Tag Archives: stocks

The Next Stock Market Collapse: Are we There Yet?

April 3, 2016

It seems that we are entering a decisive period for the stock market. The S&P 500 is right at the top of a channel between 2,100 and 1,920. Although I don’t like technical analysis, it is pretty clear that if it rises significantly about 2,100, then a new bull market will start. Conversely, if it drops below 1,920 a major market crash may follow.

S&P 500 10 Year Chart

S&P 500 10 Year Chart

Although anyone with limited knowledge of technical analysis would come to the same conclusion, I imagine 100,000,000 would-be retirees don’t look at this chart. And even if they did, they would not be able to see its importance.

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Markets go Up and Markets go Down

Although this may seem incredibly obvious, many people say that markets always go up. I remember during the real estate bubble that popped in 2008, agents were saying,

Real estate always goes up.

It’s pretty obvious now that is a lie. But it works for them. The clueless would-be investors that believed them bought up properties like there is no tomorrow. And for them, there wasn’t much of a tomorrow. Most of the properties went into foreclosure and were repurchased by more savvy investors.

Shanghai Composite Index

Shanghai Composite Index 2011 – 2016

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Are you Ready for the Financial Crisis?

A wise man once wrote:

Markets top slowly and bottom quickly.

When I read this and anlyzed some of the major market tops over the last 100 years, I was surprised by the accuracy of this statement. (One major exception was the 2000 Tech Bubble, which was quite different from other market dynamics.)

S&P 500 Jan 2011 - 2016

S&P 500 Jan 2011 – 2016

The theory behind this is that the “smart money” figures out that a market is topping long before the average Joe. I’m not sure if I agree with the theory, but it does seem to me that the “stupid money” gets out way too late, after the market has dropped significantly.

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Chaikin Analytics Review and Free Trial

One of the biggest hurdles that the individual investor faces in trying to create a nimble, smart portfolio is the competition.

Investment bankers, quants, mutual fund companies, and big Wall Street firms are employing Ph.D. researchers with degrees in everything from finance to physics to create model portfolios. They use the latest and most powerful technology to guide their buys and sells.

The little guy doesn’t have a chance.

That’s what I thought, until last week. George and I had a chance to see a demonstration of Chaikin Analytics, probably one of the most complete set of investment tools and stock market model-building technology that’s available for the money. Or at least I’ve ever seen.

The Chaikin Analytics Dashboard

The Chaikin Analytics Dashboard

How does Chaikin level the playing field?

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Stocks And Retirement | Should I Keep Holding On To These Stocks?

All retirees end up asking themselves if they should cash in their chips and make a smooth, profitable exit from the stocks game. Having nurtured their portfolios through the years, they sometimes feel uneasy about selling their stock assets. After all, a lot of time has gone by, watching them, believing in them, having them generating income, even if poor at times. Many retirees know that they could generate some extra cushion by unloading their stocks, but they just can’t seem to fathom the act.

Image courtesy

Image courtesy Andreas Poike

It’s important to remember why you started accumulating stocks in the first place. In most cases, it was simply a matter of developing a tangible financial portfolio; something that you created to make life better for the future of you and your loved ones. Well, have your stocks done that? Maybe you took a heavy hit back in 2008. Maybe you’re just recovering – and stock markets are doing just about as good as you could hope for right now. Maybe it is time time to cash them in. You can try the superannuation calculator over at Suncorp, if you need a hand figuring out how much you need to retire.

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Can You Invest a Little Money?


When most people want to invest, they never start because they think you need thousands of dollars to start. That’s not true — and it’s just another psychological barrier to keep lower- and middle-income folks out of the investing game.

You actually don’t need a lot of money to start. The key is to invest a little and keep on investing a little. One of the first investments I made was a bond fund that let me chip in $25 a month. Initially — as you can imagine — it was slow going. That’s another barrier. People want to make millions overnight an retire. That certainly didn’t happen, but during the last few years — over a decade after my initial investment — I am starting to see a pay off.  The dividends that are automatically reinvested every month are now more than double my own monthly investment and the balance has grown nicely, even though this was a horrible investment era.

I mentioned another tip. Reinvest all of your dividends and other profits.

Over the years I have branched out into other investments. I own direct-investment stocks (stocks I buy without a broker) and mutual funds. I like to trade using cheap discount stock brokers, like Sharebuilder. I also own precious metals and precious metal ETFs. All of this was started with a small initial investment that I’ve built up over time.

I also buy penny stocks with a few extra bucks, but I consider that more gambling than investing. Still, an individual investor can mess with penny stocks with little risk and little money.

Here is a great article from Investor Junkie about how you can start investing with about $500.



Why You Should Sell All Your Stocks


I would like to make more money in the stock market, so I think it’s only fair that you sell all of your stocks in good companies.

There are dozens of reasons to ditch your stocks: The economy is terrible. The economy is over-heated. Stocks underperform. Stocks are overperforming and that means they’ll underperform. Obama is the anti-Christ. The Republicans are the anti-Christs. An asteroid could hit the earth. A diamond-filled asteroid could hit the earth, thereby causing massive inflation, thereby sending the economy into a free-fall. Gold will become the currency of choice. So will silver.  And maybe even platinum. The future is uncertain and the end is always near.

Should I go on?

Preferably, you should do this all at once, so that CNBC and other financial loudspeakers catch this meme and begin to spread the panic into the far-corners of the financial world.

Give this sell-off a nickname, too. The Great Panic. The Deep Dip. Worst-Recession-Ever. We can take some time and brainstorm these. Focus group them, too.

Would it be too much to ask, when you start to panic, to bail out of stocks that have relatively low P/Es, high dividend yields, earnings growth over a string of years, and  a lack of competition? Thanks so much!

You see when a panic hits, people do really stupid things, like sell the stocks of solid companies at a discount. They’ll take 50 cents on the dollar for some stocks that have cash, talent, and product lines that will absorb any difficulties during recessions and even depressions.

And, honestly, I am willing to take those off of your hands. That’s the kind of guy I am. You should have such a friend. There are thousands of others out here, too, who might be interested in buying stocks for half-price.

So, it’s imperative that you sell your stocks.


Common Horse Sense and Jackass Investing

If you’ve ever visited the department of motor vehicle’s office, or an open bar office Christmas party, you know that the number of jackasses in the world considerably outnumber the rest of humanity.

These are the same people who bought dotcom stocks for thousands of times their net worth and took $700,000 mortgages on homes worth about $200,000 a few years before.

So, that’s bad for investors, right?

Not according to Michael Dever and just some good old common horse sense. You can actually learn how to take advantage of these jackass investors.

Dever, who is Founder, CEO & Director of Research of Brandywine Asset Management, says you can take advantage of jackasses to make money as an investor. In fact, he’s written the book about it. It’s called Jackass Investing: Don’t do it. Profit from it.

The book, which Dever says is the result of a decade of research and three decades of trading experience, teaches some contrarian lessons.

For instance, Dever believes that every decision is a trade–even the decision not to trade. He names that decision the Rush trade, after the rock band.

One difference between investors and jackass investors is whether they know if they’re investing… or gambling.

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Weekend Wisdom–The Future Gets Quicker All The Time…

Maybe, because of my readings about research and technology, as well as the Singularity, I’m becoming more sensitive to the pace of technological change. The number of breakthroughs appears to be increasing rapidly.

These new technologies and findings aren’t just coming in one area; they are spread out across a number of disciplines, from biotech to quantum physics. That’s a key insight that’s making it harder to predict just how the future unfolds.

I’ll start out with some links to stories about the latest breakthroughs…

Daily MailNew Solar Paint Could Generate Electricity from Roofs and Walls

ABC (Australia) ScienceQuantum Computer Breakthrough

GizmagA 3-D Printer Under $500

Eureka AlertDuke Researchers Turn Scar Tissue into Heart Muscle Without Using Stem Cells

Dvice.com —  MIT Reinvents Glass That’s Non-fogging, Self-cleaning, and Glare-free

MashableCompany Looks to Mine $20 Trillion Rock

By the way, if you want to keep up on this breathtaking pace of research, I’d subscribe to Futureseek. It’s a great resource.

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Are We Born to Lose Money?

Image courtesy Creative Commons

I remember a guy who used to come in a local watering hole with a tattoo on his forearm in a shaky font that read, “Born to Lose.” 

I always thought it was a rather depressing statement and to etch it on your skin is a real statement. Because the guy was big and known to use a pole stick to squelch a lot of questions, I decided not to press him on the deeper meaning of the tattoo. But it made me think…

Are we destined to be losers?

Are we hardwired to do stupid things–like get ugly tattoos and buy stocks in hyped-up companies?

I don’t have the answer to those questions, but Carl Richards at Behavior Gap certainly thinks we have some psychic tattoos on our investment souls that make us born to lose money.
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