Owner: Rant About It URL:http://rantaboutit.blogspot.com Join Date: Tue, 13 Feb 2007 00:13:47 -0600 Rating:0 Site Description: The purpose of this blog is to educate every reader including me about trading in stocks by understanding the fundamentals and techicals behind it... Site statistics:Click here
U.S. Economy: We Make and Sell Debts 2007-04-25 02:46:00 From the "oh, puh-leez" school of economics comes this headline from the recent G7 summit. A week ago the Federal Reserve estimated that domestic US GDP grew at an annual rate of 2.2%; after stripping out the more questionable data it's more like zero growth. Reminds me of the old Soviet Union: everything was fine until things imploded the next day. While not out of the woods yet, according to the ministers the global economy is enjoying its strongest sustained expansion in more than 30 years and is in the process of becoming more "balanced." Sounds pretty promising ... except that China has surpassed the US and is now the 2nd largest exporter in the world, even as our trade deficit has gone from $28 to $45 billion. Those G7 ministers must be looking at things standing on their heads ... upside down, that is. Of course you wouldn't want to rock the G7 boat lest the guy next to you figure it out and start selling first. 2nd place is not where you want to be when that landslide begins Read more:Debts
Glossary - 1 2007-04-11 09:39:00 List of stock/investment related wordsAccountingaccounts payableaccounts receivableaccumulated depreciationappreciationassetasset/equity ratioauditbalance sheetcash flowcash flow statementdebt/asset ratiodebt ratiodepreciationequityGAAPincome statementintangible assetliabilitynet marginoperating assetoperating cash flowspre-depreciation profitpre-tax profit marginprofit and loss statementprofit marginReturn on AssetsReturn on CapitalReturn on EquityReturn on Invested CapitalReturn on InvestmentReturn on SalesReturn on Total AssetsroyaltySEC filingshareholders' equitystockholders' equitytangible assettangible net worthtotal assetsBondsaccumulation bondagency bondassessment bondasset-backed securityassumed bondauthority bondbaby bondbalanced fundbearer bondbondbond marketcallable bondcalled bondcatastrophe bondcertificateless municipal bondcombination bondcommodity-backed bondcompanion bondsconsolidated bondconvertible bondcorporate bondcorporate trustcurrent coupon bonddebenturedeep-d Read more:Glossary
Products & Services 2007-01-21 11:37:00 A list of sponsored products and services Educate Yourself About Stocks & InvestingTop Penny Stock ProfessionalsFinancial Analysis & Investment SoftwareBuy Homes For Bargain PricesLearn To Trade In ForexCool CellPhone Deals
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Earnings Trends: Positive and Negative Surprises 2007-05-02 05:48:00 Here is an interesting chart displaying the earnings trend of S&P 500 companies.Column 1 represents 10 basic sectors.Column 2 represents Q1 median growth year-over-year.Column 3 represents Q2 median projected growth year-over-year.Column 4 represents 2006 median growth.Column 5 represents 2007 median projected growth.Column 6 represents the % of the companies, that have reported earnings in Q2.Column 7 represents the median % surprize factor.Column 8 represents the number of positive surprise.Column 9 represents the number of negative surprise.Column 10 represents the number of match as expected by analysts/experts.Among S&P 500 companies, 60% of them have already reported earnings. Positive
surprizes turned out be 4 times that of negative surprises. There were 201 positive surprises and 53 negative surprises. All in all, most of the sectors had positive surprises than negative surprises, except for Utilities and Telecom sector. The median S&P500 company is expected to post double Read more:Earnings
, Trends
, Negative
Dow Record High ... Don't Believe the Hype 2007-05-01 20:21:00 The big headline a few weeks ago was the record high hit by the Dow Jones average. Of course what you didn't read or hear at the time was that the ratio of declining to advancing shares was 1800 to 1300. In other words, even as the Dow was hitting its stride the market was giving way beneath investors' feet. How should an investor interpret mixed messages like that? The answer may lie in the events buried on page 30 of the Wall Street Journal a day before the historic high; you see, China had delayed the release of Q1 economic statistics and that did not portend well. Of course followers of sino-economics were not surprised at all. China had been overheating for decades and inflation was always on the horizon. Now the Chinese faced the inevitable need to raise interest rates and hike bank reserves.China delayed the release of economic statistics until after markets closed ... this was no surprise as the economy had been overheating for decades and inflation had been a rising specter. Read more:Record
Have You Considered Inflation ? 2007-05-06 07:59:00 Knowing how to work with the numbers in a company's financial statements is an essential skill for stock investors. Sound knowledge of company's balance sheet, income statement and cash flow statement helps make a smart investment choice. That said, have you considered inflation while researching a company's financial statements ? Most probably not. Infact inflation can fool even the most sophisticated investors. Let us find out why inflation should be accounted for, when analyzing financial statements.What Is Inflation
?Inflation is the rate at which the general level of prices for goods and services is rising and causing a fall in purchasing power. As inflation rises, every dollar you own pays for a smaller amount of a good or service. If, for example, the inflation rate is 2% annually, a $1 pack of gum would theoretically cost $1.02 in a year. Your one dollar would no longer pay for the whole pack of gum. (Source: Investopedia)ExampleLet us take an example of a company called Fool
Why The Dow Kept Going Up ? 2007-05-11 10:58:00 Dow Jones finally fell nearly 150 points. The reason for the fall was blamed at higher oil prices, weak economic indicators and lackluster retail sales. A variety of gold, silver, steel and oil stocks slumped. Home builders, health care and a variety of tech stocks sank too.However before this fall, stocks have gained over the last 5 weeks with Dow reaching an all-time high, the S&P 500 within reach of an all-time high and the Nasdaq at a six-year high. Many investors were confused as to why the market reached such levels, even though the dollar is weak, the oil prices are rising and the housing market is bust.Take a look at this video to understand why the stock market is strong.Market SnapshotMarch trade gap widened more than expected and that April import prices rose more than expected, both because of higher oil and gas prices.Retailers said April sales were hurt by the impact from higher oil and gas prices and the fallout in the housing market.Concerns about Iran, will hurt the U. Read more:Going
How Company Buyback Makes A Difference 2007-05-08 09:49:00 Ask most investors about how buying a stock can help them build wealth, and the answer you will get is by two ways, stock price appreciation and dividends. However many overlook the third way, stock buyback. Let us find out more about this third way.The Meaning of BuybacksA stock buyback is nothing but a company buying back its shares from the marketplace. Buyback can be thought as a company investing in itself. With the extra cash in hand, the company can use it to buy its own shares. These shares are absorbed by the company leading to reduced number of outstanding shares in the market. When this happens, the ownership of each investor increases because there are fewer shares in all. Company buybacks are usually perceived by the market as a positive thing which often causes the share price to shoot up.Typically, buybacks are carried out in one of two ways:Tender Offer: Shareholders may be presented with a tender offer by the company to tender a portion or all of their shares within a
5 Reasons Why Investors Lose Money 2007-05-15 08:08:00 Investors have a number of weaknesses which often result in investment failure. Identifying these weaknesses is the first step to reducing them. The following are 5 key reasons why investors lose money.EmotionsMoney
is important to our survival, social status and way of life and therefore dealing with finances is an emotional subject. As a result emotions tend to have exceptionally negative consequences on our investment decision making. When our investments are doing well, we tend to add to our positions or hold on to our investments too long. Alternatively, when our investments are doing poorly we tend to sell our positions in fear of losing money. This type of reaction is not healthy for making successful investments. Emotional investment decisions tend to cause the investor to buy high and sell low. Obviously this is not the best strategy.Solution: Learn to control your emotions.TrendIn the bull market everyone gets along and agree on the current hot market. However, few investors Read more:Reasons
, Investors
Weak Housing Market Affects Stock Market 2007-05-12 05:12:00 The National Association of Realtors (NAR) expected the home prices to finish down for the year, which would be the first drop since 1968. Single-family homes are expected to decline by 1%,to $219,800. The number of home sales is also expected to dip from 6.48 million in 2006 to 6.29 million in 2007, a drop of 2.7%. Experts believe speculative investing in real estate is not going to work any more and buyer should be in for long-term. In 2008, NAR is forecasting price gains of 1.4 % for existing homes and 2.2 % for new homes. NAR also expects interest rates, currently at about 6.16 % for a 30-year fixed-rate loan, to rise gradually to about 6.5 % by the Q4.Subprime Lending IndustrySubprime lending industry has added to the declining home prices. High foreclosures and forced sales all add up to the already increasing inventory, expectedly hurting the real estate industry. Loan originators are tightening up lending standards this year in response to increasing defaults among subprime bor Read more:Housing
, Market
, Stock
, Stock Market
Is The Bull Market Over For Precious Metals ? 2007-05-18 07:13:00 In general analyst believe precious metal investments currently represent great value in comparison to other investment opportunities. It is important to look at investing from as broad an overview as possible. Looking at a few months of a stock chart is like reading only a few sentences in an entire book. You only get part of the story. It is much easier to make a profit investing in a very slow moving, long term monthly chart, than a short term intra day chart. When an investor backs up and reads the full story, the picture and strategy to make money becomes clearer. It is believed that commodities in general and precious metals specifically are currently available at a sale price.So what does the story of investing look like today? We know that as individuals people can be very unique. However, group behavior is much more predictable. On average, a large group of people will react in a similar fashion under certain circumstances. Knowing this fact can help us understand investing pa Read more:Market
, Metals
Blackstone IPO: An Investment Opportunity 2007-05-23 06:00:00 For the first time China has decided to make a direct investment in a U.S. private equity fund by investing $3 billion from its currency reserves of $1.2 trillion in private equity firm in U.S. called The Blackstone
Group.The Blackstone GroupPrivate equity firms buy companies or take controlling stakes, cut costs, restructure the businesses and sell them later for a profit. They usually borrow two-thirds of the money needed to finance their purchases, making for a high-risk, high-return investment strategy. A record $911 billion was invested globally in private equity deals last year, up from $471 billion the prior year. Blackstone group is the second-largest U.S. private equity firm.Blackstone has invested in over 100 companies in a variety of industries, geographies and economic environments. Blackstone's current holdings include such diverse companies as Cadbury Schweppes, Center Parcs UK, CineWorld, Deutsche Telekom, Extended Stay America, Michaels Stores, The Nielsen Company, S Read more:Opportunity
China Goes Parabolic 2007-05-22 14:30:00 During cyclical recoveries such as the one now underway in the global equity markets copper is the commodity to watch. In fact, there has never been a cyclical recovery in which copper was left behind, which makes its current behavior so troubling - it just does not support the global rally that began in 2003 with emerging markets.As usual, U.S. equity markets languished even as the rest of the world exploded, owing to the fact that our primary export is not goods or services, but debt. But I digress. Back to the price of copper and the global rally now underway and in full swing across (most of) the globe. To get a full perspective we have to go back to the beginning in January 2003 when the biggest % movers among the relevant indicators broke down as follows: Copper up 280%China
(Shanghai) up 272%Dow up 54%S&P 500 up 57%NASDAQ up 59%Gasoline (NY harbor) up 92% Over that period of time the USD has declined 30% (trade weighted basis). Since the only measure that means anything is w
Stock Review: Gmarket GMKT 2007-05-21 22:16:00 Gmarket Inc. GMKT is a retail e-commerce marketplace in Korea. They offer the buyers a wide range of products to choose among. The potential buyers can also get hold of products in small or large quantities, thus providing the desired flexibility. Sellers are provided with flexible sales solutions. Sellers can utilize Gmarket's trading platform, training and customer support system and delivery services. Popular products listed for sale includes apparel, beauty products, computers, electronics, furniture and jewelry. These products are coupled with product information, including pictures, product descriptions and customer reviews and commentary. (Source: Google Finance)Business SummaryGmarket has revolutionized the collectibles market by bringing together buyers and sellers internationally in a huge, never-ending yard sale and auction. Large international companies, sell their newest products and offer services using competitive auctions and fixed-priced storefronts. Regional searches Read more:Stock
How To Determine Management Effectiveness 2007-05-29 17:43:00 Investors and traders both use alot of ratios to deduce whether to buy/sell/short a security. With so many ratios to consider, it can get confusing, especially when 2 ratios almost look alike.Consider return on equity (ROE) and return on assets (ROA). At first glance they do look similar. Both measure some kind of return and is some way are related to the company's earnings from their investments. Obviously both ratios represent different things. A closer look at these two ratios reveals some key differences. Let us find out more.Return on equity (ROE)Of all the fundamental ratios that investors look at, one of the most important is return on equity. ROE is nothing but a measure of how much profit a company generates with the money shareholders have invested. In other words how effectively the company uses the money invested by investors. This tells you alot about how good the management of the company is.Return on Equity = (Annual Net Income/Average Shareholders' Equity)The net inco Read more:Management
Short Selling: Squeeze, Short-Interest, Short-Interest Ratio 2007-05-31 00:08:00 In general, people think of investing as buying an asset, holding it while it appreciates in value, and then eventually selling to make a profit. The exact opposite of that is short selling. You make money when the asset falls in value. Let us take a quick look at what is short selling.A Review of Short
SellingWhen you sell X number of stocks that you do not own, but you promise to buy it back in future is called short selling. So how can you sell a stock you do not own ? Basically your broker will lend it to you. Sooner or later you must buy back the same X number of stocks (covering) and return them back to your broker. When you buy back the stock at the lower price than you sold earlier, you obviously made a profit on the difference. However if the stock price rises, you end up losing money. Most of the time, you can hold a short for as long as you want. However, you can be forced to cover if the lender wants back the stock you borrowed. This is known as being called away. If there Read more:Squeeze
, Interest
, Ratio
Private Equity Investing: Whose Next 2007-06-05 12:13:00 Last month China agreed to buy a stake in Blackstone Group, one of the leading private equity firms in the United States. The question now is which governments will be the next to partner up with a major private equity firm?Oil producing nations are believed to be the most likely candidates. The rise in the oil prices has lead to huge trade surpluses and lots of cash for Middle East and Central Asian countries. The cumulative surplus in trade and investments for oil-producing countries grew to 20% of GDP last year, up from 5.4% in 2002. Oil states don't publicize much about their investments so tracking where their funds is difficult. So far the oil nations have invested most of their oil riches into low-risk assets like U.S. Treasury bonds. But some governments have been putting money into more aggressive, return-oriented investment funds. Not only government, but retail investors around the world are investing in the world of private equity.UAE has formed private equity firms which Read more:Private
, Equity
, Investing
, Private Equity
How Can Resistance & Support Help Traders ? 2007-06-06 22:39:00 People who look at technical analysis to trade stocks, should always know the concepts of resistance and support levels. They are undoubtedly two of the most highly discussed attributes of technical analysis. They seem complex to begin with, but they actually are not. Lets look at these levels in depth to get a better understanding of them. Traders use resistance and support levels to refer to price levels on charts that tend to act as barriers from preventing the price of the stock from getting pushed in a certain direction.Basics of Resistance
& Support
LevelMost experienced traders who closely follow the price pattern of the stocks know how at a certain price level, the price of the stock doesnt move upward or downward much furthur. Let us look at an example to understand this pattern. Say in March 2006, a company Steady Inc. was priced at $37/stock. For the next several months Steady Inc's stock price fails to get above $39/stock. Even though it has gotten very close to moving ab
Value Investing versus Growth Investing: Know The Difference 2007-06-11 05:41:00 Typically when you read about investing, you would come across the terms value investing and growth investing. Both mean different things, and what investment style you would use depends on the kind of person you are. I can bet, that most investors do not really understand the difference between value investing and growth investing. If you are one of them, this would be a good time to get it right.ValueInvesting
Value investing is the strategy of selecting stocks that trade for less than what they are really worth. Value investors keep looking for stocks that are under priced but have excellent financial record. This information can be obtained by looking at the financial statements (balance sheet, income statement). Value investors typically take into consideration attributes like low price to earnings ratio (P/E), price to book ratio (P/B), price to sales ratio (P/S) and high dividend yields. In short, value is defined based on low valuations (low price ratios and high dividend yiel Read more:versus
, Growth
Sector Overlook: Computer Hardware 2007-06-10 20:08:00 Analyst estimate the unit sales of personal computers in 2007 will grow 10-12%, partly due to the release of Microsoft's MSFT new operating system Microsoft Vista. Vista sales in the first 2 months of release were better than expected.Long-term fundamentals in the computer industry looks attractive, thanks to a global appetite for technology products, which should boost productivity and communications. Add to that global competition, which would force companies to be more productive. Many vendors have also streamlined operations during the industry's downturn, thus boosting their longer-term profit potential.Emerging MarketsThe economy of emerging markets is growing rapidly and so it their purchasing power. Analyst believe with high purchasing power, more people in emerging markets will buy personal computers, therefore increasing their demand. Markets in Asia, Eastern Europe, Latin America are the ones to see the fastest growth. This ever-growing demand will boost computer hardware Read more:Computer
, Hardware
Which Penny Stocks To Avoid 2007-06-19 05:04:00 Penny stock is a stock that trades at a relatively low price and market cap, usually outside of the major market exchanges. These types of stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. They will often trade over the counter through the OTCBB and pink sheets.There are many good penny stock investments available, which could turn a small amount of capital into a small fortune very quickly. However, to discover these you need to know what to look for and what to avoid. When searching for that one big payoff, steer clear of the following examples.The Phone SalesmanAnyone who is attempting to sell you investments over the phone should be considered an enemy. They have high-pressure sales tactics, and effective, believable arguments. However, they are not doing you any favors, no matter how good they make an investment sound. They are operating in the Read more:Penny
, Stocks
, Avoid
Variety of ETFs 2007-06-19 01:51:00 Exchange Traded Funds ETFs have become very popular with institutional investors over the last 10 years. However only in the past couple of years have ETFs started to become attractive investment options for retail investors like you and me. More and more retail investors are now talking about ETFs. A part of the reason why most investors did not use ETFs in their portfolio is because they seem to be a bit confusing to begin with. ETFs were originally designed to track popular indexes like the Nasdaq 100. Unlike indexes, however, ETFs are traded on exchanges and their prices fluctuate throughout the day. In short they trade like stocks.The major advantages that ETFs offer investors are Diversification of investments Low risk Low costs than mutual or index funds, Flexibility because they trade like stocks, and Tax advantages like the ability to defer capital gains. However, not all ETFs are created equal and there are actually 4 different types for investors to choose from:UIT'sUnit I Read more:Variety
More On Housing Sector 2007-06-24 23:43:00 Overvalue-Undervalue Valuation54 metro areas were judged to be overvalued during Q1 2007, representing a decline from 62 metro areas during the Q3 2006. More important were declines in the share of all housing units, and real estate assets, judged to be overvalued. In terms of housing units, the percent deemed to be overvalued declined from 17% to 14%. In terms of single-family asset value, the percent deemed to be overvalued declined from 33% to 25%.California, Arizona, Florida, parts of Oregon, Washington and New York were judged to be overvalued. Parts of mid-west states were judged to be undervalued.House Price AppreciationHouse prices have been resilient in the interior West, though we see overvaluation there increasing, making those gains precarious. Bend, Oregon and Prescott, Arizona are now the nation’s most overvalued markets. Alternatively, price gains in Texas seem more firmly based, as valuations there are attractive by historical standards.157 of 317 metro areas su Read more:Housing
How Does Companies Get Listed-Delisted 2007-06-26 22:55:00 During the bull market, everyone is happy. More and more companies get listed and start raking in the money. However when the bull market stalls, some companies crash to rock bottom and could be pushed towards getting delisted. Investing in companies that are delisted can be extremely risky. Lets find out how and why delisting occurs and what does that mean for both the company being delisted as well as the investors that hold the company stock.Getting Listed On An ExchangeMost tech companies try to get listed on the Nasdaq. To get listed on Nasdaq, a company must meet the minimum standards required. For example, the company must pay a $5,000 application fee before its stock can even be considered for listing, and it can expect to pay at least $100,000 in listing fees if successful. The company must have at least 1.1 million public shares outstanding worth a total of at least $8 million and a share price of at least $5 per share. There are numerous other rules that apply, but until a c Read more:Companies
4 Reasons To Sell Your Penny Stocks 2007-06-26 13:41:00 Penny stock is a stock that trades at a relatively low price and market cap. Penny stocks are generally attractive to retail investors who want to make a quick buck. A 10 cent increase on a stock worth $1 is equivalent to 10% returns. A 10 cent increase on a stock worth $10 is equivalent to only 1% returns. A small increment in a penny stock can yield high returns. This makes it really attractive to many investors. However even a 10 cent drop can reduce retail investors investment drastically. Therefore penny stocks should be traded with caution.DiversifyIt is alrite to buy penny stocks at low prices and then eventually sell it off at high prices, provided you thoroughly understand the company's business model and financial statements. It is advisable to diversify your penny stock portfolio to spread your money.4 Reasons
To Sell Your Penny StockThere will be times when you might want to sell your stock for only a small profit or no profit at all. Bad news of almost any sort can drive Read more:Penny
, Stocks
, Penny Stocks
Sector Overlook: Food Retail Sub-Industry 2007-06-30 21:26:00 Analysts and experts believe that food retailers have developed strategies focusing on differentiating themselves from competitors through diverse products and services rather than low prices. The low prices is going to hurt the industry and make it unsustainable for most. By providing niche products and services food retailers have avoided a price war. As a result of these strategies, analysts believe traditional grocery chains will be gain sizable market share, with average comparable store sales growth of 5-6% in the fiscal year 2007.Remodeling Existing StoresImproving sales trends will continue to reflect food retailers' progress in differentiating store offerings from those of low-price competitors. Most food retailers will focus on remodeling their existing stores, rather than opening new ones. This will help ease the air of competition, and enable the industry stay focused.Labor Union ContractsWith newly renegotiated labor union contracts and improved sales growth will help the Read more:Retail
ClickSoftware Technologies Ltd. (CKSW) 2007-07-31 22:27:00 ClickSoftware Technologies, Ltd. (CKSW) provides mobile workforce management and service optimization solutions. The company offers service optimization suite. Their ClickSchedule enables companies to automate and optimize their service resources; ClickFix, a diagnostic and trouble-shooting tool; ClickAnalyze, ClickPlan, ClickRoster, and ClickForecast that enable corporate decision makers to analyze past performance, monitor current performance, and plan for future service needs; ClickMobile, a wireless workforce management product for monitoring field workforce activities and reducing the labor of dispatching personnel; and ClickLocate that captures the location information of a field service engineer and/or his or her vehicle, and integrates it with ClickSchedule for use in scheduling. ClickSoftware Technologies also offers various consulting services. The company's products are used by customers in the telecommunications, utilities, financial services, aerospace, defense, semi-cond
Will Beazer Survive ? 2007-11-28 00:01:00 Beazer Homes (BZH) CEO Ian McCarthy anticipates 2008 to be another difficult year. He says the Atlanta-based builder is focused on managing issues that have surfaced over the past few months, such as a recent financial restatement and an internal investigation concerning compliance. The company also is installing a downturn management plan that will focus on cash savings across the board.Beazer's latest battle plans were announced today. The company also revealed some of its fourth-quarter results. Beazer is in a restatement period until May 15, 2008, so the quarterly results were incomplete. The most telling figure from the report was the cancellation rate, which logged in at a stunning 68 percent.Leslie Kratcoski, Beazer's vice president, says that "headline issues" had a significant impact on the percentage. Federal, internal, and local investigations, top executive firings, default notices, and heavy losses have kept the builder mired in controversy this year. And McCarthy says t
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