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32 Billion Reasons The Average Investor Will Fail
I’ll be the first to concede the going’s tough. That almost every “time-tested” strategy that worked well in bull markets is sputtering and collapsing.
But is it so bad we’ve given up on turning a profit? And just resigned ourselves to preserving our principal, right?
WRONG.
This week the Treasury sold $32 billion in 4-week bills at a yield of ZERO percent.
That’s not a typo. Investors actually clamored for the opportunity to lend the government their money in return for absolutely no return. In fact, investors bid $126 billion at the auction, more than four times the amount available.
As Michael Franzese, the head…
15Dec2008 | Investment U | 0 comments | ContinuedWhat If You’re Wrong?
Look at every investment disaster individual investors have endured throughout history and the cause is virtually always the same. They neglected to ask a simple question: What if I’m wrong?
- Take the guy whose retirement account is loaded up with shares of one company, the same one he works for. He exposes himself to a career downturn and an investment disaster at the same time. He forgets to ask, "What if I’m wrong?"
- Or the woman who buys an investment property in a hot market, taking out a mortgage she can barely afford. What if she’s wrong?
- Take the trader who…
Arbitrage Opportunities: What to Look For When Efficient Markets Break Down
Last Wednesday, I wrote about Constellation Energy (NYSE: CEG) being bought by Warren Buffett’s MidAmerican Energy. I gave you a heads up that the market was severely undervaluing CEG at a price of $23.75, well below the buyout price of $26.50. And we didn’t have to wait long for the correction…
Thursday, the price jumped to $27.40, and by Friday it reached a high of $28.99 – a one-day gain of 15.37%, or two-day return of 22.06% for those lucky enough to sell at the peak.
But these moves aren’t uncommon in arbitrage opportunities.
- Arbitrage is where you attempt to profit by exploiting…
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