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Do Recent Housing Stats Really Point to a Bottom?
A different story lies behind the headline numbers
In 2006, I predicted the bursting of the real estate bubble would spread its problems into the financial industry and broad economy to create one of the worst recessions since the 1930s. In 2008, I said the problems began in the real estate industry and the eventual recovery will have to begin in the real estate industry.
On the surface anyway that seems to be happening.
Confidence among home-builders has been creeping up in recent months, although certainly still scraping along the bottom, with only 18% saying they see better times ahead. But that is…
Are You Buying The Right Options? These Four Areas Will Tell You…
In last week’s issue, I covered the profitable and simplistic world of LEAPS trading – a simple way to trade, using long-term options that have an expiration date of one to three years.
And it’s this time component that is a critical factor when it comes to valuing the price of a LEAP option and the amount of risk involved.
An option’s price is determined by a computer program – either the Options Pricing Model or the Black-Scholes Model. Black, Scholes and Merton developed the latter model in the 1970s, winning a Nobel Prize for it.
Essentially, though, both models take the same main…
19Aug2009 | Smart Profits Report | 0 comments | ContinuedHow To Grab Growth And Solid Income From The Small-Cap Sector
Can you notch up profits and earn solid, steady income at the same time?
Usually, the two don’t go hand-in-hand – especially not in the small-cap sector.
But that doesn’t mean to say that it’s impossible to grab the best of both worlds.
If you’ve read my columns here or in our monthly Xcelerated Profits Report newsletter, you know that I focus on the small-cap space – both in my specialist areas of healthcare and biotech and other sectors, too.
Typically, these small-cap stocks are ripe for big gains more so than income through dividends. But I’m actually a big fan of dividends, too.
So what…
17Aug2009 | Smart Profits Report | 1 comment | ContinuedThe Core Principles That Will Make You A Better Investor
Editor’s Note: Over the past five months, several stock indexes across the world have pulled off a dramatic 180-degree turn. From the depths of despair in March, we’ve seen the markets rack up some impressive gains. Investment U columnist Alexander Green explains how investors missed it and how, by remembering one key philosophy and two core principles, you can reject the mainstream media’s “glass half-empty, it’s the 1930s Depression all over again” outlook and enjoy greater investment success.
Martin Denholm, Managing Editor, Smart Profits Report
A Five-Month “Fun Run” For Stocks That Fooled Investors
Over the past five months, world stock markets have put on…
12Aug2009 | Smart Profits Report | 0 comments | ContinuedStick This Ultimate Trading Strategy In Your Investment Arsenal
When it comes to investment strategies, you’re looking for two key elements right off the bat: Simplicity and understandability.
After all, if you know what you’re doing, your chances of success are greatly heightened. And that’s especially true in the sometimes murky world of options.
For example, I often get questions from folks at seminars, asking why I don’t use strategies like butterfly spreads, condor spreads, or iron crosses.
Simple. They’re too complex!
There are many strategies that are much easier to execute than these and are proven to work time after time, so why confuse the issue?
Even if you’re an options aficionado, I…
12Aug2009 | Smart Profits Report | 0 comments | ContinuedWhy You Shouldn’t Chase The Current Stock Market Rally
I am expecting a significant stock market correction at any time.
If you’re a regular reader of my columns, that won’t come as a surprise to you. And I’m not alone in that camp either. Analysts, strategists and investment directors all over Wall Street have been hesitant to put new capital into the markets.
For example, one hedge fund manager told me that he just can’t buy stocks at these levels – despite complaints from his partners who expect him to be fully invested.
And a technical analyst friend reports that the vast majority of his institutional clients are bearish.
And why not? We’re…
7Aug2009 | Smart Profits Report | 1 comment | ContinuedThis Inflation Gauge Just Ticked Higher Again… Four Ways To Fight Back
The Treasury Is Punch-Drunk On Stimulus
We’ve all heard that the stock market always looks forward, never back.
You can see the proof. Just take a look at companies that recently announced great earnings, but still hedged their bets on future guidance.
The reason is that the market wants to know what’s going to happen in the future. It couldn’t care less about what’s already in the bank. Right now, the markets know one thing for sure: The U.S. Treasury is printing money and dumping it into the financial system at historically unprecedented rates in an effort to stimulate the economy.
Chances are good…
6Aug2009 | Smart Profits Report | 0 comments | ContinuedWhy You Shouldn’t Buy Short-Term Options
While I was in Canada last week, Smart Profits readers sure did pound the mailbag! I returned to find several questions to my recent column on how to execute covered call trades.
For example, one reader wanted to know how options can work with short positions – and referenced doing so on Yamana Gold (NYSE: AUY).
Here’s how…
In this case, I’m assuming that you’re short on Yamana and are trying to manage the position in order to not take a big loss in case it moves against you.
The way to do this would be to buy out-of-the money call options to protect you against…
5Aug2009 | Smart Profits Report | 0 comments | ContinuedAmerica Needs More Power… Can The Wind Industry Provide It?
From The Cities… To The Fields… And Back Again
In the waning days of the Great Depression, Franklin D. Roosevelt signed the Rural Electrification Act (REA) of 1936 into law, heralding a new era of growth and prosperity for the U.S. heartland.
You see, while electricity was generally available in cities and towns, it was nearly unheard of on farms, ranches and other rural areas. But the REA brought electric power to these sparsely populated Midwest farms and ranches.
Today, we’ve got the opposite situation.
President Obama is hoping that rural areas in the Midwest will return the favor by providing much needed wind-generated…
3Aug2009 | Smart Profits Report | 0 comments | ContinuedHow To Turn Uncommon Knowledge Into Power And Profit
So what’s a “flash order” anyway?
It’s a stock trade that is routed through private liquidity pools before they’re sent to the general market. While the orders are only seen for fractions of a second before they hit the market, it’s still enough time for advanced computerized trading systems to respond and act on them before the public has the opportunity to do the same.
Sounds a bit shady, doesn’t it?
Senator Charles Schumer (D-NY) agrees. He wants to ban these flash orders, which give an unfair advantage to professional traders using high-tech trading systems.
Senator Schumer is doing the right thing. It shouldn’t…
31Jul2009 | Smart Profits Report | 2 comments | Continued
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