SubscribeMarketMash: Long week is over, short week to profit
May 24, 2008
Last week saw a good deal of action in the markets. The bad news is that even as we were excited to enter the long weekend and the Hamptons are starting to see more life and less clothes (so I am told). The bad news is starting to sink-in and the simple fact that the oil price “blip” is not such a “blip” is upsetting investors. If that wasn’t bad enough, the weekend BBQ now costs a gonsa-fortune! We stopped on the side of the road to pick up some watermelon and were shocked when we realized that it was $9 for ONE! So, one rib, on wing and one peach is all you get in 2008 for what is costs for an entire plateful in 2007. BBQ inflation now….. eeesh….
Sure I was busy, but promised to put down my trusty MacBook laptop for the majority of hours each day and enjoy my family at my lakehouse in Central Florida. A good idea and very worth while. Check out this magical picture of the morning sunrise on the lake and tell me if even the bloggiest of bloggers (Tim, Bill, Felix or Barry) could resist the opportunity to unplug and relax to feel the soft white sand under their pedal extremities.
My son Brett was riding the waves, daughter Lauren rode on the screamer and my wife Jill was taking care of us all. A wonderful weekend, refreshing and relaxing. Thanks for listening. :-)
Anyway, here is a recap of some of the week’s goodies that Read more
Money Girl -The Preferred Way to Make Money
May 21, 2008
I am still the guest host for Money Girl and this episode teaches about preferred stocks.
Episode Text:
…Back in episode 26 of Money Girl there was a little shortcut discussed which is used in finance known as the “Rule of 72″. It states that dividing 72 into the interest rate you are earning will tell you how many years it will take for money to double. So if you have money invested in an account earning 2% and reinvest the income, it will take 36 years to double. Yuck! That is not going to get us anywhere fast, especially when inflation is running at 4% and taxes will take a piece out of it as well. If the bank pays you even as much as 4%, you still are swimming upstream!
Here is The Disciplined Investor’s “Preferred” way of investing for income. This a strategy that we use in our client’s portfolios regularly and offers a good deal of safety that is designed to help you with your investing sleep-factor. In fact, this idea helps you earn money while you are sleeping. Now that is is my kind of investing. It offers yields approaching 7 or 8 percent and even offers some tax advantaged. You like that don’t you! (I see you smiling…)
Read/Listen to the rest of this episode
Rock Bottom Housing Prices or Simply Math Gone Wild
May 20, 2008
OK, I have a question… (seriously) The idea that home prices are now at “rock-bottom” prices has been floating around lately. How is the NAHB coming up with their conclusions? In particular, do they include the sales price of short-sales? How about foreclosures?
If so, then is the average price really as low as it is going to go? If you can provide the details, I would be most appreciative.
From CNN.com:
Housing affordability best in four years - May. 20, 2008
As a result, 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).
That’s up from 44% during the first three months of 2007 with home prices the most affordable they’ve been since the three month period that ended June 30, 2004.
“Three factors combined to substantially increase housing affordability,” said NAHB president, Sandy Dunn, in a press release accompanying the report. “Mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices…
WSJ on Credit Card Lenders - Looming Danger
May 20, 2008
It seems that the pot is finally starting to simmer and there is an awakening to the problem that seems so obvious. The WSJ did a good job at looking at both sides of the argument by seems to lean towards the reality of an economy that is standing up to the slowdown on borrowed time and borrowed money.
Heard on the Street - WSJ.com
Since the credit crisis began, investors have expected rising charge-offs — the term given for losses caused by defaults — at credit-card companies. Two big negatives were identified: Job losses and, for many borrowers, a sharply reduced ability to use home-equity loans to pay off more expensive card balances.
Credit did deteriorate. Moody’s Investors Service reports that, for the card lenders it tracks, the annualized charge-off rate — which measures defaults as a percentage of loans outstanding — rose to 6.05% in March from 4.64% a year earlier. The charge-off rate peaked at just over 7% during the 1991 and 2001 recessions, according to Moody’s.
The punchline and final words of Read more
TDI Episode 57: Making the Grade with Afraid to Trade
May 19, 2008
Guest: Corey Rosenbloom, Pro Investor and top blogger. We look at the best ways to start trading the
markets and how Corey controls risk and continually learns. He gives a stunning review of my book - The Disciplined Investor… Nice! We also discuss the sector rotation that would be occurring if the markets were normalized. In addition, listen in for the the 12 Tribes of Investing.
Finally, we dig into the latest stock market miracle program that a “big name” author is promoting. For only 30 minutes a day, you can now trade your way to success, quit your job and become an instant millionaire.. Yeah right!
Corey Rosenbloom is an independent trader who trades his own accounts and focuses on intraday patterns in index futures, but also trades sector ETF positions. He is currently working with a team to develop a hedge fund which focuses on broader trends in inter-market relationships and equity market sector rotation strategies.
Corey founded and manages the Afraid to Trade.com site in late 2006, which provides daily analysis and education, often from a psychological basis, designed to help traders and investors overcome fear from trading losses through solid education. He offers limited mentorship and consulting opportunities and is working on expanding the website as an educational resource for traders. Check him out for trading lessons and mentoring opportunities
Stocks Discussed this Episode: Google (GOOG) , Yahoo! (YHOO) , Microsoft (MSFT)
– Indications of Interest as discussed in this episode–
The ZachZone Stocks : Verso Paper Corp. (VSR), American Capital Agency Corp. (AGNC), American International Group, Inc. (AIG), Ascent Solar Technologies, Inc. (ASTI), JA Solar Holdings Co., Ltd. (ADR) (JASO), Annaly Capital Management, Inc. (NLY), MF Residential Investments, Inc. (MFR), Hughes Communications Inc. (HUGH), Natus Medical, Inc. (BABY), Polypore International, Inc. (PPO), TBS International Limited (TBSI), Diana Shipping Inc. (DSX), DryShips Inc. (DRYS), Euroseas Ltd. (ESEA), Genoptix, Inc. (GXDX)
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