Stock Market Sell Off Continues

As you know the U.S. stock market has been hit hard the past 2 trading weeks.  Friday was a crushing blow as the market was down well over 2%. The S&P 500 was down 2.66% on Friday and in a fortnight it has gone from over 1550 to 1433.

Again, it is decision time. After the sell-off from the week prior, I decided to plow more money into equities on Monday and Tuesday.  I was obviously premature in my actions as the individual stocks I invested in are down about 10% in less than a week of trading. Is August 6 another opportunity to invest in broad indices as they are at such a huge discount? Is it time to jump on some stocks that you think are undervalued?  I would say yes to both questions, but the market might have another tough week. You can’t predict the highs and you can’t predict the lows so you have to determine your own investing course.

Written by Nagel on August 5th, 2007 with no comments.
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As the Stock Market Turns . . .

Last week’s stock market plummett was a wake up for the bulls of the stock market and an “I told you so” moment for bears.  But the 5% the market gave back in last week’s trading is not a clear signal in either direction, and might be only a short-term market correction.

Any way you slice it I think it remains a good opportunity to acquire some great stocks at a 5-10% discount. To combat a possible further market downward spiral build a position, and do not jump in the market all at once.  It is impossible to predict a top or a bottom in the stock market so don’t try.  Create an investment plan and stick to it. If the volatility is too much for you simply sit on the sidelines until enough positive economic is presented to solidify the market.

Written by Nagel on July 30th, 2007 with no comments.
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Investment Buying: Sears Holdings (SHLD)

A little over a week ago Sears Holdings CEO, Eddie Lampert revealed that Sears continues to have problems meeting earnings estimates.  A month prior SHLD pre-announced this was going to happen and both announcements had a negative affect on the stock price. 

I think Mr. Lampert has been pushing all this negative news in order to push the stock price of Sears down in order to get a better deal on buying back shares.  Sears is having earnings problems and Lampert is taking advantages of them in order to make the company worth more by buying back millions of dollars in shares. 

Sears (SHLD) is tarding in the low 150s after brushing 190 earlier this year.  It seems a masterstrock of genius by Lampert so when Sears’ earnings do bounce back the company will be even more attractive to investors.

This is why I am long on Sears Holdings (SHLD) and I initiated a position last week in it. 

Written by Nagel on July 27th, 2007 with no comments.
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TradeKing

I opened several different accounts with TradeKing in the past several days.  Smartmoney magazine had rated TradeKing the best online discount brokerage firm. My current accounts are with Scottrade (they finished second), and I thought after reading this that I would have the two compete for my business. 

I went to tradeking.com and the account set-up process was easy to understand and a snap to finish.  I signed up for a joint account in addition to a Roth IRA account.  All I have left is to fund my accounts, but so far I am very pleased with the efficiency of the process. Updates will follow.

Written by Nagel on July 23rd, 2007 with 1 comment.
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Toyota Motors (TM) Stock Sale

I had owned a stock position in Toyota Motors (TM) for a few months because it is the best-in-breed automobile manufacturer.  I was so confident in the investment that along the way I added to my initial position because of the long-term growth potential.  I believe there is still long-term growth potential in TM, but because the stock had not moved much during the time I owned it I needed to exit that and move my money into something with a brighter short-term outlook.

This sale freed up cash in the international portion of my portfolio so I deemed it necessary to get that money back into a foreign investment.  That money went into Barclay’s Ishares: Malayasia.  This investment is much riskier, but its short-term outlook is much brighter and it is worth the risk.

Written by Nagel on July 21st, 2007 with no comments.
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Barclay’s Ishares: Malayasia

I recently bought into the notion of Barclay Ishare ETFs.  I did some research and discovered that they have the ability to provide me with more foreign exposure, with a small expense ratio. This exposure is in Malayasia, which is an up-and-coming area that I could not access through many ADRs or in a mutual fund with a low expense ratio. 

Obviously, there is risk that is involved when investing in an area like Malaysia.  First, you have political risk with the potential for terrorit actions which could spoil the recent growth.  Another risk is that because of its recent surge it might have reached its apex and is on the downside now. These are acknowledged risks, but the diversification and potential upside of the investment make it well worth the risk.

Written by Nagel on July 18th, 2007 with no comments.
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Profit Growth: Top 5

Profit growth is another important component that many investors look to in order to get a gauge on how well a company is doing.

Below is a list of the top 5 publicly traded companies rated by profit growth, on average of the past 3 years.

1. Gulfmark Offshore (GMRK)
2. Grey Wolf (GW)
3. Houston Wire and Cable (HWCC)
4. Gulfport Energy (GPOR)
5. Applix (APLX)

Written by Nagel on July 17th, 2007 with no comments.
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Sold Best Buy (BBY) Stock

I sold my Best Buy (BBY) stock on July 12 during the stock market surge.  After fees I only netted about 4% from my stock purchase of BBY, however, I did not own it very long and I was concerned about retail in general. 

That 4% taken over the year equals 20-30% return, not bad. I still like Best Buy the company, but I do see retail in general doing poorly short-to-mid-term which will drag BBY as well.  Also, Wal-Mart is currently taking on Best Buy and Circuit City, and Circuit City is paying the price. I do not think BBY will fall apart like Circuit City, but Wal-Mart is a behemoth. Short-term, you do not want WMT to start being a direct competitor; long run who knows what will happen, but BBY will need to adapt or it will be suffer a mortal wound as Circuit City has.

Written by Nagel on July 15th, 2007 with no comments.
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Return on Capital: Top 5 Stocks

Return on Capital is a measurement used for profitability, using net income divided by invested capital. This result shows how effectively a company is employing its capital to produce profits.Below are the top 5 stocks in regards to a three-year average of return on capital.