investmentitguy

IPI IPO is a hit

2008-04-22T09:39:00.000-07:00

The IPI IPO hit today. Up 50% at mid-day

Intrepid Potash IPO Friday

2008-04-21T17:53:00.000-07:00

There is an IPO pricing on Friday that might be pretty exciting. IPI is the symbol for Intrepid Potash, the American maker of ground gold called Potash. Now doesn't that product just get you excited?

Well if it doesn't it should. Take a look at the charts for these three potash plays in the market.

Agrium, up over 700% in 5 years

Mosaic Company, up over 1400% in 5 years

Potash Saskatchewan, up over 1870% in 5 years with dividends.

This sector is still hot investors. IPI could have the makings of a big winner. Even if you don't want to invest in an IPO, you might see some market ripple effects on these three to give you a nice gain.

Admit your mistakes

2008-04-18T06:51:00.000-07:00

I was reading an Ari Kiev book last week called Trading to Win, it's a great psychological study of what makes the best stock traders and how to improve your personal trading performance using psychology. One of the concepts that stuck out was the admission of mistakes in making trades. Face it, we all can't be right 100% of the time, so why do we only talk about our stock winners?

How can I as a blogger help you be a better investor? Not by constantly touting how much we have made with big winners like FSLR (shameless 225% gain plug here) But, rather, let's admit the losers in my recommendations to learn from my past mistakes.

Back on 2007, I recommended a few dogs. BCSI and SINA are both down 40% and 35% respectively since I recommended them. Looking back I realize I was recommending stocks that were in the latter stages of growth, and when compounded with the market correction, they made horrible picks. So how can I correct that going forward?

I have since revised my criteria for picking stocks. It does not deviate in any way from what I have shared with you on this blog, all it does is require me to screen stocks a little closer using my funnel system.

If I couldn't or wouldn't admit I made mistakes on those stocks, I would have been doomed to repeat myself.

I will continue to make mistakes, but it's what I do with those mistakes that will define me as a trader.

Finally, remember when we talked about upper and lower channels, and I used the example of Masco MAS. In recent weeks it hit the lower channel of $17/share and bounced off that price nicely. If there is a pullback to $17, it might be worth getting some shares. It won't be a triple-digits gainer in your portfolio, but it will be that nice slow and steady gainer with dividends that we all need a little of.

Have a great weekend everyone!

Stock Picks

2008-04-17T06:28:00.001-07:00

Its been far to long for some stock picks and the market has been pretty resilient the past few weeks with down days distributing in lower volume, and positive days on strong volume. Sometimes it can't hurt to have a small market rally amid a recession.

Goldcorp at $43.41 GG
Apace at $140.70 APA
Mosaic at $136.82 MOS
Monsanto at $131.54 MON
Potash at $198.26 POT
Trina Solar at $44.55 TSL
Transocean at $152.77 RIG
China Mobile at $83 CHL
Southwestern Energy at $40 SWN
Bolt Technology at $23.16 BOLT
T-3 Energy Services at $57.89 TTES

Hopefully there are enough interesting companies in there for your research.

Ken Heebner is a Genius

2008-04-16T06:33:00.000-07:00

I hear plenty of stories about Warren Buffet everyday on the news, but he can't be the only Wall Street darling, can he? Of course not. Enter Ken Heebner.

Ken Heebner runs the Capital Growth Management group of 4 mutual funds and has been a wall street star for over 30 years now. In 2007 his CGM Focus fund returned over 60%. In fact, his CGM Focus fund has a 5 year annualized return of over 38%. Wait, it gets better. His funds have no load attached to them, and the expense ratio of 1.2% is within industry average. If you had invested $10,000 in this fund in 1997, you would be sitting on $57,226 and you would have had one year of nearly a 20% loss in there. Now where else can you find that on Wall Street.

His group runs three other funds that are worth mentioning, CGM Realty is a solid and surprising positive fund this year. Its year to date return of 2% far outweighs the S&P500's 8% loss for the year to date.

The CGM Mutual fund is a lower risk, lower return fund of the group, and I say that knowing that the fund has posted a 5 year annualized return of 20%. Not to shabby in its own right.

Finally, the CGM Capital Development Fund is closed to new investors and is a reminder that to get in on Mr. Heebner's funds, you need to act before you are closed out of the earnings. Given 4 stars by morningstar and a 5 year annualized return of 24.5% you can see that each of Mr. Heebner's funds have a proven track record and are not just a flash in the pan.

Therefore, the next time you read about Warren Buffet, think about who else that is out there doing extraordinary things in investor return. It might be worth its weight in gold.

Bonds for Breakfast

2008-01-22T06:03:00.000-08:00

With today's unprecedented interest rate cut, the Fed is screaming "panic". U.S. economic recession is not an if statement, but rather reality. Jim Melcher, a respected wall street guru has been calling for this since November. He noticed the head and shoulder pattern forming in the market, and now we are feeling the effects.

What to do? There are two trains of thought. Bonds are going to be very popular for the near term and there are several to choose from, so make sure your investing game plan match what the bond is offering. We will start a bond series soon to avoid the doom and gloom discussions we've had on the market.

The alternative investing strategy is, if you have credit, use it to get a line for alternative investments. You could do quite well with a private loan at prime for $100,000.00. This is what the Fed is hoping will happen out of this recession, new money investments.

What is your investment strategy during a recession? We would like to hear it.

Can it Get any Worse?!?!?

2008-01-17T12:34:00.000-08:00

I hope your getting comfortable with the idea of a recession and are not planning any new security purchases anytime soon. I know I have been harping on this market as a recession but I want to make sure your money stays on the sideline through this.

Interested in Short Selling for a market like this?
Charles Caes wrote an informative and useful guide for playing that side of the market. "Tools of the Bear: How any Investor can make money when stocks go Down"

I am not by any means an expert on this side of the market so I would rather turn you to an expert.

Buck the Trend

2008-01-16T14:36:00.000-08:00

As Wall Street continues to slide and you see profits disappear, are you paying attention to the real winners in this downturn? Obviously smart short sellers are making profits, but you have to be careful with short selling. It is an action we take less often. We are conditioned to be buyers of stock, not sellers, so short of short selling (no pun intended) what are you to do?

Find stocks that are bucking the market trend. On Monday we had a bunch of stocks make solid gain on solid volume in an otherwise weak market. Smart investors were looking at which stocks maintained their run yesterday in a dismal market. Who was bucking the trend?

Humana (HUM) was. Remember when I told you defense sectors like Alcohol and Medical stocks were most likely to buck Wall street? Humana could be just one of those stocks. For now, I recommend putting it on your watch list, as I will not recommend buying anything in the middle of a storm like this, but your best preparation for the next market swing is to find stocks like HUM and keep an eye on them.

Do you have a stock on your watch list that you want to share? Post a comment on here and lets build a watch list for the next market turn!!

The Patience to Wait it out!

2008-01-15T11:36:00.000-08:00

Yesterday might have been exciting to some investors. After a dismal start to 2008 the market showed its strongest percentage gains of the year. But, look a little deeper. The heavy volume of institutional investors was missing. The market volume was weak, even though strong leaders like MON MOS and TNH lead the way with considerable gains in strong volume. Keep track of things like that, as stocks that buck the market trend in strong volume tend to be the leaders of a new rally. I am not that optimistic that things are going to turn around for some time.

Breakoutwatch.com, a great free resource of stock picks published this graphic this week:

The H&S Top signifies a Head and Shoulders Top in the Nasdaq market. A Head and Shoulders top is a reversal in the market. It is a shift in direction, and we currently see the market has taken a downward turn. What will change the market? There are a number of factors, but the most important at this moment is TIME. The market has been running up for over 5 years now, we were due for a correction. This time, I say we are in a full blown recession. This is only one man's opinion, but I believe we are there right now, and it might not be for a couple of years when economists come out and say, we were in a recession in 2008, but we are there.

Going to Cash

2008-01-11T06:12:00.000-08:00

It's probably advice you have heard from investment gurus or friends. When the market "corrects" you go to cash. What that really means and what people do are entirely different. Here's an example, take Rico, a 37-year old man who has $170,000 in 401k assets, $35,000 in Roth IRA assets and $40,000 in stock, $10,000 in CD's and cash. When the market corrects itself taking the term, going to cash would mean he would transition his $245,000 in assets and converting them to cash. If Rico did this he would have failed as an investor.

But why?

Rico might have correctly predicted a market correction but for investments like Roth IRA's and 401k's he is pulling out at exactly the wrong time. These are long term investments we are talking about, Rico should fully expect wild corrections throughout his savings career. A better option for Rico would be to lower contributions for the down period of the market and find better ways to make money for the short term.

There still is that $40,000 in stocks that we haven't talked about. That is your cash convertible asset. Take that money and convert it to cash. You always looked at that investment as a nearer term investment and to mitigate your risk Rico would take that money and invest it elsewhere.

So as you can see, going cash doesn't mean hording your money under the bed and waiting for the market, but rather understanding the term of your investment and making critical decisions on your risk and return.

Please be sure to keep an eye on MOS and MON, they both should be on your watch list. I also liked what TTM introduced yesterday. It may not be something you would drive, but I think its something that can get India growing further than it already is.

Rate Cut Not Enough

2008-01-10T09:42:00.001-08:00

In the good ole days of 2004, the market would have rallied favorably with news that the Fed was lowering rates again. While this sounds like strong move again, it is more telling of what the reaction of the market has been today. Mixed at best! We are seeing further indications that we are in the midst of a full blown market correction. Down days are outperforming the market 6-1 thus far in 2008.

In the midst of all this, there is a company I would like for you to consider for your watch list for the next rally. Mosaic Fertilizer Company. MOS crushed earnings yesterday and they follow in line with other fertilizer giants such as POT that have benefited from the new reliance on ethanol consumption.

Market Got you Down? Have a Beer

2008-01-09T16:45:00.000-08:00

Sounds like a funny title at first glance, but when you think about it, it really makes sense. As we are going through a rough patch in our economic history certain trends in human actions take place. We drink more alcohol, to forget about the rough economic times we personally are facing. Some people smoke more often, or start smoking in the process of a recession. Worse off are those that allow stress to get to them to the point where their health deteriorates and medical attention is required.

Why am I telling you these things?

In the face of a large market correction, beer/alcohol and tobacco stocks tend to outperform others. Medical stocks see growth as well. Unfortunately there is a bull market everywhere, and in a correction its those cancerous stocks that do well.

That is why if you are itching for a stock to buy and just don't want to sit on the sidelines, then I suggest a stock like Boston Beer Company SAM or other top notch alcoholic beverage stocks. If you compare the sector chart to the broad market you will see the sector has been outperforming the market in our current 2008 downtrend.

Day 1 of the Correction

2008-01-07T06:44:00.000-08:00

Well most would have thought that last week was the beginning of the correction in the market. Unfortunately the market has some steam going into the first week of the new year and we didn't actually receive the signal that we were in a market downturn until Friday. With that said, the next question is when to get back in?

I would rather you take a breather before you ask that question and ask yourself these questions:

What is the last investment book I have read to get me better prepared to profit the next go around?

How do I feel emotionally and physically when I am active in the market? I am reading a series of books right now by Ari Kiev who is a master of the psychology of traders in the market. In the coming weeks I will do a series of reviews on the concepts found in his books, until then I would recommend reading up on the stuff.

How is my watch list looking for the next bull market? As you know I am a big fan of FSLR (+95% since recommendation) and even though the market is correcting I like this sector and have added SPWR and WFR to my watch list. All this means is I am arming myself with solid fundamental companies that if the market turns I find the strongest of my list and invest in them.

Finally, have I reviewed my last trades to see where I was right and wrong? I might have been really right in FSLR, but I was wrong on SINA, and BCSI. Why? Looking back, I wasn't looking at the latest earnings hard enough and technically they were extended. I only realized this by doing a post mortem.

Market Correction into Effect and #1 Mutual Fund

2008-01-04T14:01:00.001-08:00

While I was pondering when I was going to post the top Mutual Fund of 2007, I thought it was ironic that 2008 has already taken a turn to hibernation. This has been a brutal return to the markets for the new year and I truly expect it to get worse and stay down.

If you are in a winning position make sure your stop-loss orders are active and GTC (Good Till Cancelled)

If you are on margin, get off margin NOW!!

If you have a losing position, sell now

If you have a flat position, make sure you have your 7-10% stop-loss order in.

If you are thinking about a new position in a stock. Don't!

Enough of the bad news. Onto Mutual Fund #1
CGMFX

This the big dog of Mutual Funds. I told you Kenneth Heebner's name would pop up on this list again. There are few to none mutual fund managers that have the track record Mr. Heebner has. He is aggressive, goes against the grain, and spots trends early. With a 5-year annualized return of 36.43% all I can say is "Are you Kidding Me!!!"
The fund takes on Large capitalization stocks with value to growth range. The stock did an astounding 65.87% return in 2007, and one of its major holdings is Countrywide Financial, a huge dog in 07. While I am not advocating any position right now, as noted above, if the market turns, this is a gem worth owning.

Mutual Fund #2 and some change

2008-01-04T06:54:00.000-08:00

For those just starting off on the investment game in the new year you know it takes capital to make trades matter. The greater the capital the more relevant your gains will be in the long run. I offer a hidden gem to building up that bankroll through the years. Change!!

Each week put all your loose change into a jar and roll it up. When you get to a dollar amount sufficient ( I like $200) you take it to the bank deposit to your account and transfer the money right away to your brokerage house. Do this once a quarter and you are sitting on an extra $800/yr. to invest with. Compound that with a 10% return over 10 years and you come back with $16,099. Now compare that with the average percentage Americans save -0.2% and you are already ahead of the curve. So take a moment and pay attention to your change. It could help build your capital for financial wealth.

Fund #2 SLCGX

Yesterday we talked about a great Mid-Cap fund. Today, its the Saratoga Large Capitalization Growth I that makes our #2 fund.

This fund works because it is 100% invested in stocks as the market is in an uptrend. You live by the sword, die by the sword with this one. As you can see from the chart, both times the market corrected, the fund corrected as swiftly as the market. When the market was trending upward, the fund outperformed the markets. That does make this fund a tough play for the uncertainty of 2008, but for 07, it was a big winner.

Happy New Year and Mutual Fund #3

2008-01-03T07:10:00.001-08:00

You will have to forgive the lateness of my latest blog. My body and mind are still poolside in Florida right now.

Happy New Year to All!!

Let's hope this year will be a solid investing year. The market I believe will be sub-par in its performance this year. With rising oil prices, a slumping sub-prime market that has yet to top, falling corporate profits, and an election coming up this could shake out to be a turbulant year. Which makes blogs like this all the more important for the new year.

We continue our look back at the top 5 mutual funds on 2007:

#3 CGM Capital Development

Once again we like the no load factor of this fund, and its lower expense ratio of 1.11%. That is considerably low when you consider the turnover of the fund. Diversity in my top 5 is required and this fund is part of Mid-Cap growth which was decent for 2007 with all things considered. Don't forget this name, Kenneth Heebner. He is the portfolio manager and I am sure you will hear me mention his name again on this list. He goes totally against the grain of Wall Street and profits from it!

Personal Balance Sheet and Mutual Fund #4

2007-12-21T06:06:00.000-08:00

What is your personal net worth? What is your families net worth? If you don't know this number off the top of your head, you probably need to look at building a personal balance sheet. No I'm not talking about getting all fancy and binning items into short-term or long-term assets and liabilities, but rather a simple format for knowing how much your personal net worth is.

Take your 401k, Roth/Traditional IRA balance, CD's, mutual funds, stocks, cash, bank balances, Personal Property (house, car, jewelry, electronics, furniture) and assign a current value for those items. These items totaled together will make up your asset side.

Now take all the balanced based debts you have and total those up. They would include, mortgage, car loan, personal loan, student loans, credit cards, and any other obligation that has a balance due on it. This does not include items like gas, electric, water, or cable. Those are expenses, and should not be included here.

Now when you have your total assets and your total liabilities, you just subtract assets - liabilities = net worth.

This number will help you determine how far away from or close to your financial goals you are. I do a personal balance sheet the first of every month and archive them to compare and contrast where I am and where I was.

Mutual Fund #4
Bridgeway Aggressive Investors 2

I really thought this was going to be my number one pick in January. With a 31.7% total return for the year to date, the Bridgeway fund has invested in my personal favorite companies this year, including: CROX, DECK, AMZN, and PCU among others, so they know how to find emerging growth companies. They summarize their fund best when their goal is to exceed total market returns. Isn't that what all mutual funds should be striving for?

At an IRA initial contribution of $2000 and $500 additional it will require slightly more cash to maintain the fund, but its 5-year annualized growth rate of 21.99% is enough of a sign that your money is going to the right place.

They sport a 1.19% expense ratio, and of course no load.

2008 Contributions and a Look Back

2007-12-20T08:18:00.000-08:00

As we wind down 2007 it is important to take a look back at what we as investors have accomplished in our personal returns from our various investments. Maybe now, we can spend a half day or whole day going over all those financial records and finding ways to lower our fees, and increase our returns.
Jesse Livermore, my favorite investor of all time, would spend the end of each calendar year in a bank vault going over all of his trades for the past year and performing a post mortem. It was this continual fine tuning of his investment strategy that made him successful. I recommend each of us spend some fraction of our time learning from our mistakes.

With a new calendar year, comes new levels of contribution limits for our investments.

401k/403b/Section 457 Plans Contribution Limits
Age 49 and Under - $15,500 (same as 2007)
Catch Up, 50 and up - $15,500 + $5000 (same as 2007)

IRA Contribution Limits
Age 49 and Under - $5000 (up $1000 from 2007)
Catch Up, 50 and up - $6000 (up $1000 from 2007)

Simple IRA Contribution Limits
Age 49 and Under - $10,500 (same as 2007)
Catch Up, 50 and up - $13,000 (same as 2007)

SEP IRA Limits
Max Dollar Allocation - $46,000 (up $1000 from 2007)

We also close out the year with a look at our 5 favorite mutual funds of 2007 that we believe will be strong in 2008 (maybe not as great as these returns)

#5 Spectra N
Commanding a 30.04% YTD return, the Spectra N fund has shown exceptionally high returns since inception. Designed to invest in companies of any size and any country allows this fund to be flexible enough to go where the money is. Bell weathers in this fund include GOOG, AAPL, HOLX and CMI. An IRA initial contribution is $500 with $50 monthly contributions thereafter. There is no load on this fund, or any of the funds I will be talking about, and the expense ratio of 1.5% while higher than most, is acceptable based on its performance. All together, that is what makes Spectra N, our #5 mutual fund of 2007.

Pennies from Hell

2007-12-18T10:24:00.000-08:00

“In two days his stock skyrocketed from 2¢ to 24¢, he made $24,000” In some form or factor, we have all heard these same stories from friends and co-workers on how to get rich on what are commonly called penny stocks. What is the fascination with them and why do we as financial planners advocate against them so much.

Reasons for buying those lovely investment “steals”

In reality the term steal is reflective in the hard earned money you invest into these stocks being stolen from you. So many people invest in these stocks because they believe, that if the stock goes up from 2¢ to 3¢ then they have made a 50% return on their money. While this is true on their returns, the likelihood of that return is near improbable. These stocks are devalued for a multitude of reasons.

Ever think about these

1.) The stock was $120 a share and now its trading near $12. A perfect example is JDS Uniphase JDS While the stock is not trading at pennies or fraction of pennies it is 90% below its previous higher. In order to see that stock return to its glory of $120 a share, it will need to soar a whooping 1200%. How often do we see a stock with negative cash flow and a weak prospectus improve that much. Not very often!!!
2.) The bid and ask price are not in your favor. In 2005 I heard a lot of buzz concerning SmarTire SMTR.OB With a stock trading at 14¢ a share it seemed like a steal, with a growing company, with negative cash flow, but a promising product. I looked it up myself, and the bid price was 13¢ and the ask price was 15¢. At this point, if I buy the stock and sell it within a minute (assuming no price movement) I am already down 15% on my investment. Compare the bid and ask prices of a healthy $20 stock, and at the most you are down 1% from your initial purchase price. Note, this stock is now trading at a fraction of a penny.
3.) No institutional investors. As we all know, the market revolves around the actions of mutual fund managers, and hedge fund managers. They control 75% of all stock price movements, and they own less than 0.1% of all penny stocks. Why invest in something the pros won’t even look at?
4.) The fundamentals are just not there. I cannot stress this point enough, penny stocks are at their price, because they are generally a company on the downward spiral, with negative sales growth, no earning potential, and are operating with a lot of debt. Think of it as lending money to your Uncle Monty who has already filed for bankruptcy and is defunct on loans he made with other family members. If you want to lend money to Uncle Monty knowing you will never get it back, then feel free to feed to bottom dwelling stocks.

Now I beat penny stocks up for a reason. In the age of email and fax machines, we are inundated with “investment firms” recommending penny stocks that have risen from 1¢
to 10¢. They are simply hoping you will buy the stock and then they will sell some of their shares to make themselves a profit and devalue your investment. I know this from experience, as back in 1997 I invested in a Telecom called “Global Technologies” GLCO I bought about $500 worth of stock, and watched my stock move from .07¢ a share down to .0002¢ a share. Avoid one of the biggest rookie investing mistakes even the pros make, don’t buy penny stocks.

Percentages can be very tricky

2007-12-17T06:55:00.000-08:00

Ever read a prospectus that states 15% average annual return. Sounds great right?
Actually, better than what we identified in our last three examples. If we were to assume a 15% return, we could expect our $10,000 investment to turn into over $20000 in 5 years time.

Example #5
Assumed 15% return (cents have been removed and not rounded)

Year 1: $11500
Year 2: $13225
Year 3: $15208
Year 4: $17489
Year 5: $20112

Our investment would double!! That is, if we assume and let the fund work for itself.

But, let’s take a closer look at those percentages taken from that same prospectus. Even then the numbers look great, but lets see what our money does over that 5 years, using the given percentages.

Fund XYZ
Annual Return

Year 1: 23%
Year 2: 22%
Year 3: 9%
Year 4: -15%
Year 5: 36%
Average Annual Return: 15%

Example #5 using the real rate of return (cents have been removed and not rounded)
Year 1: $12300
Year 2: $15006 (We’re way ahead already!!!)
Year 3: $16356 (Still way ahead)
Year 4: $13903
Year 5: $18908

What happened in year 4? We were way ahead of our investment and then one bad year knocked that return off what we believed was going to be even better than the 15% increase each year as told in the prospectus. In year 5, we had a gain greater than any listed on here, but because our base (Year 4 money of $13903) was smaller then on the previous example that steadily earned 15% each year, we fell behind the assumed 15% return.

But, adding the percentages in both examples averages out to

The goal is not to let someone take over your investments and not worry about them as time goes on. Your goal should be to taken control of your investments and make them grow. You wouldn’t bear a child then hand them over to a professional for the next 30 years would you? So why would you do that with your money?

The object to investing is not to be right all the time, but rather 60% of the time. Learn from the other 40% and improve upon your skills each year.

Watch for Winners on Down Days

2007-12-12T07:51:00.000-08:00

If the market is in an uptrend, as we currently are down days can be great indicators of emerging leaders. Yesterday the market tumbled 2+% after the fed cut the interest rate by 25 base points. Investors were hoping for 50 base points, thus the market tumbled. What investors found was a lot of stocks on their watch list in the red. But, for investors that kept current watch lists they might have found some stocks were positive despite all the bearish news on Wall Street.

Three such stocks that soared yesterday were GROW (15% gain on unusually high volume) SNCR (10% gain on unusually high volume) and PRGO (7% gain on unusually high volume).

So, next time the market has a hiccup, do yourself a favor and find the winning stocks with strong fundamentals that reversed the trend of the market, and note that this will only work in an up trending market.

Is diversification the best thing for you??

2007-12-11T07:28:00.001-08:00

We are always told to diversify to protect our portfolio, and it sounds like good advice, after all, if everyone knows about it, then it must be true right?
Let’s dig into that time-tested piece of investment advice using a few examples.

Example #2:
$5000 invested over 5 separate stocks. Figures shown with annualized returns.
Investment Goal: 11%

Investment #1 – (+28%) $1280
Investment #2 – (+31%) $1310
Investment #3 - (-21%) $790
Investment #4 – (-12%) $880
Investment #5 – (+1%) $1010
Your return on investment is $5270 or 5.4%

So even though you’ve had some big winners that outdid your losers, you came nowhere near your goal of 11%
Now lets look at tightening your investments and see if less is more.

Example #3
$5000 invested over 3 separate stocks.
Investment Goal: 11%

Investment #1 – (+28%) $2133
Investment #2 – (+31%) $2183
Investment #3 - (-21%) $1317
Your return on investment is $5633 or 12.6%

Now let’s look at those three investments following our 25/8 rule

Example #4
$5000 invested over 3 separate stocks.
Investment Goal: 11%

Investment #1 – (+25%) $2084
Investment #2 – (+25%) $2084
Investment #3 - (-8%) $1534
Your return on investment is $5702 or 14%
In this case, you didn’t have to find that 30% gainer, and you still came out ahead of Example #3, because you followed a clear sell rule.

Rules of Risk

2007-12-10T11:34:00.000-08:00

The Rule of 100 – Take your age from 100. The remainder is the percentage of investments that should be in stocks.

Example #1
Take a 50-year-old woman
100-50 = 50% of your investments should be in stocks
The remaining 50% can be in securities such as Bonds, CDs or Money Markets

The rule of 25/8[1] – Any investment that makes 25% of your initial purchase price should be sold. Unless the run up is within 1 month. In that case, hold onto your investment for a few more months, watching it closely. Any investment that loses 8% of your initial purchase price should be sold immediately.
[1] http://www.investors.com/learn/S02a.asp

Find the Winners Among the Winners

2007-12-07T07:42:00.000-08:00

Earlier this week I recommended ATVI (+18% for the week) and I mentioned how bullish I was on the video game industry. Yesterday gave another strong indication of how bullish you should be on the industry. GME is a retailer of video games across the country. I am sure you have seen their GameStop locations at strip malls. What separates GameStop from all the other's is their strong fundamentals and management team. They have found a way to make the business model work in the face of competition and prior company launches.

When you combine strong fundamentals, with strong earnings, strong management team, and a produce the public demands, you have a winning stock on your hands.

Have a great weekend everyone!

Don't be a bottom feeder

2007-12-06T14:46:00.000-08:00

I remember hearing from my investment guru friends 5 years ago "you need to buy Ford stock, its a bargain at $11". You have to understand where I am from the auto industry drives and dives our economy, and by the mere fact of a stock falling to some magical price, it made the stock a good investment, because it was Ford in their eyes.

I am here to tell you that buying a stock because you think its a good price is not like buying a piece of real estate. You don't look for the cheapest price. In stocks you look for companies stock prices reaching the 52-week high.

Why is that?

Well when a stock reaches a new high it has broke past a point of resistance in its price target. There was some force of the market (psychological or otherwise) that kept the stock from breaking out to a new price high. When the stock breaks to that new high, there is no ceiling to how high it can go, and that is when you want to buy, not some price that you and your buddies think is too cheap to pass up on.

I mention Ford stock because its ironic that today, some 5 years later, Ford is now trading between $7 and $8 a share and those that invested in the company either lost a chunk of money, or even worse, had their money just sitting in a losing company when they could have been making money on companies like TTM or CAT. Two companies in the same business as Ford, but with a much better business model for growth of the stock price. If you bought these stocks at 52-week highs you could have netted 100% - 200% gains, as opposed to a 38% of Ford shares.

Investing has not changed in 100 years

2007-12-05T07:37:00.000-08:00

Having just completed my bi-annual reading of "Reminiscences of a Stock Operator" by Edwin Lefevre it struck me that the market corrects and rallies the same as it did in 1900. Why is that? Human emotion cannot change the way the market reacts. After all the computer technology, the SEC regulations, the global economy, you cannot pin-point any one event that has made the stock market any more different today than it was 70 years ago.

It is because of that that I highly recommend reading anything you can get your hands on from some of the greatest traders of all time: Jesse Livermore (My Favorite of all time), Bernard Baruch, Nicholas Darvas, Bill O'Neil, and Stan Weinstein. Between these traders their strategies are 20-80 years old and I put much more weight into what they say then what Jim Cramer spouts off in Mad Money. Take a look at some of the key points they talk about and apply them to your trading strategy. You will be surprised how valuable their information will be your trading skills.

Video Games are HOT!!!!

2007-12-04T06:18:00.000-08:00

Ever play Guitar Hero? I haven't but if Pro Athletes have to go on the disabled list from playoff games, its a sign of the times. Guitar Hero by Activision, is but an example of the video game manufacturer's capitalizing on the new video game consoles on the market. What do investors do in these situations? They take advantage of the situation and make money.

ATVI is a favorite of mine, now that the market has decided (temporarily) to move upward. We are in a see saw market, so I recommend to tread lightly on any purchase you make at this time of the year.

AOB

2007-10-31T08:01:00.000-07:00

I really like AOB as a play here guys. Strong volume. Whipped past previous resistance points. I would make a move on this one for 5 points to $19/share and then re-evaluate.

Technicals: Bounce off the 50DMA

2007-10-31T05:42:00.001-07:00

Before we get into technicals I wanted to give another stock to be aware of, and at the very least put on your watch list. CMG once again beat earnings and estimates and should move up the ladder. Don't let the share price scare you.

Today is also a big day because of the Fed meeting that is taking place today which should at the very least result in a quarter point reduction of prime. Usually the market trades in lower quieter volume on the day of a meeting until notes are revealed afterwards, so today's action could all be taking place after 2pm.

Finally, CROX does report after hours. We shall see what happens with that one.

Technicals:

Very often you find a great stock and it already broke past it's cup with handle, or double bottom chart pattern. What to do then? Buy blindly? No sir! We wait for a proper buy point. A classic technical buy point is when a winning stock touches the 50 day moving average (DMA) and bounces back up on price from that line. This sort of springboard action lets an investor know this stock has institutional support. Our #1 friend in the stock investing game. POT is one such company that recently bounced off its 50DMA.

You can use free chart services such as stockcharts.com to see what the 50DMA is.

Technicals: Double-Bottom

2007-10-30T12:52:00.001-07:00

Yesterday we showed you a cup with handle pattern. Today we explore another popular chart pattern called the double bottom, or "W" pattern.

The key to this pattern is understanding the middle part or the upside down V in the stock pattern. Following our above diagram, we have a stock that has fallen to point A. The correction in the stock levels off, and the stock hits a lower level of resistance, here shown as support. The stock then proceeds to build up in price but can't seem to make it back to its price origin. It again hits resistance at a certain point, here shown as B. The stock then trails lower until it hits that lower level of resistance. It is near the same point as part A that the stock has gained support. We call the C.

After some upwards movement the stock then nears point B again. At this point, we would draw a line from the center of the W to the right. We have set our buy point. If the stock goes beyond our line in heavier than normal volume we want to be in that stock. A successful break beyond that point of resistance should see a stock run up 25-40% before it starts building a new point of resistance.

The double bottom and the cup with handle are two of the more common stock patterns. Print off 1 year weekly charts of your watch list stocks and see if they form either of these patterns and prepare your buy point and your selling strategy.

Stock Watchlist

2007-10-29T10:13:00.000-07:00

Just wanted to throw a couple of stocks out there that are on my radar:

CROX - possibly adding a new position
ABB - like it if it passes $30/share
AOB - speculation play, but love the fundamentals
NTGR - Fell out of favor, but came back strong last earnings

Technicals: Cup with Handle

2007-10-29T06:25:00.000-07:00

You probably have heard people snip that you cannot buy a stock simply by looking at a stock chart and knowing when to buy. This is partially true. When we did our 7 part series on buying stocks you will remember it was a mix of fundamental and technical analysis that got us to the point we were willing to buy a stock. It is the fundamentals that get a stock picker to the point where they know what to buy. It is the technicals that tell us when to buy.

There are several chart patterns to look for when you know what to buy. The first in our series is the cup with handle, as shown below.

Notice in stage 1, we have a run-up of the stock from some previous point. It doesn't have to be an all-time low, it is just a recent low the stock fell into. It then runs up in price for a period of time and gets stuck, stops moving upward. The stock has hit a new resistance point.

The stock will then sell off, early on, it will sell off at larger volume than normal, and should correct itself about 15-30% in price. The stock will hit a "base low" when the stock has essentially bottomed out, and will not go any lower. You will know this by abnormally lower volume on selling and buying days. It looks like there is no interest in the stock anymore.

Slowly the stock will start moving upward in price again. It will move up on less than normal volume, or normal volume, but it will not skyrocket up. It will then get to a new lower resistance point, but this is a resistance point inside a correction. What is happening is short term investors that held through the correction are near breaking even and they just want to cut their losses and move onto another stock. This is called the pivot point. It is this price point that we note.

The stock then should hold itself in a tight range below the pivot point. There should be a seesaw battle between investors buying and selling the stock. This should occur for at least 2 weeks.

Only after the tug of war match do we set our buy point 1% above the pivot point. Recalling the pivot point, we knew the stock faced resistance and we want to be in the stock right when it breaks through the point. When the stock breaks through the pivot point, we should see abnormally higher volume on daily and weekly trading. The stock has now set itself up for new highs and great gains.

If this seems confusing to you, read this post again. It is hard to understand a chart pattern in 1 sitting. It takes time and practice.

Shanda Interactive is an example of a stock that broke out of a cup with a handle chart pattern:

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Big week on the markets. The strength of this upward trend will again be tested by company earnings reports, and the Fed meeting this week. Speculators are 99% sure that the Fed will drop rates again by a quarter of a point, and 17% project a half point reduction. My favorite company CROX reports earnings tonight after the bell. I have placed a stop limit loss on my shares in case the report is not favorable. This will not stop me from enjoying gains if the stock moves upward, which I am hoping, but know I have zero control over.

Technicals: Channels

2007-10-26T14:00:00.001-07:00

For those of you looking to buy on a bargain, today's technical analysis tip may be of interest.

Take a look at this chart.

Notice the lines I have drawn on the chart. The line slightly above $30 would be considered an Upper Channel, and the line drawn through $17 is the Lower Channel. This chart is the 10 year history of MAS. A supplier of building materials to various industries you can definitely say the stock is not in favor of the market. What you can say, is Masco consistently trades between $17-$31/share. When the price goes above the $31 point, they either split the stock, or the stock corrects itself, in pretty quick fashion. What this chart also tells you is that this stock will "bottom-feed" around $17/share. Using Warren Buffet's investing strategy, you could see MAS as undervalued.

This $17/share price technical indicator tells you the stock is near its 10-year low and is probably a decent time to dip in and hold on for a while. Now getting a stock such as MAS to $31/share is going to take time, patience, and understanding. Not common traits of most investors. Therefore, only use this indicator if you have it within you to wait a healthy company like MAS out.

Technicals: Reversals

2007-10-24T15:34:00.000-07:00

Although I was going to start today's blog talking about chart patterns, I thought it would be fitting to talk about a technical indicator called bullish reversals. A bullish reversal is when a market or stock, (in today's case the broad market) makes a trend reversal in the day. Today for most of the trading day the market couldn't sink fast enough. Then in the last hour of trading the market crept back from its 2.6% loss on the Nasdaq to close down slightly less than 1%.

This shift in momentum in the market signals there are buyers out there, and more buyers than sellers who are adding to their positions. Whenever you see a stock or market slip, and close the day in the top 75% of the price action, you are seeing a bullish reversal, which warrants your attention to start building your watch list based on our 7 steps of buying.

Technicals: Volume

2007-10-23T13:19:00.000-07:00

Well RIMM lead another tech rally today. We mentioned yesterday that the strength of this rally will be on the earnings reports of companies outside the banking industry and how they are affected by the sub-prime market. Today was a strong indicator that tech stocks are a leader of this market uptrend.

Technical Indicators:

The #1 technical indicator for any investor is price/volume action. Remember this picture

If you recall I said this picture was worth its weight in gold. The price volume action of this stock told you when to buy into it. If there was no other indicator it was the strong volume accumulation (in blue, the buying of the stock) that drove SSRX up. On September 19th this stock did several things technically right. The stocks price went up over 10% on abnormally large volume. Second, it broke through a point of resistance. Since March this stock was stuck below $12/share. $12 a share was a mental road block number for investors that sold them out of the stock.

What changed on September 19th for the stock to suddenly skyrocket past $12? A Big Boy bought into the stock, an institution, like American Funds or Pimco decided the company was strong enough financially to invest in. Their big stock purchase propelled the stock price past its $12/share point of resistance and into new highs.

Technical Indicator #1. Look for stocks that break through previous points of resistance on abnormally large volume.

Start of a Scary Week

2007-10-22T07:14:00.000-07:00

Deja Vu?

That's what it felt like on Friday on the anniversary of Black Monday. With the sub-prime market's ripple effects being felt throughout earnings of Financial and Industrial companies, the market dipped on larger than normal volume. Today, I expect another down day on the market with tomorrow possibly being a positive upswing for "bargain hunters" of the market. Could this signal the end of an upward trend in the market? Only time will tell. The market has shown resilience this year when faced with similar circumstances. In February when the market dipped 4.1% it was a minor correction that took less than 3 weeks to reverse trend from.

I would suspect with tech companies and other industries starting to report earnings we will get a better handle on the true direction of the market. If we find these sectors are just as affected by the sub-prime market by their borrowing power, then we could be in for a cold winter.

Isn't it time to start shorting the real estate stocks and its affected groups?

Take a look at a chart of one of my favorite real estate stocks.

Notice how the fund is breaking its 1 month low? That is a sure sign to short this particular stock. You could easily pick up 5 points on this stock by selling shares and watching it drop. If you want to know which stocks in this case, post a comment in the section and I will share a few.

I wanted to start the technical investing sessions today, but I thought the actions on Friday warranted a little discussion before we broke into technical buy indicators.

Picks of the Week: 10/18/2007

2007-10-18T06:50:00.000-07:00

Unfortunantly I will not have a new pick this week. I tend to shy away from recommending stocks that have yet to report earnings. The risk/reward ratio of buying stocks tends to be: possible 10% gain, possible 20% loss. I don't like those odds and would rather wait until after a company has reported earnings, otherwise I am buying on speculation and I would be gambling with my money, and investing is not a gambling proposition.

Let's recap where we stand on our current picks:

FSLR: +7.4%
BCSI: +11%
SINA: +6.2%
EMC: +0.7%

Phase Seven: Set Buy and Sell

2007-10-17T12:28:00.000-07:00

If there was ever one concept that is ignored by investors, and one concept that is considered the "golden rule" that should never be broken is the selling of a stock.

Now that you have confirmed the market, the index, the sector, the group, the fundamentals, and the technicals, you are ready to buy a winning stock that you have found thru this funnel. The problem lies in what you do after you buy the stock. Will you sell it for a 10% gain? 20% loss?, 80% loss, 150% gain, 1000% gain??? Only a sound buy and sell strategy will determine that.

Remember way back in the first blog, I left you with a rule to never keep a stock beyond a 9% loss. I want to reiterate that rule. SELL A STOCK NO MATTER WHAT, AFTER A 9% LOSS. The stock is not reacting the way you expected it to, and if you hold on, all your gains in other positions will be useless.

Let go of your ego. Ego kills investing, and will destroy your portfolio if you let it.

To put it into perspective:

A 10% loss of a stock requires a 12% gain on the next stock to break even.
A 20% loss of a stock requires a 25% gain on the next stock to break even.
A 50% loss of a stock requires a 100% gain to break even.
A 100% loss, you might want to re-think you as an investor, as you should never EVER get to this point.

A good thing I like to do when I buy a stock is print out a chart from my favorite charting service, draw an upper and lower control limit. I determine on the chart at what price I have to sell my stock for a loss, and then input a stop-loss order with my broker. Conversely I set an upper control limit of where I would accept a gain on the stock. This is usually 25%. All I am looking to do is gain 25% and move my money into the next investment, unless it is showing outrageous price gains, in which case I want to hold onto that stock and make a healthier gain.

This concludes our first series on the seven phases to making money with stocks. Tomorrow we brush up on our picks.

Phase Six: Technicals

2007-10-16T13:21:00.000-07:00

A wild two days on the markets to say the least. The housing market created pressure in our previous uptrend and it looks like the Fed is doing everything it can to avoid that from happening again.

Today, we are going to discuss Technicals of our stock selection process. You may have heard the idea of an investment guru being technical or fundamental. This seven phase approach to investing is techno fundamental, and takes the best of both worlds, so we are picking stocks that are fundamentally sound, but also are displaying technical indicators.

There is way too much information to post here on all the technical indicators in one blog, so once this seven phase program is complete, I will spend the next week or so talking about all of the technical indicators.

To give you an idea of what we will be talking about, or what you should be looking for, is a "breakout". A breakout is when a stock has a price movement, upward or downward that breaks thru a previous resistance point. So take Under Armour for example:

You can see for a two month period the stock was consolidating its price. Between $45-50 a share the stock was stuck. It didn't fall below the consolidation period, and didn't rise above it. Finally, with no new news, it broke thru $50/share on extremely high volume. This was telling you from a technical standpoint, that the stock was being accumulated by institutional investors, and it was time for you to get in. Under Armour is currently consolidating around another resistance point of $60.

As I said, there is too many indicators for one blog, and I will be dedicating a lot of time in the future to technical indicators. They are very powerful, but, they are not the end all be all, and that is why we do a fundamental analysis first.

Tomorrow we wrap up the series of seven phases to picking a winning stock. On Thursday we will check up on our picks, and starting Monday we will begin the technical series.

Phase Five: The Leaders

2007-10-15T11:15:00.001-07:00

Welcome back from the weekend everyone!

We had a pretty exciting week on the markets last week, and one would suspect nothing less from this week. You never know with a huge earnings week what the market will bring. In a strong upward trend as we are in, solid earnings reports will propel us thru the remainder of this calendar year.

Onto part 5 of our stock selection process. By now we know we need to find market direction (one way or another), leading indexes, leading sectors, and leading groups. Our next step is to find the leading stocks in the leading groups, sectors, and indexes.

As our example for today, we remember that Gold was a hot sector, and had several favorable groups, as our next step in finding a winning stock, we look for the best stocks within a group. We should scour the top 10 stocks of groups that coincide to our sector to find companies with solid financials. Yahoo Finance or Google provide nice analytical tools for comparing the top companies of a group. Let's take a look at two companies from the gold miners group: GG and LIHR. Both companies show a nice Net Profit Margin, but only GG has a strong operating margin and EBITD Margin which from a fundamental perspective make it a stronger company. We would repeat this analysis for 8 more stocks within that group to funnel down to our top companies.

What we are left with is a couple great fundamental companies in strong groups, in outperforming sectors, of strong indexes in an upward trend market.

Tomorrow we draw closer to making the stock selection process complete. Until then, I leave you with a picture that is worth its weight in gold, if you know how to use it.

Phase Four: Groups

2007-10-12T06:40:00.000-07:00

We are continually refining our stock criteria, and getting closer to actually finding winning stocks. To do that you have to have a plan, that plan is this seven step refinement process we are using. If you are not sure of where to find any of this information click the hyperlinks within each blog, or shoot me an email. I would be glad to clarify anything.

On to today's topic. Groups. Groups are a refinement of sectors. When we find the top sectors of an upward or downward trend market, that sector is comprised of several groups of stocks. VectorVest has a nice group listing of 195 groups they use and what sector they belong to. I believe you can get a no obligation 2-week trial. You can use that trial to familiarize yourself with what groups belong in what sector.

Let me give you an example of how powerful groups are. The world markets are seeing an increase in corn production for ethanol usage. Farming companies: Fertilizers, Farming Equipment, and Producers are now in higher demand then they've been in a while. It just so happens that as we funnel thru our stock selection criteria we see that the Basic Materials sector has seen extensive growth, and it is not just limited to Gold. Agriculture has many groups within the basic materials sector. Therefore it is so important to match up what groups within each sectors are leading the latest trend.

Remember Market Trend -->Indexes --> Sectors --> Groups

We will complete our series of seven steps to picking winning stocks again on Monday. I would like to leave you with a quote from my favorite market trader, Jesse Livermore. It is worth its weight in gold.

" I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting."

Picks of the Week

2007-10-11T06:25:00.000-07:00

Notice I said Picks. This market has been in an upward trend since the Fed announced its rate cut, and it was further cemented with this weeks cut. Now is the time to establish new positions, or add to existing WINNING positions.

First a recap of last weeks selection.

I recommended FSLR at $131.84, with a current price of $138.60, we are up 5.1% from our original recommendation.

Onto our new picks. I present to you three positions.

BCSI at $46.95/share. Their WAN products are designed to interface with programs such as SAP across multiple locations. Their products are highly in demand and have seen extensive growth.

SINA at $51.90.share. We've heard so much about Baidu.com that its suprising this Yahoo like Chinese portal has not received more publicity. If you like Baidu.com, you will love SINA. The Chinese economic growth makes for hot stock plays in the current market, and this should be a darling for the coming months.

EMC at $22.57/share. Who doesn't love the upward movement VMW has had since its IPO earlier this year? Afraid its too late to get in on this IPO? Well, that is why I love EMC. They own 75% of VMWare and should reap the benefits in their earnings by the astronomical price movement seen in VMW.

We will check the progress of these picks next week and every week thereafter. Remember, all stock positions should be sold after a 9% loss, no matter what.

Phase Three: Sectors

2007-10-10T10:59:00.000-07:00

We are gradually narrowing down our funnel to find winning stocks. Now that we know the market is in a bull or upward movement, and we know which indexes are stronger than other, it is only natural that we look to find which sectors are the strongest.

So, phase three, find the top 5-10 sectors in the rally to condense your stock search.

This actually easier to do than you think. You probably have access to a 401k, Roth, or broker account, which puts sectors at your fingertips. Let's take a look.

Taking a one day snapshot we see that Basic Materials leads other sectors in the markets.
This list that I use is from Yahoo and is comprised of:
Basic Materials
Conglomerates
Consumer
Financial
Healthcare
Industrial Goods
Services
Technology
Utilities

You could also add Defense and Real Estate to this list.

The point, is we need to find the sectors leading this rally in order to further sift thru the scores of stocks to find a big winner.

In this current rally I have found that Basic Materials, namely Gold has led this rally evident by its change of 33% since the latest rally began. Other leaders include: Defense at 18% and Technology at 11%

Another blogger has done some additional research on sector index ETF's in you are interested in more information.

Tomorrow we will take a break from our series of selecting the right stocks to recap our recommendations, and provide a new one.

Phase Two: Which Market

2007-10-09T08:28:00.000-07:00

It's never enough to know which way the market is moving. We also need to know who is leading the market. It is small caps, is it big caps, is it old established companies of the DOW, or young guns on the S&P600. This is your next piece of information that you need to learn. Let's take a look at this latest rally:

Some would say the market bottomed on August 18th of this year, so we will use that as our reference point.

NASDAQ: 13.89%
SP500: 10.83%
NYSE: 12.45%
DOW: 9.54%
SP600: 9.72%

So, knowing now how each index has fared, we can prioritize which markets to investigate further. In this case I would assume that large, not mega caps are making a rally, and it doesn't hurt to look at tech laden stocks like AMZN, BOBJ, CRM, VMW .

Tomorrow we continue our series of 7 steps to finding a winning stock, and on Thursday we update our recommendations to see how we have done.

"The race is long, and in the end, it is only with yourself"

Phase one of Selecting a Winning Stock

2007-10-08T08:06:00.000-07:00

I hope everyone had a great weekend. The positive jobs report on Friday was another key indicator that we are in a full blown market rally. Knowing we are in a rally, I want to introduce the seven keys to picking a winning growth stock, as learned thru Investor's Business Daily.

Imagine the stock selection process as a funnel. We start at the top at the most broad concept, and that is #1, the markets. FACT: 75% of all stocks move in accord of the general market. So when we are in a bull market as we are in now, we buy new stocks. When we are in a bear market we sell stocks short. Finally when we are in a sideways market, we sit on the sideline. People can make money in bull and bear markets, it is tough for someone to make money in a sideways market at forces from both bear and bull are pulling stocks in frustrating directions. We have all heard the trend is our friend. That is a quite easy way to remember rule #1
Know which way the market is moving.

Tomorrow we will discuss the second rule in our stock selection process.
Look for a new stock pick or recommendation recap later this week. All weeks may or may not contain a recommendation, but this blog will surely teach you how to make money!!!

How this Blog Can Benefit You!

2007-10-05T07:33:00.000-07:00

Welcome to my investment blog!!

I first off want to introduce myself so you know how credible my recommendations and tips are going to be on this site.

My name is Kevin Kaczmarek and I work as an Information Technology Director for an automotive manufacturing company in Detroit, Mi. Over the past 5 years I really became interested in the power all types of investments have on one's own Net Worth. Everything I will be talking about is centered around building up net worth, but I digress. I started investing in my companies 401k plan, and opened an Ameritrade account some years prior where my $500 christmas bonus of 1998 at Masco Corporation was in some penny stock and some off the wall index fund. I was not building wealth but had an extreme desire to be wealthy. I began reading books like "Rich Dad, Poor Dad", and "The Magic of Thinking Big" and my whole thought process was turned right-side up. I knew it was possible to be wealthy if I took the time, effort, and had the fortitude to perserve in the face of financial adversity, I too could be wealthy. (My list of books read can be found here.

One of the things that changed for me was my stock picking process and ability because I found the holy grail of investment methods, the Investors Business Daily method. I went from lukewarm investment results to fantastic returns in just under three years. I want to share this insight with you, offer some stock recommendations along the way, and some investment ideas outside of Wall Street that will help you and I become wealthy.

Here is where I stand in my investments YTD to give you some idea:

GROW: +20.1% position closed
NTGR: +9.72% position closed
CROX: +160% position open
UA: +24.82% position open
IDSA: +27.18% position open

I had one previous position with IDSA that is closed for a 14% loss, and a seperate UA position that lost 7.2%. That is my YTD returns.

To kick off this blog I am making a recommendation of FSLR at $131.84/share. In the coming blogs I will explain my methodology and will track all recommendations, good or otherwise.

One last thing!!!
I study all the greatest traders of all time, and they all stick to a hard and fast sell rule on losses. I sell my positions at no more than a 9% loss. You will see why I do this.

I look forward to hearing from you, and getting your thoughts on my investment methods.