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Contemplating Collectible Investments
If you have much space for storage, your attic and garage might be stuffed with old furniture, books and other items youve held onto over the years. If this is the case, you may be sitting on a few valuable collectibles just waiting to make you money. That said, you are just as likely to be looking at little more than a pile of junk. In this article well take a look at collectibles as an investment and help you decide whether this emotional market is a good place to park your money.
All Things Old Made New Again
140,000,000 B.C: A young Allosaurus missteps and finds itself mired in a sink hidden beneath the underbrush. Millions of geological ages later, an amateur paleontologist helps him out - or at least what was left of his head. In 2005, the Allosaurus restored skull sells for the high price of $600.
1908: Honus Wagner of the Pittsburgh Pirates hits his tenth home run and ends the year with a .354 batting average, marking one of the best years of his career. The next year, the American Tobacco Company commemorates Wagner by putting a trading card inside its cigarette packages. Less than 60 make it into stores before it is discovered that Honus is vehemently against smoking. In 2000, Wagners cigarette trading card is sold on EBay for $1.1 million.
1962: Stan Lee creates a superhero who has to worry about rent, his ailing aunt and passing his next test - all in addition to saving the world. Peter Parkers misadventure with a radioactive spider hit the stands with a $0.12 cover price. And, in 2006, the first edition of The Amazing Spider-Man is among the most valuable comics with a price around $6,000 or more, according to Wizard: The Guide To Comics pricing guide.
These are all examples of the strange and wonderful world of collectibles. While there is no denying the thrill of owning a juvenile Allosaurus skull, is collecting really a form of investment?
All That Glitters ...
The reason we began by discussing a fossil, a comic and a baseball card is that people have no qualms about calling them collectibles. However, when you speak about diamonds, gold and other precious materials, people tend to call theminvestments . In theory, these materials - and even stocks - could be termed collectibles because their price is based more on what people are willing to pay for them (or market value) than on their actual intrinsic value. But in the practical world, precious metals and stocks have an intrinsic value. For metals, this value is based on rarity and the fact that if you melt it, burn it or bend it, you still have the same atomic substance in the end. For stocks, the value is produced by the underlying brick and mortar company that the share represents - a company that is generating earnings to justify the prices you pay for its stock.
What makes collectibles different is that even a little damage can erase all of a collectibles value. This is because a collectibles value is based on emotional factors like nostalgia. These emotional factors can be as erratic as they are powerful. If you were asked whether people would be willing to pay more for a dinosaur skull or a baseball card, even if you chose one over the other you would give them both a higher value than, say, a torn up baseball card or a box of bone fragments. Those items you would probably call worthless (unless you are an archaeologist or a fan of papier-mâché).
The 20-Year Itch
It is said that nostalgia runs in 20-year cycles. In other words, the things that are popular now will become collectibles in 20 years when people want to reconnect with their past. This doesnt mean that you can buy the top 10 items from consumer polls, incubate them for 20 years and then sell them for a fortune. It means that some items this year will become collectibles if they meet two conditions: rarity and appeal.
Rarity is becoming a harder thing to find as mass production methods allow companies to (over)fill demand without incurring that much extra cost. Beanie Babies have devalued as more and more product lines are introduced. It is profitable for a company to sell as many products as it takes to satiate demand, and that mentality destroys a future collectors profits. (For more on this concept, check out Economics Basics.)
Appeal is also a difficult thing to nail down. To make money at collecting, you have to predict what will become popular in retrospect - perhaps something that is not in high demand now will become popular in the future, either because they are rare or they were not fully appreciated at the time. For example, in the 1950s and 1960s, wing-tipped plastic sun glasses with glass lenses were sold for a few dollars in drugstores, but they can now fetch hundreds of dollars in collectors markets.
Reasons Not To Buy Collectibles
Mark-ups
When you buy a collectible from a dealer, that dealer is usually marking up the price to make a profit. Unlike collectors, dealers do not have the luxury of holding an item for years and years while the value may or may not increase - they have sales to make and a business to run.
Maintenance
Many collectibles require special care to keep them in top condition. These can range in cost from the $1 plastic cover used to keep hockey cards safe to a special room with moisture, heat and light monitors to lengthen a paintings life. On top of the storage costs, there are the added costs of buying insurance for the more valuable types of collectibles as well as paying to have professionals, appraisers, restorers and dealers look at the collectible before you sell it. A collectible doesnt produce income while you hold it, and it may actually eat income while you wait for it to increase in value.
Wear
Most categories of collectibles - from Pokemon cards to antique plumbing fixtures - have a manual classifying how much an item is worth in pristine condition and what sorts of damage degrades it by what percentage of value. For example, a well-read copy of the aforementioned Amazing Spiderman #1 may only be worth 30-60% of the $6,000 list price, depending on what type and what degree of wear it shows.
Counterfeiting
Most museums display dinosaur fossils models - not the real thing. Can you tell the difference between an Allosauras skull made of plaster and cement and one made of fossilized bone? No matter how experienced the appraiser, forgeries do make it to the dealers and then through to the collectors, which could leave you holding a very expensive piece of criminal art.
Low Returns
Collectibles tend to have lower returns than a stock market index fund, a money market account and most bond funds. If you took an average of the returns on all collectibles – which is practically impossible to do given some have little or no market to measure – it would be dismal compared to the S
The security is a Grey Market security. Grey Market securities do not have any quotes in either OTC Link or the OTCBB. Grey Market securities are indicated in OTCMarkets.com by a grey triangle next to the symbol or on the top right of the quote page.
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The Benefits Of An Investment Club
Most mutual fund investors would be hard pressed to name more than one or two of the top holdings within their favorite funds. This is because fund investors tend to compare mutual funds on the basis of their performance, without giving much thought to the specific stocks, bonds and other financial instruments held within the fund. By their nature, mutual funds are a passive form of investment: we trust that the mutual fund manager has the expertise to choose the right investments that will provide the best returns in our portfolios.
As individual investors, we rarely have a large enough portfolio to make individual equity or bond selections on our own. As a result, the average retail portfolio is usually insufficiently diversified with individual stock picks, and we mutual fund holders are subjected to undue risk from one or two bad choices forming a large percentage of our total holdings. For these reasons, retail investors who are dissatisfied with the passive approach of mutual funds and want to take a more active role in choosing equities would do well to join an investment club. (Find out more in Benefit From A Winning Investment Club.)
The Benefits of an Investment Club
You can think of an investment club as a small-scale mutual fund where decisions are made by a committee of non-professionals. In fact, an investment club can be established as a legal entity, either as a legal partnership or as a limited liability corporation, making its framework similar in principle to that of a mutual fund. Best of all, an investment club avoids the often burdensome management fees that all mutual funds levy on their unit holders - fees that can have a significant impact on the overall return provided by mutual funds.
But the benefits of an investment club come with a major caveat: the returns (or losses) that the club realizes entirely depend on club members and their abilities to choose the right investments for their pooled funds. When we purchase mutual funds from the major fund companies, we are effectively purchasing the education, experience, skills and discipline of the mutual fund managers entrusted with our money. When we join an investment club, we are attempting to replicate (and improve upon) some of those management attributes, but in a non-professional setting.
A typical investment club will meet on a regular basis (usually every month) to review its existing portfolio and to take suggestions from club members regarding new investment opportunities. The monthly meeting is an open floor, where each club member is able to voice his or her opinion about the suitability of new investments and other concerns regarding the performance of the pooled funds. Unlike any mutual fund, the investment club is a true democracy: here, the collective wisdom of the club members, combined with information theyve gathered through intensive research, serves (in theory) to produce the best investment decisions.
Principles of a Successful Investment Club
The National Association of Investors Corporation (NAIC) is the pre-eminent advocate of collaborative investing. It maintains extensive archives of information for starting and maintaining investment clubs. The NAIC advocates four simple principles which apply as much to making excellent individual investment decisions as they do to making democratic decisions in a club setting:
• Invest regularly.
• Reinvest dividends and capital gains.
• Discover and own leadership growth companies.
• Prudently diversify by company size and industry.
These principles are very much in keeping with a buy-and-hold strategy, characterized by low portfolio turnover rates. The average holding period for equities within NAIC-advocated portfolios is more than six years. The NAICs principles and strategies have enabled it to claim that on average, the long-term performance of NAIC members has generally outperformed market benchmarks. The NAIC boasts a large membership consisting of both individual investors and investment clubs, and it offers services for introducing individuals to clubs in their area. (Learn more about investment clubs in Investment Clubs Pool Assets, Expertise and 4 Tips For Joining An Investment Club.)
Conclusion
You dont need to belong to the National Association of Investors Corporation to see the value in its overarching principles of discipline, diversification, reinvestment and careful selection of top companies. Indeed, you dont even need to belong to an investment club to adopt these principles as part of your individual investment strategy.
But there are clear benefits to the discipline and decision-making typical of investment clubs. By maintaining a strict regimen of regular meetings, investment clubs force individual investors to adopt an active investment style, in which portfolio review is ongoing and investment decisions - whether to buy, sell or hold - are constantly made.
Furthermore, the decision-making power of the investment club resides in its democracy. Each member brings his or her own education, experience and skills to the group, all of which are used to their fullest when evaluating and debating a decision. The power of the mutual fund comes from professional management that may be able to beat average market returns. The power of the investment club comes from the collective talents of numerous individual members.
The FINRA OTCBB system, on the other hand, is a quotation only system, as it lacks the electronic messaging capabilities of OTC Link. Furthermore, only companies that are SEC-reporting (or bank/insurance reporting) are eligible for quotation on the FINRA OTCBB. Since these securities may also be quoted on OTC Link, many BB eligible securities are ‘Dually-Quoted’ on both inter-dealer quotation systems. Currently, 99% of OTCBB eligible securities are quoted on OTC Link.
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The NYSE And Nasdaq: How They Work
Whenever someone talks about the stock market as a place where equities are exchanged between buyers and sellers, the first thing that comes to mind is either the New York Stock Exchange (NYSE) or Nasdaq, and theres no debate over why. These two exchanges account for the trading of a major portion of equities in North America and worldwide. At the same time, however, the NYSE and Nasdaq are very different in the way they operate and in the types of equities traded therein. Knowing these differences will help you better understand the function of a stock exchange and the mechanics behind the buying and selling of stocks.
Location, Location, Location
The location of an exchange refers not so much to its street address but the place where its transactions take place. On the NYSE, all trades occur in a physical place, on the trading floor in New York City. So, when you see those guys waving their hands on TV or ringing a bell before opening the exchange, you are seeing the people through whom stocks are transacted on the NYSE.
The Nasdaq, on the other hand, is located not on a physical trading floor but on a telecommunications network. People are not on a floor of the exchange matching buy and sell orders on behalf of investors. Instead, trading takes place directly between investors and their buyers or sellers, who are the market makers (whose role we discuss below in the next section), through an elaborate system of companies electronically connected to one another.
Dealer vs. Auction Market
The fundamental difference between the NYSE and Nasdaq is in the way securities on the exchanges are transacted between buyers and sellers. The Nasdaq is a dealers market, wherein market participants are not buying from and selling to one another directly but through a dealer, which, in the case of the Nasdaq, is a market maker . The NYSE is an auction market, wherein individuals are typically buying and selling between one another and there is an auction occurring; that is, the highest bidding price will be matched with the lowest asking price. (For more on different types of markets, see Markets Demystified.)
Traffic Control
Each stock market has its own traffic control police officer. Yup, thats right, just as a broken traffic light needs a person to control the flow of cars, each exchange requires people who are at the intersection where buyers and sellers meet, or place their orders. The traffic controllers of both exchanges deal with specific traffic problems and, in turn, make it possible for their markets to work. On the Nasdaq, the traffic controller is known as the market maker, who, we already mentioned, transacts with buyers and sellers to keep the flow of trading going. On the NYSE, the exchange traffic controller is known as the specialist, who is in charge of matching up buyers and sellers.
The definitions of the role of the market maker and that of the specialist are technically different; a market maker creates a market for a security, whereas a specialist merely facilitates it. However, the duty of both the market maker and specialist is to ensure smooth and orderly markets for clients. If too many orders get backed up, the traffic controllers of the exchanges will work to match the bidders with the askers to ensure the completion of as many orders as possible. If there is nobody willing to buy or sell, the market makers of the Nasdaq and the specialists of the NYSE will try to see if they can find buyers and sellers and even buy and sell from their own inventories.
Perception and Cost
One thing that we cant quantify but must acknowledge is the way in which the companies on each of these exchanges are generally perceived by investors. The Nasdaq is typically known as a high-tech market, attracting many of the firms dealing with the internet or electronics. Accordingly, the stocks on this exchange are considered to be more volatile and growth oriented. On the other hand, the companies on NYSE are perceived to be more well established. Its listings include many of the blue chip firms and industrials that were around before our parents, and its stocks are considered to be more stable and established.
Whether a stock trades on the Nasdaq or the NYSE is not necessarily a critical factor for investors when they are deciding on stocks to invest in. However, because both exchanges are perceived differently, the decision to list on a particular exchange is an important one for many companies. A companys decision to list on a particular exchange is affected also by the listing costs and requirements set by each individual exchange. The entry fee a company can expect to pay on the NYSE is up to $250,000 while on the Nasdaq, it is only $50,000-$75,000. Yearly listing fees are also a big factor: on the NYSE, they based on the number of shares of a listed security, and are capped at $500,000, while the Nasdaq fees come in at around $27,500. So we can understand why the growth-type stocks (companies with less initial capital) would be found on the Nasdaq exchange. (For further reading, see What are the listing requirements for the Nasdaq?)
Public vs. Private
Prior to March 8, 2006, the final major difference between these two exchanges was their type of ownership: the Nasdaq exchange was listed as a publicly-traded corporation, while the NYSE was private. This all changed in March 2006 when the NYSE went public after being a not-for-proft exchange for nearly 214 years. Most of the time, we think of the Nasdaq and NYSE as markets or exchanges, but these entities are both actual businesses providing a service to earn a profit for shareholders. The shares of these exchanges, like those of any public company, can be bought and sold by investors on an exchange. (Incidentally, both the Nasdaq and the NYSE trade on themselves.) As publicly traded companies, the Nasdaq and the NYSE must follow the standard filing requirements set out by the Securities and Exchange Commission. Now that the NYSE has become a publicly traded corporation, the differences between these two exchanges are starting to decrease, but the remaining differences should not affect how they function as marketplaces for equity traders and investors.
Conclusion
Both the NYSE and the Nasdaq markets accommodate the major portion of all equities trading in North America, but these exchanges are by no means the same. Although their differences may not affect your stock picks, your understanding of how these exchanges work will give you some insight into how trades are executed and how a market works.
In between the trading ranges are smaller uptrends within the larger uptrend. The uptrend is renewed when the stock breaks above the trading range.
Does it sound too good to be true? Then it probably is. You should never make a decision about investing your money in a particular company solely on the basis of a "hot tip" or someone's advice. It is important that you make an informed decision based on your thorough research which includes the company's annual report, current financial statements and material news.
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Do You Understand Investment Risk?
A study conducted by Englands Financial Services Authority (FSA) in 2004 called Consumer Understanding Of Financial Risk has shed some light on how well people understand their investments. Such understanding or, in some cases, the lack of understanding, leads to specific types of behavior. It is important for both investors and providers to be aware of the differences. In this article, well go over this study and what it can teach investors about their own understanding of their personal finances.
Types of Investors
The respondents in the study were divided into three main groups:
• Trusters
were defined as unsophisticated investors who primarily rely on their advisors.
• Partners are those with an intermediate level of sophistication who work together with their advisors to some extent.
• Controllers are sophisticated and often experienced investors who rely on their own understanding and make their own decisions. This simple categorization provides considerable insight into the nature of investors, what they do and expect, and the associated risks and opportunities that exist for both buyers and sellers. (Learn more in What Is Your Risk Tolerance?)
Education and Financial Sophistication Are Not the Same Thing
It is important to note that general or even business education doesnt necessarily translate into specific knowledge about the world of investment. A business graduate is certainly likely to know something about investments, but this knowledge may be very theoretical and, therefore, less applicable to the graduates own experiences. Conversely, a doctor who happens to be very interested in getting the most bang for his buck on his investments may turn out to have a relatively sophisticated understanding of investing. Likewise, retired people with no formal financial education or qualifications may spend hours pouring over the financial pages of the newspaper every day. In this case, they may know more than their advisors about day-to-day developments.
Lets look in more detail at each of the three groups.
Trusters Rely On Others
Not surprisingly, the lower the level of sophistication, the less people understand about the risks to which their money is exposed and the more naive they tend to be about what their advisors or investment companies can really do for them. The FSA study points out that this naiveté can lead to excessive reliance on people in the industry, which can open the door for potential abuse. Alternatively, it may lead nervous and distrusting people to adopt a savings approach, which may be too risk averse to benefit the investor. (For related reading, see Determining Risk And The Risk Pyramid.)
When investors lack understanding of their investments, this often means that they are uninformed about what is meant by high, medium and low risk, the three standard categories prevalent in much of the investment literature. The problem is compounded by the failure of many brokers to present people with clear options with clear risk labels. Investors often think that anything to do with shares is risky, or that fund managers generally buy shares with such astuteness and expertise that there is little risk involved. Generally speaking, the reality is that the greater the value of equities that an investor has in his or her portfolio, the greater the amount of risk the person is taking on compared to leaving that money in a savings account.
While many investors understand the principles of diversification and risk well enough to know it is bad to put all of their eggs in one basket, they do not always know how to avoid this in practice. Trusters, for example, were shown to have a poor understanding of asset classes and very little, if any, awareness of the range of products available in the market. As a result, they tend to delegate most of the responsibility to others, which predictably leads to somewhat mixed results. (For more insight, see Introduction To Diversification and The Importance Of Diversification.)
Partners Make Mutual Decisions
Partners tend to have a medium level of sophistication and often want to be involved in the decision-making process. They generally read newspapers or magazines in and attempt to follow the markets. They also rely on advisors for help, but certainly not for the basic-level financial matters. They are interested in the second opinion that brokers or advisors provide, and also seek professional assistance to ensure that paperwork is completed correctly and that they understand any applicable legal jargon.
The main difficulty with partners is finding the right balance between control and delegation. While some advisors do not welcome client input, and others tend to think customers know more than they really do, it is essential for the investor-advisor roles to be quite clear to both parties. It may be best to have some form of written agreement - even if its an informal one - that highlights the nature of each players respective roles.
Controllers Want to Run the Show
Controllers are sophisticated investors (or at least think they are!) and prefer to take charge of the investing process. They are very interested in the financial sector and have a good understanding of both products and markets. They are aware of and understand the array of products that are available and they know what they want. They also spend a considerable amount of time researching products and markets, and they actively send off for financial statements, buy the latest books, and even attend investment seminars and conferences. This does not necessarily make them risk friendly, but they understand risk and know how to construct an optimal portfolio. Such investors often purchase on execution only, which means that they dont seek an advisors advice.
With respect to controllers who think they are sophisticated, there are certainly those who ought to delegate more of their investing tasks to a professional. Investors who seriously overestimate their knowledge or abilities can get into trouble.
Who Are You and Who Are You Dealing With?
The FSA study reinforces the need for informed financial planning; it also suggests the vulnerability of investors who are either too trusting or not trusting enough. For trusters, and to a lesser extent, partners, ease of understanding is fundamental and checks need to be built into any investment process to ensure that peoples personal and financial circumstances and willingness to take risk are taken into account. If investors are to be served well, what they know and, more importantly, what they do not know, must form a fundamental component of the advisory process. Advisors must take the level of investor knowledge and understanding very seriously.
Conclusions
Fundamental analysis can be valuable, but it should be approached with caution. If you are reading research written by a sell-side analyst, it is important to be familiar with the analyst behind the report.
OTC Link LLC (OTC Link) is an electronic inter-dealer quotation system that displays quotes, last-sale prices, and volume information in exchange-listed securities, OTC equity securities, foreign equity securities and certain corporate debt securities.
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Dont Go Broke Buying Bankrupt Stocks
Sometimes, when stocks drop precipitously, they can easily over do it on the downside, as panic-selling ensues. These large declines can provide an attractive entry point for investors. The problem is that the biggest declines in stocks often occur the day that a company files for bankruptcy. Does that mean that bankrupt stocks can be a good buy? No, although some people dont realize that. Before buying that company that just filed Chapter 11, know the facts, and find out why any amount of money put in is bound to be lost.
When a Company Liquidates
Companies do not want to go bankrupt. Management will lose their jobs, and usually have equity at risk in the company. Companies declare or get forced into bankruptcy as a last resort, because they are having trouble paying their debt and need to gain protection from creditors. If the company liquidates or reorganizes, it needs to pay back everyone else in line before the common shareholders.
The hierarchy of claims goes like this: Bondholders including all classes (ie. subordinated, unsubordinated, secured, unsecured) have first claim to any assets or payments. After that the company may need to make payments for taxes, employees, trustees, etc. Then comes preferred equity holders, and, if there are any, the common equity holders get the leftovers. Its unlikely that shareholders receive anything.
When a Company Restructures
Even when the company will remain a going concern after emerging from chapter 11, the old shares are generally canceled with no payment to holders. New shares are issued, generally as a form of payment to debt holders.
An example of this was Delta Airlines. Delta filed Chapter 11 in 2005 and, following the filing, common shares traded over the counter on the pink sheets. Under its plan of reorganization, Delta was to issue new shares upon emergence from bankruptcy and cancel the old shares, with holders receiving no value. Delta even set up an online Restructuring FAQs for Investors, where they specifically outlined how old shareholders will receive nothing. The website stated:
Under the proposed plan of reorganization, current holders of Delta common stock would receive no distribution, and the securities would be canceled upon the effective date of the plan. Delta has indicated for some time that the company expected its common stock would not have any value under any plan of reorganization the company might propose, which is not uncommon in Chapter 11 proceedings.
The company also explicitly pointed out: Since the expected value of the Company will be less than creditors claims, we will not be able to exchange old stock for new stock.
Despite this clear declaration that holders of old stock would receive nothing, shares exchanged hands at 13 cents just a week before the shares were set to be canceled. Thirteen cents doesnt seem like a lot of money , but for those who were buying 10,000 shares, the loss a week later was a very real $1,300.
Why Bankrupt Stocks Dont Trade at Zero
As weve seen with Delta, the residual value of the shares is zero, so why doesnt every stock trade at zero after declaring bankruptcy? Stocks generally get close to zero on the day of the bankrupt, but can rise afterwards - sometimes even doubling or tripling. This affords some lucky individuals big gains. It is basically equivalent to a lottery ticket and generally has no basis whatsoever. So speculators, much like those who ride other penny stocks , make quick trades in the stocks trying to make big profits, but they also experience big losses. This type of strategy makes little sense with bankrupt stocks, as someone is buying something worth nothing, and hoping to sell it to someone else for more. It is an extreme example of the greater fool theory.
The other reason why a bankrupt stock wont trade at zero is because in rare cases some value may emerge for the common shareholders to claim. This will occur in a situation where the company is able to sell assets for higher than expected prices and can pay off everyone in line, and still have some left over. This, I remind you, is very rare. As stated above, the reason a company declares or gets forced into bankruptcy is because it cannot afford to pay its creditors. (Instead of investing in equity, some investors invest in distressed debt to make a profit; learn more in our article Distressed Debt An Avenue To Profit In Corporate Bankruptcy.)
What About Price-to-Book Value?
A commonly used metric to judge the value of a company is its book value. When looking at book value, the stock of a bankrupt company may look compelling, as it will trade for a small fraction of book value. This, however, cannot be used to determine that there is value in the stock. First, book value contains many things that are of little or no value during bankruptcy, such as goodwill. On top of this, any assets that get sold off in a bankruptcy proceeding will likely receive distressed prices, as buyers will not pay up for assets in liquidation.
The Bottom Line
Dont buy bankrupt stocks. Unless you have some great research on the stock and the bankruptcy proceedings, and have truly figured out that the company can generate enough cash to pay all claims and then some, there is no reason to do it. While buying a stock that was trading at $20 and is now at 20 cents may seem compelling, the vast majority of the time that 20 cents is worth nothing. So why throw away money and look like a fool? If youre looking for something else to buy, I have a great price on a bridge in Brooklyn. For related reading, check out Taking Advantage of Corporate Decline.
Strengths of Fundamental Analysis
Long-term Trends
Fundamental analysis is good for long-term investments based on very long-term trends. The ability to identify and predict long-term economic, demographic, technological or consumer trends can benefit patient investors who pick the right industry groups or companies.
Short selling carries with it unlimited risk because the purchase price of a security can rise to any price point. Conversely, long investors (buyers) may only lose the amount invested – if, for example, the security price drops to zero.
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How To Invest In Private Companies
The internet has revolutionized the world of retail stock investing by making vast amounts of financial information quickly and easily available to individual investors. And though still in the early stages, the advent of digital information exchange is also making it easier for more individuals to invest in privately-held companies. Just as eBay has put buyers in contact with sellers of collectibles that used to collect dust on attic shelves, today private companies are much more able to seek out buyers of their securities to allow them to raise capital. TUTORIAL: Advanced Financial Statement Analysis
The drawback to vast amounts of information is the difficultly in knowing what to focus on. Below is a comparison of private companies to public ones, overview of private company types and varieties, investment options currently available for interested investors, and a survey of other considerations to make when investing in private companies.
Private Companies versus Public Companies
Overall, it is much easier to invest in a publicly-traded firm. Public companies, especially larger ones, can easily be bought and sold on the stock market and therefore have superior liquidity and a quote market value. Conversely, it can be years before a private firm can again be sold and prices must be negotiated between the seller and buyer.
In addition, public companies must file financial statements with the Securities and Exchange Commission (SEC), making it easy to track how they are doing on a quarterly and annual basis. Private companies are not required to provide any information to the public, so it can be extremely difficult to determine their financial soundness, historical sales and profit trends.
Investing in a public company may seem far superior to investing in a private one, but there are a handful of benefits to not being public. A major criticism of many public firms is that they are overly focused on quarterly results and meeting Wall Street analyst short-term expectations. This can cause them to miss out on long-term value creating opportunities, such as investing in a product that may take years to develop, hurting profits in the near term. Private firms can be better managed for the long term as they are out of Wall Streets reach. An annual report by the World Economic Forum has detailed that productivity increases when a public firm is taken private. They can also create more jobs when run more efficiently and profitably.
Being an owner of a private firm also means sharing more directly in the underlying firms profits. Earnings may grow at a public, firm but they are retained unless paid out as dividends or used to buy back stock. Private firm earnings can be paid directly to the owners. Private owners can also have a larger role in the decision-making process at the firm, especially those with large ownership stakes.
Types of Private Companies
From an investment standpoint, a private company is defined by its stage in development. For instance, when an entrepreneur is first starting a business he or she usually receives funding from a friend or family member on very favorable terms. This stage is referred to as angel investing, while the private company is known as an angel firm. Past the start-up phase is venture capital: investing where a group of more savvy investors comes along and offers growth capital and managerial know-how and other operational assistance. At this stage a firm is seen to have at least some long-term potential.
Past this stage can be mezzanine investing, which consists of equity and debt, the last of which will convert to equity if the private company cant meet its interest payment obligations. Later-stage private investing is simply referred to as private equity and is currently a multi-billion dollar business with many large players.
For investors, the stage of development a private company is in can help define how risky it is as an investment. For instance, approximately 40% of angel investments fail and the risk falls the more developed and profitable a private company becomes. And although the goal of many private firms is to eventually go public and provide liquidity for company founders or other investors, other private business may prefer to stay private given the benefits given above. Family businesses may also prefer privacy and the handing of ownership across generations. These are important matters to become aware of when deciding to invest in a private company. (To learn more, see What Is Private Equity?)
How to Invest in Private Companies
Early-stage private investing offers the most investment opportunities but is also the most risky. As a result, joining an angel investor organization or investment group may be a good idea to make the process easier and potentially spread the investment risks across a wide group of firms. Venture funds also exist and solicit outside partners for investing capital.
As noted above, the internet has quickly become a central source to find these types of organizations, while other websites have sprung up to fill a void and put buyers and sellers of many types of private companies together. Online sources also have made it easier to at least locate basic information on a private firm. This can be done by visiting the companys websites, and reading online blogs and articles that discuss the firm and its industry.
Other resources that can be used include small or private business brokers that specialize in buying and selling these firms. Private equity is also an option, and ironically a number of the largest private equity firms are publicly traded so can be purchased by any investor. A number of mutual funds can also offer at least some exposure to private companies.
Other Considerations
Overall, it is important to reiterate that private companies are illiquid and require very long investing time frames. Most investors will also need an eventual liquidity event to cash out. This includes when the company goes public, buys out private shareholders, or is bought out by a rival or another private equity firm. And just like with any security, private companies need to be valued to determine if they are fairly valued, overvalued or undervalued.
It is also important to note that investing directly in private firms is usually reserved only for wealthy individuals. The motivation is that they can handle the additional illiquidity and risk that goes with private investing. The SEC definition calls these wealthy individuals accredited investor or qualified institutional buyer (QIB) when considering institutions.
The Bottom Line
It is now easier than ever to invest in private companies, but an investor still has to do his or her homework. Investing directly is still not going to be a viable option for most investors, but there are still ways to gain exposure to private firms through more diversified investment vehicles. Overall, an investor definitely has to work harder an overcome more obstacles when investing in a private firm as compared to a public one, but they work can be worth it as there are a number of advantages to be gained by investing in private companies.
During this 90-day period, an investor may still purchase securities with the cash account, but the investor must fully pay for any purchase on the date of the trade. For more information on the 90-day freeze, please read our investor bulletin “Trading in Cash Accounts – Beware of the 90-Day Freeze under Regulation T,” and the cash account provisions of the Federal Reserve Board’s Regulation T.
Resistance breaks and new highs indicate buyers have increased their expectations and are willing to buy at even higher prices.
$MRDDF BarChart Technical Analysis NITE-LYNX
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This question must be answered by your broker-dealer. Broker-dealers hold customer orders in their proprietary order books and only they can tell you why your order has not been filled. Possible explanations include: the order may not yet be marketable (at or within the bid/ask spread) or if it is/was marketable, other customer orders at the same price may have been in the order book longer and received execution priority.
Usually, companies are compared with others in the same group. For example, a telecom operator (Verizon) would be compared to another telecom operator (SBC Corp), not to an oil company (ChevronTexaco).
Why Expense Ratios Are Important To Investors
The most valuable pieces of advice ever shared regarding investing of any kind, in ascending order of importance:
1. Fundamental analysis is crucial. Technical analysis is akin to fortune telling by interpreting patterns in tea leaves.
2. Its not a game or a hobby. Spend hours researching an investment when others are spending minutes. Spend days when others are spending hours. Done right, youll still enjoy a stupendous return on your time.
3. You make your money going in.
Its straightforward math, and easy to overlook or dismiss in its simplicity. An overpriced asset is that much harder to gain a return on than an underpriced or properly priced one. Wait for a real estate bubble (or, say, the hoopla surrounding a social networking sites much-anticipated initial public offering) to subside and then buy; yourmargin for error and potential for return should increase correspondingly.
The Price of Management
Were not talking about normal price fluctuations, here, or the inherent unpredictability that comes with almost any investment. Rather, were looking at whats essentially a surcharge on the price of the investment, levied before you buy. For example, take two new cars with the same model, same color and same options. One dealer sells the first vehicle for $22,000, out the door. The other sells the identical vehicle for $22,000, but with a $495 non-negotiable advertising and marketing assessment. Do you need to be told to buy the former? Its like purchasing a residential air filter in Vancouver, Washington (and paying 8% state sales tax) instead of going across the river and buying the same thing in Portland (Oregon levies no sales tax).
This is how it goes with mutual funds, the financial product of choice for most casual and many sophisticated investors. While no two funds are indistinguishable, two similarly constituted funds can come with price tags that differ considerably. Why? Varying expense ratios.
Its understandable that a mutual funds price costs more than the prices of its components. It costs money to create a fund. The fund has to be set up, registered and maintained. The firm that created it and that hired its managers has to be compensated. However, to what tune? The U.S. Securities
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The company was first established in 1913 as the National Quotation Bureau (NQB). For decades, the NQB reported quotations for both stocks and bonds, publishing the quotations in the paper-based Pink Sheets and Yellow Sheets respectively. The publications were named for the color of paper on which they were printed. In September 1999, the NQB introduced the real-time Electronic Quotation Service.
Strong-form: Technicians
The strong-form of market efficiency theorizes that the current price reflects all information available.
Buy-And-Hold Investing Vs. Market Timing
If you were to ask 10 people what long-term investing meant to them, you might get 10 different answers. Some may say 10 to 20 years, while others may consider five years to be a long-term investment . Individuals might have a shorter concept of long term, while institutions may perceive long term to mean a time far out in the future. This variation in interpretations can lead to variable investment styles.
For investors in the stock market , it is a general rule to assume that long-term assets should not be needed in the three- to five-year range. This provides a cushion of time to allow for markets to carry through their normal cycles.
However, whats even more important than how you define long term is how you design the strategy you use to make long-term investments . This means deciding between passive and active management. Read on to learn more.
Long-Term Strategies
Investors have different styles of investing, but they can basically be divided into two camps: active management and passive management. Buy-and-hold strategies - in which the investor may use an active strategy to select securities or funds but then lock them in to hold them long term - are generally considered to be passive in nature. Figure 1 shows the potential benefits of holding positions for longer periods of time. According to research conducted by Charles Schwab Company in 2012, between 1926 and 2011, a 20-year holding period never produced a negative result.
Source: Schwab Center for Financial Research
Figure 1: Range of S
$SLIO BarChart Technical Analysis NITE-LYNX
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From a trading perspective, liquidity is the ability of a security to be bought or sold without causing a significant movement in the price of the security. Liquid securities may be bought and sold in large numbers without a dramatic movement in the price of the security.
Trading Range
Trading ranges can play an important role in determining support and resistance as turning points or as continuation patterns.
A Guide To Investor Fees
Fees are one of the most important determinants of investment performance and something that every investor should focus upon. This article will show why fees are so important, list some of the typical fees investors can expect to pay, and focus on some investment types that generally carry high (and low) fees. (Discover how investment strategies and expense ratios impact your mutual funds returns. Check out Stop Paying High Mutual Fund Fees.) TUTORIAL: Choosing Quality Mutual Funds Why Fees Matter
It is easy for investors to forget about fees when focusing upon other important subjects such as asset allocation or security selection. However, in addition to the overall market movements and an individuals stock picking abilities, the level of fees that investors pay is one of the most important determinants of investor performance.
The following example might astonish you. The numbers below assume that you contribute $3,000 to your retirement account in year one. Each year, as your salary increases, you increase your contribution by $250. So in year two, you contribute $3,250, in year three you contribute $3,500, and in year four you contribute $3,750. You then continue to gradually increase your contributions for the remainder of your career (30 years) and earn an 8% annualized return on your diversified portfolio. Although you earn 8% gross returns, your net return will be reduced by the amount of fees you pay. The higher the fees, the lower the return you actually receive.
The only difference in the investment programs in the chart below is the level of fees - everything else is identical. Look at the difference in the amount that you end up with at retirement, depending upon how much you pay in fees each year. The numbers are nothing short of staggering.
Gross
Return Fees Net
Return Account
Value
Without Fees Account
Value
With Fees Amount
Lost
Due To Fees
8.00% 0.50% 7.50% $648,118.44 $596,477.60 ($51,640.84)
8.00% 0.75% 7.25% $648,118.44 $572,454.51 ($75,663.93)
8.00% 1.00% 7.00% $648,118.44 $549,551.41 ($98,567.03)
8.00% 1.50% 6.50% $648,118.44 $506,887.81 ($141,230.63)
8.00% 2.00% 6.00% $648,118.44 $468,078.69 ($180,039.75)
Source: From Piggybank to Portfolio
A common retirement goal is to be able to withdraw between 3-5% of an investment portfolio each year during retirement. In the scenario above, if two individuals had invested throughout their careers in a similar manner, but one person had paid 0.50% in fees and the other had paid 2.00%, the difference in their annual income during retirement would be more than $5,000 each year. That means that one person would have $420 less each month on which to live, just because they had paid excessive fees on their investment portfolio during their working years. (If you are investing small amounts regularly into an exchange-traded fund, be sure to do it right. See Dollar-Cost Averaging With ETFs.)
Sample Fees
Hopefully, the above example has convinced you of the importance of fees. While it is not always necessary to aim for the lowest possible fees in a portfolio, it is generally a good idea to select investments and investment providers that fall in the range of those available. With that in mind, the matrix below demonstrates some typical fees. (Note: the fees in the matrix below are indicative and are intended to serve as a starting point for further research and analysis.)
Online Brokers Stock Trade ($) Option Trade ($)
Brokerage 1 8.95 8.95 0.75 per contract
Brokerage 2 7.99-9.99 7.99-9.99 0.75 per contract
Brokerage 3 7.95 7.95 0.75 per contract
Brokerage 4 9.99 9.99 0.75 per contract
Brokerage 5 7.00 7.00 1.25 per contract
ETFs Issuer X Issuer Y
S
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FINRA requires member firms to ascertain the best market to execute their customer orders. OTC Link and the OTCBB are the two recognized inter-dealer quotation systems in the OTC market that can be relied upon for electronic best execution if there are two priced quotes. If fewer than two quotations are displayed on an inter-dealer quotation system that permits quotation updates on a real-time basis, FINRA members must contact at least three dealers by phone to obtain other quotations.
Trade Smarter With Equivalent Positions
How can two trades have the same risk and reward when they look so very different?
Thats the frequent response when investors first learn that every option position is equivalent to a different option position. For clarification, equivalent refers to the fact that the positions will earn/lose the same amount at any price (when expiration arrives) for the underlying stock. It does not mean the positions are identical.
Of all the ideas that a rookie options trader encounters, the idea of equivalence is a real eye-opener. Those who grasp the significance of this concept have an increased chance of succeeding as a trader. (For a background reading, see our Options Basics Tutorial.)
Different but Equal
Lets begin with an example, and then well discuss why equivalent positions exist and how you can use them to your advantage. And it is an advantage. Sometimes you discover that theres an extra $5 or $10 to be earned by making the equivalent trade . At other times, the equivalent saves money on commissions.
There are two commonly used trading strategies that are equivalent to each other. But you would never know it by the way stock brokers handle these positions. Im referring to writing covered calls and selling naked puts. (For more, readUnderstanding Option Pricing.)
These two positions are equivalent:
1. Buy 300 shares of QZZ
Sell 3 QZZ Aug 40 calls
2. Sell 3 QZZ Aug 40 puts
What happens when expiration arrives for each of these positions?
Buying the Covered Call:
• If QZZ is above 40, the call owner exercises the options, your shares are sold at $40 per share, and you have no remaining position.
•
If QZZ is below 40, the options expire worthless and you own 300 shares
Selling the Naked Puts:
• If QZZ is above 40, the puts expire worthless and you have no remaining position.
•
If QZZ is below 40, the put owner exercises the options and you are obligated to purchase 300 shares at $40 per share. You own 300 shares.
Trade Conclusion
After expiration, your position is identical. For those who are concerned with details (and option traders must be concerned) the question arises as to what happens when the stocks final trade at expiration is 40. The answer is that you have two choices:
1. Do Nothing
You can do nothing and wait to see whether the option owner allows the calls to expire worthless or decides to exercise. This places the decision in the hands of someone else.
2. Repurchase the Options
Before the market closes for trading on expiration Friday, you can repurchase the options you sold. Once you do that, you can no longer be assigned an exercise notice. The goal is to buy those options for as little as possible, and I suggest bidding 5 cents for those options. You may want to be more aggressive and raise the bid to 10 cents, but that should not be necessary if the stock is truly trading at the strike price as the closing bell rings.
If you do buy back the options sold earlier, you may write new options expiring in a later month. This is a common practice, but its a separate trade decision.
The positions are equivalent after expiration. But does that show that the profit/loss is always equivalent? No, it doesnt. But the truth is that options are almost always efficiently priced. When priced inefficiently, professional arbitrageurs arrive on the scene and trade to take the free money offered. This is not a trading idea for you. Instead, its a reassurance that you will not find options mispriced too often. The available profit from these arbitrage opportunities is very limited, but the arbs are willing to take the time and effort to frequently earn those few pennies per share. (Read Arbitrage Squeezes Profit From Market Inefficiency.)
Proof
To determine if one position is equivalent to another, all you need to know is this simple equation:
S = C – P
This equation defines the relationship between stocks (S), calls (C) and puts (P). Being long 100 shares of stock is equivalent to owning one call option and selling one put option when those options are on the same underlying and the options have the same strike price and expiration date.
The equation can be rearranged to solve for C or P as follows:
C = S P
P = C - S
This gives us two more equivalent positions:
1. A call option is equivalent to a long stock plus a long put (this is often called a married put).
2. A put option is equivalent to a long call plus a short stock .
From the last equation, if we change the signs of each attribute, we get:
-P = S – C, or a short put equals a covered call
As long as you are cash-secured, meaning you have enough cash in your account to buy the shares if you are assigned an exercise notice, there are two very practical reasons for selling a naked put:
1. Reduced Commissions
The naked put is a single trade. The covered call requires that you buy stock and sell a call. Thats two trades.
• Exiting the Trade Prior to Expiration
Sometimes the spread turns into a quick winner when the stock rallies way above the strike price. Its often easy to close the position and take your profit easily when you sold the put. All you must do is buy that put at a very low price, such as 5 cents. With the covered call, buy the deep-in-the-money call options. Those usually have a very wide market and there is almost no chance to buy that call at a good price (and then quickly sell the stock). Thus, the strategic edge belongs to the put seller, not the covered call writer.
• Other Equivalent Positions
These positions are equivalent only when the options have the same strike price and expiration date.
Selling a put spread is equivalent to buying a call spread, so:
• Sell ZXQ Oct 50/60 Put Spread = Buy ZYQ Oct 50/60 Call Spread
Selling a call spread is equivalent to buying a put spread, so:
• Sell JJK Dec 15/20 Call Spread = Buy JJK Dec 15/20 Put Spread
Selling put spread is equivalent to a buying collar. so:
• Sell XYZ Nov 80/85 Put Spread = Buy 100 XYZ; Buy one Nov 80 put; Sell one Nov 85 call
To convert a call into a put, just sell stock (because C - S = P)
To convert a put into a call, just buy stock (because P S = C)
The Bottom Line
There are other equivalent positions. In fact, by using the basic equation (S = C – P) you can find an equivalent for any position. From a practical perspective, the more complex the equivalent position, the less easily it can be traded. The idea behind understanding that some positions are equivalent to others is that it may help your trading become more efficient . As you gain experience, you will find it takes very little effort to recognize when an equivalent is beneficial. It just takes a little practice thinking in terms of equivalents.
NITE-LYNX $HPGI BarChart Technical Analysis
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Quotes for all OTC securities are available on OTCMarkets.com by entering a symbol in the quote search area at the top left of any page. All OTCQX securities display real-time level 2 quotes while all OTCQB and OTC Pink securities display real-time inside (best bid and ask) quotations. Quotes are updated from 6:00 AM to 4:00 PM on all trading days.
Market Problems? Blame Investors
Sure, the economy sometimes hits a slump, whether because of a war or unforeseen natural disaster. Of course, these things are beyond an investors control. But turbulence in the market can often be linked not to any perceivable event but rather to investor psychology. A fair amount of your portfolio losses can be traced back to your choices and the reasons for making them, rather than unseen forces of evil that we tend to blame when things go wrong. Here we look at some of the ways investors unwittingly inflict problems on the market.
Following the Crowd
Humans are prone to a herd mentality, conforming to the activities and direction of others. This is a common mistake in investing. Imagine you and a dozen other people are caught in a theater thats on fire. The room is filled with smoke and flames are licking the walls. The people best qualified to get you out safely, such as the building owner or an off-duty firefighter, shy away from taking the lead because they fear being wrong and they know the difficulties of leading a smoke-blinded group.
Then the take-charge person steps up and everyone is happy to follow the leader. This person is not qualified to lead you to the local 7-11, let alone get you out of an unfamiliar burning building, so, sadly, you are more likely to end up as ash than find your way out. This tendency to panic and depend on the direction of others is exactly why problems arise in the stock market, except we are often following the crowd into the burning building rather than trying to get out. Here are two actions caused by herd mentality:
• Panic Buying - This is the hot-tip syndrome, whose symptoms usually show up in buzzwords such as revolution, new economy, and paradigm shift. You see a stock rising and you want to hop on for the ride, but youre in such a rush that you skip your usual scrutiny of the companys records. After all, someone must have looked at them, right? Wrong. Holding something hot can sometimes burn your hands. The best course of action is to do your due diligence. If something sounds too good to be true, it probably is.
• Panic Selling - This is the end of the world syndrome. The market (or stock) starts taking a downturn and people act like its never happened before. Symptoms include a lot of blaming, swearing, and despairing. Regardless of the losses you take, you start to get out before the market wipes out whats left of your retirement fund. The only cure for this is a level head. If you did your due diligence, things will probably be OK, and a recovery will benefit you nicely. Tuck your arms and legs in and hide under a desk as people trample their way out of the market. (For more on this kind of behaviour, check out our Behavioral Finance Tutorial.)
We Cant Control Everything
Although it is a must, due diligence cannot save you from everything. Companies that become entangled in scandals or lie on their balance sheets can deceive even the most seasoned and prudent investor. For the most part, these companies are easy to spot in hindsight (Enron), but early rumors were subtle blips on the radar screens of vigilant investors. Even when a company is honest with an investor, a related scandal can weaken the share price. Omnimedia, for example, took a severe beating for Martha Stewarts alleged insider activities. So bear in mind that it is a market of risk. (For more on stock scandals, check out The Biggest Stock Scams Of All Time.)
Holding Out for a Rare Treat
Gamblers can always tell you how many times and how much theyve won, but never how many times or how badly theyve lost. This is the problem with relying on rewards that come from luck rather than skill: you can never predict when lucky gains will come, but when they do, its such a treat that it erases the stress (psychological, not financial) youve suffered.
Investors can fall prey to both the desire to have something to show for their time and the aversion to admitting they were wrong. Thus, some investors hold onto stock that is losing, praying for a reversal for their falling angels; other investors, settling for limited profit, sell stock that has great long-term potential. The more an investor loses, however, the larger the gain must be to meet expectations.
One of the big ironies of the investing world is that most investors are risk averse when chasing gains but become risk lovers when trying to avoid a loss (often making things much worse). If you are shifting your non-risk capital into high-risk investments, youre contradicting every rule of prudence to which the stock market ascribes and asking for further problems. You can lose money on commissions by overtrading and making even worse investments. Dont let your pride stop you from selling your losers and keeping your winners.
Xenophobia
People with this psychological disorder have an extreme fear of foreigners or strangers. Even though most people consider these fears irrational, investors engage in xenophobic behavior all the time. Some of us have an inborn desire for stability and the most seemingly stable things are those that are familiar to us and close to home (country or state).
The important thing about investing is not familiarity but value. If you look at a company that happens to look new or foreign but its balance sheet looks sound, you should not eliminate the stock as a possible investment. People constantly lament that its hard to find a truly undervaluedstock, but they dont look around for one; furthermore, when everyone thinks domestic companies are more stable and try to buy in, the stock market goes up to the point of being overvalued, which ironically assures people theyre making the right choice, possibly causing a bubble. Dont take this as a commandment to quit investing domestically; just remember to scrutinize a domestic company as closely as you would a foreign one. (For ideas on how to get involved with foreign stocks, check out Go International With Foreign Index Funds.)
Concluding with a Handy List
Some problems investors face are not isolated to the investing world. Lets look at the seven deadly sins of investing that often lead investors to blindly follow the herd:
1. Pride - This occurs when you are trying to save face by holding a bad investment instead of realizing your losses. Admit when you are wrong, cut your losses, and sell your losers. At the same time, admit when you are right and keep the winners rather than trying to over-trade your way up.
2. Lust – Lust in investing makes you chase a company for its body (stock price) instead of its personality (fundamentals). Lust is a definite no-no and a cause of bubbles and crazes.
3. Avarice – This is the act of selling dependable investments and putting that money into higher-yield, higher-risk investments. This is a good way to lose your shirt--the world is cold enough without having to face it naked.
4. Wrath – This is something that always happens after a loss. You blame the companies, brokerages, brokers, advisors, the CNBC news staff, the paperboy - everyone but yourself and all because you didnt do your due diligence. Instead of losing your cool, realize that you now know what you have to do next time.
5. Gluttony – A complete lack of self-control or balance, gluttony causes you to put all your eggs in one basket, possibly an over-hyped basket that doesnt deserve your eggs (Enron, anyone?). Remember balance and diversification are essential to a portfolio. Too much of anything is exactly that: TOO MUCH!
6. Sloth – You guessed it, this means being lazy and not doing your due diligence. On the flip side, a little sloth can be OK as long as its in the context of portfolio activity. Passive investors can profit with less effort and risk than over-active investors.
7. Envy – Coveting the portfolios of successful investors and resenting them for it can eat you up. Rather than cursing successful investors, why not try to learn from them? There are worse people to emulate than Warren Buffett. Try reading a book or two: knowledge rarely harms the holder.
Conclusion
Humans are prone to herd mentality, but if you can recognize what the herd is doing and examine it rationally, you will be less likely to follow the stampede when its headed in an unprofitable direction.
The Basis of Technical Analysis
At the turn of the century, the Dow Theory laid the foundations for what was later to become modern technical analysis.
This link will help thou $WSRA BarChart Technical Analysis NITE-LYNX
http://www.barchart.com/technicals/stocks/WSRA
The Caveat Emptor symbol is displayed in place of the OTC marketplace identifier on all OTC Markets’ platforms and is distributed on market data feeds. The symbol is displayed wherever OTC Markets’ quote data is available. It is used by investors, broker-dealers, clearing firms and other industry participants when they make trading decisions.
Even though many principles of technical analysis are universal, each security will have its own idiosyncrasies.
Conclusions
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If the firm is unable to do so, and the account has remained inactive for the period of time specified by state law, the firm must report the account to the state where the account is held. The state then claims the account through a process called "escheatment," whereby the state becomes the owner of the account.
Psychological or logical may be open for debate, but there is no questioning the current price of a security. After all, it is available for all to see and nobody doubts its legitimacy.
BarChart Technical Analysis NITE-LYNX $CRCUF
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