AssemblyBoard

  Monday I am officially a member of the "Lead to Gold" investment club. They maintain investments in ten stocks at a pretty conservative standard. They are your stable well established companies, General Electric, Proctor and Gamble etc... Everyone in the club, about 15 people, seem to be just interested in learning the ropes. I get the feeling that they have much more invested in their personal portfolio's.  I hope to learn as much as I can. As you all know, right now the stock market sucks!  But according to some people, "NOW IS THE TIME TO GET IN!"    I hope they are right!    What do you think?  Got any hot tips?

I would watch closely what the DOW does on Monday. If it continues to dive, that would be a very good sign as it would signal a long-needed correction was taking place.  Have you seen some of the ridicuolus P.E.s being tossed around?
I would like to see it test the floor at around 9200 to 9500 and if that happens I think it might be a good buying opportunity for some better stocks caught in the down draft. It follwed this pattern when it hit in the high sevens a while back.
If it bounces up, it will be because of speculation and I would definitely short it...big time!
Verne

Hi David!

  My favorite investment manager was a guy who came to work everyday wearing flip-flops and shorts!  He didn't study fundamentals or read charts.  Instead, he read the National Enquirer while at work with his feet up on the desk! ;D

  His one strategy was to go the opposite way that the market was going.  He was a complete contrarian in his style and his fund made money!  He seemed to understand that the market always overreacts, based on either fear or greed, and that by not running with the herd he could make some money.

  Here is my one stock pick of the week: Oregon Steel (OS) down .98 on Friday to $17.95------ big overreaction to a fear that steel is starting a cycle down, but this company is making good money with a great P/E of 5.98!

                             God Bless,  Mark C.

Hey thanks!  Boy seems like you guys do your homework! :D :D :D

Contrary indicators are particularly interesting when it comes to options in the currency market.
Last early Spring I read in the Financial Times that there was an all time record number of contracts shorting the dollar against the Euro. I remember getting a strong feeling in my gut that somebody was going to pull the plug.
There were some very big names sitting on some of those contracts and by all indications it seemed a one-way bet.
There are some very powerful forces manipulating these markets let me tell you.
The anticpated weakness of the dollar has certainly subsequently been borne out but all those contracts expired worthless due to some incredible behind the scenes power plays by the Fed and others.
The rumor was the recent spikes in oil was to pay back some very pissed off folk.
If I had followed my instinct, I would have made an absolutely scandalous killing.
If you play your cards carefully, the current dollar situation offers the best opportunity for anyone to retire early and live well. Stagger those contracts... :)
Verne
p.s. Mark that stock looks like a good buy...

   I talked to a guy last December. He and his wife have their own seperate investments in the same stocks.  "She gets a feeling to sell but I said "No" I think I will give it some time!"   WORLDCOM!!!!!!

Well...it looks like the bounce I anticipated on Monday is materialising today.
I guess those on the sidelines were not enticed back in on Moday despite what must have been some big institutional buying to keep the market virtually sideways.
It's up 48 points at 10:30 but I am definitely sceptical. Methinks some folk have in mind locking in some profits. I still like about 9200 or thereabouts... :)
Verne

p.s. Yep! yep! yep! If you want to make a little money folks, short the market...easy cash... :)

   Last nights meeting was very interesting.  I learned that I am required to attend seminars at my own expense!  Its O.K. I am learning a lot and its fun.  Hope to be living in a beach front property soon!!! Vern I am a newbee  What/how does one "short the market"????

I do not recommend this for a beginner. I do not recommend it without a "buy- stop" order, for keep in mind that when you bet that a stock will decline (shorting the stock), it could theoretically rise indefinitely!
Here is the gist:
The short sale of stock is a bet that the price of that stock will decline. Here are the mechanics. You decide that stock "Geftakys and Sons"  (GAS) at a price of $110 is at or near its peak. You feel that Geftakys and Sons" will decline in price from this level. So you want to short the stock. You tell your broker you want to short 100 shares of "GAS" at 110. You borrow from your broker 100 shares of "GAS" at $110 and sell it to someone else.

This is the nature of the short sale. You're selling something which you borrowed. Again, you borrowed 100 shares of "GAS" at $110 and sold it to someone else. You actually borrowed the 100 shares of GAS from your stockbroker. He either has it in inventory or he borrowed it from a client or another brokerage firm. Either way, it is your broker who loans you the stock to sell to someone else.

So now what happens. Hopefully, the price of GAS goes down for you. Let's say that GAS declines to $85. At 85, you decide that GAS may not decline much further, if at all. So you want to take your profits. How do you do that? You now buy 100 shares of GAS at $85 and pay your broker back the 100 shares of GAS. You borrowed the stock at 110 and paid it back at 85. You made $25 per share in profit or $2,500. You sold the borrowed stock for $11,000 and bought it back for $8,500.

Conversely, suppose the price of GAS goes up to $125. The investor would have sold the stock for $11,000 and now might want to get out of the position. He would now have to go into the market and buy 100 shares of GAS for $12,500. He would then be returning the loaned stock at $12,500. In this case, he has a loss of $1,250.


Capisce?  :)
Verne

p.s I am serious about the buy-stop (or GTC: good- till- cancelled) precaution. If you want to try this, start with only a few shares and do your homework...
p.s. A lot of folk supposedly shorted the market (to the tune of hundreds of millions) just before 9/11.
The rumor is that the money was not collected and the records have been sanitized...remember how many brookerage firms lost data?...just a rumor mind you...

O.K People...If you have an on-line account with Ameritrade, the morons have lost a back-up take filled with personal information on a couple of hundred thousand account holders.
This is not good, not good at all. They are whining about the fact that this is all the fault of some third party vendor but that is not good enough. I recently got an invitation to open an account in exchange for a nice palm pilot and wondered what was up. This happened back in February and they are just now getting around to divulging the fact that this tape is missing. These people do not deserve your confidence in my humble opinon. If you have an account with them you should get the heck out...
Verne

The biggest one-day "rally" since 2003 huh?
Well, it certainly did not last more than a day.
I still say the fundamentals are lousy, rosy earnings reports notwithstanding.
While the current evaluations are better than they have been for some time, I still think the market is substantially over-valued. Short 'em!  ;D
Verne

Thanks for the advice.  Yet I am not experienced enough at this time.  I am currently looking for another Martha Stewart deal!  My wife and I are having dinner with an investor in two weeks.  I will ask her about shorts!  Every Friday night we walk anong the beach and admire thy neighbors houses! :D :D :D

It is very important to dream big David. Some believers have been sold a bill of goods on this score.
Not all desire is covetous, and a natural consequence of doing and being your very best is material prosperity.
This has nothing to do with religion per se.
In all your success, do not neglect to acknowledge the One Who is the giver of very good and perfect gift...
Verne

p.s you should see the plans I've got for my three acres in the V.I; God willing of course... :)

Hi eager Traders!  :)

  No, I am not Joe's friend Burt from Barstow (who is always trying to sell something to the unsuspecting) but I would like to receive a little praise for my last stock pick of the week, Oregon Steel (OS)  ;)

    Up over 2 bucks last week!  :o

  Okay---- My next pick of the week is especially for Dave M., as he requested another nice mover:   Salem Brodcasting (symbol= SALM).   The stock is a growth play, vs. a value one like OS.

   Re. shorting:  Fine explanation by Verne, but I would like to add that when shorting stock you have to pay a tick for the privilege.  This means you have to give up a point, along with any commissions or fees that you have for the trade.

    You can use options, without giving up that tick, and the only risk is the cost of the option.  For instance, you could write a covered call, if you still own Martha, by selling someone an option to buy Martha at a higher price.  If Martha tanks the option expires worthless to the buyer and you pocket the premium, but if the price rises your rising stock price compensates for the rising price of the option.

  You could also just outright purchase a "put" option (this is the same as selling short a stock, in that your option value increases as the price goes down).  Options have expiration dates, and as this date approaches the time value erodes, but if the stock price moves your way the option will increase in it's intrinsic value.

    There's a lot more to this, strategy wise, but I'm just pointing out that there are ways to hedge your bets, if you are going to try to get into trading to make a killing. 

   The best advice that I can give is to avoid becoming a trader (which I must admit I am) and instead become an investor.  A trader is a gambler, while an investor is cautiouslly diversified.  I trade for fun, and because it is a challenge, but keep the bulk of my savings in a safe diversified portfolio.

    Right now I'm trading soybean futures and I'm using options.  I've been doing this for about ten years now and at one time thought I would become a millionare doing this!  The potential to make big money is there, but it ain't easy.  After ten years I figure I'm about even  :P.

    It cost $950.00 to put on the option spread for the month of Sept., and that is all the money that I can lose from the trade.  It has a potential to make $4,000, if all works perfect, but it never does!  At this point am up about $400.00 on the trade and will let you know how it proceeds.

  Don't forget to check out SALM David M., as this is a stock I would really like to see you get into  ;).

                                                     God Bless,  Mark C.

Good point Mark. As we all know, you cannot say the word "broker" without fees and commissions coming hard and fast behind...! :)
Great call on OS. At that evaluation I was really tempted to pick up a couple K worth just for laughs...
Do you know the high and low for Salem the last 24?
What kind of upside potential do you see there?
(Bill me!  ;D)
Verne

   At the moment I am taking CLAD classes to help second language learners. I feel as if I qualify as 2LL when it comes to what you are trying to communicate to me.  But thanks!  I am learning a lot and hope to catch up to where you guys soon!  Vern, I have a clear conscience, while my wife and I are walking down the beach and I just happen to see a nice looking mansion, I turn to her and say, "Honey" "I would buy that house for you if I could!" (It is just an innocent expression of my selfless love and devotion towards her!) and if I happen to see a relatively cheaper looking house in the same area I say, "I would be perfectly happy living in that cheap house over there!" (Another sign of selfless humility!)  and Marc, I agree with your advice. I have 4 retirement plans going all very secure. (Except S.S.) I am a gambler but not with anything that would hurt if I lost it!  Right now I am playing with 25 grand. This money was part of the 15 from Martha and some from a real estate investment that made me 7 times what I paid!  Gambling is fun!!!!  But I will admit very stupid!!!!  Oh by the way what do you think about the lottery?

P.S. Pam (My wife) doesn't believe my motives are really that pure but that's O.K. The Lord knows those that are His! >:D

Good for you my friend. I just love browsing through Architectural Digest and Home and Garden. In our case fantasizing about a behemoth house is kinda silly as we only have two kids and before we know it they will  be off to college.
There is just something about attractive well-built living space! The thing that has kept us in relatively modest quarters is that even if we were to buy our dream house cash on the barrrel head, we would still be in hock to the state for R.E.T to the tune of ten grand a year! Thanks but no thanks. That puts too much of a dent in one's cash flow if you know what I mean... :)
Best of luck with your investment decisions. Concervative is good. The bulk of my shekels are now in a stable return fund yielding a measly 3 per cen annually...a very safe 3 per cent  :)
Verne

Verne,

  Salem broadcasting has a 52 wk. high of $33.10 and a low of 18.90.  It is not a value play as it has a very high P/E at 66 plus.

  It is trading near it's low right now at 19 plus, but it's profit outlook for the next year is .84 while it's last year saw .51.

  It is experiencing a lot of volatility right now and is a gun-slinger's trade right now.

  I like the company's potential and what their expanding programing is capable of in the future.  I usually lean toward value stocks, but thought David M. might want to check this one out as he learns to trade stocks.  It would be a philosophically contrarian play for him  ;).

   You will have to suffer from the up's and down's on this one, but I think patience will be rewarded by the end of next year.  Since it is trading at it's low for the year it looks like a good time to get in.  Potential to exceed last year's high is in place ,and if so would make for a doubling of stock price.

                                                 God Bless our speculations ( ;)),  Mark C.

Well, I just might pick up a hundred shares for the fun of it...thank for the info my good man!  :)
Verne

p.s.  would I have to give you a finder's fee if it turns out to be a doubler?  ;D

Hi Verne,

  Check out first what kind of broadcasting Salem does before you pull the trigger.  This will explain what I mean when I suggested that this would be a "philosophically contrarian play" on David's part  ;).

  If you do well with this stock (which I haven't bought yet btw) the only fee I will require is an invitation to visit your BVI spread when you get done with it.  :)

  Since you live in the Midwest if you could manage to keep the rain going for the next month and follow it with three months of drought I will be able to buy a place next door to yours with my soybean profits ;D!

                                             God Bless,  Mark C.

                 

I will also check this out with my club members!  Thanks!  Keep em coming!

Hey Mark:
I have been watching those soybean numbers. Looks like the bears are making a run. I hope you are still ahead... :)
Verne

Thanks for watching Verne!

  I do not hold an outright long futures contract that goes up and down with the market, but have what is called a "bull spread" using options on futures.

  I purchased one Sept. 640 call option and sold one 720 call option in the same month.  These prices are called "strikes": Sept. is at about 626 right now, and as the price rises the value on the above options increase.

  When the price of the market reaches my strike the value will increase at a greater rate than the one I sold at the higher strike.  The spread between the two prices will increase in my favor and allow for a profit.  If it goes right up to expiration then the 720, if still below that strike, will expire worthless while the one "in the money" will have intrinsic value of about $4,000.

  If beans just go down and never reach my strike I keep the premium for the sale of the 720 and lose the premium I paid for the 640.  All it will take is one weather scare this summer to tack on another dollar to the price and make me some dough.

  As to your private message:  I read it and am aware of the situation.

   Bad day for Oregon Steel today  :P!  Keep watching, or maybe buy a little at this point.  You need nerves of steel to hang in with these value stocks.

                                         God Bless,  Mark C.

Sophisticated trading my friend. I think you are sitting pretty.
Well folks, wil tomorrow be the day that we smash through the DOW 10K floor??!!
I think it should have happened long ago and that some folks are playing us for suckers.
The Chinese are rumored to be getting ready to reposition themselves vis a vis the U.S dolllar.
Something's gotta give... ;D
Verne

O.K. bro we shall see!!!

Verne,

  Nah, if a truck driver can figure it out then anyone can! ;)--- I still love to talk this stuff though.

        MARK'S STOCK PICK OF THE WEEK

  AMCC :  A chip company from the San Diego area that has super great valuations---- the P/E is almost the exact price of the stock!  Just announced a good quarter with increased profit, and is trading for less than $3.00 now.

  You will have to be patient with these value stocks, as in a 3 to 5 year holding pattern, but I think you will be rewarded for the wait.  I am going to buy some of this next week and will let you know how it goes. 

  I noticed Oregon Steel has been like a roller coaster (seems to mimic the DOW and energy stocks).   If you've got the nerve this still has great fundamentals and in a few years it could easily double in price from where it is now.  (notice how I said "could"-----  This is a famous trick of financial advisers as an out when they ruin their clients portfolio!! ;)

     Gold stocks have tanked (I have some BGO- Bema gold--- a Canadian company Marcia!) and should have followed my own advice and sold half when it doubled in price (from $2.00 to $4.00) in a year's time.  I still think gold will make a move up in the next couple of months and so it might be good to have a little exposure to this area.  BGO has made some great discoveries, but it remains to be seen if they are more than just great prospectors and can actually run a company! ???

    Disclaimer: Don't follow advice from truck drivers on BB's who won't even follow the things they recommend to others ;D.

                                              God bless, Mark C.

   

Me too man!
Don't you just love it when they are interviewing some stock guru making grand statements about how great a particular group of stocks are, and then end the interview by asking:

So, are any of those stocks in your portfolio?

and some of 'em get this dumbfounded look on ther faces?!  ;D
Verne

  Mark, I remember the Gold market back in the early 80's.  I have wondered if were are headed toward something similar. (The devalueing of the dollar). Why are you expecting it to go up?  Vern great call!  I really enjoy reading your post.  You guys seem to be doing your homework! Can I copy?? I honestly don't know anything about all of this stuff. The Interact curriculum I mentioned on another thread has a unit on stocks!  If I was teaching 6th grade I would do it just to learn for myself! Pam and I are having dinner with a financial advisor May 10. I think we are going to hear a shpeal about "How to get rich quick"  Any experience with these kinds of people I should know about??

Hi David!

  Gold is a commodity, and I have a better feel for commodities vs. trying to figure out all that goes into what makes a good stock investment; companies are very complicated, but supply and demand fundamentals are easy.  I believe gold will go up based on certain basic fundamentals such as rising interest rates.  I think every investor should have a little gold as a hedge against a possible major disruptive event in the World (Great Trib.?)

   Re. financial advisors:  No one can predict the future (even me  ;)) and I firmly believe that you should not spend one cent unless you understand what you're being sold, and what the total cost of the investment will be.

   Some of these advisors sell investments with huge loads (sales charges).  They promise a high interest return and then the loads and expenses for the investment eat up a huge amount of the profit.

  Watch out for how they compare the performance of the instrument they are pushing.  If they compare it to the S&P, it is below water right now, and as such anything else could look positive.

   I would advise learning and investing on your own.  You can begin by paper trading (following stocks, etc. without putting any money in and seeing how it goes).  After this start small, keep diversified, and you will do at least as well as a mutual fund (mostly because you only have commissions to pay on your own-- my Scottrade account charges $7.00 a a trade.)

  Be more of an investor than a trader by not buying on margin and looking mostly for deep value stocks to buy with a 3 to 5 year window.  Of course, if the stock starts to fall below 10% best to unload it------ you can't pick all winners all the time.

   Go ahead, once in a while, and pick a growth stock, but trail it with sell-stops as it moves up.

                                              God Bless,  Mark C.

It looks like declining oil futures shored things up on Friday along with some slightly better than expected eranings statements. I am guessing a lot of the up-tick also had to do with folks with less than the courage of their convictions covering their hinies...er...short positions, (not a bad idea actually)  ;D
Well, Monday is another day huh?  Expect the Fed to tighten on Tuesday. :)
Verne

This is most excellent advice David. Some companies, including Forex, will even let you set up a dummy account to get some practice. They also accept mini-accounts of as little as 300 clams!  :)
Verne

  Thanks! :)

I had a very enjoyable evening with my investment club last night.The topic of ENRON came up. What and how did this happen?  I've read a few things, "Their advisor was their auditor.." What, how?  The more I learn the less secure I feel. What garuntees do I have that I won't be burned? Also what info do you know about worldcom.  Martha stewart is up to $ 26. No, make that $27!!! Wish I was back in!!!!  :'( :'(As of tomorrow I am back in!!!!! :D :D :D

Martha's stock shot up from $21 two weeks ago to $27!!  I think it is going back up to mid 30's!!!  If not soon probably 6 months from now???!!!  (I only put 5 grand in this time. Thinking I should go more!) The more I think about it MSO is on its way back and beyond.  The Martha hype is over and now she is going to kick butt!  Yep I think it is on its way up!!!!!!

Hi David M.!

  I don't agree re. Martha, but if you must plunk down your $'s make sure and trail any move up with a stop-loss order.

      MARK C.'s STOCK PICK OF THE WEEK!!!!

   XTO Energy.  With the drop in Crude energy stocks have dropped and there is a chance to pick-up some of these at a good price.  Crude will go back up and also Natural gas will see a bump this summer and these things will benefit XTO.

  Also, if you have the nerve, buy some gold stock, like BGO (Bema Gold).  BGO down to $1.72 and this is way below value. 

                                                     God Bless,  Mark C.

Well! well! well!
It sure looks like 10500 is the strike point for a lot of us. The DOW teased up over that and immediately it looked as if the profit-takers swooped in.
Looks like I was wrong about a DOW 92500 this year. If it does not see a steep decline the next few days, 12000 here we come!  :)
Verne

p.s. I'm jumping in if it hits 10600 in the next two weeks...

p.p.s They are taking the oil speculators out on stretchers. As Bob Brinker said, this a" take no prisoners" decline with the blood freely flowing. What was that Goldman-Sachs said about impending 80 per bbl??!
The guys are truly hysterical; better yet, pupteteers extraordinaire...you can bet quite a few folk made a killing as a result of the panic buying...hyuk! hyuk! hyuk!

This market is alive! It is also sneaky.
What is it about this 10500 ceiling that refuses to give??!!
It just keeps roping in the suckers and then retreating with a snicker.
Well, I for one am staying put. There is something real fishy going on.
Any guesses??!!  :)
Verne

   Your guesses are better than mine!   

Hey Mark, After hitting $21 a month ago she's up past $27  Yep I really think this is just the start! (Perhaps I shouldn't have sold?) By September she will be up in the mid thirties again!! I  better buy more!  :D :D

Dang! It closed over $28!!!!

  Today's close $28.50!!! :D

AAAAAHHHHHH! She is spikng $30!!!  Time to get in!!!!!!!!!!!!!!! :D

Hello to all BB investors! :D

   BGO (Bema Gold) up from my last alert a few weeks backat $1.76 to $2.33 today.   Up on climbing gold prices even in the face of a rising dollar.

 XTO, another recent recommendation of mine, up about $6.00 in the last few weeks to $34.38!  XTO up on surging crude prices nearing $60.00 a barrel.

  Soybeans have surged to new highs as well!  I closed out the trade I had on the option spread with a nice profit of $1650.00 on my initial $900.00 investment.  Is it really as hot and dry in the Midwest as grain traders seem to think? 

    Commodity related stocks are doing well as funds pour money into basic materials and food stuffs because they see demand outstripping supply in the future.

  Go ahead and trade Martha Dave, but use trailing stops, as the valuations for this company are too high for where it's trading at.  I still want you to check out Salem Broadcasting (SALM) as this company has the most potential for growth of any broadcasting company out there.

    Am taking some of my profits and sending them to Steve Harris for his Romanian Mission work and would encourage others to consider this as well.  He has a container ready to go and needs money for shipping costs.

                                            God Bless,  Mark C.

   

Great info Mark!  Thanks!

She's at $$$$$30.50 ;D

  I just bought 1 Yes 1 share of Berkshire Hathaway BRK.B  at 3 grand!!!! Yes 3 grand!!!!  Why????   It is the stock for See's Candies!!! ;D ;D ;D ;D  It has gone from 1 to 3 in the last 3 years!  NOT BAAAAAD!

If you are heavily weighted in equities or even in an index fund, you had better start minding the store...something's up...or should I say down??!!
Call your broker and flee to the safe haven of a money market fund..trust me, you'll be much better off...
I can trade directly and yesterday moved EVERYTHING...!
Verne

 


The following post comes from Mark Campbell:


Note:  Opinions expressed within the "quote" box are those of Mark Campbell, and do not necessarily represent those of the management ;D ;D.  (See "Mark Campbell By Proxy" thread.)

I agree that there are some great buys for the perceptive, and those willing to risk some capital.
10,500 has been my medium term floor for being in equities and I am wondering if the long anticipated China effect is starting to take its toll. The trend the last weeks has been downward. How long can we continue to soak up 80% of all global capitilization and still pretend to be a prosperous country? I heard George Souros has made a huge bet against the dollar...he is very rarely wrong...they call him one-way George, and for good reason...

These days, Cathy & I find ourselves investing heavily in petroleum products... :'( :'(

This is a test post!

    I'm just trying to see if I can post now.

                                    God Bless, Mark C.

 Wunderbar!!!! :) :)

   It appears I can now post!

 Verne:  If one invests in "bubble" momentum stocks (like Google) that are trading way, way, beyond reasonable valuations it can be expected that such speculations will result in getting your clock cleaned eventually.

   If one instead searches for deep value stocks that have fallen out of favor with high-flying traders, and you can wait 3 to 5 years, your patience will be rewarded.

   As big a mover and shaker as George Soros is, his trading actions alone cannot cause a dollar meltdown.   He may be known as "one way George", and that is how to hit trading home runs, but you can bet he hedges himself against mistaken bets.

   Even big traders are only correct about 20% of the time, and this means that the most important aspect of trading is money management.  This means that only 2% of their captial is ever put at risk of loss.  The largest part of Soros $'s are in very conservative and safe places, and his risk captial is the smallest percentage of his positions.

                                     God bless,  Mark C.

My new rule is that if you are not paying a nice dividend and reasonably free of debt, I am not interested. The U.S is living in an illusion of prosperity but we are in fact in economic trouble, deep trouble. George may be hedging his bets on the future of the dollar, but my money is on his call. I am surprised that people shorting the dollar have any takers at all.
I agree with you about the high-flyers. The key is knowing when to unload... ;D
Verne