that you should always have some money set aside in a diversified portfolio that you should rarely touch. Retirement accounts (IRAs, ROTH, 401k) should just contain mutual funds that are rarely touched. The younger you are the more aggressive the mutual funds should be.

The other part of your cash should be the "mad money" which is used for speculation. Speculation is risky and it depends upon your situation. If your a 45 year old father of two children with a mortgage, then I would not recommend such a risk. However, if your a 26 year old single guy living out of a cheap studio apartment, then it might be worth the risk.

So as a retail investor, you should be part Dr. Jekyl and part Mr. Hyde. The percentage on either side depends upon your age and responsibilities.

"Long term investors need to keep their eyes on their ultimate goal, which is usually decades away. This correction will be forgotten in a matter of months."

Uh-oh. See this is why I call you a novice investor. Lets take a look at a graph of the Nikkei:

http://finance.yahoo.com/q/bc?s=%5EN225&t=my&l=on&z=m&q=l&c=

So if I was an investor of Japanese stocks in 1990, would you advise me that this correction will be over in a matter of months? It appears the high was 40,000 for the Nikkei in 1990 and today its only at around 15500. The Nikkei never recovered from the loss it took 16 years ago.

Ok, lets forget about foreign markets and stick with the domestics.

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=nasdaq&sid=3291&o_symb=nasdaq&freq=2&time=13

So if I was an investor in 2000 when the Nasdaq was at over 5000, would you tell me that this would be over in months?

Lets go back in history to the stock market crash that lead to the depression era. The market did not full recover for 24 years.

The fact of the matter is that this is not a "correction". Right now India's police are on full alert watching for suicides. Exchanges are being shut down as they hit their "limit down". When is the last time these exchanges were shut down?

The FTSE has lost 6 months of appreciation in a few days.

http://www.bloomberg.com/markets/stocks/movers_index_ukx.html

The same goes for the DAX

http://www.bloomberg.com/markets/stocks/movers_index_dax.html

Australia and Brazil have fared a little better and have only lost 3 months of appreciation in a few days.

http://www.bloomberg.com/markets/stocks/movers_index_as.html
http://www.bloomberg.com/markets/stocks/movers_index_ibov.html

I could go on and on with graphs and indexes. They are all in the red. This does not appear to be a simple minor correction.

We will see in the coming days what transpires, but it does appear many of the money managers are going into defensive stocks and fixed income. They are going to avoid risk at all costs until the next Fed meeting.

The most popular stocks right now are anything you would see at the foodstore. Tyson foods has staged some impressive gains over the last few days. High P/E though, but I think it will continue to rally.

"Hehe Don Marco, you always seem to have a negative spin and have this pension for questioning things, especially when things seem to be going right for someone else and not yourself"


There you go again with your crystal ball-- did you read about my economic demise in the journal? The largest hit to my net worth in two weeks is certainly not my investments (poker perhaps), as I haven't added new stocks to my portfolio in well over a year as i've been gobbling up gold and silver. I recently liquidated all when the silver ishares began trading a couple weeks ago... I didn't time the top perfectly, but I'll take a 4 bagger when it comes my way.

Negative spin? What was negative? Questioning-- indeed. Are you saying people shouldn't question grand market predictions posted on the web by someone whom no one knows anything about their credentials? I didn't see you post anything about a market downturn, and in fact you were soliciting new stocks to invest in... then there's a downturn, and now you resurface as the bear market guru...


"I have analyzed the Vegas market and the key factor is that its overwhelmed with novice investment. "

in the words on Khun Mor, please cite some references and rather than post "I analyzed therefore..." try posting something interesting like the analysis--just a suggestion.


"If I could be confident in a prediction, then I would go to the CME and bet against it on the futures market."

Then why go on and on with your PREDICTIONS with which lack confidence and in an omnipotent tone?


"Are you naive enough to believe that an investment vehicle is exempt from gravity? Are you naive enough to believe that it will just keep going up and then at some point just level out?"

Your ducking my offer-- want to place a friendly bet? Your quote ""Real estate has come to an end in Vegas" is absurd. If you think it's not, put your money where your pen is in this case.

You know what, you should post your transactions like fooledagain posts his baseball bets... That would be funny.


Muraski-- it's the crystal ball he's got in the basement... he knows us better than we know ourself

"The most popular stocks right now are anything you would see at the foodstore. Tyson foods has staged some impressive gains over the last few days. High P/E though, but I think it will continue to rally"

Really? run a screener with market cap over a bill, price % gain vs. 200 day moving average, and pick all the sectors your heart desires. About 75% of the hits will be from the healthcare/medical industry sector. One of my favorites due to fundamentals is ASPV, which has been a real joy to watch for the last year.

As for Vegas real estate being dead "now".
In the last 2 months, asking prices of condos in vegas went from:

From MLS survey data on condo sales(feb-april) in LAS:
Asking Price $272,174 $362,755 33% increase
Sales Price $259,087 $328,027 27% increase

average time on the market rose slightly up 6 days. Frothy -- yes... 33% increase in a couple months is crazy, primed for a correction at some point-- yes, Dead-- LOL.

The market, ya the market went down fearing the fed reaction to data that our economy is growing too fast and unemployement #s were too low... Shit, I wonder how many countries would like to have that problem?

I'm a novice investor because I invest in international markets? And to support your condemnation, you cite one market in the world that peaked 16 years ago after a frothy bubble?

Oooookkkkaaaayyyyy........

Murasaki,

Ok. Lets see you post a portfolio and then we will track it over a 6-12 month period to see where it goes. . .Lets see how much of a pro you really are. . .

Don Marco,

How do you think Wall Street, the individual residents of these areas and hombuilders feel? Do you think they have your same spirit?

I think they are jumping for joy due to the run up in equity they have seen for the last 4 years. As for your heralded Ivana project, it was pulled not due tot the market or financing, it was pulled because the developer backed out. If your familiar with LV real estate, you should know this is nothing new for mega projects

(Message edited by donmarco on May 24, 2006)

" Lets see you post a portfolio and then we will track it over a 6-12 month period to see where it goes. . .Lets see how much of a pro you really are..."


actually I see you touting the horn-- why don't you post yours up rather than spout off reams of generic 101 stuff mixed in w/ your macro "predictions"

Has anyone been reading about vonage of late? WOW-- what a soap opera, I can't recall so many snafus in the history of an IPO

Amazingly they are up today when the market is getting creamed.

Yeah. A bigger drama than a certain Bangkok go-go girl or a large breasted Soi 6 Pattaya drama queen.

(Message edited by the_senator on June 06, 2006)

Last week the Wall Street Journal published the figures for 2006. Let’s take a look at how those markets did, especially the international ones that the "novices" invest in.

The DJIA returned 18.3%.
The S&P 500 returned 15.8%.
And the Russell 2000 clocked in at 18.4%.

Thus was the story with the domestic US markets.

Now looking at the world stock funds chart under the mutual funds yardstick, we see that:

International returned 24.9%.
European region gained 33.7%.
Emerging markets went up 32.1%.
Latin American up a whopping 44.1%.
And the Pacific region a modest 29%.

Returns for some individual ETFs:

EEM Emerging markets up 30.7%.
FXI China 25 up 83%.
EWZ Brazil up 44.2%.
IEV S&P Europe 350 up 32.8%.
ILF S&P Latin America 40 up 40.8%.
EWW Mexico up 44%.
EWP Spain up 49.5%.
EWD Sweden up 43.3%.
EWA Australia up 31.4%.

And so on. Power to the novices I guess.

I got a ? for Murasaki, or anyone else. It concerns international ETFs. I own quite a few, but don't really understand how they are priced.

For example, the FXI (China) seems to be only weakly correlated day to day with how the Chinese markets do. There are days where the main Chinese market closes up four percent, and FXI closes down a few percent the following day (keep in mind the New York market opens a few hours after the Chinese markets close). Although I understand that things like currency fluctuations can affect how the ETF does relative to the underlying foreign market, the Chinese currency does not fluctuate much. I also understand if there is some major event that intervenes between the time the Chinese market closes and the New York market opens, this could affect the New York market's price in anticipation of what will happen the next day on the Chinese market. There also will be instances where a dividend is paid on the ETF thereby lowering the market price to reflect this. But these two latter factors also don't seem to explain what I am observing.

From my vantage point it appears there is more to this picture. And while I have observed this lack of a good day-to-day correlation in prices to some extent with the Brazilian ETF, it seems to be much greater with the Chinese ETF, i.e., FXI, at least lately.

Can anyone illuminate what is going on? Is it simply supply and demand, and the fact U.S. investors may make different judgments about the future of, for example, the Chinese market than Chinese investors? I suppose this is possible, although strikes me as unlikely.

Don't misunderstand me. I own four of the ETFs listed by Murasaki so I'm no complaining. Just curious (and the answer to the question could affect any decisions I may make about selling what I own, or buying additional ETFs).

saki, I recall someone saying last year was a great time to sell everything in the markets-- don't you? I'm sure glad I didn't!

I have cut back my foreign funds a bit tho this last month. Let's hear it for the novices.

LAG, in a simple nutshell, ETFs are priced against groups of securities that are part of an index. In the case of FXI, they use the FTSE/Xinhua China 25 index, consisting of 25 "red chip" companies in China. So when you say "Chinese markets", which one are you referring to? And are you referring to the entire market, or just to the FTSE/Xinhua 25 index or another index? Most likely you and the references you are seeing are not referring to this particular index.

Also keep in mind that the managers of the ETF may not always strictly follow the valuation of each company component in the index. I'm not about to go read through a bunch of prospectuses, but I'm guessing they have the right to stray a little in alloting the amount of shares they purchase of each index component. Such activity could also explain the skew you describe.

DM, I recall precisely the same thing. I remained, and still remain, 100% in equities. I'm actually increasing my international exposure a bit.

Thanks Murasaki. I usually look overnight at the SSE Composite Index which is different than the FTSE/Xinhua China 25 index, so that may be part of the problem. I vaguely recall reading an article or two about how there are some restrictions on foreigners buying certain Chinese equities so there may be less overlap between what is included in the ETF and the primary Chinese market. I'm still rather amazed though at days when the SSE Composite goes up a few percent and FXI then goes down a not insignificant amount (and vice versa).

Incidentally, what international equities are you looking at?

LA Guy,

The FXI is based on the following Companies

http://www.ishares.com/fund_info/holdings/holdings.jhtml?period=d&symbol=FXI

You can also find info & complete holdings of index shares on ishares.com

I think there needs to be a balance between foreign and domestic holdings, we have become a global economy so there has been a paradigm shift from the old models.. and IMHO, Money Managers are not what they once were they have been commoditized and somewhat mutualfundized (are those even words)... Indexes have helped me out and having a simple allocation and rebalancing has been an effective practice for me.

True returns are found in Fund of Funds or Style Specific Hedge Funds, but you have to have a solid team or manger and barrier entry for top tier is usually a 1MM+

As far as real estate.. I do not know much about it but i have never heard someone involved in "Flipping" state that they ever lost money... just like gambling in vegas!! ha ha .. just at small jab at those RE Brokers.

GL
AnonGURU

Thanks for the info Goodlife. Since my original post on the topic I have learned about two other China ETF's: CAF, which is a managed fund by Fidelity, and PGJ, which tracks an index different than FXI. I believe only CAF actually has the right to invest directly in Chinese stocks; the others somehow link into Hong Kong and via Hong Kong into China owing to some of the restrictions on foreign ownership of Chinese stocks (I still really don't understand this Chinese stock market stuff though). I, however, am moving a fair amount out of China given that I have made an excellent return on my investments there to date and in the short-term it looks like there may be a bubble problem.

Anyone follow Petroleos, PBR? worth buying here?

(Message edited by bluelight on May 31, 2009)

Friggin' Dubai.

Don Marco, by the way...Vegas real estate, like most real estate, has been crashing for 4-5 years now. Are you aware of this yet? Or in some alternate universe is it still going up?

on the positive side, your thai girls are top notch

Cobra, were you aware you read a 4 year old post? DOH.

Funny you should mention it though, in 2005/6 I bought a property in china. I took profit in early 2009 for around a 70% return. What did I do with the cash?

BTW-- the choice in Colombians is sublime.

In early 2010 I bought 2 prime properties in Vegas (both now rented to great tenants). Besides the 800 or so in positive cash flow every month, both are up around 20% from my buy price.

Yes, Vegas got hit much harder that I predicted in 2006, but I didn't buy until 2010. That's my universe thus far amigo.

(Message edited by donmarco on May 14, 2010)

Without wanting to turn this into a political debate, I am wondering what effect, if any, a government shutdown, which is beginning to look like a real possibility, would have on the stock market.

I'm not really sure about this, but the uncertainty a shutdown would bring, along with potential defaults on governmental obligations, strikes me as a negative. But, if so, how significant a negative would this be? Would this trigger a massive bear market, at least in the short run?

Any ideas/predictions if a shutdown should happen?

A government shutdown is looking like a real possiblitity? What country are you talking about?

Bluelight, the US.

Back in 96, or whenever the Republicants last tried to fight a Dem president by allowing the budget to run out, there was no adverse effect. "Essential" services are still done, and debt payments and auctions are held as usual.

As usual, the dumbasses will overplay their hand, just like Gingrich did. For a bunch of people who swore they were not going to do what they did the last time they controlled the House, 7 weeks into the new Congress it's clear they're following the exact same playbook as last time. It didn't work then, it won't work now. It's beautiful, watching them fall all over themselves to no avail.

"A government shutdown is looking like a real possiblitity? What country are you talking about?"

Bluelight: You might want to either read a newspaper, check out some news on a reliable internet news site, or watch a news program on television. If you do any of the above, you should be able to very quickly figure out which country I am talking about.

(Message edited by laguy on February 20, 2011)

Republicans lost all credibility last time.

Clinton and Dems just had had there asses kicked in mid term elections.

Sound like the same stupid replay.

Clinton became more powerful after the shutdown. I am NZO LOVER of the Dems, but the Republicans are just acting like a bunch of cry babies right now.

MM

Thanks Cat, for some dumb reason I was thinking about Egypt or Libya where the governments are being shutdown because they are being overthrown!!!!

Stupid me, I should of been thinking about the bunch of theives in Washington and how they will screw us over again. How could I been so stupid?

Now that I know what you are talking about, I can answer the question. The theives won't have any impact on the stock market. They are nothing but noise compared to Botherhood toppling governments in the Middle East.