Monday, June 30, 2008

Horrible Quarter

The quarter has come to an end and as we have watched along the way it had finished horribly. The major benchmarks for the market have been heading south and have not looked back yet. As much as this may be depressing for those of us in the market currently as our investments have likely been shrinking on a daily basis, this is a great time to get into the market (also a good time to add more money in for those of us in the market currently; dollar cost average down).

There are a lot of values out there, its tough and not smart to go out there and start buying stocks without studying and learning a lot about the stock and the industry, but you can get into some index funds, or solid mutual funds at a premium right now. I am not going to tell you that the market is not going to make a turn around tomorrow and we are all going to make a killing, but the market is down, its lower than it has been in a while, and its a good time to get in and maybe be able to get an extra few shares of that index fund for the same about of money you wanted to put in last year.

Again, you need to be very aware of what you are investing in, if not thats just silly, but for those of us who don't have the knowledge or time to study investments, just take a little time out of your day and read up on some index funds and mutual funds. Look for mutual funds that are investing how you want (aggressive, conservative, income...), make sure they have a great track record as a manager and then its up to you to take a little risk.

Sometimes it tough to get money together to invest, take a look at hustlermoneyblog, there are some good ways to save a few bucks to plow it into the market if you want. Ive been a long time reader and have never been disappointed.

Ill continue on with investing education over the next few weeks....

Friday, June 13, 2008

10 Rules from marketwatch

Ten investing rules that will help you weather this stormy market



Wednesday June 11, 12:24 pm ET By Jonathan Burton


Ten rules to remember about investing in the stock market


SAN FRANCISCO (MarketWatch) -- Rules may be meant to be broken, but with investing ignoring the rules can break you.


Especially now. Investment rules are tailor-made for tough times, allowing you to stick to a plan just when you need it most. Indeed, a rulebook is important in any market climate, but it tends to get tossed when stocks are soaring. That's why sage investors warn people not to confuse a bull market with brains.


So with the economy looking more and more like the oil-shocked, stagflation-strapped 1970s, and stocks recoiling from rising unemployment, record energy prices and falling home values, it makes sense to dust off the old playbook and see how it applies today.


One of the most relevant lists of rules, from a legendary Wall Street veteran, is also among the least known. Beginning in the late 1950s, Bob Farrell pioneered technical analysis, which rates a stock not only on a company's financial strength or business line but also on the strong patterns and line charts reflected in the shares' trading history. Farrell also broke new ground using investor sentiment figures to better understand how markets and individual stocks might move.
Over several decades at brokerage giant Merrill Lynch & Co., Farrell had a front-row seat to the go-go markets of the late 1960s, mid-1980s and late 1990s, the brutal bear market of 1973-74, and October 1987's crash. Out of those and other experiences came Farrell's 10 "Market Rules to Remember."


These days, Farrell lives in Florida, and efforts to contact him were unsuccessful. Still, the following rules he advocated resonate during volatile markets such as this:


1. Markets tend to return to the mean over time



By "return to the mean," Farrell means that when stocks go too far in one direction, they come back. If that sounds elementary, then remember that both euphoric and pessimistic markets can cloud people's heads.
"It's so easy to get caught up in the heat of the moment and not have perspective," says Bob Doll, global chief investment officer for equities at money manager BlackRock Inc. "Those that have a plan and stick to it tend to be more successful."


2. Excesses in one direction will lead to an opposite excess in the other direction



Think of the market as a constant dieter who struggles to stay within a desired weight range but can't always hit the mark.


"In the 1990s when we were advancing by 20% per year, we were heading for disappointment," says Sam Stovall, chief investment strategist at Standard & Poor's Inc. "Sooner or later, you pay it back."


3. There are no new eras -- excesses are never permanent



This harkens to the first two rules. Many investors try to find the latest hot sector, and soon a fever builds that "this time it's different." Of course, it never really is. When that sector cools, individual shareholders are usually among the last to know and are forced to sell at lower prices.


"It's so hard to switch and time the changes from one sector to another," says John Buckingham, editor of The Prudent Speculator newsletter. "Find a strategy that you believe in and stay put."


4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways



This is Farrell's way of saying that a popular sector can stay hot for a long while, but will fall hard when a correction comes. Chinese stocks not long ago were market darlings posting parabolic gains, but investors who came late to this party have been sorry.


5. The public buys the most at the top and the least at the bottom



Sure, and if they didn't, contrarian-minded investors would have nothing to crow about. Accordingly, many market technicians use sentiment indicators to gauge investor pessimism or optimism, then recommend that investors head in the opposite direction.


Some closely watched indicators have been mixed lately. At Investors Intelligence, an investment service that measures the mood of more than 100 investment newsletter writers, bullish sentiment rose last week to 44.8% from 37.9% the week before. Bearish sentiment slipped to 31.1% from 32.2%. Meanwhile, the American Association of Individual Investors survey was less positive, with bearish sentiment at 45.8% and bulls at 31.4%


6. Fear and greed are stronger than long-term resolve



Investors can be their own worst enemy, particularly when emotions take hold.


Stock market gains "make us exuberant; they enhance well-being and promote optimism," says Meir Statman, a finance professor at Santa Clara University in California who studies investor behavior. "Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks."


After grim trading days like Friday's nearly 400-point tumble, coming after months of downward pressure on stocks, it's easy to think you're the patsy at this card table. To counter those insecure feelings, practice self-control and keep long-range portfolio goals in perspective. That will help you to be proactive instead of reactive.


"It's critical for investors to understand how they're cut," says the Prudent Speculator's Buckingham. "If you can't handle a 15% or 20% downturn, you need to rethink how you invest."


7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names



Markets and individual sectors can move in powerful waves that take all boats up or down in their wake. There's strength in numbers, and such broad momentum is hard to stop, Farrell observes. In these conditions you either lead, follow or get out of the way.


When momentum channels into a small number of stocks, it means that many worthy companies are being overlooked and investors essentially are crowding one side of the boat. That's what happened with the "Nifty 50" stocks of the early 1970s, when much of the U.S. market's gains came from the 50 biggest companies on the New York Stock Exchange. As their price-to-earnings ratios climbed to unsustainable levels, these "one-decision" stocks eventually sunk.


8. Bear markets have three stages -- sharp down, reflexive rebound and a drawn-out fundamental downtrendIs this a bear market? That depends on where you draw the starting line. With Friday's close, the S&P 500 Index (CDNX:SPX.V - News) is down 13.1% since its October 9 peak. Not the 20%-plus decline that typically marks a bear, but a vicious encounter

nonetheless.


Where are we now? A chart of the S&P 500 shows a couple of sharp downs and subsequent rebounds in the past six months, with a tighter trading range since April. It remains to be seen if we can avoid a tortured period of the kind seen from 2000 to 2002, when sporadic rallies couldn't snap a slow, protracted decline.


9. When all the experts and forecasts agree -- something else is going to happen



As Stovall, the S&P investment strategist, puts it: "If everybody's optimistic, who is left to buy? If everybody's

pessimistic, who's left to sell?"


Going against the herd as Farrell repeatedly suggests can be very profitable, especially for patient buyers who raise cash from frothy markets and reinvest it when sentiment is darkest.


10. Bull markets are more fun than bear markets



No kidding.

Tuesday, June 10, 2008

Make Extra Money?

As we are graduating college, enjoying summer break, awaiting a job, gainfully employed; whichever of those fits you best, money is of the essence. We all have bills, and as we get older the more bills we are accountable for. So obviously any type of free money or easy money is great to help subsidize out income. Whether you are fighting to pay the bills, or you can pay your bills but you are trying to get some money into the stock market to invest for tomorrow or to have that help subsidize your income, free money deals are great. I will begin to post any free money deal I find around the Internet and if you find any, e-mail me, or post to me and let me put it on my site so the other people who read this can get some free cash too. Help out your fellow man who's trying to stay afloat.

Current ones that I know of are:
ING Direct-Open an account with $250 you get a free $25; no fees, no minimums, its a great account and you can get free money to get the ball rolling.

Virtual Bank - Open an account with $100, they give you $20

OptionsXpress- Is giving $100 if you open an account wtih $500 and make one trade.

Let me know if you want info on any of these or if you know of any free money deals we can get.

Thursday, June 5, 2008

SABOTAGE?!?!

Icahn Accuses Yahoo! of Sabotage

Pia Sarkar

06/04/08 - 04:51 PM EDT

SAN FRANCISCO - Financier Carl Icahn is calling for Yahoo!YHOO to remove a provision for generous severance packages to company employees, which he deemed as a major deterrent for a MicrosoftYHOO takeover.


The billionaire investor shot off a letter to Yahoo! on Wednesday, in which he borrowed heavily from a shareholder lawsuit claiming that the tech giant had purposely tried to sabotage a merger deal with Microsoft by introducing the severance packages.

"The board can rescind the 'severance plan' that is the largest impediment to a Microsoft deal," Icahn wrote. "You currently can do this because Microsoft withdrew their bid 30 days ago. It is time for you to stop misleading your shareholders with respect to Microsoft."

Icahn added that by removing the severance plan, Yahoo! could free up about $2.4 billion.
"It is also time to admit to your shareholders that the severance plan was not done for your employees (who you conveniently neglected to inform that Microsoft had earmarked $1.5 billion in retention incentives for), but rather was done simply as an entrenchment device and to impede a Microsoft bid," he wrote.

A Yahoo! spokesperson could not immediately be reached for comment.

On Jan. 31, Microsoft made an unsolicited $44.6 billion offer for Yahoo!, and later bumped the amount to $47.5 billion but still could not reach an agreement.

Since then, Microsoft has said it is no longer interested in a merger but is currently in talks with Yahoo! to come up with an alternative deal.

Icahn, however, wants the merger and has come up with a dissident slate of candidates to oust Yahoo!'s board and bring Microsoft back to the table.

"I and many of your shareholders believe that the only way to salvage Yahoo! in the long if not short run is to merge with Microsoft," he wrote.

Icahn is also pushing to remove Jerry Yang as Yahoo!'s CEO, adding that he and the rest of the board have made it extremely difficult for Microsoft to renew negotiations.

In his typical colorful language, Icahn wrote: "Until now I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board."

Yahoo! has defended its position all along, emphasizing that Yang and the board have been "crystal clear that it would consider any proposal by Microsoft that was in the best interests of its shareholders."

Who shareholders ultimately believe will be determined on Aug 1 at Yahoo!'s annual meeting in San Jose, where they will vote on the company's board members.

Shares of Yahoo! were down by less than 1%, or 3 cents, to $26.82 in after-hours trading.

Wednesday, June 4, 2008

Five Tips for 20-Somethings to Save for Retirement

From thestreet.com

Legend has it that Albert Einstein once called compounding interest the most powerful force in the universe. Unfortunately, that concept has escaped many of those who would benefit most from it: the 20-somethings who have entered the work force but aren't saving up for retirement.
While it can be hard to justify saving for something that will occur decades into the future, financial advisors say its importance can't be understated.

One reason is that Social Security is far from guaranteed: Without reform, the program will not be able to pay out benefits at current levels, starting in 2041. People who are 22 years old now would typically still have at least 10 years to go until retirement at that point.

Another reason is that compounding interest makes saving early far more profitable than starting late.

As an example, Vincent Barbera, director of financial planning at TGS Financial Advisors, offers two different scenarios: Person X deposits $2,000 into an IRA each year from the ages of 22 to 31, then stops, while Person Y deposits $2,000 each year from the ages of 31 to 65. Both have the same interest rate and allow interest to accrue. Person X will earn nearly $50,000 more than Person Y by age 65, even though the latter contributed $50,000 more to the account over 25 additional years.

With that in mind, here are five helpful tips for 20-somethings who want to start preparing for the future:

Put "surprise" cash into an IRA. Instead of spending that $100 birthday present or $600 rebate check, pretend you never received the money and stick it into your retirement savings account.

If your company offers a 401K plan, enroll -- even if you put the minimum amount that will be matched. If not, start contributing to your own individual account.
Joseph Birkofer, a financial planner at Legacy Asset Management in Houston, suggests putting at least 7% of your gross pay into such an account to match your contribution to Social Security and Medicare.

Use automatic deposits from your check or bank into your IRA. That way, you don't have to put in the effort of manually depositing funds and won't be tempted to use them toward another purchase.

Put yourself in their shoes. Find it hard to justify saving money for something so far off in the future? Imagine yourself as a retiree and how it will affect your family and lifestyle. Birkofer suggests thinking about how your grandma, great-uncle or local retirees pay for lunch.
"There's only three places to get money besides stealing it or winning the lottery: the government, whatever you did yourself or from your family and your kids," he says.
If you don't want to rely on Social Security's shaky outlook or the unattractive option of burdening your family, being financially independent through your golden years can only come from the initiatives you take now.

Don't get burned. When choosing a fund, make sure to balance risk.
Some want to chase higher returns with riskier funds, but starting out slow might make more sense -- especially for those who are hesitant to start saving in the first place.
Birkofer suggests young investors build up a core of $15,000 to $20,000 in a balanced retirement fund, then start exploring funds that are weighted in international or emerging-market investments.
"We lost almost a generation of investors because of the dot-com bomb and it's taken them years to come back to the market," he notes.

Icahn

Carl Icahn wants Yahoo CEO fired

By Yi-Wyn Yen

Another day, another angry Yahoo shareholder.

Yahoo investor Carl Icahn told the Wall Street Journal that he wants wants to get rid of Jerry Yang as Yahoo’s CEO for botching the Microsoft (MSFT) bid.

Icahn is putting more pressure on Yahoo (YHOO) in an effort to force a union with Microsoft. “It’s no longer a mystery to me why Microsoft’s offer isn’t around,” Icahn told the Journal. “How can Yahoo keep saying they’re willing to negotiate and sell the company on the one hand, while at the same time they’re completely sabotaging the process without telling anyone.”

The corporate raider’s scare tactics to bring Microsoft and Yahoo together haven’t worked so far. Microsoft CEO Steve Ballmer withdrew a $33-per-share bid one month ago after Yang indicated he wanted a higher offer. Shortly after, Icahn bought up a minor stake in Yahoo and announced plans to launch a proxy fight to oust Yahoo’s board in hopes of convincing Ballmer to come back. But Ballmer has said he has moved on. So far, has not revealed any plans to make another offer.

Icahn told the Journal that he doesn’t believe Ballmer will return because of Yang. Court documents in a Yahoo shareholder lawsuit that were unsealed Monday accused Yang of trying to sabotage the Microsoft deal.

The complaint made by two Michigan pension funds said that Yang convinced the board to adopt a poison pill that would make a Microsoft takeover extremely difficult. Though Microsoft said it was willing to set aside $1.5 billion to retain Yahoo employees, Yang adopted a plan that would allow all employees to leave Yahoo and receive a generous severance package if the company was bought.

“I’m very cynical about many of the boards and CEO’s in this country, but even I am amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation,” Mr. Icahn told the Journal.

The Journal also reported that Yahoo’s board is scheduled to meet Tuesday.

Oil

Oil Falls Amid Indications High Prices Will Cut Fuel Demand

By Mark Shenk

June 4 (Bloomberg) -- Crude oil fell amid indications that U.S. and Asian fuel consumption will drop because of increasing prices.

UAL Corp.'s United Airlines, the world's second-largest carrier, will reduce its fleet by about 100 planes to counter record jet-fuel costs. India, Malaysia, Indonesia, Taiwan, Sri Lanka and Thailand have cut subsidies and raised fuel costs, which is likely to curb fuel demand.

``You are starting to see consumers respond to these high prices,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``We are getting growing evidence that demand is taking a hit. I think we will test $120 before the week is over.''

Crude oil for July delivery fell 68 cents, or 0.6 percent, to $123.63 a barrel at 9:14 a.m. on the New York Mercantile Exchange, after earlier dropping to $123.15, the lowest since May 15. Futures reached a record $135.09 a barrel on May 22. Prices are up 87 percent from a year ago.
Brent crude oil for July settlement declined 80 cents, or 0.6 percent, to $123.78 a barrel on London's ICE Futures Europe exchange. The contract touched $123.03, the lowest since May 16. Prices reached a record $135.14 on May 22.

India's government raised retail prices of gasoline, diesel and cooking gas, Oil Minister Murli Deora told reporters today in New Delhi. The government previously increased fuel prices in February, the first time since June 2006. Cooking-gas prices had been capped since April 2005.
U.S. gasoline use fell 4.7 percent last week from a year earlier as motorists cut consumption, MasterCard Inc. said yesterday.

The Energy Department is expected to report that U.S. supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, according to the median of 14 estimates in a Bloomberg News survey.

The department is scheduled to release its weekly report on inventories at 10:35 a.m. in Washington.