http://www.investorbootcamponline.com/_rss/bootcamp.xml Market insightsen-caSat, 04 Feb 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/market-timing-stock-market-on-fire.html http://www.investorbootcamponline.com/blog/market-timing-stock-market-on-fire.html This is the point in the stock market’s rally where people are starting to notice it’s actually going higher. But many won’t notice, or take action, until later. But like every other market rally in history, this is also the point where we can mark it on the calendar that if there is any more delay, you’re too late! Here’s how the stock market’s rally has unfolded. On October 4th, the market averages undercut the lows that had previously held. The August 9th low was significant as it marked the end of a ten day plunge that rattled the markets. The market spent two months digesting the massive wipe out although many stocks continued to undergo significant selling. Resource stocks that trade on the TSX and TSXV were hard hit as commodity markets deepened their corrections with no meaningful bounce. The trigger of course was the fear Greece debt issues were going to bury the global banking industry. Sellers Hit The Panic ButtonThe renewed selling starting late September rekindled investor anxiety. When the market undercut the August lows, fear intensified pushing the last of the die hard bulls to sell their stocks and commodities. But by this time, net selling was a cycle that was nearly nine months long for many stocks. The swing to negative sentiment was complete and big money that had been waiting for a wash out swooped in and started buying. The market reversed ripping higher for a big gain. The very heavy volume highlights both the heavy selling and the heavy buying that ultimately took over. This bullish reversal occurred at exactly the right moment to define the low in the 2011 correction. A gain of more than 10% in the market averages quickly unfolded catching many mutual fund managers off guard. The story behind the scenes was they didn't want to miss the next 10%. As it turns out they had time to build positions as the market consolidated. In fact, in mid November it appeared the rally was failing. That kept many investors on the side lines believing the stock market was still in trouble. The reality is, for many stocks it was. But a handful of stocks in high growth companies were running up to new high territory starting as early as late September. In mid December, the rally went into the next phase as buying spread to more U.S. stocks. The Canadian market was off the lows but resource stocks were still conspicuously absent by their inability to counter down trends. From the first trading day of the New Year momentum kicked in and it was clear the power from the October advance was on display again. But now many of the leaders, i.e. the market’s hot stocks, were at their last entry points. Wait Longer and Market Timing Is LostHistorically, the break outs in many stocks, accompanied by the powerful run up in October, are reliable signals a correction is over. We're seeing that now as the remaining laggards, resource stocks and commodities, are now working on recoveries as hot stocks get away. The U.S. market is the leader by far as growth stocks from the cloud computing area and other sectors rip higher. In fact, the character of this market is as strong as a market gets. The stock market is on fire! If you want to find out which is the hottest emerging market stock, send an email to info@investorbootcamponline.com or sign up at the Trade Tip on the left hand side of the home page.Mon, 30 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/moon-point-a-moon-shot.html http://www.investorbootcamponline.com/blog/moon-point-a-moon-shot.html The entertainment industry is a tough business which nobody knows more than those who work in it. Whether its music, film, television or art it’s an orphan business that no parent recommends to their children and governments do little to support. But in the new economic order, small businesses including artists of all types have to roll up their sleeves and work their way to success. In previous articles, some shots were made at the music industry's stubborn adherence to the old ways of doing things. Technology may be blamed by senior management, and lawyers, but the music industry is likely its own worst enemy. The industry fails to recognize the need for new business structures and relationships which detached observers believe is obvious. Some might say the same about the film business, but producer Avi Federgreen sees it and is doing something about it. Avi was tired of seeing great low-budget Canadian movies being made but not distributed. So he decided to launch his own distribution company, Indiecan Entertainment, in order to put productions on screen. The company’s first film launch is Moon Point showing at the AMC Theatre at Yonge and Dundas in downtown Toronto starting February 3rd. Avi and his crew have been working around the clock to generate interest in the film. They used the Moon Point Facebook page to hold a contest asking bands to submit a song to be used in the movie. Submissions were so good that four songs were chosen instead of just one, which was the original plan. The movie's soundtrack has been put into a C.D. that "any music fan would want to have." Avi has all kinds of creative promotion set up between now and the release of the movie. It's unprecedented marketing in the movie industry. The next step is to spread the word to audiences across the country, not just in Toronto. But that’s just what they’ll do. They’ve taken the bull by the horns and decided to do it themselves breaking down traditional barriers. In “Why Rap Rules And Rock Is In A Rutt” Hypebot.com cited the difference in the business of the two music genres is the work ethic of musicians attempting to get ahead. “If you want to succeed in music today, you have to hustle. Not social media hustle, meaning randomly friend requesting and spamming your way through Facebook and Twitter. This is an unchallenging and ineffective roadmap for acquiring new fans. It quite simply reeks of desperation, or far worse, entitlement. Succeeding in music is about hustling because if you don’t, you won’t survive.” In the film business, Indiecan Entertainment is forging ahead. Matters of business aside, the public might take notice as it opens up new doors, to big screens, and more high quality film. Moon Point also features no less than twenty three independent Canadian musicians and bands in thirty songs. The added bonus is Moon Point might just be an excellent movie too! Show times from February 3rd – February 9th are 2:00 p.m., 4:45 p.m., 7:00 p.m., and 9:00 p.m. daily. Sat, 21 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investment-course.html http://www.investorbootcamponline.com/blog/investment-course.html What investors don’t need in an investment course is an extensive review of basic terms and ideas. Those can be obtained anywhere including a basic search on the web; Investopedia and Wikipedia provide definitions. What investors really need is information that is useful and relevant. They need to be able to know exactly what is happening in the markets and what they should do about it. For investors who manage their own portfolios, and Investment Advisors, knowing how to choose the best performing markets and securities, including hot stocks, and when to avoid them is the key. Perhaps that seems obvious, but surprisingly few people are actually operating that way.Timing is Everything Investors need, more than anything, to know how to execute accurate timing. To do otherwise, is to suggest that the stock market, the bond market, commodities and currencies are risk free. If that were true wouldn’t everybody be rich by now?Here’s another though to ponder; if all that free information out there was good investment advice wouldn’t everybody be getting rich from that too? Many investors don’t realize how extensive their speculating is. Operating without a valid system does not provide for the ability to make adjustments. Randomly watching CNBC or BNN does not provide relevant information. It’s a presentation of one or two people’s opinion and it is frequently stilted. Opinions and facts are inherently different. Fund managers and analysts have a vested and narrow interest which does not provide investors with critical timely information. Investors should always ask, what is the trade? There are numerous assumptions that interfere with the objective analysis of markets. What compounds the problem is execution flies not only in the face of conventional wisdom but the emotional state of the herd. Investors need to be like horses in a race with their blinders on. Focus on the real time evidence of trend changes and they have a big advantage. Assuming that an extensive amount of research into any one company is going to pay off is like crouching down in front of a tree in a huge forest and jumping to a conclusion about all the trees. The stock market doesn’t favour a stock just because an investor thinks the underlying company is a good one. It favours the choices made in the handful of stocks that are preferred over all other stocks. That’s a big difference. There a lot of clichés and ideas out there on how to handle the stock market. Unfortunately, very few of them are statistically valid. It is useful to recognize that the stock market, in particular, is driven by people not machines. The millions of investors and trillions of dollars that operate in the stock market may have similarities in their decision making but the net affect is what matters. Mutual funds and pension funds have a mandate that is not the same as an individuals. The average person who manages their own portfolio needs to recognize that they do not use portfolio theory nor should they be attempting to follow what the big funds do. The market is a black hole for money that will also consume a person’s mental capital and emotions if they don’t manage effectively. Our observation is that, when it comes down to it, most investors don’t really care that much about their investment portfolios. That might seem absurd but that’s what we see. Otherwise, the media would present timely useful coverage when trends change not when the market is ugly. We identified several critical variables for managing a stock portfolio. One of them, the use of bases, is largely unheard of. Over time, our observation of thousands of stocks through numerous cycles has led to the conclusion that the use of bases is a miracle cure for many portfolios if only the investors managing them understood it. That might seem boring, but the remarkable insight and out performance is anything but boring. Fri, 20 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/real-return-bonds-whacked.html http://www.investorbootcamponline.com/blog/real-return-bonds-whacked.html The bond market was one of the rare winners from 2011. But like any market at any other time, the up trend eventually comes to an end. For the bond market, that time may be now.U.S. treasuries broke down January 19th following a reasonably constructive 3.5 month consolidation. The next session, Jan. 20th, followed up with more downside. The action is highlighted below using the Ishares 20 year treasury E.T.F., TLT. The Canadian bond market has been in better condition. In fact, the long term maturity E.T.F. XLB, traded on the TSX, continued to chug higher until peaking January 18th. But you can see, like the U.S. market, the past three sessions are decisively bearish (see the second chart below). Notice the huge volume January 17th. It's common to see E.T.F.s trade in huge volume near the time the trend changes. But the most significant damage this week is in real return bonds. Real Return Bonds WhackedThe decline in the TSX traded iShares Scotia Capital Real Return Bond Index Fund, XRB, is clearly out of character for the up trend (see below). Successive declines have been increasingly bearish with the 1.8% plunge on Jan. 20th being vicious. After all, this is a bond security not a stock or commodity. The up trend in XRB has risen steadily since late 2008 when the credit crisis was in full bloom. This may be another temporary and mild pull back within the powerful up trend but historical cycles analysis tells us three years is a long time for an uninterrupted up trend in any financial market. Do bond investors want to challenge this pull back by hanging in as they have done previously? The issue for investors who rely on their portfolios for income is the need for fast reaction to accomplish precision in timing in the execution of portfolio restructuring. Waiting too long to execute a sell and deploying the capital elsewhere erodes a significant portion of capital. That compromises the investor's ability to increase the portfolio's income generating power. Consider the following; In the past year, XRB has risen just over 25%. That's a more than respectable return for a bond or bond related security. But in three days, 3.4% has been lost with nearly two percent of it in one session. It's not particularly significant for the size of the one year, or three year gain, but other bonds have not done as well. What happens to investor portfolios that continue to delay the capture of equity? The bond market is no longer what it used to be. But the reality won't become common knowledge for several years after the fact when it is too late for millions of retired people to do anything about it. Fri, 13 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock-market-pullback.html http://www.investorbootcamponline.com/blog/stock-market-pullback.html We have said previously that the stock market action is best interpreted in the context of the trend. Like the weather, the market has a climate. The climate does not change when the market goes up one day and change again if it’s down the next. That would be the change in the weather which most people understand is part of the variation within the season dictated by the climate. Today the stock market is lower (until mid session when this was published). It is a considerable decline, at more than 1%, which may feel like a chill has returned. But in the context of the markets overall up trend and in particular the impressive surge since the beginning of the year it is insignificant. The chart below is the factual presentation of the buying and selling by all investors. This is the Nasdaq which may be the most representative reflection of investor action. You can see how the decline snaps the recent winning streak of seven days closing higher in the past eight. But that doesn't mean the up trend from the market's bottom, on October 4th, is over. Note the higher lows in late November and early December. it's the normal sign post of an up trend. Thu, 12 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investment-portfolio-thoughts-part-I.html http://www.investorbootcamponline.com/blog/investment-portfolio-thoughts-part-I.html If tracking Warren Buffett's investments worked, then why aren't these stocks trading better than others? Since at least the mid '90's, Warren Buffett's alleged stock investments have under performed substantially. How does randomly watching CNBC or BNN and hearing a bull and a bear debate about something improve the results of a portfolio?If buying stocks or commodities can be done when ever it seems like a good idea then why aren't more investments successful?Have you ever noticed how high risk does not translate into high reward? When it comes to the financial markets it seems the higher the risk the more likely it simply isn't going to work.For those who use investment analyst research, have you ever noticed how off their stock price targets are? Why aren't more investors incorporating the reliability of transacting into the management of their portfolio. This is the Investor Boot Camp Online Trade Risk™ indicator reflecting the current risk assessment or reliability of trading? How many investors conduct a real time study comparing what they are doing or thinking of doing with a small sample of investments from a different category? Try taking two or three stocks that are near their lows and compare their performance against two or three stocks that are trading near their highs. How significant is timing?Send an email to info@investorbootcamponline.com expressing interest in receiving an email update on significant action in the financial markets when it occurs.Wed, 11 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/observations-for-successful-investing.html http://www.investorbootcamponline.com/blog/observations-for-successful-investing.html Here are some observations made over the years that you may consider in the management of your portfolio. Some of these are based on studies as well as unscientific observation. When trading isn't working, trying another stock rarely works. Concentrating holdings in stock market sectors that are amongst the best performers has a huge positive impact on results. Knowledge is not necessarily helpful. In fact, it can be detrimental. So can the failure to manage subjectivity and emotion. Successful investing is related more to reaction at the right time than anything else. Choosing stocks based on perception of lower risk is often flawed with a lower reliability in the success of the buy. Risk isn't typically from what is known but rather from what is unknown. Observations of investor behaviours reveals many investors aren't taking the investment process seriously (enough). There is too much indifference or too much speculation. Investors are too focused on the economy or other headline news and not on the trends in the markets. The markets are not disconnected from the economy, but the timing of cycles can be significantly shifted.Some investors are stuck on their own idea of how to invest, what they think works, predicting the future and other subjective viewpoints. Tue, 10 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/top-10-rules-of-trading.html http://www.investorbootcamponline.com/blog/top-10-rules-of-trading.html Investor Boot Camp Online Rules of TradingNever, ever, under any circumstances, add to a losing position. Sell transactions that have undercut your purchase price before the loss becomes large.Be on the winning (profitable) side, not the "right" side.Buy high - sell higher.The trend is your friend, go with it and "don't fight the tide". In bull markets, take long positions only. In bear markets, take a neutral or short position only. This is understandable but very few people actually trade this way.Buy strength, sell weakness. This also appears obvious, but many investors migrate to stocks in deep down trends. It doesn't work!Be very impatient with losing trades, but let winners run.Use fundamentals, but trade like a technician. If it's not trading right the fundamental analysis is irrelevant.Understanding investor sentiment and investor behaviours is more important than knowing business and economics.Do not consume mental capital.Be flexible; all rules and precedence will be tested albeit infrequently.There are times when it is more valuable to work on effective trade execution and portfolio management techniques than it is to conduct market research. Poor market conditions allow for investors and traders to assess this while waiting for better conditions. What is the trigger you need to become a great investor?If you would like clarification or more input on any of the above, email info@investorbootcamponline.com.Tue, 10 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/growth-stocks-on-fire.html http://www.investorbootcamponline.com/blog/growth-stocks-on-fire.html Today’s headlines include the following. Wholesale Stock Piles Rose In November Austrian Five Year Borrowing Rates Rise It looks like another day of doom and gloom about the global economy and sovereign debt issues. The stock market must be terrible still. But it isn’t. In fact, the stock market is on fire. The market averages are up over 1%, they’ve been up four straight sessions, the fifth in the last six, and the thirteenth in the last seventeen. The market has also gapped higher today. It's not a clean dividing line, but the Nasdaq has cleared a resistance level that has been in play since April. More importantly, leading stocks are proving they are holding their up trends. There is very heavy buying in an increasing number of stocks with a number renewing up trends. These are objective sign posts of the stock market’s price trend. Put it together and you have undeniable evidence of an up trend. To argue differently, is essentially foolish. But CBC won’t tell you what’s going on, BNN can’t figure it out and CNBC wants to put a bull and bear debate on everything so you can’t get a clear indication. If market timing matters, then this it! If it doesn’t matter, then why isn’t everybody rich? Our increasing belief at Investor Boot Camp Online is that investors actually don’t really care about their investment portfolios. They’ll do plenty of crying when the market gets ugly as it was in early 2009, but even then, they’re not making timely informed decisions. Some would rather speculate because it’s apparently more fun or makes them feel more important when they formulate their own ideas. But there are investors who execute timely trades based on the evidence. Doctors operate on evidence, detectives build cases on the evidence but apparently, when it comes to managing investment portfolios, people generally believe something else works better. Here is some of the evidence. More will be presented at length in the three session Investor Boot Camp course starting Wednesday January 25th. To learn more about the misdirection from the media, the investment industry and the numerous cliches on investing, attend Investor Boot Camp January 25th in Toronto. It's an interactive, intense three night course providing investors with the opportunity to make a monumental shift in the way they manage their portfolio.Mon, 09 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/three-things-the-economy-needs.html http://www.investorbootcamponline.com/blog/three-things-the-economy-needs.html The state of European economies, high unemployment along with debt burdened governments and consumers continue to dominate headlines about the economy. In fact, it’s such an old story that it has become monotonous. It begs the question why are these still issues? There used to be the idea that American ingenuity would rise to the occasion boosting the U.S. and the rest of the world’s economies to new heights. The fact of the matter is, the U.S. still leads, the U.S. economy is in fact growing and if it weren’t for the U.S., the global economy would be a mess. The headlines aren’t helping sentiment but telling it like it is wouldn’t sell advertising. Nonetheless, economies are stale just like the headlines. Something creative is needed to put a new spark in the behaviour of governments, business or consumers or all three. For starters, a new U.S. President is critical but that won’t happen until the election. So that brings us to the increasingly imperative need for a separate agency that determines and manages fiscal policy. Most governments anywhere at any time have clearly proven they aren’t up to the task. They are uneducated on the complexities of business and economics and the structure of democratic government sabotages good policy by supporting the individual interests for the ridings and constituencies of elected officials. This Is F.A.B.Number one: Instead of trashing central banks, as some are suggesting, we need to institute F.A.B.; the fiscal agency board. Hire professionals in economic analysis and policy to manage the economy. Number two: The North American investment industry has been decimated by the credit crisis. That has left an enormous number of smart well educated Investment Advisors and investment bankers out of work or generally under employed. These guys, and gals, know more about everything than you could imagine. But all those online recruiters want everything wrapped up into a nice tight package. Unfortunately, for employers and the economy, Investment Advisors, in particular, do not present their knowledge and experience into a new position. But there is one thing they could do and that’s run businesses and economies. Number three: Solutions that work for the economy need to be rooted in something people could use and desire. So, what everybody needs now is a new cereal shaped like dollar signs. Cheerios are great but they are zeros. That’s counter productive in the world of money. Feed people a nutritious breakfast of dollar signs and the economy will take off. Some might even argue it’s inflationary. Let’s see how the central banks deal with that. For other mind boggling ideas and insights, sign up for the convenience of our Trade Tip Sign Up.Fri, 06 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/short-selling-is-high.html http://www.investorbootcamponline.com/blog/short-selling-is-high.html The level of short selling is very high at this time. In fact, the current reading of 16.4% is approaching the five year extreme of 17.99%. The measure indicates the percentage of short sell positions for all stocks listed on the New York Stock Exchange (N.Y.S.E.). However, what is useful to know about short sell indicators is, most importantly, it is a contrarian indicator. In other words, at extreme readings the short sellers, or lack of, are usually wrong. In general, when the herd is one the same side of the fence a trend is about to shift. Notice the high level of short selling at at time when the stock market is working its way higher. In fact, investors who delay investing in the market, specifically U.S. growth stocks, until later will be declared too late! Short selling on some stocks would have worked very well for some investors. Many stocks have been wiped out in the 2011 correction particularly resource stocks. But the N.Y.S.E. has very few resource stocks in its overall make up. As short sellers start to close out their positions they add buying pressure. Fri, 06 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock-market-reporting-is-misleading.html http://www.investorbootcamponline.com/blog/stock-market-reporting-is-misleading.html In the first trading session of the year, the stock market blasted higher for gains over 2%. The reason cited was economic strength on the release of economic data. But most of the time, the stock market does not go up or down based on the news. The news may have some impact at the periphery but the stock market has many big investors transacting in billions of dollars every day. Does the press really think those well informed investors operate on news? Understanding the stock market may be enhanced with the following; Stocks go up when buyers exert their action over sellers. Stocks go down when sellers exert their action over buyers. It’s as simple as that.Knowing what the trend is, will put every session in perspective. Like the weather, the stock market has a climate with daily changes interpreted in the context of the current climate. With the weather news, a warm sunny day in the winter is nice but nobody is going to get out their sandals and plan a picnic. But when it comes to the stock market that’s precisely what the press is insinuating. The press isn’t doing investors any favours with their headlines. It might be boring for them to report differently but investors need to recognize the press knows about as much about managing your portfolio as they would for conducting emergency surgery in a hospital operating room. CNBC writes Groupon’s stock (GRPN) is down the past two days following a report that many of Groupon’s merchants don’t plan on doing another offer with in the next six months. Undoubtedly, there is a reaction in the stock market to a report of this nature but the stock’s two day loss is not out of context with what is already a deep 43% correction from the November 4th high. What is factual is the stocks of unprofitable companies are trading badly and I.P.O.’s, which by nature magnify market conditions, have been nothing short of terrible. The weather for GRPN is consistent with the climate for I.P.O.s. Check out Linkedin (LNKD) and Pandora Media (P-n.y.). DamagedI.P.O.sDeclinefromHighGroupon (GRPN) 43%Linkedin (LNKD) 47%Pandora Media (P) 59%Selling has been intense in GRPN since November 21st when the stock fell nearly 45% in just five sessions. That established a climate of selling which does not just suddenly end with the stock turning into a monster winner. Where is the reporting of the climate affecting GRPN, I.P.O.’s and many stocks of unprofitable companies over a period that is now at least six months? If it snows heavily for a couple of days in the middle of winter, is that really a new development? Has something changed? When it comes to reporting of the stock market, it is presented that way. Apparently, not only does the press actually believe it but so do far too many investors. The reporting of the investment markets should be no different than the relevant factual reporting of the weather.The stock market doesn’t go up one day and down the next raising questions about what it is really doing. Trends don’t change over night contrary to perception. The plunge in the markets in the fall of 2008, for example, wasn’t the beginning of the credit crisis driven bear market. The bear had made its entrance ten months earlier in late October 2007. In July 2007, three months before that, mortgage insurers began their massive plunge. The six month period of carnage in the stock market from Sept. 2008 – March 2009 was dramatic but it was predictable as the final phase of bear markets have been through out history. Market trends are much longer than what is reported by the media with numerous objective indications to confirm it. Investor behaviours tend to be the same through out every up trend and down trend in history. Using the market chart below, it’s the Nasdaq, see if you can spot a change in the behaviour of investors signalling a change in the climate of the stock market. To learn more about the misdirection from the media, the investment industry and the numerous cliches on investing, attend Investor Boot Camp January 25th in Toronto. It's an interactive, intense three night course providing investors with the opportunity to make a monumental shift in the way they manage their portfolio.Wed, 04 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/why-bottom-fishing-is-too-risky.html http://www.investorbootcamponline.com/blog/why-bottom-fishing-is-too-risky.html Q: What do investors like to do best? A: Target a market or stock right at the very bottom, put in a buy and make piles of money. It's also what gamblers like to do at casinos and the race track. Unfortunately, the similarity is why the richest person in the country is never somebody whose claim to fortune took either path. There are certain times when targeting a buy at or near a low may be done. But that time is rare and it is usually restricted to bear markets that are extreme. 2000-2002 was one extreme bear market and so was the credit crisis driven bear market in late 2008-early 2009. In the recent bear market, i.e. October 2008- March 2009, certain stocks were targeted. Those were PCLN, BIDU, NFLX and GMCR. With the huge declines in resource stocks and now an increasing number of u.s. stocks such as some techs. etc., the buy low strategy has been increasingly obvious. But the problem is it usually doesn't work out for investors. It's not the timing issue since timing the bottom can be done. In the current investment environment subscribers now appreciate why we frequently said to stay away from weak and weakening stocks. This has been a theme for protecting capital for the last six to seven months. Look at APKT which continues to suffer badly along with, unfortunately, many other stocks. The stock market has been nothing short of cruel in the last year. It takes considerable skill to target certain stocks during down turns. The primary issue with a buy low or bottom fishing buy is out performance or leadership vs. laggard performance when a new up trend develops. New cycles, i.e. up trends, tend to feature new sectors and stocks that out perform. The deeper a stock falls, the more we might think it's an opportunity but history has shown us that the farther something falls the less desirable it is. Big money doesn't sell relentlessly and then come back like mad dogs into the same stock. Some examples from the 2002-2008 bull market that are now horrible include fertilizer/potash stocks and the shippers (VLCCF, etc,). Notice the difference between performance and psychological desires.It is speculative to some degree to make the following statement at this time, but the market is telling us that the commodity cycle may be over even though commodity markets are correcting in the context of longer term up trends. Resource stocks have fallen so far in the last twelve months that it is hard to believe it is a big opportunity. Hard to believe because that's the precedence from history. Historical precedence is the most valid indication for making reliable and profitable decisions. Be ReadyHowever, there will be one or two stocks to pounce on when the time comes. For those that like to do this, be prepared. The buy will provide an alternative buy strategy that may serve to reduce risk in a growth portfolio. But the strategy is by nature a much higher risk. The key is to wait for indications of a bottom.Sign up for email alerts for pivotal action in all markets that you likely won't get somewhere else.Wed, 04 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/market-timing-and-the-economy-not-the-same.html http://www.investorbootcamponline.com/blog/market-timing-and-the-economy-not-the-same.html Headlines have, repeatedly, been about the big problems with debt, government deficits and pending default from Greece. Italy recently said markets would remain volatile without a solution. Conversations are all about economic weakness and high unemployment. Consumers in most countries are over ridden with debt flagging a problem for perhaps generations. So the stock market must be in a big hole then! Wrong! In fact, one stock is telling us a completely different story.British based jewelry firm Signet Jewellers (SIG-n.y.) operates 1,317 U.S. and 540 U.K. stores under Kay, Jared and other names. The stock is undergoing a very significant and pivotal event in the January 3, 2012 session. That event is a "break out" from a very long 4.5 year base.Signet Jewelers reports not only meaningful growth in earnings, but powerful growth. Note the pattern to an accelerating growth rate in earnings. QuarterendedEarningsGrowthRateOct. 31, 2011329%July 31 69%April 30 50%Jan. 3116%If the economy was going down the tube big investors would not be piling into the stock. The stock trades $50 million every day. It's no accident that the stock has fully recovered from not only the 2011 correction but the bear market caused by the credit crisis. It may be helpful for investors to recognize that stocks suffered a long and relatively serious correction in 2011. The very quick and deep downturn in late July, ending August 9th, was a high anxiety sell off. For two months a significant amount of money continued to leave the market culminating in another panic driven decline with a new low recorded on October 4th. But on October 4th a very reliable event occurred indicating the selling had exhausted itself. Another stock in an up trend is Canadian Pacific (CP-tsx). A rail road company is also an unlikely candidate for increased buying and a new up trend if the economy was expected to be a mess. CP is up 54% since September 22nd 2011.Big investors are relaying that the economy is or is likely going to improve. The stock market has worked this way in every down turn and subsequent up turn through out history. The break out in SIG is not the only historically significant and valid event in the stock market. There have been numerous high quality break outs since early October and in the January 3rd session there were scads of new break outs. You can time the market with these indications. How many times have you heard lately about this type of action and analysis? Ever wonder why? If you're not using this information how will you know which stocks and markets are the best choices? Investor Boot Camp Online provides investors with factually based information on the markets with tools to profit and protect capital. Subscribe for one month and you'll know why existing subscribers say it's worth it.Sun, 01 Jan 2012 09:00:00 ESThttp://www.investorbootcamponline.com/blog/year-in-review-bonds-voyage.html http://www.investorbootcamponline.com/blog/year-in-review-bonds-voyage.html Defying analyst predictions, yet again, the bond market went higher in 2011. In fact, it not only went higher, the bond market was down right hot as a powerful up trend propelled prices to gains approaching the scale of the fear driven flight to safety during the credit crisis. The 20 year U.S. treasury is shown below. In this chart displaying the 2011 price trend, the price of this benchmark bond rose an astounding 34%. A peak was established early October but the price remains close to the high in a relatively tight range. Gold rose about 14% for the year but it has fallen nearly 20% from the September high. Apparently the market that offers yield and safety, i.e. the bond market, trumped the fear market (gold) in 2011. It may be easy to predict that bonds won't repeat again in 2012, but it's worth noting there is no sign of a rush to the exits from the bond market. Meanwhile, real return bonds have quietly been outstanding performers. In the Canadian bond market, which did not perform as well as its U.S. counterpart, the real return bond E.T.F. (XRB-tsx), rose nearly 20% in 2011. The yield at year end was reported at 1.93%. You can add that in to the total return for investors who held XRB through the year. Real Return Bonds Out PerformIn the last five years real return bonds have out performed the U.S. equity exchanges. As you can see from the chart immediately below, real return bonds starting to out perform in early 2008 as the bear market in stocks developed with most of out performance accelerating in 2011. It's a relatively long period for any bond to stand out over the stock market. It has been a great voyage for bond investors despite the huge gains in the stock market from March 2009 until mid 2011. But investing for safety in 2012 might mean reducing exposure to bonds as the market corrects based on normal cycles. See other 2011 Year In Review stories. Try the Trade Tip sign up for an email alert when the bond market peaks. Fri, 30 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/time-the-market-with-market-averages.html http://www.investorbootcamponline.com/blog/time-the-market-with-market-averages.html The trend in the equity market averages is often overlooked by individual investors. Of those that do use the trend, many are going against it looking for a bargain during a correction or bear market. 2011 may go down as the year the stock market delivered the lesson of going with the trend rather than against it, once again. Using the leading market average works better as a timing tool. The Nasdaq stands out as the leading average due to out performance during the up trend, since March 2009, and a more constructive condition during the 2011 correction. The decline in the Nasdaq from the high to the low was less than it was for other markets including the Canadian market. The stock market’s correction appeared to have started in February. The Nasdaq was a rarity in that it recovered from the February decline to etch a new high on May 2nd. In that session the market lost its gain, a bearish reversal, in heavy volume starting a two month decline that officially marked a stock market correction. Most U.S. market averages such as the S&P 500 and S&P 600 also hit a high May 2nd but other markets around the world failed to recover from their earlier 2011 highs. See the chart on the TSX at the bottom of the page.The decline through June swept many stocks into a correction. The rally that followed provided an opportunity for profitable trades in a thinning crop of leading stocks. But the market average provided another timing signal to sell recent profitable buys and other stocks that were already entrenched in a correction. July 27th was a decisive session, providing investors with a tip off of more downside. When the market and most stocks failed to recover the exit sign was well lit up. Sovereign debt issues, featuring Greece and the U.S. Aug. 2nd debt ceiling deadline, quickly shifted sentiment from relatively calm to high anxiety. Failing to heed sell signals from the market averages led to the sharp and sudden blind side selling through July and into early August. History tells us that the more severe the trend is, the longer it will persist. The implication for the 2011 stock market correction was more downside with a return to the August 9th low was probable. Nearly two months later another slide developed driving the market averages to a significant and pivotal event on October 4th 2011.On October 4th, the market carved out a new low in the correction by undercutting the August 9th low. Undercutting a low frequently triggers more selling as those who held a bullish view now find their belief, and their investments, challenged. Heavy selling followed but it was quickly met with a massive wave of buying, pushing the market averages from the new low to a powerful gain. The bullish reversal was an event investors and analysts could have used to declare a bottom had been put in. It certainly didn't feel that way at the time, but the behaviour has been consistent with bullish reversals at new lows through out history. Why would this time have been any different? Now the market averages are giving investors another signal for market timing. A range continues to develop with numerous indications of its reliability. The range is characterized as narrowing or tightening. It is effectively closing in on itself. The implication is eventually something has to happen, either up or down. Some investors don't want to use either the market averages or a chart for the purpose of timing the market. But the interpretation of investor behaviours through the use of factual price action as shown in a chart may be the most reliable method for timing the market. Sign up at Trade Tip for an email alert with updates for precise timing.Wed, 28 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/year-in-review-commodities-crushed.html http://www.investorbootcamponline.com/blog/year-in-review-commodities-crushed.html Commodity markets have been the worst casualties of all markets in 2011. Their corrections have not only sliced significant value from their peaks but their down turns have continued to grind investors down near the lows. For the most part, there have been very few bounces giving investors a chance to get out at a better price. Copper is often referred to as the metal with a PhD in economics. It may be used as an indication of commodity markets in general. But as you’ll see from the charts below of copper and other commodities, copper has held up better than most despite a 30% decline. Some of the out performing commodities in 2010 and into 2011 have suffered big declines. Coffee was hot until May but has since fallen 30%, trading just above the low. Cotton was another big winner but its 2011 correction has seen it plunge 50%. Like most commodities, it also trading near its low. Commodity markets may be traded with exchange traded funds (E.T.F.).Most are traded in the U.S. markets. There are also numerous agriculture E.T.F.’s covering grains (JJG), corn (CORN), and soybeans (SOYB). Inverse or bear E.T.F.’s are also available, some of them with two times performance such as the TSX traded copper inverse E.T.F. HKD. CommodityMarketE.T.F. SymbolCotton BALTin JJTCoffee JOSugar SGGCopperJJC, HKU-tsxCommodity bulls have had a bad year if they didn’t exit early in the correction. Recent buys may look attractive compared to the distance highs, but there are no indications commodity prices are rebounding. The U.S. dollar remains in an up trend against most major currencies including the resource currencies such as the Australian dollar and the Canadian dollar. Some analysts are speculating the Japanese Yen is the next currency that is about to fall victim to an appreciating greenback that had been in a significant longer term decline. Those who are leaning on a resurgence in commodity prices and the secular commodity bull market are counting on a resumption in the U.S. dollar’s longer term decline. Resource stock investors are doing the same as the TSX has been a considerable laggard to the U.S. market as many resource stocks have been hammered.See other 2011 Year In Review stories. Try the Trade Tip sign up for an email alert for the timing on a resurgence in leading commodity markets. Tue, 27 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stocks-and-information-flow.html http://www.investorbootcamponline.com/blog/stocks-and-information-flow.html Sears Holdings Corp., or Sears, announced they are closing between 100 and 120 Sears and Kmart stores following poor holiday sales. The stock (SHLD) was hammered plunging more than 18% to a new 52 week low and the lowest level since December 2008. At first glance, the stocks sharp decline appears consistent with the news. But the stock has been pricing the announcement in over the last two months. Some would say the stock has factored in poor results for much longer than two months. The retailer’s struggles are no secret and the stock has been trending lower since the May 2010 intermediate term peak (see the second chart below under Sears Since The Credit Crisis). Like most stocks, SHLD was hammered during the credit crisis subsequently undergoing a significant recovery, a gain of 367%, from the late November 2008 low. But the 72% decline from the May 2010 high is not consistent with most stocks that continued to go higher until the broad correction in the summer of 2011. Sears (SHLD) Since The Credit CrisisThe stock's decline from the November 2011 peak at $83.25/share is likely a direct result of people in the know reacting to future store closures. Some investors might think there's illegal insider trading going on. However, this is normal information flow in motion. A matter as significant as closing many stores cannot be disguised. Sears management and likely many other employees are aware of poor results. In fact, good management of a company would have brought the importance of marketing and service strategies to employees in order to improve results. Once senior management decided it was time to cut stores loose, there would have been extensive investigation into leases and discussion with property managers and location owners of pending closures. The individuals in those companies are now aware of the pending event before the news gets out. Some of those people may have called their Investment Advisors and either sold SHLD or shorted it. Investment advisors may have taken the trade to other clients, fuelling a developing trend to net selling. Others in the company's operations would have included suppliers of inventory, shippers, firms that provide shelving, marketing materials etc. They see what is going on, reacting predictably by selling and/or shorting the stock. They also would tell other people who in turn would tell others. That's not inside information, that's normal investor behaviours. This is the way it should be. Investors who react to the announcement of store closures, on December 27th, are too late. The down turn, and related sell signal, occurred long before the announcement "sealed the deal". News is rarely news when it comes to the stock market. Mon, 26 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/year-in-review-resource-stocks-hammered.html http://www.investorbootcamponline.com/blog/year-in-review-resource-stocks-hammered.html Resource stocks and commodities were amongst the hottest areas for investors from the time the stock market exploded higher following the credit crisis driven bear market. But a peak developed in January 2011 for most resource sector stocks. At the time very few might have thought the top was developing. But it has been a long and painful year for investors who hung onto these stocks. The decline has not only been deep, with percentage declines matching any bear market type decline, but there have been very few rallies or bounces of any significance. Analysts and investors who are proponents of a secular bull market in commodities are likely bewildered by the severity of the decline. But the adage, “what goes up must come down” was relevant at the beginning of the year.What Goes Up Must Come Down!There were two factors tipping investors a large and perhaps long decline was pending. Stocks had logged monstrous gains over a nearly two year period. Cycles analysis tells us that extreme intermediate term gains, or losses, will reverse and they will be significant.Commodity prices, like resource stocks, had logged large historical gains since early 2009. Even if a companies underlying commodity price held near the high, earnings comparisons would weaken putting stocks under pressure. Late 2010 financings had been hugely successful with significant gains before many financings were even closed. Large and quick gains following the completion of financings usually trigger selling, following a holding period, on the exercise of warrants. It's a significant wave of selling that is often difficult to absorb particularly as the longer term cycle balance of buyers to sellers weakens towards net selling. Prognosticators are going to have some fun with resource stocks and commodities in their 2012 predictions. As 2011 winds down, a rally perhaps a large one is predictable. Historically, the extreme weakness and relative under performance has led to a shift to leadership to other areas of the stock market. If, in fact, that’s what transpires, the twenty year cycle for commodities would be cut in half. See other 2011 Year In Review stories. Try the Trade Tip sign up for an email alert when resource stocks mercifully break their down trends and begin an up trend. Sat, 24 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/year-in-review-uranium-stocks-nuked.html http://www.investorbootcamponline.com/blog/year-in-review-uranium-stocks-nuked.html As the year comes to a close and we look back at the events that shaped the markets, the first and perhaps underestimated event seems like a long time ago. But the earthquake and tsunami in Japan has had a significant impact on the global economy, stock markets and in particular uranium stocks. The natural disaster in Japan was the first event that led to a series of events in economics and markets that has rendered 2011 a very bad year for many investors. Uranium stocks suffered two consecutive days of heavy losses in March 2011. Nine uranium stocks in the Canadian market fell 20% or more for two straight days. That punctuated a correction that had already shaved 40% off most juniors. Many people, led by the media, were talking about the great opportunity in bottom fishing beaten down uranium stocks. But it hasn’t worked out that way. Uranium stocks have fallen even further since March. Dismissing the severe damage to juniors would be understandable. After all, they are the epitome of carnage when it comes to the stock market. But Cameco (CCO-tsx, CCJ-n.y.) looks similar to the rest of the sector. A severe decline in March, followed by a continuation of the down trend with few upside bounces, has characterized a long and painful down turn.See other 2011 Year In Review stories. Try the Trade Tip sign up for an email alert when uranium stocks mercifully break their down trends and begin an up trend. Wed, 21 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/canadian-bond-market-hot.html http://www.investorbootcamponline.com/blog/canadian-bond-market-hot.html The bond market has been the hottest market in 2011 defying analyst predictions, once again, that interest rates would go higher, not lower. The Canadian bond market has been a laggard to the U.S. market but that has changed. The Canadian bond market is on fire! You can see from the chart of TLT, representing the U.S. 20 year treasury bond, the market broke out of a range in August 2011 (marked by the green box). A significant gain developed until the market was extended. The gap between price and the market's long term trend line, the 200 day moving average (marked in blue), wasn't as extreme as it was when the bond market ripped higher during the height of the credit crisis in late 2008, but it was still historically extended. The red arrow marks the gap. The consolidation from late September has cooled the market off, allowing for a more normalized condition. The Canadian market, which as previously mentioned had been a laggard to the U.S. market, cleared its own range, scoring a winning streak that has pushed the market to a number of new 52 week highs. Canadian Bond Market Represented by Long Term Bond E.T.F. XLBIt should be noted that the percentage gain in XLB is significantly less than the gain in U.S. equivalents. The fuel for the Canadian market's "catch up" is likely related to the weakness in the Canadian dollar. Nonetheless, Canadian bond investors can be thankful for the factors that have come together to push bond prices higher rather than lower. The U.S. bond market is now running into resistance at the top of its three month range. The consolidation remains constructive however which sets up the possibility of a renewed up trend. But with more upside, in either market, bond prices will be approaching resistance points based on historical cycles. Like the extended state in August 2011 and the fall of 2008, the market cannot be expected to sustain gains indefinitely. Investor behaviours are predictable at cycle extremes, and one is approaching for investors whose retirement funds and peace of mind may be at stake. Sign up for the free Trade Tip newsletter flagging market timing in all markets, including bonds, for investors and traders. Investor Boot Camp Online offers investment markets information that investors may use to monitor the holdings in their portfolio. Investment seminars and workshops are an interactive platform for asking questions related to market analysis, portfolio management and effective trade execution.Mon, 19 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/TSX-traded-inverse-etfs.html http://www.investorbootcamponline.com/blog/TSX-traded-inverse-etfs.html Inverse or bear E.T.F.'s provide investors with an opportunity to profit from a decline in the underlying market, index, benchmark, sector or basket of stocks represented by the exchange traded fund (E.T.F.). Investors may consider their use as a hedge for long positions, however, the hedge is an imperfect one as most hedges are in reality. Some E.T.F.'s are designed to provide two times performance. Their names may use different terminology such as double, ultra, etc. Some issuers report a 99.9% correlation to the underlying benchmark. However, that nearly perfect correlation is applicable to a single session only. Depending on how the underlying market or benchmark trades, a two times performance E.T.F. may net a performance figure that is significantly different. The longer a two times E.T.F. is held the less likely it will match the performance of the underlying market. The following are the current inverse or bear E.T.F.'s that currently trade in the Canadian market. All are traded on the TSX. New E.T.F.'s are issued frequently so this list will be incomplete and increasingly inaccurate over time. The issuer's name is not listed. E.T.F. symbols starting with an H are issued by Horizon's BetaPro. In their two times performance E.T.F.'s, the second letter in the symbol denotes the market and the third letter represents whether it is a long E.T.F. (U for up), or an inverse (D for down). Horizon now offers inverse E.T.F.'s that are one times performance. E.T.F.'s issued by iShares, use a symbol starting with an X. BMO issued E.T.F.'s use symbols starting with a Z. Powershares symbols start with a D. The volatility index is not an inverse or bear E.T.F. However, volatility tends to rise during down turns in the equity markets spiking as sentiment becomes increasingly pessimistic. Investors may visit the website of the issuer, contact the issuer or their Investment Advisor for more information on the structure of the E.T.F., the components, potential changes to components and fees. Some issuers list the top holdings for equity E.T.F.'s. However, there is no regulatory requirement to list holdings, provide accuracy in the holdings listed or a time line on disclosure related to changes in holdings. Trade risk may be elevated for some E.T.F.'s due to low daily volume. Inverse or Bear E.T.F.'sBenchmarkSymbolTwo TimesPerformance TSX equity market HXDYes TSX 60HIX Nasdaq HQDYes S&P 500 HSDYes Emerging Markets HJDYes Base metals HMDYes Copper HKDYes Oil HODYes Oil HIO Oil DOEYesGold HGDYesGold HBDGold HIGSilver HZDYesNatural Gas HNDYesNatural Gas HINEnergy HIEInverse E.T.F.'s by SectorBenchmarkSymbolTwo TimesPerformance Financials HIF AgricultureDADYesInverse Bond MarketsBenchmarkSymbolTwoTimesPerformance Federal Bonds ZFS Provincial Bonds ZPS Corporate Bonds ZCS U.S. 30 Year Treasury HTDYesVolatility Index E.T.F.'sBenchmarkSymbolVolatility Index - MidTerm VXZVolatility Index - Short Term VXXInvestor Boot Camp Online offers investment markets information that investors may use to verify the validity of the holdings in their portfolio. Investment seminars and workshops are an interactive platform for asking questions related to market analysis, portfolio management and effective trade execution.Thu, 15 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/market-scorecard-dec-2011.html http://www.investorbootcamponline.com/blog/market-scorecard-dec-2011.html The table below is a Market Scorecard provided for subscribers to www.investorbootcamponline.com. Combined with our indicators including the proprietary "Trade Risk" indicator and Trend Indicators (not showing) they provide a useful overview for investors who manage their own portfolios or want to know more about the condition of markets and the performance of portfolios, securities, mutual funds and advisor performance. Market "Scorecard": EquitiesSummary of conditions and key indicators: Under PressureIndicatorTrend or behaviour AnalysisMarket Trend Up trend under pressure Break down Dec. 13th requires defense.Leading stocks Break Outs since Dec. 13th have failed.Stock picker's market with powerful, but limited, choices.Sector leadership (by performance)MixedIt's not the sector, except for bio-techs and pharma., but rather the best stock/company in a sector.IPO’s WeakIPO's tend to magnify the underlying condition of the market. Action is mixed but generally poor.Put/Call Ratio:Contrarian Sentiment Indicator1.07Readings above 1.20 are significant for market lows. Not reliable at peaks. Investor's Intelligence Survey: Contrarian Sentiment IndicatorBulls: 45.3%Bears: 30.5%A cross over has historically coincided with the low in the market's correction. This occurred in early October.E.C.R.I. FallingThe Economic Council Research Indicator has been quite reliable for its coincident timing with stock market trends.Investor Boot Camp Online offers investment markets information that investors may use to verify the validity of the holdings in their portfolio. Investment seminars and workshops are an interactive platform for asking questions related to market analysis, portfolio management and effective trade execution.Wed, 14 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/greece-default-and-the-markets.html http://www.investorbootcamponline.com/blog/greece-default-and-the-markets.html The enormous amount of debt that Greece, Italy and numerous other countries need to raise is a major cloud over the world’s economy and the markets. Even the average person who doesn’t follow this type of news is aware of it. The fear is that Greece, in particular, is going to default. In fact, those in the banking and investment community believe it’s just a matter of time before Greece does in fact experience a technical default. Meanwhile, European banks, investment dealers, mutual funds and many other investors from around the world are pumping more and more money into debt ridden nations. You might wander why they’re doing it, but the argument against further investment, while sound, wouldn’t work very well in the short run. Economic collapse isn’t a political or social option in the modern world of central banks, securitized investments and social societies. It’s not a case of “too big to fail” it’s a case of too significant to fail. How are they making such a large investment without taking on too much risk? One thing they’re not doing is putting money into other areas such as the stock market. If the stock market were ripping higher it would likely push bond prices higher. Higher bond prices means lower yields and that would translate into a higher cost, and risk, for investments in high risk sovereign debt. This explains the “death drift” in the stock market and the commodity markets. The markets remain depressed, in a waiting mode, while trillions is destined for Greece, Italy and the rest of the economically handcuffed herd. However, the big banks and other lenders are well aware their capital is at risk. So they aren’t sitting around with their fingers crossed hoping the hundreds of millions, or billions, on their balance sheets is going to miraculously work out. They are mitigating risk by selling off some of their position and hedging the rest. Powerful lenders, acting as a group, are going to do what they can to reduce the risk of their existing, current and future investment in high risk sovereign debt. The headlines are a real time display in negotiations and attempts to fulfill self interest. The media is being used as a pawn in a big game of financial chess. There is also the battle of political will which is increasingly inserting its tentacles into the actions of central banks. More on this subject will be addressed at another time. Individual investors have an advantage over much larger investors such as the mutual funds. Through nimble trading, and cash in reserve, investors may take advantage of any sharp short term sell offs related to debt issues from Europe. It’s a volatile and psychologically challenging trade, but those who are prepared financially and emotionally may take advantage of the situation. Big money anticipates it but they can’t strike at the moment of opportunity the way smaller investors can. Investor Boot Camp Online offers investment markets information that investors may use to verify the validity of the holdings in their portfolio. Investment seminars and workshops are an interactive platform for asking questions related to market analysis, portfolio management and effective trade execution.Thu, 08 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investment-clubs-weak-link-in-the-investment-chain.html http://www.investorbootcamponline.com/blog/investment-clubs-weak-link-in-the-investment-chain.html An investment club is a group of individuals who meet on a regular basis for one of two purposes. To share information about markets and investing. To pool money and make investments. It’s a valiant attempt to improve an individual’s knowledge and/or wealth through the potential of a community. It works well for running a business, but if when it comes to improving financial market investment results the chain is only as strong as the weakest link.Some individuals may benefit from picking up a key part of the investment process from someone in the club. But following that, they are likely going to be wasting their time, or worse. Without a member of the club in a position of authority who “knows their stuff’, information that is either a distraction, irrelevant or erroneous is going to pervade every individual’s investment process. Most clubs serve to make individual investor’s feel better about what they’re doing. For the new investor, it makes them feel they are making progress with confidence. But somewhere along the way, the process detracts from an individual’s ability to learn useful information and, more importantly, make good investment decisions. People who are good at investing either invest for themselves or they work in the investment industry. Others who are good at teaching will run their own investment seminars and workshops. Why would they stay in an investment club that has no measurable objective or end point? An effective investment process requires observation of the markets in order to term the significance of events that affect results. Sports analysts don’t meet to talk about games, they watch them. In fact, they watch as many games as they can so their knowledge and ability to make distinctions is above the average fans. A theme that is becoming more evident to Investor Boot Camp is the rampant tendency for speculation. Most people don’t even realize what they’re doing is speculating. Attempts to be more informed, and less speculative, are often leading them down the road of speculation. Increasing knowledge of a company, for assessing the stock, is one of them. While there’s nothing wrong with knowing about the company, truly useful knowledge isn’t going to come close to the knowledge of those who are management in the underlying company. What matters to results is the performance of the stock, not the company. Factors that influence stock trends are typically exogenous. That’s why most stocks will undergo the same trend at the same time. Investment clubs would be well served to look at their internal process of how and what is being disseminated. Is it factual or is it opinionated and ultimately speculative? How are you identifying which stocks to buy and when? Which markets are out performing other markets? How do you know what is based in facts? How do you know what is relevant when it comes to the bottom line, which is the performance of a transaction?Wed, 07 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/high-risk-stocks-no-reward.html http://www.investorbootcamponline.com/blog/high-risk-stocks-no-reward.html Investors in penny stocks have a common experience; they eventually lose all, or most, of their capital in a single investment. Just ask anyone who has bought several junior resource stocks, particularly Canadian investors. The common response, after the fact, is "I'll never do that again", or "I learned my lesson"! But a bigger issue for post analysis may be, did the investor truly get the lesson? It's easy to feel the energy of thinking you'll be smarter next time around. But over time that will fade. The issue with smaller company investments, lower priced stocks and their related financings is there are so many traps that learning one specific lesson can be difficult. Just ask an Investment Advisor who has blown most of his client book away trying to make his clients rich and happy. For that reason, this short and to the point article cannot list one or two points to use as a template that would serve as a catch-all for mistakes in junior resource stocks. But investors may want to consider avoiding these stocks so they don't fall through another trap door the next time.Low Risk-High RewardOne of our observations over decades is investors appear, to us, to not understand risk in the stock market. Many seem to believe that if you take a bigger risk, the reward is also bigger. But it doesn't seem to work out that way. A theme in the research, and the communications, from this investment information service is that taking lower risk in transactions that are more reliable tends to produce bigger returns. Investor Boot Camp Online provides an extensive investor resource for subscribers. A regular articles feature includes How To Invest In Financings and Junior Resource Stocks. The series explores how junior resource stocks typically trade and how to avoid the myriad of traps investors far too frequently fall into.Mon, 05 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/u.s.-stocks-far-better-than-canadian.html http://www.investorbootcamponline.com/blog/u.s.-stocks-far-better-than-canadian.html The U.S. stock market offers far more stocks in up trends than the Canadian market. In fact, the divergence may be the most pronounced in perhaps twenty five years. Take a look at the two examples below. There are exceptions of course but even a casual observation will reveal Canadian stocks are in a bear market. Many resource stocks, which represent most of the Canadian market, are down 55-60%. These are very large declines in what is supposed to be a secular bull market in commodities. But commodities are also in very poor condition with only the most well known commodity markets still trading in the context of longer term up trends. Those of course are oil and precious metals.Some might think that a few good stocks were picked out from the U.S. market to fabricate this story. They'd be right that the pickings in the U.S. markets are a little slimmer than what we saw in the developing rallies in March 2009 or September 2010. However, a deeper analysis reveals the one thing that matters to investors; the U.S. market has enough hot stocks that investors have what appears to be an excellent opportunity. How Many People Recognize The Very Powerful Action In U.S. StocksOur daily observation of the market since October 4th reveals a challenging investment environment but an increasingly voracious appetite by big money for key stocks. Heavy buying is re-emerging as F5 Networks (FFIV), Mercadolibre (MELI) and Taleo Corp. (TLEO) all blasted higher in Monday's session (Dec. 5th). See TLEO's action in the chart below. This kind of buying isn't a fluke. All three of these stocks have staged a "break out" which marks the resumption of the up trend. It's an identifiable and very sensitive event in the price trend of stocks that, through out history, has led to more upside. There is one thing that is most notable about the buying since early October and that is the clear power in price gains and the very heavy volume behind it. What separates these stocks from the rest of the herd are above growth in earnings and sales. That’s what’s dogging Canadian resource stocks, whose comparables are obviously suffering from deep declines in their underlying commodity price. Fri, 02 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/green-bay-packers-stock-a-fumble.html http://www.investorbootcamponline.com/blog/green-bay-packers-stock-a-fumble.html The N.F.L.’s Green Bay Packers will attempt to raise $62.5 million in a public stock sale at $250/share. The Packers are a publicly owned not-for-profit organization that is effectively owned by the fans. Share sales are scheduled to start December 6th, ending February 29th, 2012 unless it is extended. The financing is limited to individuals who may buy no more than 200 shares which includes their purchase from previous sales.According to Opposing Views, the Packer’s stock can’t be sold, and they haven’t paid any dividends. You buy it, you’re stuck with it. But that’s the trend in the public markets since numerous other investment products have proven to be a black hole for money a.k.a. the ‘credit crisis.’ Junior resource stocks have an even longer history of proving to be a disguised vehicle for someone’s job or hobby while the investment industry takes their cut of the action. At least the Packer’s share issue doesn’t try to infer any illusions about getting rich. But don’t think you can create a market in the stock and take control of the team. There is a rule in place that no one can hold more than 200,000 shares. Packers Souvenirs Include A Piece Of PaperThe Green Bay Packers stock isn’t an investment; it’s team merchandise just like jerseys, footballs, hats, bobble heads and cheeseheads. At $250, the stock is the most expensive souvenir, slightly more than the $239.95 Green Bay Packers Flip Top Coffee Table. However, Packers management knows how to manage the financing as if was a real investment. Each financing has been done at a higher price. The cost per share in the 1997 financing was $200/share. Perhaps those investors might at least feel good about a paper gain of 25%. Notice the savvy marketing in the timing of the financing as the team sports an 11-0 record following their Super Bowl championship. For whatever it’s worth, the team is considered to be the ninth most valuable N.F.L. franchise. At $250/share, the team’s market value will be $1.25 billion if all 250,000 shares are paid for. In 1997 less than half of the stock offered was actually subscribed for.Total shares outstanding 4,750,000 250,000 shares at $250 each $62,500,000 Market value, post financing $1.25 billion Given the trend by numerous firms issuing E.T.F.'s, perhaps one of them could issue a Green Bay Packers E.T.F. There are some far more absurd E.T.F.'s in the market than one representing a share in the Packers. At least, people would understand this investment even if real ownership of the team has no profit potential. Investor Boot Camp Online is an investment information service that works for individual investors and Investment Advisors. Sign up for the Trade Tip newsletter for the inside story on the markets and the economy and visit Boot Camp Banter.Thu, 01 Dec 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/SXC-defying-historical-odds.html http://www.investorbootcamponline.com/blog/SXC-defying-historical-odds.html SXC Health Solutions (SXC-tsx, SXCI) has been one of the market's best performing stocks since the bull market rose from the ashes of the credit crisis. It also appears to be defying gravity in a surprising rally following a very heavy volume 23% decline October 24th. But SXC may be another hot stock that is about to get crushed.Notice how the stock completes a full recovery in a "straight line". There was no interruption or consolidation during a run from $42/share to $60/share. That's a gain of 42% from a new low that was triggered by a sell off in volume 1377% above average. It is historically abnormal for a stock to stage this kind of recovery right at the moment big money has made it clear they don't want the stock. The other issue with SXC is the size of the gain from the 2008 lows. The gain of ten times is not as extreme as some other stocks during this time but it is pushing historical limits. Lululemon (LLL, LULU) was one of the market's biggest winners since 2009, up 20 times before getting hammered Dec. 1st, 2011 sending the stock back down to the low of the correction. It's worth noting that Lululemon also reports above average fundamentals and, like SXC, it has kept the stock in a range trading close to all time highs. See SXC's trailing four quarters of earnings and sales growth below.Accelerating Earnings And Sales Growth Fuel StocksStocks with accelerating earnings and sales growth tend to be the hottest stocks in the market. SXC is continuing to report spectacular growth as you can see in the table below. Why shouldn't it go higher with numbers like these? Quarter ended Earnings Growth Sales Growth September 30, 2011 57%163%June 30, 201131%153%Mar. 31, 201127%143%Dec. 31, 20108%19%During the big gain from the 2008 lows, SXC has formed one short base in early 2010. You can see the chart below. That base can be disregarded due to the relatively short period for the base and the slightly less than 20% decline from the high to the low. That makes the current base, starting July 21st, 2011, as the only significant base since 2008. Historically, big winners tend to form three or four bases before finally peaking and rolling over. It's possible SXC is setting up for another break out and resumption in its huge up trend. The stock may consolidate briefly near the highs of the base, where it is now, before staging the break out. But the recovery from the October 24th sell off is a flawed trading pattern. Further, a weekly analysis of volume shows the four straight weeks of gains featured just one week of higher volume than the week before. That's another issue as it indicates the heavy downside volume, which has occurred twice during the base, has exceeded upside weekly volume. Could big money have made a mistake, perhaps out of fear, dumping millions of shares in a single session (Oct. 24th)? Or have investors who hung onto the stock been lucky with a stock that defied gravity and staged a full recovery? Whatever conclusion may be drawn, with the trading flaws and increasing hits to other previously hot stocks, investors might consider looking at a different choice before committing their money to a higher risk scenario. Investor Boot Camp Online provides investment information that is relevant to managing portfolios, not irrelevant news stories. To get the inside scoop on market developments, sign up for the email alert in Trade Tip and read what gets your attention in previous Boot Camp Banter articles.Fri, 25 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/how-much-lower-can-RIM-go.html http://www.investorbootcamponline.com/blog/how-much-lower-can-RIM-go.html How much lower can Research in Motion (RIM-tsx, RIMM-nasdaq) go? If history can provide insight, the answer would be more, a lot more! And RIM isn’t alone in this market. A remarkable number of stocks have been pounded in 2011 with the worst of the decline occurring in the last month. In the Wednesday August 17th, 2011 article, “RIM Ready To Roll”, what was highlighted was a change in the way RIM was trading with the appearance it had snapped a deep decline and was now set to undergo an up trend of some significance. That scenario came to an abrupt end September 16th when the stock plunged 19%. The article was an example that if you open up the idea of buying a beaten down stock to make a big profit it’s too hard to resist for most people. The stock market in 2011 has featured not only deep declines for many stocks but the idea stocks can be bought near the low is a fantasy. See Buy Low Not Working from November 22, 2011. Fortunately, RIM was not presented as a buy to subscribers except for the most aggressive growth investor who might take only a marginal position in the stock. We have been “pounding the table” for months that investors stay away from stocks in deep declines. Since early October, the strategy we call “Trade Up’ has worked far better than bottom fishing. The market has been a real time case study in the way the stock market works. Not just in 2011, but through out history. The stock market does not present bargains, it provides for growth. There’s a big difference between shopping for shoes and shopping for a hot stock. The art market is perhaps the most obvious study in the importance of paying up for an investment quality product. If you pay $50 for your friend’s grandmothers painting you will likely lose all your money. But if you pay $50 million for a Van Gogh, you have a much higher probability for making a better than average return. If penny stocks made people rich, Warren Buffet would own all of them and they wouldn’t be penny stocks any more. Since RIM (RIMM) gapped lower on September 24th, the stock has fallen another 32%. It has been too easy to speculate that RIM, APKT, LIM-tsx and a horde of other stocks had bottomed out. It is more than a cliché, when it comes to the stock market that “it ain’t over until it’s over”! More than anything, it’s a market phenomenon that destroys investor portfolios rather than a reflection of the underlying company. That was highlighted in Why RIM is done in August 2010 when the stock was $50/share. Now it’s just over $16/share U.S.Investor Boot Camp Online provides subscribers with indications of trend changes so they may make the most timely evidence based trades possible. Be sure to visit Boot Camp Banter for more market insights. Tue, 22 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/buy-low-not-working.html http://www.investorbootcamponline.com/blog/buy-low-not-working.html Down turns in the stock market always present investors with an opportunity to learn something. It could be about their trade execution, their system of decision making or something about themselves related to the way they handle their portfolios. Unfortunately, the lessons can be painful both financially and emotionally. The current investment environment is pounding home certain aspects of how the market works. The October 4th bullish reversal marked a significant turn in events in the stock market as a new low was quickly reversed and the market charged higher. Within three weeks, a gain of more than 10% had been recorded. Many mutual fund managers were left on the outside wondering what would happen if they missed the next 10%. But many individual investors and traders wouldn’t have noticed as stocks in their portfolio may have continued to crater. Upside power has been limited to a relatively thin group of stocks. But in four days, from November 16th, what had been a constructive consolidation has fallen apart threatening the up trend. What is an issue for investors who continue to hang on to beaten down stocks is these stocks continue to wilt. A recent attempt to rally, through out October as the averages ripped higher, is now being retraced as many stocks are already revisiting their early October lows. There are several features of the market, at this time that emphasizes a characteristic of the market that has held through out history. This Is The Way The Stock Market IsStrong stocks continue to out perform. Weak stocks continue to weaken and under perform. Buying early is a fool’s game. Making assumptions about what is going to happen, on any other measure than historical implications, is also a fool’s game. We have a strategy called "Trade Up' which is a theme of placing capital in superior performing markets and securities. The "Trade Up” strategy has proven to be the winning strategy for growth portfolios during the up trend, starting March 2009, and the subsequent correction in 2011. The application of the strategy allowed investors to hold big winners while stocks charged higher and avoid big losers during the correction. Canadian investors may recognize the benefit more than others as resource stocks have been wiped out with declines of at least 60% since early 2011. How many investors hung on to stocks of Chinese companies that were huge winners? Many of those stocks peaked two years ago and yet they still remain in an ugly decline. When it comes to the stock market, time does not heal all wounds. If you would like a free consultation on your portfolio with applicable strategies and trade execution practices try the live chat button, email info@investorbootcamponline.com or call (647) 349-6777.Fri, 18 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/hot-stocks-no-more.html http://www.investorbootcamponline.com/blog/hot-stocks-no-more.html Remember how hot the fertilizer and potash sector stocks used to be? For nearly five years Potash (POT) and Agrium (AGU) were on fire being the cream of the crop in hot stocks. So were the shippers who enjoyed filling up their gigantic tankers with oil and other goods being transported around the world as global trade took off. But where are these stocks now? The shippers now qualify as the worst of the worst. Many investors migrate to hot stocks to make more money and build their growth portfolios. So they should as the market’s best performers tend to continue to be the leading sectors and stocks. But the cycle cannot be ignored. History has shown us that a previous bull market’s hot sectors tend not to repeat. Take a look at Research In Motion (RIM-tsx, RIMM). Here’s a stock that was one of the hottest stocks in the bull market in the ‘90’s and again from 2002 until 2008. RIM was a rare stock in that it led two bull markets in a row. But this stock continues to trade at a new 52 week low and 88% off its all time high. It’s easy to cite the declining earnings and real competition at this point but the August 2010 BNN interview emphasized normal investor behaviours suggest money will, on average, exit RIM over time. There are other examples through out history which are highlighted in the Investor Boot Camp seminar series. For several years, following the tech. boom of the ‘90’s many investors were hung up on buying the laser eye companies. JDS Uniphase (JDU-tsx, JDSU) was another one. These stocks were, predictably, amongst the worst in the following decade. Everyone knows what goes up must come down. But noting where a stock is in its cycle puts a new transaction in perspective. At this juncture, the stock market is more than 2.5 years into a bull market that has featured very large gains on any historical measure. Lululemon (LLL-tsx, LULU) is one stock that has been a stellar performer. The company’s fundamentals have been superb, continuing to favour big money sticking around. But how much higher can this stock go should it trigger another buy signal in the near term? Netflix (NFLX) was another big winner that has been crushed in a brutal down turn triggered by the first sign of a problem in the business. That’s the way the stock market is. Stocks are fun while they’re profitable but they are deadly, financially and emotionally, when the story doesn’t synchronize with the real time trend of the stock. Sign up for email alerts in the Boot Camp Trade Tips on matters that affect your portfolio. Investor Boot Camp Online is the premier investment information service for investors who want to make money in the markets and keep it.Wed, 16 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/reverse-stock-splits-bad-management.html http://www.investorbootcamponline.com/blog/reverse-stock-splits-bad-management.html Reverse stock splits are, by definition, a reduction in the number of a corporation's shares outstanding that increases the par value of its stock or its earnings per share. The market value of the total number of shares (market capitalization) remains the same. The reverse stock split, like a forward stock split, is effectively a strategy. It may be used by some companies to cash out shareholders with a small number of shares and/or odd share lots. The intention is to cut administrative costs by reducing the number of shareholders who require mailed proxies, financial statements and other documents. But the wider spread use of the reverse stock split as a strategy is to increase the price of the stock creating the illusion the company is in better condition and the prospects for higher share prices has improved. It is effectively an illusion that rarely works. The Bank of Ireland (IRE-n.y.) did a 1:10 reverse stock split on October 17th, 2011. The stock plunged 17.1% in volume 673% above the average on a split adjusted basis. Since the day before the split, the stock has fallen 43% to a new low. At $4.66/share the stock is nowhere near its $986/share all time high. There are only 24.3 million shares outstanding now but the reverse stock split clearly created no benefit. In fact, the reverse stock split only made it easier for short sellers who can continue to pound the stock lower making potentially enormous profits at the expense of whoever continues to buy and hold the stock. Management’s decision to conduct a reverse stock split has been a disaster. Investors in junior resource stocks may be well aware of the numerous penny stocks that get wiped out only to have management conduct a reverse stock split. It almost never works. The reality of publicly traded companies is the C.E.O. has two management responsibilities. One is the operations of the company and the other is the management of the capital structure and the stock. The issue with most junior resource stocks isn’t the underlying business it’s the failure to manage the stock. No matter how good a property is, or how good the drilling results are, if there are too many shares outstanding, too many financings or too large a decline in the price of the stock, investors have no hope of ever making money. Reverse stock splits should coincide with a significant bullish corporate event. The Bank of Ireland (IRE) had no press release or other apparent event that warranted good news which may have propelled the stock higher. IRE is finished! The stock will undoubtedly become delisted never to be seen from again without some miraculous change in fortune. Unless you’re a short seller avoid stocks that have undergone a reverse split. Find something else that is going higher. Investor Boot Camp Online is a premier investment information service for investors and Investment Advisors. For free updates on the markets and insights on managing a portfolio, sign up for the Boot Camp Trade Tips email. Sat, 12 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/risk-for-fixed-income-investors-rising.html http://www.investorbootcamponline.com/blog/risk-for-fixed-income-investors-rising.html Investing for fixed income is considered a relatively straight forward, low risk way of investing. Most would probably consider it boring. But the markets have changed and the risk for fixed income investors has risen. It’s possible a disaster is about to bury unsuspecting fixed income investors.The most commonly cited risk for investors seeking yield are rising interest rates. Interest rates move in twenty year cycles and the long term down trend in rates ended in 1989. Many analysts have predicted rising interest rates since the credit crisis erupted but their predictions have proven incorrect or at least premature. The belief that increased borrowing by governments would push rates higher as not developed except for countries on the verge of collapse including Greece and Italy. But rates have little room to go lower except for short and intermediate term declines. The most significant trend will, eventually, be rising rates.Fixed income investors may welcome rising rates since it provides increased income for the same level of capital. For investors whose portfolios are positioned this way it will be an improvement. But many investor portfolios won’t be in this position and capital losses may develop and continue until the portfolio cuts the risk of further loss. Unlike the stock market however, fixed income investors cannot wait too long before undertaking the required transactions. It may be ironic that timing needs to be earlier in the bond market versus the stock market but risk is inherently rooted in what is not known or respected.But there may be a bigger issue for investors seeking interest rates; bond vigilantes and a bond market that has a similar structural weakness as the securitized products that paralyzed the markets, and the economy, during the credit crisis.Investors in Bond Funds May be the Most at Risk The good news for investors is there are alternatives that provide liquidity. Bond E.T.F.’s are not only cheaper alternatives many of them provide individuals with the opportunity to divest when necessary. In fact, bond E.T.F.’s give the retail investor an advantage over institutional investors which includes mutual funds. It’s a new world order for fixed income investors. But breaking the mould on how to manage a portfolio requires new knowledge and the flexibility to operate outside the norm. There are risks in the new management style but failed to undertake them may prove to be a greater risk with little recourse when it becomes evident.Seminars For Fixed Income Investing and Interest Rate MarketsInvestors in the Canadian yield market may not realize they have one of the highest quality and highest yielding markets available to them. This and the other topics noted here are the themes in our Fixed Income Investing seminars (see the current schedule). Growth oriented investors would also benefit from knowing more about the significance of the bond market particularly as it relates to the stock market. There is a reason why the bond market is referred to as “the wise one”!Opportunity for every type of investor exists in the fixed income markets. It can be a high reward - lower risk option but the traditional view that investors seeking yield can just ride their portfolios out over the years is now at serious risk of destroying their lifestyle and their children’s inheritance.Investor Boot Camp Online offers investment seminars and workshops for investors who manage their own portfolios or want a deeper understanding or markets and the investment process. Members of www.investorbootcamponline.com receive extensive investment markets information including indications of new trends with trades and portfolio strategies. The Investor Tool Kit is one of the largest resources available to individuals and Investment Advisors who are deprived of critical information. Thu, 10 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/are-currencies-the-crystal-ball-to-stocks.html http://www.investorbootcamponline.com/blog/are-currencies-the-crystal-ball-to-stocks.html In late July, the Australian dollar and Canadian dollar rolled over from their peaks and began what has proven to be a significant down trend. On November 1st, their attempted recoveries appeared to have failed. On November 9th, they plunged confirming the next phase of the down trend. The stock market was also hammered as the Nasdaq dropped 3.9% in heavy selling. The Euro has been the most watched currency as sovereign debt default issues dominate the headlines. On May 2nd, the stock market peaked followed by a reversal from a 52 week high in the Euro two days later. But it wasn’t until September 6th that the Euro started to look like a relatively constructive consolidation was deteriorating. The decisive blows in the October 31 and November 9th sessions provide more evidence the Euro is headed lower. See the chart of the Euro below. Note the similarities in the timing of the trends in the Canadian dollar and the stock market (the Nasdaq which is the most indicative market for conditions). See the two charts below. The same pattern can be seen in the Australian dollar which featured a nearly full recovery from the October 4th lows (not showing). Managing The Markets and The PortfolioThe crack in the currency markets would suggest the stock market is headed lower. The stock market, however, does not lend itself to generalizations since the October 4th bullish reversal and subsequent rally. It is a stock picker's market with an increasing number of stocks undergoing significant heavy buying while other stocks get hammered on poor earnings results. Historically, leading stocks tend to buckle eventually under the pressure of widespread selling if deteriorating sentiment overwhelms bullish investors. But the story behind the scenes is many mutual funds are upset they missed the 10% rally in October and they don’t want to miss the next 10%. Sharp declines in the stock market, related to European debt issues, have a clear pattern of equally sharp recoveries. Nonetheless, the environment for investing is becoming increasingly challenging.Investors who want information on executing precise timing of the best performing securities may consider a short term subscription. The impact in the next month for a portfolio could be significant. Fri, 04 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock_market_rules_need_to_change.html http://www.investorbootcamponline.com/blog/stock_market_rules_need_to_change.html We’ve said it before, and we’re going to say it again. The rules in the publicly traded markets, i.e. the stock market, are too constrictive. In fact, the rules, many of them written in law, contravene the intended benefit of the publicly traded markets. The spirit of the rules is to provide transparency and disclosure. But the reality isn’t even close to achieving this, at least, not any more. The bear market from March 2000-October 2002 featured significant changes in legislation and corporate governance. Sarbanes-Oxley was created and other rules and laws passed intended to keep the criminal and unethical from attempting to line their own pockets behind the scenes. The witch hunt that put Martha Stewart in jail lingers over the mouths of C.E.O.’s and senior management. They don’t dare say anything to avoid prosecution. But how is that working for investors who’d like to know what they’re getting into? In “The Mutual Funds Know Nothing”, the wild swings in share prices following earnings announcements were highlighted. It appears the mutual funds and pension funds, who drive price trends, don’t know what’s going on in the companies they invest in. Their heavy buying and selling is triggered by earnings results rather than insightful analysis between the quarterly numbers. But in their defense senior management isn’t about to provide in depth juicy information when a fund manager or investment dealer analyst calls them up. You can imagine a phone call between a C.E.O. or C.F.O. and an investor. Investor: “Can you tell me about .....”? Company management: “No”. Investor: “Any changes in the operations of the company”? Company management: “You’ll find out along with everybody else when the statements come out or a press release is issued". The information seeking process has become compromised. It effectively renders analysts useless. Other rules intended to provide fairness through the process of information dissemination include; Earnings releases are done only when the markets are closed, Trading is halted for the release of material corporate news.The argument is it’s not fair if someone gets the information before someone else has a chance. This is nonsense. If you are paying attention to a stock you own and you happen to see the information before others do, why shouldn’t you reap the rewards by making a trade? Why should investors, especially those in mutual funds, be victimized by giant price swings because the funds are effectively trading huge amounts of capital at exactly the same time (when the market opens)? When South American online marketplace firm Mercadolibre (MELI) released earnings at 4:01 e.s.t. November 2nd, the stock did not trade through a price range between $65.90 and $76.61 in the following session. If earnings had been released when the market was open, there may have been a more fluid transition through the price range gap. That may have provided a profit opportunity to those who bought the stock immediately following the announcement. Only the investment industry operates on the concept information should be freely available and then ties everybody up in trying to get it. Perhaps it’s time to change the rules restricting the flow of information and provide investors with an opportunity to profit before others do. After all, the entire premise of investing is to execute transactions ahead of the crowd. To find out more about what affects your portfolio, see what gets your attention in other Bootcamp articles.Thu, 03 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/oil_stocks_on_fire.html http://www.investorbootcamponline.com/blog/oil_stocks_on_fire.html Resource or commodity related sectors have been in a dismal correction. Many higher quality company stocks have seen as much as 60% erased from their 52 week highs. They continue to be significant laggards in a developing rally that for an increasing number of U.S. growth stocks is a very powerful up trend. But growth stocks are not alone as some oil stocks are on fire. The separation between hot oil stocks and the rest of the resource sectors is considerable. A number of oil stocks have defied flawed trading patterns staging rapid recoveries following the late September – early October sell off that completed the sentiment cycle. Spooked investors who survived the big July decline caved in believing the market was unable to hold the August 9th low. A handful of hot oil stocks are the clear choices for resource hungry Canadian investors to profit from. The rest of the lower quality excessively risky Canadian stock market remains in poor condition lagging the U.S. market considerably. However, the choices are thin as many oil stocks remain in deep corrections unable to break their down trends. Some have started a bottoming out process establishing a range that could last a long time. But that’s for traders who are happy to play the swings in a range rather than go for big gains in a monster stock. Two contrasting examples are below featuring Black Pearl Resources (PXX-tsx) and Trilogy Energy (TET-tsx). Many Stocks Remain High RiskThe stock market has certain characteristics that punctuate a rally or decline with a lesson associated with it for investors who care to learn. The current market continues to feature stocks undergoing huge one day declines following an already deep correction. This is still happening despite a broad advance since October 4th. "Big money" is clearly unloading inferior choices placing capital into their one or two top picks from a sector. Individual investors have a distinct advantage over the mutual funds and pension funds. They don’t need to buy 100-150 stocks to fill out their portfolio. They just need a handful of the absolute best performing stocks. One month from the correction lows, it is apparent who the hot stocks are. Investing in anything but the select few continues to profile a very high risk scenario that is damaging many portfolios. Investors can avoid more losses and profit but they need to know which stocks to own.To find out which oil stocks are the best performers with indicated buy prices, email info@investorbootcamponline.com. Investor Boot Camp Online is the premier investment information service for investors who manage their own portfolios and investment advisors. Subscribe and see how your portfolio may achieve superior results with precise timing, indicated buy and sell prices and trade execution strategies.Wed, 02 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/greece_rules_the_world_again.html http://www.investorbootcamponline.com/blog/greece_rules_the_world_again.html Greece’s austerity program and debt issues are once again in the news. For those that follow economics and the markets on a regular basis this is a very old story that is getting more than stale. But it is also becoming a serious impediment to an economic recovery in nearly every major economy in the world. Insiders and participants in the investment industry have believed for a considerable time now that Greece will ultimately default. That attempts to get its economic house in order are unrealistic and, thanks to a slowing economy, becoming increasingly challenging. It’s only a matter of time before the official event arrives with the associated fall out. The cockroach theory, that when you see one you know there are plenty more, will trigger fears of what’s going on with Portugal, Ireland, possibly Spain and who knows who else. Meanwhile, banks, investment dealers and institutional investors are unloading risk in securities and business operations before the economic roof caves in. In theory, it will be a muted event as hedging and other measures spreading the risk dilutes the impact. The markets won’t react that way, at least initially, but there is a more significant impact to what is going on with Greece that is tying up the global economy. Banks aren’t exactly motivated to lending money to anybody but the best credit risks, quantitative easing funds aren’t getting to new plant and equipment purchases, inventory and business operations through out the numerous sectors that comprise a nation’s economy. Confidence is low which unfortunately handcuffs investment and spending. The world is sitting around waiting for the big event. The evolution of the economic environment to a global economy is relatively recent. At least forty percent of the world’s economy is now an emerging market with huge implications for worldwide growth. But ironically, a non capitalist economic situation and the viewpoint of Greece’s population is strangling growth. While very few people including the most right wing capitalists would have agreed bail outs should not have been done back in 2009, the view that the mess should have been flushed away is starting to look good. Three years since the credit crisis led to a world wide “closed for business” sign, nothing has really changed. If you’re looking for the reason why unemployment remains so stubbornly high, this may be it. There was a time thousands of years ago when Greece was the world’s dominant economic power. It would appear they have once again seized that position. But this time it’s from weakness and not from strength. The result may impact the interest markets that could go down in history as catastrophic. The limitation in the structure of the bond market is similar to what ultimately crippled the economy during the credit crisis and yet nobody seems to have addressed it. The issues are a theme in the increasingly popular “Fixed Income Investing; Why The Rules Have Changed’ seminar. Investors in this usually quiet conservative interest rate markets may suddenly find out there is an earthquake in their portfolio and dealing with it after the fact will be too late.Tue, 01 Nov 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investment_seminars_and_workshops.html http://www.investorbootcamponline.com/blog/investment_seminars_and_workshops.html What is interesting about the financial markets is anybody old enough to open an account can make a trade. Unfortunately, most individuals are not capable of transacting successfully in the financial markets. That includes many investment advisors.Investing is not the same as being a sports fan of a game that you may also play. It’s fun to say the coach should be fired and so and so should be traded. But that doesn’t qualify the fan to actually play the game, coach or be a G.M. There’s a reason why only a handful of people are pro athletes or coaches and the rest of the herd isn’t. The truth is it’s the same in the financial markets. Most people are speculating and gambling unnecessarily and they don’t even know it. The Investor Boot Camp seminar is a program that introduces investors to the realities of investing. More importantly, it provides investors with the ability to determine exactly what is going in the markets with out interference from the noise that fills the investment arena. Many students are shocked to find out why they have stumbled with their retirement nest egg, their cash or margin account, education savings plans and in Canada the Tax Free Savings account (T.F.S.A.). Those same students tend to repeat the course, some of them numerous times. Part of it is attributable to practice, but the truth of the matter is success comes from internalizing useful information, indicators and the methodology for mastering the markets, trade execution and your own mindset. It's not easy otherwise everybody would be rich by now. By the way, this course is definitely not boring! Investors may visit the Investment Seminars & Workshops page to see scheduled courses with descriptions and location(s). The Advanced Investor Workshop: Get your PhD in investing. The information provided in this half day workshop is an intensive study in the critical components of analysis and portfolio management. It is highly recommended that investors take Investor Boot Camp first. Fixed Income Investing: This course isn’t just for retired seniors looking to produce some or all of their retirement income from their investments. There is information here for growth investors who should have a good working knowledge of the bond market so they may incorporate the bond market with other markets such as stocks, commodities and currencies. Most importantly, at this time, fixed income investing has developed an elevated level of risk. All investors need to know what it is and how to handle in case something happens that may destroy a seemingly safe portfolio. How To Time The Market: This course focuses on how to time the market regardless of the market’s condition or trend. It’s one thing to know what the market’s condition is, or an individual security's, but knowing when to execute a trade is equally important. Practice, practice, practice! Investors in other cities and countries may subscribe to access information that is making many investors amongst the most successful anywhere. We don't just say what's going on, we show you. Otherwise, how do you really know?For more information contact us at info@investorbootcamponline.com , call (647) 349-6777 or try the live chat feature on any page in www.investorbootcamponline.com. Fri, 28 Oct 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/avon_not_calling.html http://www.investorbootcamponline.com/blog/avon_not_calling.html Despite a red hot stock market, many stocks continue to get whacked. If you only looked at the percentage declines list, you’d think it was a bear market. For some investors it is! The stock market is more than an exercise in analysis. It is a study into an investor’s strengths and weaknesses. Whatever weakness dogs an investor, it will be exposed by the stock market. Guaranteed! The new up trend, like other cycles, has its own characteristics. This time it’s a classic case study in the inherent nature of the stock market which is growth. Stocks in a relatively weaker condition tend to under perform the market’s hot stocks. The hot stocks have a common characteristic which is powerful growth in earnings and sales in the underlying company. For others, the inferior condition is hard not to see. Many stocks in already deep corrections have, and still are, suffering huge one day declines in very heavy selling. Meanwhile, the market’s leading stocks continue to rip higher leaving stingy buyers behind. Avon (AVP-n.y.) is just one example of a stock attempting to come off the bottom only to be subsequently buried in heavy selling. Big investors are leaving their mark telling individual or retail investors that they are going after certain types of stocks and dumping the rest. While AVP and others may bottom out here there is a high probability they will lag the market’s proven out performers or leaders. That’s the way it has been through out history, and history is playing out again. Why should this time be any different? In the New Year, our prediction wasn’t about what the market was going to do but more specifically that it was going to be a very bad year for investors who rode a correction down. See A Disaster Is Coming for Investors. It has been worse than anyone might have imagined as some previously great stocks fell 60% or more. But that’s what happens when they go up five to twenty times from the bear market low over a two year period. Too many investors will now make another trading mistake which is to fail to unload the laggards or stocks trading in clear up trends. Over the past three weeks, we have highlighted frequently, perhaps beating it to death, that investors use our strategy called "Trade Up". It means simply that investors sell securities in a relatively weaker condition and place money into the top performers on a timely basis. Sports fans will understand the concept. Why bet on a team that is in the middle of the pack or worse, instead of a team at the top of the standings? The team's relative comparison is of course shown by their position in the standings. We have shown investors (i.e. our subscribers) how to categorize stocks by relative condition. It has had a huge impact on results. A stock trading near its low is a laggard and inferior choice compared to a stock that has already started a new up trend and is barging higher. The issue with buying these stocks for too many investors is they have this idea that they should buy low. Great idea, but it doesn't work otherwise we'd all be rich by now. The real time process of investing money successfully by using relative condition as a key filter will be a theme in the upcoming Advanced Investor Workshop and the How To Time The Market seminar. Be sure to visit again for information relevant and useful to your portfolio and your understanding of the markets. Tue, 25 Oct 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/the_mutual_funds_know_nothing.html http://www.investorbootcamponline.com/blog/the_mutual_funds_know_nothing.html Stocks are getting hammered on earnings and stocks are blasting higher on earnings. Why? Don’t the mutual funds know what’s going on with these companies? You would think their army of analysts along with the fund managers would have a better handle on the company’s business without waiting for earnings. The latest action in the earnings season includes business process outsourcer Unisys (UIS-n.y.) springing higher by 31.4%. Volume was an extraordinary 800% above average. On the other hand, laser systems and high power electrical and microwave components manufacturer II-VI Inc. (IIVI) closed down 10.5% in volume more than 550% above average. Intraday IIVI fell 19.8% to a new low. Both of these stocks were effectively in the same condition at the close of trading October 24th before earnings were released. From the table below, you can see the dramatic swing in the earnings for UIS. IIVI was already slowing in the June 30, 2011 reported quarterly statements before their just released Sept. 30th quarterlies. You would think that further weakness in IIVI was predictable based on the overworked headlines of an economic slow down. What were the fund managers operating on? Hope? How is it that three months goes by with out “big money” knowing what the trend was in basic company operations? How could they not have even a notion that a massive shift in earnings was developing at Unisys (UIS) following several quarters of declining earnings and revenues? You can imagine Jim Cramer of Mad Money yelling out “they know nothing”! CompanySymbolEarningsGrowth UnisysUIS-n.y.226%II-VI Inc.IIVI0%In defense of analysts and the mutual fund industry, changes in securities laws, and more specifically the enforcement of violations, has made publicly traded companies more tight lipped about revealing data except by publicly released documents. But, as we have said before, this is completely counter productive to what is supposed to be the benefit of investing in publicly traded securities. Investors of all kinds, including mutual funds and pension funds, are supposed to be provided with transparency and full disclosure. But the truth is, many investors can get more information from a private company that wants to kiss up to their investors than they can from publicly traded companies. The investment environment in publicly traded securities has rendered analysts effectively useless.In depth analysis does not end in a conversation with management of the company. If a company is suffering from a “difficult period”, what do people think the C.E.O. or C.F.O. of a publicly traded company is going to say? Earnings are rotten, we stink and you should sell your stock? Of course not! The investment industry is now a place where individuals must have either an M.B.A. or the certified financial analyst (C.F.A.) qualification. The C.F.A. is three years of study and exam torture but like most business schools, they don’t teach the process of true investigation. There are many other ways to gauge the level of business activity in a firm by checking with suppliers, customers etc. How many analysts actually do that? Why should investors pay any M.E.R. to a mutual fund that is holding stocks getting clobbered? Why should investors hold stocks, especially U.S. traded stocks, over the earnings release date? It has become too risky to have your portfolio blind sided by an earnings landmine. But this kind of action is rare in the Canadian market. In fact, most resource stocks, which is just about all the Canadian market has, have been in deep down turns since January. Canadian mutual fund managers seem to have figured it out that commodity prices, which didn’t peak until later, were going to fall and earnings comparisons would be rough. Perhaps fund managers should swap countries. The American fund companies can cover Canadian traded stocks and the Canadian fund managers should cover U.S. traded stocks. Maybe then, the Americans would recognize the opportunities in Canadian traded resource stocks better and U.S. stocks wouldn’t be flying around on earnings so much. Fortunately, investors can trade their own stocks and E.T.F.'s and out perform the mutual funds. They don't have to hold a ridiculous number of stocks like the mutual funds do by owning just the best performers. They can also execute buys and sells with good timing before most mutual funds do. Send an email to info@investorbootcamponline.com to find out how to do it. We'll give you free access to the member's area which includes an extensive resource of information on how to trade and manage a portfolio including the Investor Tool Kit.Fri, 21 Oct 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Coffee_leads_weak_commodity_markets.html http://www.investorbootcamponline.com/blog/Coffee_leads_weak_commodity_markets.html The commodities markets were mixed Friday Oct 21st but some new trade possibilities are setting up. Copper was strong, up 6.36%; the gain comes just as copper had revisited the low in a eight month correction. It would appear copper is trading in a range that represents the bottoming out phase. The two times performance TSX traded copper E.T.F.'s can be used to trade a range between $8.20 - $10.36/share. HKU is the bullish E.T.F. which will rise in price as copper rises, and HKD is the inverse or bear E.T.F. There are no leveraged copper E.T.F.'s in the U.S. market. American investors might want to consider putting JJC aside and trading copper E.T.F.'s in the Canadian market. The recently I.P.O.'d Ishare Pure Beta Copper E.T.N. CUPM is far too illiquid to consider. Coffee is Best CommodityCoffee, represented by the U.S. traded E.T.F. JO, had a more significant session springing higher from a one month range at the bottom of a 5.5 month correction. The action looks better than any other commodity market at this time. It's the first to jump out of the bottoming phase and that makes it a leading candidate for more upside. Support is indicated at about $60.50.Commodities Remain LaggardsCoffee (JO) is 23% off the high, oil 26% and copper is nearly 31% off its high. These are relatively deep declines which renders these markets in poor condition. Gasoline, as measured by the gasoline E.T.F. UGA, is in the best condition 12.8% off its high. But even gasoline doesn't compare favourably with the Nasdaq which is now just 8.6% off the May 2nd peak. For that reason, most retail investors might want to avoid investing in commodities especially if they are going to blindly hold onto them. But more active traders may execute buys near the lows of a range and sells near the top of the range for reasonably good gains particularly if a leveraged E.T.F. is used. Profit From Commodities With E.T.F.'sIdeally, investors and traders want to see a single commodity market emerge as a hot market and out performer. We're not there yet, but when it happens, we're going to identify the market and the E.T.F. that can be used to trade it. Don't assume the U.S. dollar has to decline for any single commodity to go higher. With the right conditions, lead (LD) or cotton (BAL) or any other commodity could run higher. Agricultural prices may also be hot E.T.F.'s if corn (CORN) or grains (JJG) catch fire. If you would like to know more about emerging commodity markets and commodity market trades, as they develop, email info@investorbootcamponline.com with your interest. We'll send you an alert, but only when it's timely for your portfolio. Tue, 27 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/no_early_quotes_must_change.html http://www.investorbootcamponline.com/blog/no_early_quotes_must_change.html Imagine one sleepy morning you stroll into the bank just after it opens, get in line and wish the teller a good morning. The teller then tells you that the bank can’t confirm whether you have any money in your account or not.He or she says, our system doesn’t provide this information for a while. Undoubtedly, you and everyone else would be outraged saying this is unacceptable. So why is it we put up with no quotes from the stock market in the first fifteen to twenty minutes of trading? Using delayed quotes is common for the average investor who may log onto one of many free web sites that provide stock and E.T.F. quotes. But there are no quotes at all, except for the market averages, between 9:30 a.m. e.s.t. and about 9:45 a.m. It’s hard enough, in the current market madness, to trade profitably when the futures markets are substantially higher or lower prior to the open of the stock market. It's a double whammy for the average investor. If you trade in the futures markets, you may execute a trade as early as you like and position your money accordingly. But the average investor rarely trades in the futures markets and they aren't permitted to trade with leverage in registered accounts. In the last two sessions those who operate exclusively on the stock exchanges had their trade potential virtually erased by the futures markets.Early Monday morning (September 26th), gold had fallen $100/oz. subsequently cutting the loss in half before most people had their first cup of coffee. When the stock market finally opened, gold and silver stocks were already down 5-9%. Tuesday morning, it was the same story but gold ripped higher with a gain of as much as $75/oz., again, before the stock market opened. Silver was up over 11% prior to 9:30 a.m. e.s.t. If an investor had bought a silver E.T.F., intending to profit from the rebound, they would have lost money as silver gave back nearly 5 points, or half, the session gain by the close of trading. It’s as if there are odds makers compounding the issues of trading by stacking the odds against you before you can make a trade. Twenty four hour trading probably isn’t the solution people want in order to deal with this issue. However, longer trading hours would effectively counter another issue related to the release of corporate news from publicly traded companies. The current requirement is company’s report material news, such as earnings, when the market is closed. The intention is to achieve fairness by providing for dissemination to the public before others can execute trades. This is nonsense! The rule is in fact unfair. If you make a point of taking the time to read the press release as soon as it is available, you should gain an advantage by trading the security before other people get around to it. It would also certainly help to alleviate the far too frequent huge swings in price that typically occur on earnings announcements especially in the U.S. market.It’s time legislators and regulators reviewed these issues.Ask yourself, who is profiting from those first fifteen minutes of trading when no quotes are available. The stock market isn’t supposed to be an “old boy’s club” where investment industry firms and so called professionals may do whatever they want, in secrecy, so they can line their own pockets.Thu, 15 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/rogue_trader_losses_arent_invisible.html http://www.investorbootcamponline.com/blog/rogue_trader_losses_arent_invisible.html Another rogue trader has apparently been revealed. This time Swiss banking firm U.B.S. has been whacked with a loss reported to be nearly $2 billion U.S. Huge losses from so called rogue traders seem to be a recurring theme with one of the most notable stories coming from Barings Bank. Nick Leeson’s losses were reported to be over $1.4 billion before he fled the country leaving a note saying he was sorry. How is it massive losses go undetected so frequently? The answer is simple. The employers are well aware of the activities of traders including the losses. Only the smallest firms with one or two people in management and the back office might not know until it’s too late. But the big firms have to know given their extensive accounting systems, back office and compliance staff. When traders are making money, its business as usual, but when they get wiped out its rogue trading! The trader’s employer will “hang the trader out to dry” in order to cover their legal, regulatory and public relations interests. Huge losses don’t just occur over night. It’s not like the U.B.S. trader invested $200 billion last week and lost 10%. The accumulation of massive losses takes time. Nick Leeson’s losses were reported to have evolved over a period of three years before the bank was buried. Management had to have known since their loss amounted to twice their trading capital. The issue here is rooted in relationships. Management trusts the traders to dig themselves out of the hole they created. The underlying issue that triggered the credit crisis was founded in relationships where one organization was letting others off the hook because it was easier or it risked cutting off their revenue sources. There are many more rogue trader stories that we never hear about because they don’t end up in the press. How many wives have had to face selling their home because their husband blew all their money, and beyond, trading in the futures markets? It happens more than you think. In every case, the damage could have been mitigated by cutting losses before they became too large. Successful investing isn’t about being right, it’s about building a winning position when the trade is right in terms of timing. It can be done and it can be done quite well. If you want to see how to do it, try the free trial subscription. If it isn't currently available when you're looking, send an email to info@investorbootcamponline.com and we'll set you up with access to investment information that you've probably never seen before.Wed, 14 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/timely_useful_investment_information.html http://www.investorbootcamponline.com/blog/timely_useful_investment_information.html Our investment information, refined from various research techniques and variables, is designed to assist investors with real time management of their portfolios. It is intended to answer the question, "so what do I do about my portfolio", or "what's the trade"? Here is a sample of some of the content provided to subscribers over the past three or four days (dates not provided). One of the more recent features is a table of stocks, and markets, by relevant condition. It's called Tracking The Action (see below). The markets have been in a correction which demands a much higher level of caution and defensive action by growth investors. For more active traders and those who monitor the markets on a regular basis we provide evidence of actual events or developments in the U.S. and Canadian markets for the purpose of assessing matters related to managing the portfolio. That includes the bond market, commodities and currencies. The first entry, "Where's The Volume?" is an example of a portion of the real time commentary that is updated through out the session.Where's The Volume?The gain in the Nasdaq has the appearance of clearing a range the market has been working on as part of the bottoming out process which includes passing time. However, the volume is extremely low. Volume is usually a reliable secondary indicator although it has had less significance since the market came off the bottom in 2009. A more significant indicator may be new highs which are still very thin. The bullish slant to today's session is the percentage leaders are former leaders mostly from the tech. sector. Another is the relative strenght line of the Nasdaq, relative to the S&P 500 is at a new high and its highest level since late last year. The correction has been characterized by the best performers in any given session being beaten down stocks enjoying a single day of big gains. Read more at Orderly Trading.(this was updated at 1:00 p.m. e.s.t., Wednesday Sept. 14th.Tracking The ActionCurrent Phase in the Stock Market: Bottoming Out Phase in CorrectionSee the dedicated page for Gold and Silver Trades.Stock and Markets Tracker ActionorConditionSymbol Leading Bio-techs ALXN, VRUS, JAZZ, HITKTo Watch LQDT, SPRD, FNSR, RIM-tsx, FM-tsx,IIVI, NVMI,NTGR, MDSO, ULTA, JVA,VRUS Emerging sector(s) Gold and Bio-techs NewHighsAZO, LMNX, CBOU, CF, TNH UpfromsupportSGG-u.s. AAPL, SuperiorRelativeStrength CF, TNH, ZL-tsx, MITK, TDG Breakouts UAN, PANL, CPA, ULTA, TNGO, ALXN, MA, DOL-tsx,KRN, JAZZ, VRUS, TNH, CF, YRI-tsx,ELD-tsx RegainingSupportCanadian: BMO, TD, DOL, CMG, PD, LLL, DOL, VNU.S.: EZCH, HITK, FAST, TSCO, PCLN, CRR, IACI, JVA, ISRG, GMCR, MLI,BIDUI.P.O.'S to watchTNGO, LNKD, P, TAOM,CommoditiesCoffee (JO)I.P.O. TangoLate July U.S. I.P.O. Tangoe Inc. (TNGO) was highlighted for a powerful break out on September 8th. Since the break out the stock has been wild but it has held the break out and new up trend. Tuesday's action appeared to be day one of the next phase in its up trend as the stock emerged from a three day consolidation in heavy buying. I.P.O.'s have been flagged as a sensitive indicator for investor sentiment. TNGO is trading much better than other I.P.O.'s. It's not surprising given the strong earnings and sales growth and the potential upside for their software. Companies like LinkedIn (LNKD) and Pandora (P), might seem sexy but their popularity may be hurting share performance since the initial days following their I.P.O.'s. TNGO was added to the list of significant break outs in the table Tracking the Action (below) along with other I.P.O.'s to watch. Fertilizer Stocks Explode HigherAnother fertilizer stock is emerging with strong fundamentals. CVR Partners (UAN-n.y.) jumped out of its first base in Monday's session. Investors who want to capitalize on strength in the sector may consider buying UAN as close to $25/share as possible. The fertilizer sector has two of the strongest stocks in the market; TNH and CF. Canadian counterparts are not trading as well. Euro May Be Investor Training GroundDuring the stock market's new nine day trading pattern, the Euro has been undergoing a significant decline. The action marks a new down trend that has ruined what had the appearance of a set up to a break out from a three year base. During this time the Canadian dollar and Australian dollar have both experienced some weakness. Both of these currencies, which have been amongst the stronger currencies worldwide, are below their long term trend lines. Since nearly ten years ago, the stock market and commodity markets have never rallied unless the U.S. dollar was falling against most major currencies. As you may imagine, the break down in the Euro could be the beginning of a significant long term down trend for the Euro. That would be a major shift in the relationship between all markets as the U.S. dollar becomes an area of strength rather than weakness. For that reason, be alert and open to new developments. This is a time where trade execution and portfolio management done systematically, i.e. objectively, may be more important than ever. Another "Break Out" and New Up TrendUniversal Display (PANL) designs organic light emitting diode devices for flat panel displays for the consumer electronic market. The stock has broken out of a five month base in heavy buying. See the chart in Stocks to Watch. While the company doesn't report earnings, the success of the break out will add another piece of the puzzle to emerging break outs. Those are noted in the Tracking the Action table below.Gold and Silver Stocks In ConsolidationGold and silver stocks were mostly lower following Monday's relatively large losses. While this sector is a stand out, by far, that doesn't mean it's going to be easy. As long as your holdings, as well as the leaders from the precious metals group, consolidate in the context of their up trends you can ride out, and ignore, the day to day madness. Support levels, marked by price, have been noted in the status column for theleading stocks listed. A pattern of wide and loose trading has developed in this sector over the past week similar to what we've seen in the U.S. market averages. The implication of this action remains to be seen. Coffee's Getting ColdThe coffee market, represented by the E.T.F. JO, has pulled back to the 50 day moving average. This might look like an opportunity in one of the few markets that are relatively healthy. However, most markets and stocks are range bound or, technically speaking, trading in bases. The implication for JO is it is going to remain constrained, trading up to the high at best, and subject to increasing pessimism that may show up as sharp declines.Avoid Buying Too Early; Avoid LossesFirst Majestic Silver (FR-tsx) provided a real time example of the importance of not buying early. The stock had gone through the phases of setting up for a new up trend but was wacked in Monday's session sending the stock back down into the 5 month base. The single session of action ruins the consructive nature of the base with the implication it may take considerably longer for the stock to initiate an up trend. This relates to the significance of the "break out" and its very sensitive nature in the overall price trend of a stock.On the matter of buys, the one and only official buy entry, Alexion Pharmaceuticals (ALXN), is still in an up trend implying the break out is intact. It may be testing investor patience but tight ranges are a normal part of up trends. Until the Strategy Manager, in the Time the Markets page, is officially in an up trend the stock market and most other markets remain a "black hole" for investor money.Avoid The Traps Of High Risk InvestmentsIf you like investing in junior resource stocks, particularly through financings with warrants, see the series on How to Invest In Financings and Resource Stocks.This Week: Be Prepared to Sell To Protect CapitalIn the event the stock market cracks this week and resumes the down trend be prepared to sell stocks that are in a loss position no matter how large it is. Significant downside may develop which provides investors with an opportunity to minimize further damage and cut into the loss by buying holdings back at lower prices. It's not a polished slide-show but if you haven't seen the trading template for managing securities with large losses now may be a good time. Don't discount the possibility that the stock market and most commodity markets may go substantially lower. Many stocks have already cratered by large amounts, 50% or more, but they will not be immune to a market wide decline. What is also a common characteristic in corrections is a "shake out" at the end of the correction that is violent and emotional. Use it to your advantage. Perspective on Day to Day ActionGold and silver stocks are lower in Monday's trading. However, the declines are in the context of strong gains over the past two sessions or more for leading precious metals stocks. Stocks that are unusually volatile, such as gold and silver, emphasize the significance of evaluating day to day price swings in the context of the trend. The bond market may be interpreted the same way as today's decline is modest in the context of last week's strong upside action.Avoid The Traps Of High Risk InvestmentsIf you like investing in junior resource stocks, particularly through financings with warrants, see the series on How to Invest In Financings and Resource Stocks.The More It Changes, The More It Remains The SameTech stocks that are trading under their 200 day moving average have run into resistance and continue to struggle. It's part of the basing process that prolongs the emotional process of trying to make money. See the chart of Vmware (VMW) as an example in today's Stocks To Watch. Something that might be worth realizing, is despite the stock market going through some interesting intraday action on a regular basis things haven't changed. The market is still working on establishing the bottom, gold stocks are not only out performing they're "hot" and the bond market remains in the driver's seat.Former leader Ulta Salon (ULTA) has blasted higher, up nearly 10%, in what is clearly a break out from a two month base. That's a nother break out in the third day of new break outs in the U.S. market. So far, most of them have held their new up trends. That's not only a bullish sign, it is the most significant indicator for making reliable profitable trades. It's only three days so a few more days should provide a sufficient body of evidence to potentially execute buys in the early leaders. They will also likely set up new buy points following their intial break outs. ULTA is too extended to buy already partly because of the nature of the base. Recent break out Alexion Pharm. ALXN is lower today in a three day consoldation following a break out. The pull back is mild in declining volume which suggests the stock should undergo the next phase of its up trend. Defensive Stocks Roughed UpA number of defensive stocks are down sharply including KO, HNZ and UL. These stocks would have been nearly impossible to have profited from despite stocks categorized as being defensive being out performers. Previously, it was mentioned that a break down in defensive stocks might signal mutual funds are preparing to shift to growth stocks. The timing of their decline with the market landing at the low of its trend channel may not be a coincidence.Bonds At New HighsThe bond market is continuing to excel. Investors may still buy bonds or bond E.T.F.'s such as XLB but be careful with any new purchases. The cycle in bonds is perhaps late which implies profiting from new purchases may prove challenging if the market peaks in the near term. Remember the price of your last purchase when adding to bond E.T.F. positions and make sure you don't lose any money on it. Note that the U.S. bond market has been far more profitable than the Canadian bond market with TLT and EDV out performing substantially.Managing the Growth Portfolio and the Bond TradeIf we look back at the beginning of cycles we can see how executing on time can potentially make a big difference to a portfolio. When the bond market renewed its up trend most growth investors wouldn't bother. It was indicated at the time that the trade may prove to be one of the few reliable ones and a large position built up over time might produce a big swing in returns. This is most pronounced for larger portfolios. A bond position that is anywhere from 40%-80% of the portfolio hasn't produced a huge percentage return, yet, but it's relatively decent money for the conditions. If the portfolio had stayed focused on the bond market consider the flip side of what didn't happen. If money had been held in some troublesome U.S. growth stocks or damaged Canadian base metal stocks or energy stocks, the loss might have been 10%, 20% or more. It's a swing trade where results could be substantially different. For smaller portfolios, consider this;If you can’t manage a $10K portfolio, what would happen if you had $500K, or $2 million or more?July 27th U.S. I.P.O. Tangoe Inc. (TNGO) jumped 16.2% to a new high. The enterprise software provider reports a 200% increase in earnings on a 56% jump in sales. The company reports accelerating growth in sales. The combination of stellar fundamentals and superior out performance in the stock makes it a potential buy. Fundamentals are obviously critical to out performance for a stock. But many investors are looking at measures that are relatively insignificant. Price/book value for example is meaningless for most companies. See Accelerating Earnings Growth to see what attracts savvy investors. Tue, 13 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/calling_the_left_wing.html http://www.investorbootcamponline.com/blog/calling_the_left_wing.html Many of us have had the frustrating experience of dealing with an automated voice mail system. Unfortunately, it may be representative of real world experiences and relationships. It goes like this; Voice Mail: This is “The Left Wing”. Please listen to our choices because they are the only ones we’ll consider. Listen carefully for the options which have never changed. Push 1 for taxing the rich. Push 2 to support the union. Push 3 to speak to an operator. Caller: O.k., I’ll take 3. Voice Mail: Please hold, our operators are busy. Pause..., more waiting.... Caller: This is taking a long time. Oh, here they come, that’s good. Voice Mail: Thank you for holding. Our operators are probably on a break or filling out forms saying they work very hard. If you would like immediate assistance, please push 4 for Screw Corporations. Caller: Alright, I’ll take 4, maybe I’ll get someone. Voice Mail; Our business hours are 8:00 a.m. to 4:00 p.m. Our offices are now closed. Please call another time when you see things our way. Thank you for calling The Left Wing. Have a nice day. Nowhere in life is there such a great divide as there is between the “right wing” and the “left wing”. There’s nothing wrong of course with having an opinion, that’s not what this is about. It’s about the persistent stubbornness by the left wing to not engage in meaningful exploratory and insightful conversation with those who actually care about the issues.For those that consider themselves left wing please consider these questions amongst others in the context of real world issues with unemployment, the economy, corporate sponsored benefits plans, etc.If you think business has it all wrong, what would you do? If you believe taxing the rich is the answer how would you do it? Be specific; if you would raise the marginal income tax rate at what level of income would you do it? If the rich moved their businesses and/or personal affairs offshore, how would you deal with that? If you raise income taxes and business owners incorporate and pay themselves dividends instead of income, what are you going to say to your grandmother whose retirement income is dividends? If you were giving a presentation in a room full of those “rich people”, would you say the same thing that you say in conversations with other people? What if your job depended on the outcome? The reality is the rich pay most of the income taxes. It’s not a matter of debate, it’s a fact. For those that still don’t believe it, do the math. Take the approximate number of middle income earners in the country, make a ball park calculation of the taxes generated and see how that matches up the income tax revenues the government takes in every year. It doesn't!Like the absurd process of dealing with some voice mail systems, there are many people who find talking with the left wing view, is an insult to their intelligence, or at least, their knowledge. It’s easy to sit on the other side of the fence and debate something. After all that’s what sports is about. But those right wing people the left wing hate, ideologically, are people you may know personally. They are also the ones who are actually trying to solve issues that can be complex.Thu, 08 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/the_most_critical_fundamental_for_hot_stocks.html http://www.investorbootcamponline.com/blog/the_most_critical_fundamental_for_hot_stocks.html Investors will typically assess numerous measures of fundamentals in order to gain the upper hand. With stocks, investors may look at a company's debt level and return on equity amongst others. In the commodity markets, investors might look at inventory supplies to determine if the price trend of the commodity is going to go higher or lower. Unfortunately, most of these are a waste of time. In fact, many of them lead investors to making decisions that lead to losing money.In the stock market the single most significant factor that drives investors into a stock is earnings growth. But studies show the most significant factor that influences the market's hottest stocks is accelerating earnings growth. At Investor Boot Camp Online we filter stocks starting with this critical factor and then add one more. We consider those that also report accelerating revenues. This is the fuel for big earnings growth and typically huge gains in the stock price. Jazz Pharmaceuticals (JAZZ) is a company that develops specialty drugs to treat a number of disorders including obsessive complusive disorders, social anxiety disorders, cataplexy and narcolepsy. Take a look at the trend in sales growth, in particular, in the past four quarters. The quarter ended Dec. 31, 2010 interrupted the pattern in accelerating growth from the Sept. 30th quarter. But the sales growth continues to ramp higher since then to record levels. Earnings growth is so large that realistically it is very difficult to maintain accelerating growth.FundamentalSept. 30, 2010Dec. 31, 2010Mar. 31, 2011June. 30, 2011Earnings Growth+583%+91%+228%+193%Sales Growth+45%+39%+45%+59%JAZZ has a relative strength of 99. That means the stock has out performed 99% of all other stocks in the market in the past fifty two weeks. It doesn't get any better than this. In 2009, this was a penny stock but now trades over $44/share. It's no fluke as earnings growth attracts the investors who drive price trends; mutual funds, pension funds and hedge funds. The superior fundamentals and proven stock performance is the primary reason why this stock was one of our top picks from a year ago.The stock shows a very important trait during a period when broad weakness has pushed many stocks and the market averages into a correction. The stock never undercut its 50 day moving average. What that indicates is existing shareholders are willing to hold the stock rather than sell it. It''s a distinct difference from other stocks that have seen investors rush to the exits from as far back as mid February. Remember the uranium sector following the nuclear reactor disaster in Japan in March? The Trouble For Higher Share PricesThe issue for many growth stocks at this time is the ability to continue to report accelerating earnings growth. This is most pronounced for resource stocks that have, in most cases, seen their underlying commodity price decline from six to nine months ago. For these companies their commodity price is the driver for higher sales and earnings. Our real time study of stocks starts by filtering for companies that are in the stratosphere with earnings and sales growth. It significantly reduces the possibilities for a buy. For individual investors, who only need a handful of stocks as opposed to the 150 held by mutual funds, why own anything but the highest growth companies in the world? That's how you put your portfolio into the top 5% of performance. Tue, 06 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/wheres_rockefeller_now.html http://www.investorbootcamponline.com/blog/wheres_rockefeller_now.html Sunoco Inc. has announced it is getting out of the refining business. Earlier this year, ConocoPhillips and Marathon Oil spun off their refinery business. When you think about it, this is actually hard to believe. A company like Sunoco is moving out of a significant area of the oil business. For those on the inside, this may be a sad moment in the history of the oil industry. Companies shed assets and business lines because they are plain and simply not profitable. Very few new refineries have been built in North America in a long time due to poor business prospects, environmental back lash and the huge capital cost to build a refinery. Meanwhile, over the past five to six years many consumers and businesses have been complaining about the high cost of gas. In 2008, the high cost of oil was thought to be at a tipping point for the economy. The same view emerged again over the past few months as gasoline prices returned to the highs. In both cases, the economy turned lower shortly afterwards. The biggest loser has been the airline industry with jet fuel representing their highest operating expense. Perhaps it’s time the government entered the refining business. In the 1870’s Standard Oil, led by John D. Rockefeller, bought up the numerous refineries that had sprung up in the early days of the emerging oil industry. Most of those were in Cleveland servicing the oil producers in Pennsylvania. While some hated Rockefeller for being the octopus that refined 90% of U.S. oil production, economists believe he could have just left his competition to wither and saved his money. The oil industry is now taking on the same characteristic although for different reasons. Many people, including those at Investor Boot Camp Online, believe the government should stay out of most markets. But the refining business might be one that makes sense for government involvement at this time. They have the capital and they can take care of domestic economic needs without consideration for maintaining maximum profits. They can also pay more attention to environmental concerns by combining alternative energy programs with waste from refineries. President Obama could handle a win and this just might be the place to work one.Buy a refinery and devote it to the production of jet fuel. Provide jet fuel to the airline industry in a more predictable and cost effective process, for the airlines, and spark a much more favourable business environment. That helps the airline industry which helps everyone else. Refine gasoline to provide better prices to drivers when it makes a difference by smoothing out extremes in prices. Weak economic times would of course qualify and so would times when gasoline effectively becomes too expensive. This isn’t as big a stretch as it might seem. It’s a strategy that may provide some fuel to get the U.S. economy back on track. The government can sell the refineries later when there’s profit and use the proceeds to pay down debt. Fri, 02 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/holiday_time_doesnt_mean_the_markets_asleep.html http://www.investorbootcamponline.com/blog/holiday_time_doesnt_mean_the_markets_asleep.html There are many clichés used to describe some aspect of the investment markets and the process of investing. Many of them are just plain wrong while others have statistical validity but it is only marginal. If the clichés were valid, wouldn’t everybody be rich by now? The final week of August, going into Labour Day, is frequently considered a quiet time. Investors think the big money managers are up at the cottage and nothing will happen. But further analysis shows that turning points have frequently developed during holiday times, including the period between Christmas and New Years. If you go back to the credit crisis driven bear market December 26th was a significant session as it marked the beginning of an ugly three week sell off in the stock market that erased 35% from many of the market leaders including Apple (AAPL) amongst others. Now we’re seeing it again this week. On the surface, the stock market is having an insignificant but welcome week following a brutal four week decline. While the action in Friday September 2nd’s session looks like the market has run into resistance, many stocks have come off their lows with an increasing number of former hot stocks undergoing new buying. Depending on what happens in September, this week may turn out to be insignificant despite some bullish trading opportunities developing. But the bond market is another story. Bond prices have exploded higher clearing a short term range. The gain indicates the bond market is effectively beginning the second leg up following the original break out, and new up trend, that started July 29th. The timing of the bond markets new up trend in late July corresponded with the beginning of the stock market’s steep two week plunge. The bond market doesn’t experience fake outs to the same degree as the stock market. In fact, the bond market is, in our analysis “the wise one” when it comes to the markets. Investors and traders of all types who decided to ignore the markets this week, due to seasonality, may find they’ve missed out on market timing. Canadian long term bond E.T.F. XLBThu, 01 Sep 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investor_mindset_challenge.html http://www.investorbootcamponline.com/blog/investor_mindset_challenge.html If somebody thinks investing, and the stock market in particular, is a pleasant place to live, they're probably making some good money. But that is a temporary condition just as the summer turns into winter. The reality of investing successfully is there are certain events or developments that are in a sense a sacrifice. Putting up resistance has proven to be costly for investors in terms of money and emotional capital. The ugly July-August 2011 sell off in the stock market's correction and now the attempted recovery is a phase in the market that provides an opportunity for investors to internalize the successful lessons of investing. One of the big issues for investors, emotionally, is to deal with selling stocks off to protect capital only to buy stocks back at potentially higher prices. In some cases, stocks are bought back at much higher prices as they etch new highs. Consider the following;Things ChangeThe stock market isn't just a game. It reflects the real world of many variables that are influenced by people's behaviour around the world. It is important to recognize that stocks that were top notch performers in the most recent up trend, i.e. leaders, may be duds in the next rally. It frequently has nothing to do with the company's fundamentals but history has also shown that many stocks peak long before their earnings and revenue growth goes into decline. By going to cash early in a new down trend, you place yourself and your money in a position of objectivity to snare the new leaders. The second potentially frustrating development is the inherent sense that the chance to buy a stock at a lower price was missed. That is mathematically correct but realistically there is no way of knowing which stocks are going to rip higher and when. Embrace ItThe way to deal with this is to accept it, target new areas of strength and look for the next systematically determined entry point for initiating a position with the first buy.An example of a potential buy in a new rally, should it expand beyond August, is Liquidity Services (LQDT). The company reports a huge jump in earnings, 247%, on an 18% increase in revenues. The stock ripped higher by more than 20% in huge volume September 1st. That puts the stock on the radar for a potential buy following the fist consolidation. The consolidation could be as short as one day but waiting for it is the way to place money into an area of strength. Strength is what investors pursue. This has been validated with thousands of stocks over many market cycles. If a stock continues to fall, as others are being bought up, then obviously it is undesirable. To conclude the market is wrong actually doesn't matter. That won't help you make money if they're wrong and don't miraculously change their mind. It is impossible to have more valid information than everybody else in the world. So make it easy on yourself, and go with it. Then you profit! Tue, 30 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/defensive_stocks_risky.html http://www.investorbootcamponline.com/blog/defensive_stocks_risky.html The so called defensive stocks and sectors in the stock market have emerged for their out performance since the market's sharp sell off bottomed out in early August. The rapid recovery in defensive stocks indicates mutual funds are taking a defensive view of the economy investing in companies that tend to maintain stable sales and earnings during periods of economic weakness. It's potentially a cautionary warning on what may transpire in the stock market after Labour Day.It may be tempting to buy one or more of these stocks based on their clear bullish action. However, it is important to consider that a buy and a sell need to be executed with a sufficient gain in between to provide a reasonable profit. Given that a characteristic of the market has been sharp declines, sometimes in one session, the risk may not be worth it. Mutual funds are in a different business than individual investors who are not mandated on what they buy and hold and do not need to sell themselves to any one. As previously mentioned, sometimes it's what you don't do rather than what you do that makes you a successful investor. Here is an example of some of the constructive action in stocks that fall under the defensive banner. If you can catch a defensive stock early enough a buy may pay off. But consider a break out in a defensive stock at this point in time is late. That makes the stock a laggard raising the risk again. A late break out most certainly won't out perform one of the early leaders such as Unilever (UL-n.y.), shown above. Heinz (HNZ-n.y.) staged a break out on Monday August 29th. The break out is occurring from just above the mid point of the base. The base is relatively shallow, with a high of $54.50 and a low of about $48.50, but historically a break out from this deep in the base is prone to a higher rate of failure. Is it really worth chasing after a high risk-low return trade in an erratic market environment? Investor Boot Camp Online assists investors who manage their own portfolios. The Investor Tool Kit, available to members, is an extensive easy to use resource providing investors with the tools that have been proven to produce winning trades while maintaining capital.Mon, 29 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/its_time_to_raise_interest_rates.html http://www.investorbootcamponline.com/blog/its_time_to_raise_interest_rates.html Fed chairman Ben Bernanke has been attempting to do everything in his power to revive the banking industry. Record low interest rates and quantitative easing have been the weapons of choice. While some have been critical of inflationary measures, the reality is the Fed.’s intervention in early 2009 thwarted a meltdown in the economic system. But the solution then may be today’s economic handcuffs. The economy is slowing raising fears of another recession. Adding to deteriorating sentiment is the dark cloud of pending defaults from at least one European country. It would seem that rising interest rates would only contribute to a constrained economy. But the argument against central banks holding rates low has been directed at how “easy money” has been used. Big investment dealers and their institutional clients have bagged guaranteed returns borrowing money and investing in government bonds. The spread might not seem like a big deal but it’s a healthy return when hundreds of millions are invested. The capital has been productive in the financial markets but not the main wheel in the economy. If the Fed. started raising rates their huge injection of capital would have to start looking for better and more productive returns. Banks would look at new loans with a higher risk profile, but the businesses who borrow are typically the more productive spoke in the economic wheel. The U.S. housing market would appear to be at risk, but the reality is nothing would change for many home owners. If they can’t afford, their mortgages now, the impact of higher interest rates is relatively insignificant all things considered. The banks have already decided who they’re going to foreclose on. Don’t count on them adding more to the list when rates go higher. The funny, or not so funny, thing about the economy is it is driven by behaviour. The current economic order has become stale. Change it up and the economy might just move into higher gear sooner rather than later. Bernanke is waiting around for Obama to see the light on economic policy but time is up. It was central bank action, led by the Fed., which sparked the recovery two years ago, now it’s time for them to do it again. Fri, 26 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/disaster_awaits_the_markets.html http://www.investorbootcamponline.com/blog/disaster_awaits_the_markets.html The stock market has had a very rough August falling nearly 18% since July 26th. Since July 1st, gold has rallied 29% before peaking August 24th subsequently suffering the worse single session decline in more than three years. Fear has increased dramatically shifting investor sentiment from stubbornly bullish levels. It would appear that worst is over as stocks are now attempting to bottom out. Or is it? There doesn’t appear to be any catalyst for investors to come back into the market. The economy is weakening. Banks are crippled by massive European sovereign debt load. Stocks have made huge gains since the lows of the bear market in March 2009. How much higher can they go without a significant correction? Earnings comparables will be challenged particularly in the resource sector(s).China is dealing with tightening credit and inflation. Investors, including governments, who provided what were effectively “bail out” funds in 2009 are taking profits. Accordingly, companies saddled with bail out money are unloading the costly burden. The solution to the credit crisis is now becoming a crippling factor to economic growth. The Fed .is keeping interest rates near zero for reasons they aren’t going to publicly reveal. The essentially free money was, and still is, intended for the banking sector for the purpose of mitigating risk. The money led to an explosion in asset prices, like the stock market, and guaranteed profits through investments locking in a spread between the cost of borrowing and higher yields (i.e. government bonds). But that’s an old story now, and it is becoming stale. The money hasn’t had a significant real world economic impact because it is seeking safety rather than higher growth returns. Meanwhile, European governments and banks, are trying to sell off as much of their exposure to Greece as they can, insuring the rest in order to reduce future losses. The belief is, Greece is going to default. It’s not a matter of if; it’s a question of when. The cockroach theory, tells us that Greece won’t be the only one. Portugal, Ireland, or perhaps Spain will be next. A domino effect is probable and it will effectively create a new world economic order when it happens. The stock market won’t quietly let is pass by. You can count on that. Individual investors might want to consider that many larger institutional investors can, and have, hedged their stock and commodity portfolios. But mutual funds don’t and won’t because they aren’t allowed to by law. Millions of people with money tucked away in their retirement accounts are at risk. Those with stock portfolios, either with their advisors or a discount broker, will be the accounts that get slaughtered in the event the market collapses on an official European country default. Investors can do something about it when they react to real time events that indicate a renewed down turn is developing. The problem is, most people don’t because they are operating on hope. Unfortunately, hope doesn’t work in the stock market; otherwise, we’d all be rich. Thu, 25 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/buffett_invests_in_bank_of_america_why.html http://www.investorbootcamponline.com/blog/buffett_invests_in_bank_of_america_why.html Warren Buffett is investing $5 billion into Bank of America (BAC-n.y.). It looks like another big move by the world’s most watched investor. But there are surely thousands of investors and, in particular investment industry participants, who ask the question, why? The deal certainly appears to have been structured to fatten Buffett’s war chest. Like most financings, there are warrants and the pricing of the warrants looks like the sweet part of the deal. The following was reported by the press on the deal; “the warrants to buy 700 million shares of common stock he gets ...are priced at just over $7.14 per share, with an unusually long 10-year exercise period. As James Armstrong, president of Henry H. Armstrong Associates. said, “It's amazing how much a little hug from Buffett is worth these days." It is virtually a mirror of the deal Berkshire did with Goldman in the depths of the crisis in fall 2008, except in Goldman's case it paid a 10 percent dividend. The Goldman deal paid Berkshire $15 a second in dividends until Goldman bought Buffett out earlier this year.” That’s the way it works when you are the richest guy in the world. Since the credit crisis, Mr. Buffet has been talking up a good story in the press that comes across as patriotic perhaps intended to provide stability and calm. Something like a grandfather might say. But this deal, while on the surface opportunistic, seems odd. The Bank of America has been the problem, not the solution. While Buffett talks about taxing the mega rich along with other economic ideas he has to resurrect the economy, and confidence, this deal begs the question, what about the hundreds of thousands of small businesses that are being trampled by big businesses, red tape and taxes in an economic environment that is taking on the look of a parched wasteland? Couldn’t he have put money into some of these? The behind the scenes story in the investment industry, since the bear market fuelled by the credit crisis, was no one was going to consider anybody else’s mess. New financings had to be in something completely new which didn’t mean a new company; it meant a new company in effectively a new industry such as alternative energy and electric vehicles. There isn’t anyone, except apparently Buffett, who would make an investment in a company like Bank of America. Imagine working at Berkshire Hathaway. What hard working well educated ambitious investment professional who works there would be jumping up and down with the idea they should be dropping billions into Bank of America? While many out of work investment bankers would be happy with any pay cheque, this isn’t the stuff that puts a gold star on a resume. This deal has been structured to reduce the risk, but it’s still not appetizing enough for anyone. If we didn’t have the view of Warren Buffett that we hold, we’d say he’s acting on a sense of duty, has too much money or is trying to write a final chapter in his career. In either case, the rest of us should hope this deal doesn’t fail. Not because it’s going to ruin Buffett’s portfolio, but because it would be a very bad sign for the banking industry. Tue, 23 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/IPOs_as_a_tip_off.html http://www.investorbootcamponline.com/blog/IPOs_as_a_tip_off.html Initial public offerings (I.P.O.’s) that are trading in the stock market tend, historically, to magnify the underlying condition of the stock market. They are essentially a tip off to investor behaviour you can use to time the market There were three recent I.P.O.’s that are significant for their size of offering, significance in their industry and investor interest. Using those three, we can track their progress and use them to; look back and match their action to the stock market’s trend, their current condition, and, pivotal price action to identify time the market. The three are;U.S. based internet radio station Pandora (P-n.y.). Professional social networking site Linkedin Corp. (LNKD-Nasdaq). Chinese online children's entertainment community operator Taomee Holdings (TAOM-nasdaq). Here are the trading characteristics in these stocks reflecting investor sentiment: All three started trading above their I.P.O. offering prices. All three followed the market's trend higher throughout June, logging significant gains and out performing most stocks (relative strength data not shown). The gains were substantial during this short term up trend which, for all three, did not end until shortly after leading U.S. market averages peaked. These reflect the persistent bullish enthusiasm that dominated the market through 2011. So were the dramatic intraday gains in the first session of trading that quickly sold off with all three closing near their session lows. But since the 52 week highs, the losses have been large especially for Pandora (P) which is down nearly 55%. The Current ActionYou can see that all three stocks are attempting to hold in a tight consolidation over the past four sessions. But intraday gains, in the most recent session which is August 22nd, have been given up as a lack of buyer interest keeps prices depressed. Investors may use these three stocks as an indicator of conditions for the purpose of executing good timing. When these stocks start to move higher, clearing a range, they are tipping off investors that more upside may be underway. But more downside, etching a "lower low" since their declines accelerated, will tell us that bottom fishing for a buy remains an unprofitable strategy. Thu, 18 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock_market_gets_ugly.html http://www.investorbootcamponline.com/blog/stock_market_gets_ugly.html The huge blind side sell off in the stock market ending August 9th undoubtedly shook up many investors including big fund managers. Many probably thought it was over too. But now the stock market has turned ugly, very ugly. Thursday August 18th is one of the worst days in the stock market you'll ever see. A greater than 5% decline, in the Nasdaq, is an extreme sell off coming up just short of the 7% decline that is used to define a crash. Ironically, in what is perhaps another bearish sign, the market's decline has been slow and steady through the session. But the real story is in the widespread slaughter in many of the market's hottest stocks from the last two years. Big Investors Wave Bye Bye, The Bear Says HelloThe damage inflicted in so many former great stocks is shocking. Take a look at the very heavy selling in these charts.These stocks are substantially below their long term trend lines, the 200 day moving average, which is the dark blue line in the charts. Many traders may have likely been fooled by the already significant decline from this significant yard stick having bought in following the deep ten day down turn ended August 9th. If the bulls are looking for something positive, the gains in a rally to the 200 day will be significant. But for now, it's a rush to the exits as severe as any in history.Wed, 17 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/rim_ready_to_roll.html http://www.investorbootcamponline.com/blog/rim_ready_to_roll.html A stock that may have bottomed out is Research In Motion (RIM, RIMM). We've seen marginal gains like the current rally from the August 8th low before of course, however there are a number of factors that point to the potential of renewed upside. There are two major factors in the deep decline in RIM's stock. In a a BNN interview with Michael Hainsworth, on August 26th 2010, Investor Boot Camp Online research director, Paul Thornton, suggested that RIM's price trend was effectively doomed. It wasn't fundamentals that were cited, but rather the supply of big investors buying into the stock was exhausted. After incredible growth and two very powerful bull market runs what mutual fund hadn't loaded up on the stock? See the interview; Why RIM Is Done!The other factor is what is, loosely, a pair trade, with Apple (AAPL). Apple is the most significant competitive threat to Research In Motion and its Blackberry in RIM's history. That gave big investors a reason to sell RIM effectively justifying profit taking in a departure from an old story. Traders, most of them larger investors, bought AAPL and shorted RIM primarily through the options markets. The company reported, in the quarter ended May 31 2011, a decline in profit of 4%. That puts the issue of declining growth officially behind it. More importantly, the stock's intermediate term decline, from February 18th 2011, was nearly 70% which is historically extreme and without any meaningful bounce. The plunge during the credit crisis was slightly larger at 76% and that took seven months. The stock has now broken through, on August 15th, the top of the channel that defines the down trend. Noticeable accumulation has developed since the June 17th climax sell off.The stock is trading at what may be considered an abnormally low valuation based on the flawed but heavily used price-earnings ratio . A low price-earnings ratio would be understandable if the company is, or is expected to be unprofitable. But RIM still earns about $6/share annually and anticipates renewed growth. They have also completed streamling operations that reduced headcount and other expense. They still generate more than $8/share in cash. The company anticipates growth from new products although the market clearly doesn't believe it. Here are some key metrics for Research In Motion.Cash per share $5.53 Cash flow per share $8.32 Price-earnings ratio 4 P/E per share ofenterprise value 3.16 Trading RIMInformation related to tradinge RIM using specific trade execution and portfolio strategies is available to subscribers. Trading stocks in the current market environment has been treacherous. Buying RIM or any other stock is more speculative than normal at this time. Stocks in deep down trends have tended to prolong their down trends. Specific portfolio strategies have been designed to deal with short term and intermediate term uncertainty for all securities and markets. Investor Boot Camp Online's proprietary Trade Risk Indicator currently reveals an historically high level of risk and low trade reliability. See other recent articles including breaking story Investors Ripped Off Again, Stock Market In Correction, and They Still Don't Get it. Thu, 11 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/they_still_dont_get_it.html http://www.investorbootcamponline.com/blog/they_still_dont_get_it.html According to a Bloomberg article, “Turkey Joins Greece, South Korea in Curbing Short Sales After Global Rout”, a number of countries are attempting to reel in short selling. Turkey raised margin requirements to 70% from 50% as Turkish regulators investigate whether short sellers manipulated share prices as Turkey’s ISE National 100 Index plunged 19% so far in August.Curbing short sales isn’t going to work. It didn’t work when the S.E.C. tried to curb short selling in the financials during the credit crisis and it won’t work now. During the credit crisis, the stock market went through extreme gyrations for a tortuously long six months. One reason may have been the inability to effectively complete the selling process thanks to short selling curbs. Some will argue that short selling serves a legitimate element in an efficiently functioning market. We’re not so sure about that at least not in the way it is currently structured. Short selling is permitted on penny stocks but the margin requirements are so high it’s not worth making the trade. If investors, and regulators, want effective short selling rules, they might consider flipping the margin requirements around. Rather than the current 30% on option eligible stocks, they might impose the heavy margin requirement rules imposed for short selling penny stocks. Instead of putting up .25 for all stocks with a market value under .25, put up just 30%. This way the real junk in the markets will undergo more short selling and larger more established companies won’t be so easy to target by short sellers. Many of these penny stocks have no business taking investor’s hard earned money in the first place as Investment Advisors who work in lesser quality investment dealers find out the hard way. The riots in Greece were apparently the reaction of people who felt their lifestyle was threatened. If the Greek government, amongst others such as Turkey, wanted to help their own citizens, they would create a financial market structure that supports ramping up profits from trades. That would include easy short selling particularly during periods of market declines. Markets are far more global now than they have ever been in history. So are economies, and the winners in a new world economic order will be the countries that implement easier, more profitable, policies that work for those who live and operate within their own borders. Start with the capital markets where the opportunity for increasing net wealth offers the most leverage.Fri, 05 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investors_discover_black_hole.html http://www.investorbootcamponline.com/blog/investors_discover_black_hole.html A great deal of money has been spent by NASA and other organizations studying black holes deep in space. But they may save a considerable amount by looking a little closer to home; it’s called the stock market. Once again, the stock market has imploded after a more than two year build up of energy. One of the most powerful starts to a bull market propelled stocks like Lululemon to gains of twenty five times from the bear market lows. But as all of us great scientists know, the time for light to travel across the universe is a long time. It’s just like investor sentiment. A delayed reaction that, at this very moment, is showing up in the form of a big surprise stocks are going down. The black hole for investor portfolios has opened up again. Gravity, or some other unexplainable force, is conspiring to make investor’s hard earned money disappear by telling them that bank stocks, amongst others, are a good buy right now and the market is going to rip higher at any minute. Where was that talk two years ago when stocks were actually going up following the last black hole known as the credit crisis? If listening to the media was the way to make money, we’d all be rich. If you could just buy and hold stocks and commodities, we’d all be rich. Why is it that people believe timing matters in love, finding the right job and avoiding traffic jams, but not when it comes to managing the portfolio? Black holes are a strange phenomenon. So is investor behaviour. Scientists are smart about one thing; study black holes. It’s a lot easier than trying to figure out why so many investors operate as if they don’t care. It’s hard to quantify crossing your fingers as an investment methodology. The mutual fund industry makes billions every year on the passive nature of investors. Millions of people just assume the funds are going to take care of them because the managers wear a suit to a downtown office in a big city. Not that some funds and their managers aren’t good at what they do but there are very few mutual funds that will go to cash during market downturns. When you see somebody quoted in the financial press, talking about how something is a buy, the odds are it’s a fund manager. What investors don’t realize, it seems, is mutual fund portfolios are managed differently than the portfolio of an individual investor.It’s not rocket science, but money is made when the trend is higher. While buying at the very low and selling right at the top might feel good, successful investing isn’t a feel good process. If it was, we’d all be rich. Letting the portfolio crater with the market isn't the way to build wealth. Tue, 02 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock_market_in_correction.html http://www.investorbootcamponline.com/blog/stock_market_in_correction.html Stock market corrections may start with a slow developing top which leaves investors and traders uncertain with a still relatively high level of bullish optimism. Other times they're like a bomb creating a large instant hole in a portfolio. The current correction has been a case of weakening general conditions with clear corrections in an increasing number of stocks and sectors but many stocks have remained in a bullish condition, some with heavy buying. But now it's clear; a deepening correction is here. There are different signs of a correction, some more obvious than others. But let's mark August 1st and 2nd on the map as the decisive blow to investor optimism. The market averages have fallen four of the past five sessions in very heavy volume. It's a sign of net selling by mutual funds and pension funds who are reducing stock positions and placing capital into the bond market. Traders and analysts who are active in the stock market will understand the relative differences between the percentage gainers list and the percentage decliners (or losers) list and the implication for market conditions. In good markets, the percentage losers list doesn't even get looked at. But the action of August 2nd is clear; stocks are getting pounded. Take a look at the number of stocks with huge losses. There are two hundred stocks from this list (not all showing) and the losses start at 7%. These are not penny stocks and some of them are significant companies that, at one time, were great performing stocks.Here are signs of more damage. Unfortunately, these stocks are not alone. That's another sign of a developing correction. Investor Boot Camp Online is an independent investment information/research service for investors who manage their own portfolios. Expertise is market timing and portfolio management techniques.Tue, 02 Aug 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/fiscal_policy_agency_please.html http://www.investorbootcamponline.com/blog/fiscal_policy_agency_please.html The wrangling over the U.S. debt ceiling limit has, besides ruining the economy from a policy perspective, bludgeoned business and consumer confidence. President Obama said, during the process to forge an agreement, this isn’t the time for political grandstanding and yet he targets Republicans as bad guys for suggesting something different than his own ideas. Is it just me, or isn’t there a better way to run the world’s largest economy? Monetary policy is managed by central banks such as the Federal Reserve Board, the Bank of Canada and the Bank of England. All developed nations have one and they are the central organization behind the operations and policy that define the underpinnings of capitalist economies. But why is it we don’t have a similar agency that implements fiscal policy? Why do we use politicians many of which have little or no training or knowledge in matters of business, finance, organizations or policy? Perhaps it’s time that a federal agency is created for the purpose of managing fiscal policy. People who are actually experts may be appointed to implement policy and policy changes based on their professional opinion. It would be a full time job just like Ben Bernanke’s job to run the Federal Reserve Board is full time. Other members of the agency might be hired based on their expertise in capital markets, regional economic development issues, organization management, research capabilities, etc. The F.P.A. (Fiscal Policy Agency) would not be replaced every time a federal election occurred. Terms would be established that, in the interests of simplicity, might be the same as the terms established for structuring central banks. The concept of organizing this way is precisely what every well run business does; hire experts or specialists to manage areas that require a high level of training and knowledge. But getting politicians to actually implement the idea might be another story. It may appear that federal politicians, subsequent to the implementation of a fiscal policy agency, might not have anything to do. While that is appealing to most of the electorate, the truth is there is still plenty for them to manage; healthcare, education, regulated industries, foreign policy, infrastructure, and the relationship between governments on different levels (i.e. federal, states, municipalities and cities) still needs to be managed. Emerging economies, which comprise more than 40% of the world’s current population, may be able to grasp and implement this concept readily. It would disarm the threat of inertia and government mismanagement providing business, in particular, with a better risk managed environment to operate in. If the U.S. and Canada don’t implement a fiscal policy agency, the current issues people think are a big deal may turn out to be minor in a rapidly changing economic landscape. Sat, 30 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/earnings_season_portfolio_landmine.html http://www.investorbootcamponline.com/blog/earnings_season_portfolio_landmine.html The U.S. stock market offers a number of potential benefits for investors that the Canadian market is lacking. Liquidity, more world class companies, sectors that don't exist in the Canadian publicly traded markets and many more E.T.F.'s. For these reasons the Canadian market is considered higher risk. However, there is one feature of the U.S. market that, at times, is a landmine that can put a substantial hole in a portfolio. It's earnings season! It would appear that the risk of holding U.S. stocks during their quarterly earnings release may have just spiked. Several stocks have suffered massive declines on their most recent earnings reports including Stratasys (SSYS), Illumina (ILMN) and Travelzoo (TZOO). Many more companies will be reporting next week including former top pick Opentable (OPEN). But Opentable is already 40% off the high. Given the time of year and the shift from a bullish buy and hold market to increasing risk, holding beyond earnings doesn't appear to be appetizing for many stocks.The risks for investors going forward are a slowing economy and perhaps more significantly difficult earnings comparisons. Investors in the U.S. and Canadian markets might care to note that the Canadian economy has contracted two straight months. That's a red flag indicating that the slow down in the U.S. is real and Canada, one of the world's more robust economies, is beginning to buckle. Perhaps interest rate increases by the Bank of Canada were more than enough. After massive earnings growth over the past two years it's difficult to maintain the torrid growth rates for some companies. Since mutual funds are particularly sensitive to earnings reports, it puts U.S. traded stock holdings at risk. That includes inter-listed Canadian companies. Resource stocks are the most sensitive group to the risk of declining earnings as most commodity prices are in some kind of consolidation or correction. Many Canadian resource stocks are already in deep corrections as the market has been pricing this in. Resource stocks, generally, may not be at risk of huge single session declines following earnings release but the odds of a deepening down trend is increasing. Watch for key companies in each sub sector as a tip off to the earnings trend for the entire sector and trade accordingly. Widespread heavy selling on earnings has not been significant since prior to the bear market. But this scenario appears to have returned. It raises the strategy of selling U.S. growth stock holdings before the earnings announcement and potentially buying it back afterwards. Investors may miss a large gain, if results exceed expectations but these companies are becoming rare. It also doesn't hurt the portfolio, whereas a 15-25% decline does. Thu, 21 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/who_knew.html http://www.investorbootcamponline.com/blog/who_knew.html On Tuesday July 19th, Interdigital (IDCC) broke out from a five month base with a 28% gain in 663% heavier buying than average. The next day the stock jumped 29% and, in early trading on the 30th, the stock is up nearly 15%. Shipping logistics firm Sino-Global Shipping (SINO) jumped 150% July 20th and added another 57% in the next session. These are the gigantic gains every investor dreams of. Human nature being what it is will prompt some traders to make a predictable response; they'll buy some. This is a conundrum in the world of investing and effective trade execution. The strategy of going with strength suggests buying a stock that is clearly "on fire". But after gains of 95% for IDCC and 236% for SINO, it's obvious there is a risk of decline and a big one at that. The probability of success can be set at 50/50 based on "maybe you make money, maybe you don't"! Some may argue that it's the same risk they take on other stocks especially ones from analysts. So why not go for it? Interdigital (IDCC) is a stock that has been on our short list of stocks for a considerable time. The break out on July 19th did not go unnoticed particularly since the stock was sitting at support after a constructive two week consolidation. But the stock was not added as a break out, and therefore a buy, because of a deterioration in earnings and sales growth. That could have been overlooked since the stock's trading action was excellent but fake outs have been higher than normal in the past few months. Earnings growth has been the driver of hot stocks such as Lululemon (LLL, LULU) and Green Mountain Coffee (GMCR), so why take a chance on something that doesn't meet a successful screening process.The news for these companies, that has apparently propelled their stocks into the stratosphere was as follows;Interdigital Exploring Potential Strategic Alternatives.Sino-Global Announces Strategic Cooperation Agreement With COSCO Container Shipping Agency.This type of news doesn't typically blast a stock higher although it can if share price appreciation has eluded management (and the market). But the reality is it would have been nearly impossible to accurately forecast explosive gains in these stocks as seen here. It would have been a pure guess. Unfortunately, guessing and other speculative strategies rarely provide investors with a success rate that is good enough for long term success. Sometimes traders have to accept that a huge gain was missed. Spending emotional energy fixating on this kind of action is a distraction from objective systematic trade execution and sometimes devastating results. Wed, 13 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investor_quiz.html http://www.investorbootcamponline.com/blog/investor_quiz.html Try this quiz and see how you stack up as a savvy investor. All three questions are yes or no answers. When you hold a stock, do you base it on the company? Do you buy, and hold, certain stocks because they are considered lower risk (such as higher yield)? Did you hold stocks during the bear market triggered by the credit crisis? Add up your yes and no answers and see how you score.Answer ScoreThree yes answers.Your score is zero.Three no answers. Your score is perfect.Answering yes to any of these questions exposes common mistakes in the management of a portfolio. Here’s why; When an investor buys a stock, they are not buying the company. Money is made in the stock market based on the behaviour of other investors. If they are selling, the stock will go lower. When investors are net buyers, the price will rise and will continue to do so as long as more investors continue to buy, out weighing sellers. Unless you own more than 50% of all shares outstanding, you do not own the company. Even if you did, it doesn’t render control of the trend in the share price. No stocks are low risk. The concept of “blue chip” is long gone as many long term investors discovered when G.M., Lehman Brothers, Countrywide Financial and others went bankrupt. Investing for higher yield is a practice for some mutual funds because they have a legal mandate to hold most of their portfolio in the market. But individuals don’t need to follow this practice. Holding a stock for a 10% dividend seems sensible but when the capital falls 25%, the flaw of overlooking the price trend is exposed. Investors may have a long term horizon but generating losses does not satisfy sound investment objectives. There is no trampoline at the bottom of a down trend, springing a portfolio above the portfolios of others. If you answered no to all three questions, you are amongst the elite investors who not only understand sound portfolio management tactics but execute. Ineffective tactics and strategies may be rooted in psychology, a lack of knowledge on how to execute market timing and/or the erroneous views cultivated by the investment industry. Sat, 09 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investors_ripped_off_again.html http://www.investorbootcamponline.com/blog/investors_ripped_off_again.html Benefits of the developed public markets, which include significant legislation and regulation of its members, are transparency, disclosure and a higher level of assurance or comfort. Fiduciary duty is an inherent and significant element of the activity by investment dealers and other markets participants. But unfortunately, the public is frequently putting too much trust in some individuals who work in the investment industry. The Bernie Madoff Ponzi scheme is still fresh in the minds of investors and the press in one of the biggest frauds in U.S. history. But another one may have just been uncovered north of the border. Apparently, an advisor from Investors Group has borrowed money from individuals in what was promoted as a mortgage. At least several individuals who wrote cheques for six figure sums to the Toronto based advisor were told they would earn 10% for a four month loan. That's an annualized rate of return of 30%. The advisor Paul Yoannou, apparently called some of the investors to tell them cheques for the return of their capital and income at the maturity date should not be cashed because they will be returned N.S.F.He has also apparently been suspended by his employer and the M.F.D.A. but the Investors Group website still has his profile and contact information posted and a search on the M.F.D.A. website didn’t display his name as either active or suspended. This has every appearance of a scam or at least a desperate attempt by someone in a position of influence to try and resolve their own financial issues. An investigation indicates the advisor has an interest in real estate properties in Florida. Perhaps they were buried along with millions of other speculators in the collapse of the U.S. housing market. Speculation aside, there were three significant warning signs that investors could have picked up on before considering the investment;Members of the self regulatory organizations (S.R.O.) are not permitted to accept loans from clients or the public. There was no security detailed in client statements. Investments offering exorbitant rates of return are not legitimate. How can someone offer such a rate of return in an investment climate that is characterized by historically low rates? If something appears too good to be true, it usually is. The good news for investors is it’s not necessary to attempt to hit home runs. Volatile growth markets, like the stock market, may provide huge returns for individuals who execute timely trades, and manage their portfolio accordingly which includes selling and keeping the profits. But far too many inexperienced investors with little academic and/or practical knowledge are falling into traps. Investor Boot Camp offers seminars and investment markets information for investors and Investment Advisors who want to cut through the noise and find out the truth about markets and the investment industry. See what else is of interest to you in Boot Camp Banter.Fri, 08 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/gas_prices_going_much_higher.html http://www.investorbootcamponline.com/blog/gas_prices_going_much_higher.html The price of gasoline is rising. Drivers can expect to pay for more gas the next time they fill up the tank. For the foreseeable future, expect to continue to pay more, much more! The price of gasoline, in the futures markets where the price is determined, entered a correction May 2nd at the same time oil peaked. However, gasoline did not decline as much as oil. A shallower decline, on a relative basis, is one indication for an eventual resumption in the up trend. Coppers decline from the high to the low was 16.8%, while gold’s decline was just 7%. Most other commodities have declined more substantially including silver down 35%. The nature of gasoline’s correction is, on historical measures, a basing pattern that has been one of the more bullish set ups to a new up trend. On Thursday July 7th, gasoline “broke out” from the base. That systematically defines the new up trend thereby providing a buy signal. Gasoline may be traded with the United States Gas Fund E.T.F. with the symbol UGA-u.s. You can see from the chart provided below, UGA’s gap higher in heavy volume is a clear display of bullish power that stands out from the rest of the trading action following the May 2nd peak. The markets are in a commodity super-cycle that started October 2001. Commodity, and interest rate, cycles are normally twenty years long. Following the deep bear market triggered by the credit crisis, the recent correction in gasoline and other commodities can be seen as a normal bump in the road to higher prices. Gasoline is one of the potentially better performing commodity markets based on historically indicated trading patterns. That’s good news for investors who capitalize but drivers won’t be too pleased about it. Mon, 04 Jul 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/as_the_economic_wheel_turns.html http://www.investorbootcamponline.com/blog/as_the_economic_wheel_turns.html Here are some economic, investment and business matters to contemplate as we move into the dog days of summer. Greece Will DefaultThe passing of the austerity legislation by the Greek government is a means to buy time for banks and European governments to prepare for the eventual break up of the Euro (currency). Banks and governments are buying time to unload their exposure to Greece, as much as possible, before Greece finally defaults. There are some heavy hitters negotiating over hundreds of billions of dollars. The public will never hear the full story on the negotiations, the side deals, and who’s lying. Somebody, i.e. certain banks and ultimately at least one country, is going to bear a massive and crippling financial burden. What then? The Stock MarketThe stock market appears to be renewing the massive two year up trend. How much higher can stocks like Lululemon (LLL, LULU) go? Will the Fed. pump make this bull market one of the greatest in history? More importantly, how are investors going to handle stocks that they have surely fallen in love with when the roof caves in? What has changed in the investment industry since the credit crisis? Mutual funds still manage portfolios the way they did before the credit crisis. Have mutual fund investors changed their view so they can manage their retirement account when the stock market goes into the next big decline? The bond market has entered a down trend, decisively, snapping a five month up trend. The twenty year cycle in interest rates officially completed itself in 2009. The current cycle is, accordingly, a twenty year up trend in rates. How many fixed income investors will suffer from losses related to holding longer term interest bearing securities and mutual funds? Big Business and Rising RatesBig business is growing while small business struggles. What will happen to entrepreneurial ambitions? The Bank of Canada will undoubtedly raise their key lending rate this fall. Analysts are calling for four increases over the next year. Mortgage rates have already increased twice in 2011 for Canadian home owners. Thu, 30 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/fixed_income_investors_beware.html http://www.investorbootcamponline.com/blog/fixed_income_investors_beware.html The five month rally in the bond market is over. In decisive selling U.S. and bond prices have plunged pushing market interest rates sharply higher. The sell signals suggest investors in bonds and bond E.T.F.'s. in both the Canadian and U.S. markets take notice in the interests of preserving capital. It is understandable that many fixed income investors take the view holding interest bearing securities is how you collect yield over time. But there are two reasons not to follow this tactic any more. The long term cycle in declining interest rates are over. Based on both the calendar and trading action in the bond market the twenty year cycle ended in 2009. Despite rates remaining relatively low since early 2009, the long term trend will likely bring rising rates. That's negative for fixed income investors whose portfolios aren't positioned accordingly. Investors may take advantage of rising rates by redeploying capital in phases that define the peak in rates in intermediate cycles. In layman's terms, it means avoid declining prices and reinvest in interest bearing securities when prices have bottomed out. Used effectively, investors may avoid the erosion of income producing power that many investors suffered through in the 1990's. The StrategyBy selling longer dated maturities and going to cash capital is intact for reinvesting later. The transactions would have looked similar, in timing and result, to the example below. It is not a stretch to execute the transactions highlighted here when they were indicated in real time. They are also infrequent as future transactions may likely turn out to be for fixed income investors. But the most important portfolio restructuring for fixed income investors occurs at the completion, or beginning, of the twenty year cycle and that time is now. The bond market would have been avoided by selling in early 2009 and not returning until a clear up trend was indicated in May 2010. Using a hypothetical figure of $100,000 in capital (based on a sell in early 2009, the reinvested amount, priced with the 30 year U.S. treasury bond, would have been executed at approximately $124. The sell would have netted a capital gain of $8 ($132-$124) for a capital gain of over 6%. $106,000 could have been reinvested in March 2011 and sold, based on recent real time sell signals, for a net capital gain of 5%. The capital has risen to $111,300. Interest would have been earned during the periods invested but let's assume no income was earned during the periods the interest rate markets were avoided. Using this strategy $111,300 is available for reinvestment versus approximately $100,000 which represents the amount of capital in the portfolio if an investor had held their position during this time.If an investor was willing to follow the trends indicated by cycles research, they could have used some or all of the proceeds from their interest bearing investments in the stock market. Returns could have been, and should have been, substantial over the past two years. The capital could have tripled or more during this period following sound investment strategies and trade execution. If that had been the case $300,000 may now be available to reinvest. Given the limits, historically, that many stocks have now reached in terms of their two year gains, it would be prudent for a fixed income investor to take their money out of the stock market and make it available for reinvestment in shorter term maturities to produce income. Income is not earned when capital is in cash or in securities such as stocks that do not produce income. But the investor who requires cash flow from their portfolio could have withdrawn cash on a regular basis. Given the historically low levels of yield, this would have not rendered a negative impact on the portfolio. They would still be much farther ahead managing their fixed income portfolio actively. Diversification through the use of spreading portfolio assets out into more than one market (stocks and bonds) and/or lower volatility securities is intended to reduce risk. However, lower risk is not achieved when the reality is a down trend eats away at a portfolio. Timing is paramount for investors of all kinds regardless of their personal views and financial objectives. After all, the markets are the same for every one. Mon, 27 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/can_stocks_break_through.html http://www.investorbootcamponline.com/blog/can_stocks_break_through.html Prior to the correction in the stock market, most stocks had logged big gains. The gains were large from the completion of the last correction, August 31st 2010 and much larger from the lows of the bear market in early 2009. But that was then and the correction is now. Following a June slide nearly three weeks long stocks are attempting a bounce. The question is can they move above prices that represent resistance and test their highs. Many of the leaders, prior to their recent down turns, have limited room for rebounding. The 50 day moving average represents a normal point of resistance as they carry through on a bounce from recent lows. But the 50 day moving average is sloped downwards and the change in slope developed only recently. Stocks can still push through but it would be rare for them to do so without spending more time trading at or below the 50 day m.a. Potash and a number of agricultural stocks are in ranges that are more shallow than other stocks. That's more constructive and historically implies they have a better chance of being one of the first to go higher. Resource stocks have been amongst the weaker performers. Their declines are not historically excessive but many continue to retest the lows. They have not yet indicated that the lows have been established. The next phase would be to spend time retesting a support level in a bottoming out phase. Then a recovery attempt may be made. But that may prove to be a considerably long time into the future. You can see how Labrador Iron Mines (LIM-tsx) has twice failed to overtake its 50 day moving average (the red line). Note how the second time looks similar to what other stocks, such as tech leaders, have yet to do. Acme Packet (APKT) above is one example. Understanding bases and their components is a key to trading success in the stock market. Traders may be tested, perhaps unnecessarily, if they fail to recognize normal obstacles. It has been that way for many market cycles and will continue into the future since people shape price trends and they tend to repeat. Mon, 27 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/good_companies_are_not_always_good_stocks.html http://www.investorbootcamponline.com/blog/good_companies_are_not_always_good_stocks.html Following the Japanese earthquake, Friday March 11 2011, the uranium sector suffered a massive sell off that shook many juniors with 25% declines two sessions in a row. Many of these stocks have continued to fall with declines that are more than 60% from their 52 week highs. From early December 2010 break outs, the fiber optics sector offered some of the market’s hottest stocks as Finisar (FNSR) and JDS Uniphase (JDU, JDSU) barged higher for 130% gains. Fundamentals remain strong but these two stocks have lost 65% and 45% respectively from early 2011 highs. These two sectors are real time examples of stocks that continue to be seen favourably by many investors. There’s one thing these investors are missing however. They’re trading terribly and in most cases, they’re getting worse. The huge declines could also have been avoided if investors had followed the clear change in the price trend of these stocks within a relatively short time following their peaks. How many investors bought banks and investment dealers, like Lehman Bros. and Merrill Lynch, during the dark days of the credit crisis driven bear market because “they’re solid companies”. How many investors have spent years hanging onto the great companies from the ’90’s that have done nothing since? Microsoft (MSFT), Yahoo (YHOO), and Dell Computer (DELL) comprise the internet boom debris that is full of stocks with no performance for ten long years. Investor sentiment would be a funny subject if it didn't cost people their hard earned money time and time again. Historical performance is the single best indicator of future performance but all good cycles eventually come to an end. The stock market is notorious for corrections and bear markets that are playing into the basic investor concept of buy low-sell high. Unfortunately, bottom fishing rarely works except in early cycle stocks with all the characteristics of big winners. In the current bull market Netflix (NFLX), Priceline.com (PCLN), Baidu.com (BIDU) and Lululemon (LLL, LULU) all displayed superb fundamentals with the right stock action prior to the bear market’s conclusion in early 2009. But now the stock market along with commodities have entered the second correction in the bull market. The correction was nearly unnoticeable until the June slide kicked in. Bullish sentiment is beginning to erode after being stubbornly high for months. The rest of 2011 could play out the way 2004 did following a big surge from the lows of the internet bust. The market's decline seemed modest in '04 but making money was challenging and it only got worse as time went by. Corrections are a cycle that tends not to end until every investor and analyst thinks it's going to get worse. Over the past week, the stock market has shown it is attempting to hold at a critical support level. But historical measures of investor sentiment are not yet at levels that coincide with meaningful market bottoms. Unfortunately, acting on current trends and patience elude too many investors. Big investors have hedged positions, bail out money is taking profits and another Greece refinancing is weighing on the market. Seasonality doesn’t play into the favour of a renewed up trend any time soon either. A short term recovery is unlikely given the short duration of the correction and the absence of a catalyst that would push winners to more gains that are already as large as any in history. We also seem to be a long way from everybody crying about the poor condition of the market. Until then, the correction isn’t likely to end soon. Thu, 23 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/real_estate_market_must_change.html http://www.investorbootcamponline.com/blog/real_estate_market_must_change.html Residential real estate in Canada remains close to insane. Buyers continue to pile into every open house, multiple bids follow and two days later a sold sign is on the front lawn. Another deal done! It’s been that way for at least ten years and the cycle is now seventeen years long since the bubble from the ‘80’s bottomed out in 1993-1994. You have to wonder how it’s going to end when it finally does. The real estate market is also a market that structurally has flaws some think will be its undoing. Yet, buyers and sellers continue to do business probably because housing has more to do with putting a roof over your head than a straight up profit opportunity. The process of buying and selling, as most adults know, operates on these characteristics; Buyers and sellers use their own real estate agent. The process is a closed auction; sellers see all buy bids but prospective buyers don’t see any bids from other buyers. The seller may decide to not accept any offers, take the listing off the market and subsequently re-list at a different price without legal consequence or standing buy offers. Viewings, offers, and return offers are managed through the agents. You want to look at a house as possible buyer, you call your agent who calls the listing agent who arranges for a time and the buyer’s agent takes their client into the building. You want to put in a bid to buy you sign the bid with your agent, who meets with you to sign the document, the agent then takes the bid to the listing agent. Back and forth it goes. This is a ridiculous process for a market that is inherently illiquid. Selling and/or buying a house takes a considerable amount of time. From the time a seller decides to put the house on the market to the time the buyer takes possession takes at least a month and typically several. Nobody would stand for this in the stock market, a transaction at Home Depot or an art auction. When is it going to change in a world that now has the technology to make the process substantially more efficient? The financial services industry including banking and the investment industry use clearing houses to facilitate transactions. A stock exchange is a market that provides transparency into live bids and offers and, for most stocks, instantaneous fills on transactions at agreed to prices. It works even for the thousands of junior resource stocks, amongst others, that effectively trade by appointment. It’s time for the same facility to engineer transactions in real estate. Here’s how it might look. A potential buyer may see a listing, as they can now, and enter an online request to see the property. Then they may immediately follow up, possibly while they’re still at the property, by entering a bid at their specified price using a legal online template document with options for terms the buyer may want to use. The vendor can receive immediate notification, by email alert, of the bid from a buyer. The vendor may decide, at that very moment, to accept the offer. Deal done. Real estate agents will hate this. Some thought the internet was going to make their jobs obsolete by showing houses online. Many listings feature an online slideshow or streaming video of the outside and inside of the property. But there’s nothing like seeing the real thing in person. That’s why people still go to book stores, car dealers or movie rental outlets. Too bad the music industry can’t figure that one out by improving their retail merchandising and making cool c.d. packages the way vinyl records were sold in the ‘70’s. But that’s another story for another day. Change the structure of the market and the depressed U.S. residential real estate market may see immediate benefits. It removes impediments and speeds up the process. It may also separate truly knowledgeable helpful real estate agents into the useful consultants they really are from the rest of their colleagues. In the long run, the current system is destined to fail. Tue, 21 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/greece_a_nation_of_experts.html http://www.investorbootcamponline.com/blog/greece_a_nation_of_experts.html Greece is dominating the headlines these days in both mainstream and financial media. Protests continue into their fourth week as Greeks step up their resistance to the government’s proposed austerity program. Thousands of people continue to march away in what is reported to be anger. In another story, there is power outages through out the country as workers shut down the power at utilities intended for privatization. It’s an amazing situation in that a nation, which is effectively bankrupt, is apparently full of people who are experts in economic policy. If this weren’t real, and serious, it would be funny. There are very few people, in any country, that have deep knowledge of the business of utilities. There are relatively few with in depth knowledge of running big companies. That’s why C.E.O.’s get paid a lot of money. The same could be said for finance ministers since a country only has one although there is a compelling argument that most finance ministers are learning on the job and they're not doing very well. There may be a number of academics at every major university who think they can engineer policy changes but the reality of shaping a business is challenging and an economy virtually impossible. So how is it that what appears to be the majority of an entire country seems to think they are doing fine the way they are and the proposed changes will make things worse?Greece is a nation that likes to live on credit and a lack of credible economic policies that has deteriorated to corruption. The average annual cost for “bribes” and other “pay offs” is now estimated to be $2,000 U.S. per person annually. Apparently, it’s a tax they’re willing to pay, but other taxes are off side. The reality is the protestors don't have a clue of what they're talking about. Neither do people in other countries including those who think the U.S. central bank is the biggest problem since global warming. Of course, global warming is another contentious issue that some say isn't an issue at all. Or perhaps the Greek actually are brilliant economic policy analysts. The reality is, they have other countries willing to pay for their spending. Isn’t the purpose of financial freedom to “live the way you want”? Proposed capitalist ideas contravene the status quo sparking fears their lifestyle is in jeopardy. The Greeks may be on the verge of arranging for foreign banks and lenders to come up with yet another $80-$85 billion U.S. to meet a refinancing in mid July. Perhaps that’s what the Obama administration has up its sleeve; have the Chinese buy every U.S. bond issue and spend, spend, spend. If it works for the Greek, it can work for the rest of us. Mon, 20 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/bulls_versus_bonds.html http://www.investorbootcamponline.com/blog/bulls_versus_bonds.html What to do? Banks and governments around the world put money into Greece and the risk shoots higher. Alternatively, don’t put money into Greece and a default seems certain. That would plunge the markets and the banking sector into chaos and perhaps the economy with them. It seems like a no win situation. Behind the scenes, some big players are trying to gain the upper hand. Negotiations are going around the clock with some shrewd analysts, investment bankers and lawyers. This is the stuff of novels in the setting of economics, markets and business. The public will undoubtedly never know about some of the drama playing out in corporate boardrooms. Who, and what governments, are going to make billions, or perhaps more importantly, who’s going to be left “holding the bag” in what appears to oppose productive capitalist flow of money. Is the next James Bond movie going to feature Daniel Craig sneaking around trying to get rid of the evil back stabber who weasels some desperate government into their back pocket?The ratings agencies, such as Moody’s, aren’t helping when they lower debt ratings. Prior to the credit crisis, they weren’t helping by not raising red flags on increasing risk. But their shortcomings have been well exposed, so now they are going to err on the side of slashing ratings. Ultimately, they’ll go too far and lenders know it. The rumour is Greece needs to raise about $80 billion U.S. to meet a mid July refinancing. U.S. banks have allegedly comprised nearly 30% of all lending to Greece since the credit crisis. It’s a lot of cash that could be used elsewhere for something more economically effective and everybody knows that too. The world used to be a place where bulls faced off against bears but now it’s the bulls versus bond holders. The market has recently undergone a fourteen day slide that feels like it’s biding time rather than a more ominous bearish threat. Technically, it looks too much like the conditions just prior to the “flash crash in May 2010. At that time, European debt default was an imminent threat as it is now. But now we have the added challenge of a consolidation in stocks that have made massive amounts of money since the market rose from the ashes of the credit crisis. Investors may not have considered the big money, including government bail outs, is taking profits. Many institutional investors began to hedge their positions earlier in the year. Like every other correction through out history, it raises the question about who’s going to ride the markets lower. What’s going to happen to retail investors if the markets cave in on the heels of a huge bond default out of Europe?Fri, 17 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/research_in_motion_hammered_again.html http://www.investorbootcamponline.com/blog/research_in_motion_hammered_again.html At the time of publication, Research In Motion (RIM-tsx, RIMM) was getting hammered plunging more than 20% in one of the heaviest volume sessions on record. This stock, once the hottest of all hot stocks, is now a complete dud. In an interview on BNN August 26, 2010, Investor Boot Camp Online head of research Paul Thornton discussed with host Michael Hainesworth why RIM is a stock that investors should stay clear of permanently. Unfortunately, it was a forecast that has proven to be correct. In the interview, the premise given for why RIM should be avoided was not because of fundamentals but because of the inherent nature of the stock market. Stocks that were the premier hot stocks in a bull market tend not to repeat as strong performers. In fact, they turn out to be one of the worst performers in the next long term cycle. The action of big investors is the driving force behind stock trends. Mutual funds and pension funds take years to accumulate their positions as long as a stock stays in favour. When a stock proves itself as one of the hottest stocks in the market more and more investors, big and small, take a position and add to their positions. In the case of RIM, this stock was one of the greatest tech stocks in the '90's but it also repeated as one of the hottest stocks in the bull market from 2002-2008. Ask yourself this question, "what significant investor has not taken a position in RIM over a period that spans fifteen years? If a fund manager had not taken a position in RIM by say 2005 or 2006 they weren't going to. Eventually the universe of potential buyers becomes exhausted. Once the cycle of accumulation is completed, a stock has only one direction to go; down. That doesn't mean the company has some fundamental weakness developing but simply, the net transaction becomes selling. In RIM's case, real competition has popped up primarily Apple (AAPL) and now Google (GOOG). Imagine you're a fund manager, in the last two years are you going to buy RIM based on future prospects or are you going to buy AAPL? The answer is AAPL. As time goes by the funds begin to recognize their own view, which is to lighten their position in what has been a great performer for them in the past but is now becoming an old story. The pendulum swings the other way psychologically in tandem with net selling. Understanding the nature of investor behaviour frequently proves to be more important than knowledge of a company and its operations. For investors who followed the first and most significant sell signal they have avoided a disastrous ride down. The sell signal for RIM was exogenous to the stock. It was the broader market averages and other leading stocks that had already indicated the market was not only in poor condition but a bear market was underway. RIM actually peaked eight months into the bear market. That provided investors with plenty of time to sell their entire position. Since then the poor relative performance should have prompted capital to be deployed in the areas of the market that were proving out performance.Thu, 16 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/IPOs_reflect_investor_sentiment.html http://www.investorbootcamponline.com/blog/IPOs_reflect_investor_sentiment.html Investor sentiment was extremely bullish for a considerably long period of time until recently. From late November until mid April the Investor’s Intelligence survey of investment newsletter writers reported a historically wide spread between bulls and bears. As the stock market deteriorates, following some badly beaten down commodity markets, investors still seem to have a sense of bullishness. There has been a number of internet I.P.O.'s lately that seem to be reflective of investor sentiment. I.P.O.'s, or new issues, tend to magnify investor sentiment going from extremely profitable as the market's out performers to extremely weak as a correction or bear market deepens. Popular professional networking site LinkedIn (LNKD) completed their I.P.O. at $45 and exploded higher in their first day of trading closed at $94.25/share. But the stock was as high as $120 in the session. Since then LNKD has wilted to a low of $70.50/share. That's a considerable and quick loss for investors who have been buying the stock in the secondary market. On June 15th internet radio firm Pandora Media Inc. (P-n.y.) started trading closing at $17.42/share. Not bad for those who acquired the I.P.O. at $16/share but the stock was $26 intraday in its first session. Other internet I.P.O.'s are similar in their trading pattern. That includes Chinese social networking firm Rennen Inc. (RENN) and Russian search and web content firm Yandex N V Class A (YNDX). Nice pay day for investors who had the relationships in place to pick up the I.P.O.'s but buys since then have suffered badly. You can see the exuberance by investors who push the first session of trading into the stratosphere but the quick erosion that follows as investors take profits. Investors who have been trading these stocks on sustained optimism are paying for it. It's typical of a correction. Many resource stocks pulled off successful financings in 2010. The hang over from the credit crisis finally faded and investors who snapped up smaller resource company units that included warrants enjoyed a substantial pay off. In fact, many of these financings made 20% or more before the deals were closed. But falling resource stocks pushed the TSX into a correction before the U.S. markets rolled over. Many juniors are trading 35% or more below their 52 week highs. Selling pressure from the exercise of warrants has been a heavy weight on those who's late cycle buys are insufficient to prop up the price.Investor Boot Camp Online is an investment information service for investors who manage their own portfolios, investment advisors and fund managers. Extensive research with historically indicated trading behaviours and cycles research are incorporated into a trading system that provides investors and traders with precise buy and sell prices. Market timing is the key to the research developed over twenty five years.Thu, 16 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/big_business_crushing_small_business.html http://www.investorbootcamponline.com/blog/big_business_crushing_small_business.html Since the credit crisis crushed the banking sector, in nearly every major country except Canada, economies have suffered from what appears to be a sluggish recovery. Unemployment remains at the top of the list of what is apparently wrong with the economy. What may be the major contributor to the unemployment issue, and perhaps a bigger dilemma for the economy long term, is the growing divergence between big business and small business. If you talk to the “man on the street”, or more notably a small business owner, things are not good. I’ve heard so many stories from a personal level, never mind the more formal research, that something is obvious; small business is struggling. It’s the first time in decades that the divide between small business and big business is so evident. Comscore reported in 2009 that the level of online business going to bigger business had never been so wide. They seemed to indicate it was a surprising if not shocking trend. Technology has a lot to do with it as streamlined efficient consumer oriented selling drives people to big businesses who can execute. Suggest that someone go to a near by grungy shop for a new rim and tire on their bike and one thing is obvious, no woman is going to go there. They’ll go to Wal-Mart, Home Depot or Canadian Tire. Small businesses are left wondering what they’re supposed to do. The typical small business owner is suddenly faced with the need to spend time on new marketing programs rather than operations. You could argue, so what, but it will hurt the economy in the long run. Most small business won't pull it off.Small business tends to be the area with the most leverage on new hires. Consider the economy wide impact when a small business goes from ten employees to twenty. That’s a 100% increase in staff. Multiply that across other small businesses through out the economy and suddenly the unemployment numbers shift significantly and the economy swings into high gear. On the other hand, adding staff to government payrolls is a black hole for money as inefficient if not ineffective employee action ultimately buries the economy. Small business is in a dog fight. It may be the most significant battle the economy has faced since prior to World War 2. If it doesn’t improve soon, the economy will be run over with a sluggish real estate sector, unpaid debts, sluggish investment activity, weak hiring and government deficits. Unfortunately, it’s an issue government is unlikely to resolve since this has ultimately proven to be their area of incompetence. Tue, 14 Jun 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/long_not_down_for_long.html http://www.investorbootcamponline.com/blog/long_not_down_for_long.html Elong Inc. Ads (LONG-nasdaq) is a Chinese firm that provides call centre and online booking services for hotel reservations, airline tickets and related travel products. On May 31st the stock exploded higher in a massive 56.7% advance in extraordinarily heavy buying. Volume in that session was 3600% greater than the average daily volume. Since the huge gain, and break out, the stock has gone straight down in a sustained losing streak that has shaved more than 36% off the stock’s value from the high. The volume numbers are nothing short of remarkable but the stock traded less than 12,000 shares/day at the time of the massive gain. Nonetheless, 1.6 million shares plowed into the stock on the announcement that the company "now cooperates with over 20,000 hotels in 700 cities across China, creating the largest directly-bookable online hotel reservations network in the country. eLong also offers consumers the ability to make bookings at over 140,000 international hotels in more than 100 countries worldwide via link with Expedia." Normally, a 36% is the death knell of a stock. But there are several factors that work in favour of not only a recovery to the May 31st high but a significant price gain beyond. For one, the break out coincided with the last day of a failed attempt by the market to put a four week pull back behind it. Since then the Nasdaq fell 7.2% in nine sessions that featured seven down days. Very few stocks etched new highs during this stretch. The other, which is somewhat speculative, is that all that money didn't go plowing into the stock not to stick with it. Some of those investors are likely considering adding to their position at what works out to a lower price than they paid on May 31st. LONG is also, technically, above the break out price and the base that it cleared on May 31. It's also above its 50 day moving average, a feat that few stocks except for Herbalife (HLF-n.y.) and a small handful of leader quality stocks can boast about. What is compelling for aggressive traders in terms of targeting a buy near the low is the nature of the 36% decline. You can see from the chart the stock essentially went straight down with only four up days and two of them were virtually insignificant as up days often are in sharp down turns. The implication is the bounce could be large. If the stock retraces 50% of the decline, it could hit the $23-$24 level quickly. One of the services provided by Investor Boot Camp Online is the formulation of trading strategies. Given the possibilities for this stock, and the lack thereof in others, building a position as the stock provides profits is a winning strategy that can have a big impact on a portfolio. There are several ways incremental buys can be made with the stock as a recovery works its way higher.Investor Boot Camp Online is an investment information service for investors who manage their own portfolios, investment advisors and fund managers. Extensive research with historically indicated trading behaviours and cycles research are incorporated into a trading system that provides investors and traders with precise buy and sell prices. Market timing is the key to the research developed over twenty five years.Sun, 29 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/rotation_in_commodities.html http://www.investorbootcamponline.com/blog/rotation_in_commodities.html Commodity markets have entered a correction that, for some, has rendered a very swift and deep decline in investor portfolios. Silver was the most notable following one of the largest intermediate term gains in a commodity market you'll ever see. Other markets followed with oil slipping lower, gasoline's up trend becoming damaged in one session and the previously hot tin buckling under the contagion that spread through the commodities complex. The Tin market E.T.F. JJT and coffee (JO) had been our top commodity picks for some time until their recently triggered sell signals. Now corn is making an attempted recovery setting itself up for a renewed up trend. That makes corn, and the corn E.T.F. with the symbol CORN, the best performing commodity market E.T.F. Grain E.T.F. JJG is in a similar condition with CORN.Tue, 17 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/wounded_stocks_dying.html http://www.investorbootcamponline.com/blog/wounded_stocks_dying.html One of the better indications of a stock market entering a correction is in the action in stocks that are in relatively poor condition. Their long and deep down turn has vanquished all hope as focus has been redirected elsewhere. Most investors have forgotten about these stocks including those who still hold them. But their action this week tells all investors a great deal about investment conditions. Historically, stocks in the worst relative condition tend to continue to trade poorly. That means not only do they go lower but their relative performance may continue to be worse than stocks in better conditions. VanceInfo Technologies (VIT-tsx), was a hot stock from the beginning of the bull market until the stock's peak December 3rd, 2010. The chinese outsourcer for software R&D and other I.T. services rose ten times from its late February 2009 low. Until last Friday, the stock had held its ground at a low in the $28-$30/share range first established February 23rd 2011. That's a considerable amount of evidence supporting a "buy low" trade at this price level in anticipation of a recovery. After all, the company's fundamentals are still reasonably decent with an 11% gain in earnings on a 30% jump in revenues. But Monday's session destroyed this trade as the stock plunged $3.20/share to $28.31 in volume four times the average. In Tuesday's session, the stock was rocked again falling nearly 9% in even heavier volume. It's getting worse and it's not alone. More downside is probable for stocks that move into another phase of selling after an already prolonged correction. it's clear that big investors have no interest in holding this stock. For those that think it's an opportunity ask yourself this question; "if the stock is such a great deal, why are the big investors who know a lot more about it than most selling it after all this time"?Mon, 16 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/lower_gas_prices_coming.html http://www.investorbootcamponline.com/blog/lower_gas_prices_coming.html The price of gas is coming down. That translates into lower prices at the gas pump. It's good news for drivers but bad news for investors who are stuck in bullish mode.There are two indicators that tell investors, and drivers, more downside is highly probable for the price of gasoline. One of course is the price of gasoline in the futures pits. We're going to use gasoline E.T.F. UGA to illustrate. The other is the bearish action in most commodity markets. The biggest tip off to lower prices was the sharp decline in the price of gas on May 11th. It's not the sharp decline alone, but rather the timing of it following gasoline's nearly full recovery from the decline that bottomed out May 5th. Bullish traders would have been fooled by gasoline's quick recovery in just three days which usually sets up more upside. But that was not to be. In just one session a decisive blow to this hot market was delivered. Following that decline, gas undercut its trend line which has been a reliable measure of the up trend. But in today's session, Monday May 16th, a large decline ruins any chance of gasoline recovering from the three days of bearish action that preceded it. More downside is probable. Elsewhere we see most commodities in sharp declines. Oil has fallen from $115/bbl. to $97/bbl., silver has been crushed falling 30% and one of the hotter markets, tin, has fallen 19% to its long term trend line. The chart below is the Barclay's Ipath Tin E.T.F. JJT-u.s.Thu, 12 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/your_government_doesnt_care.html http://www.investorbootcamponline.com/blog/your_government_doesnt_care.html Guess what, the new Canadian federal government doesn’t care about your economic well being. They might say they do but just one week into power and they’re raising a stink that is clearly related to their wallet and not yours. The Globe and Mail’s “Ottawa, U.S. clash over customs duties” is clear on the government’s position they are concerned about losing sales tax revenues from Canadians who shop in the U.S. While it is understandable they would also be concerned about Canadian retail operations, run by Canadians, there are alternatives that may work for all Canadians. This is the same government, when in a minority position, that axed the income trust tax structure. The decision cost the government the tax revenues they thought they were missing out on. It also cost Canadian investors, primarily in their R.R.S.P. and R.R.I.F. accounts, a large chunk of their nest egg. If the government wants shoppers to stay on the north side of the border then establish an economic environment that, at minimum, enables prices to be the same as they are in the U.S. But how are Canadian retailers going to do that when they are being taxed to death along with their customers? The fact the Canadian electorate believes paying nearly half of their income in income taxes and then 13%, in Ontario, on every dollar they spend is absurd. The idea that the Canadian economy is better than the U.S., and it’s worth paying for, is nonsense. A little more capitalism and a lot less socialism would work better. There's plenty of real world evidence that proves this type of policy works. It starts with supporting markets to operate as directed by normal consumer and business behaviours. The government could ignite a wave of economic growth by cutting income taxes, the G.S.T. and the gas tax. Once they've set the wheel in motion, then they can move forward with increasing the annual contribution in the tax free savings account (T.F.S.A.). Then Canadians can earn, spend and invest they way they choose and be better off financially. Sat, 07 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/gold_the_useless_investment.html http://www.investorbootcamponline.com/blog/gold_the_useless_investment.html David Olive wrote an interesting and informative article about gold in the Saturday May 7th Toronto Star. In “What’s Good About Gold” his stance on gold is that it is essentially useless. The implication is the powerful up trend is based on investor psychology. It’s a critical factor to keep in mind because essentially all markets are driven by investor psychology. All trades, buys and sells, are based on a viewpoint including transactions coming from a quantitative system. Gold is of course used in jewellery but the idea that gold is a storage of wealth, particularly as it relates to a devaluation of fiat currency, is actually ridiculous. As David Olive points out, when it comes down to it, what are you going to do with a bag of gold? It has no exchange value now and it won’t later when the fiat currency system becomes extinct for whatever reason some nut bars out there believe. In 1990, I wrote an article for the Over 50 publication on the theme gold would be replaced as the alternative investment when other markets are undesirable. As financial markets started going global money managers could, and would, buy a German T-bill, for example, providing a guaranteed return of capital and income. If they didn’t like the Deutsche Mark they could hedge it in any other major currency with either the objective of reducing risk or increasing potential return. Why would they buy gold and have to deal with storage costs and wide spreads. Investors far too often make investment decisions based on some kind of a fundamental analysis that, seemingly, has intellectual merit. I’m not suggesting that such analysis be abandoned after all many markets will follow, to some degree, economic trends as well as the demand-supply balance in markets. But leaning on their conclusions when their investments are falling doesn’t pay. Are investors collecting gains in their retirement accounts or are they trying to be right? Some very large investors are going to unload their positions before gold, and other markets, peak while some sell near the peak. Everyone else is going to be dealing with a declining market and the decision to sell. Unfortunately, especially for retail investors, the decision is plagued by emotional stress as the price falls viciously and/or continuously. If you’re a gold bug where will you position yourself?Fri, 06 May 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/silver_hammered.html http://www.investorbootcamponline.com/blog/silver_hammered.html Silver has fallen 31% since the start of the week and 39% from the April 25th high. The decline has been astounding and probably shocking to many investors. It's not that investors haven't seen big declines before, but a steep rapid decline typically occurs near the end of a long drawn out down trend not from the peak. The complete collapse in silver has unfolded in just five sessions, five days after the peak. It was only a little over two years ago, investors saw the same kind of wipe out in the markets as the credit crisis took hold. The one week decline in the stock market, ending October 10th 2008, remains as the single largest weekly decline in history. But sentiment readings indicate investors have forgotten all about the debacle that left retirees and near retirees wondering how they were going to survive. The most recent five Investor Boot Camp seminar series featured a theme of considering "what goes up might come down". In fact, extensive discussion centered around silver based on the question "is it time to buy some"? This critical trade management matter arose just after silvers peak when silvers short term gain was 45% and the intermediate advance 84%. The point made in the seminar was to recognize that there is a big difference between thinking "wow silver and many stocks have been great; wish I had some" and actually executing a buy after huge gains had already developed.My concern for investors, and their portfolios, was highlighted during the credit crisis. In early 2009, I appeared on CBC, daily, as fear ran rampant giving the media a story to run with. Now my story has been running rampant since late last year which subscribers likely became tired of reading about day in and day out. That story was "the market has been great but extended stocks and markets shifts portfolio management strategies to putting risk management first". There is an appropriate price "location" to execute a buy and the equivalent price for selling. To do otherwise has been proven, by historical evidence, to be what is best categorized as gambling. Investors don't need to gamble and they don't need the drama of the markets to ruin their portfolios. Our research is based on extensive real time studies of useable strategies, the identification of buy and sell prices, trade execution tactics and cycles analysis in the context of decades of historical evidence. The cynic will think we're just pumping ourselves up for our own interest. But if you don't believe it I invite you to do the research that will prove it to you. First, read Silver, How Do You Make Money Now"; this article from April 26th is publicly available. If investors had read it, they could have sold their silver near the peak. If you want to see how the research works, in real time, and how it supports the management of your portfolio please accept this free trial subscription to www.investorbootcamponline.com; enter the promotion code may11. Our specialty is picking the best performing stocks, and markets, at the right time. See how timing the market makes money and enables you to keep it.Wed, 27 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/how_to_lower_gas_prices.html http://www.investorbootcamponline.com/blog/how_to_lower_gas_prices.html An chain email is making its way around on how to lower gas prices. The email says that if you don't buy any gas for one day from the two largest oil companies the price will drop by more than 30%. It's a nice idea but it's a plan that is not only ineffective it would backfire for those who think they understand the dynamics of the oil and gasoline markets. The email says avoid buying from Petro Canada and Esso. But what good is it going to do if just two retailers of gas are targeted? What about the other companies running gas pumps from coast to coast? You would likely be doing Petro Can and Esso a favour by boosting their inventory to sell the next day at a higher price. Staying away from the pumps for a day doesn't change anything, except for those that put off the purchase. Those rare individuals would be effectively putting themselves out of commission for a day. What good does that serve? They will have to resort to public transit to go to work (not the worst idea), they won't being going anywhere else including Tim Horton's or Starbucks for their morning fix, buy groceries or have any fun. That's the way our society works. You get in a car and go! Without it you and the rest of us are living in the dark ages which, unfortunately, too many people in the world still exist in. But that's the belief the economically empty are operating on. They think the oil companies are ripping people off. Some even think it's the gas stations that are master minding some grotesque and evil money making scheme as if they control the world. Just in case a reader isn't sure, the gas stations buy gas from their supplier(s) and sell it at a slight mark up that is sufficient to stay in business and operate like other companies in other industries.If avoiding gas for a day would actually change the behaviour of the oil companies here's what they would do; they would lay off their staff and shut down their drilling operations. As a result the supply of oil and gas being produced would decline. Supply goes down and price goes up. The solution to rising demand in a world that features 40% of the population actually starting to earn some income is to drill for more supply. As it turns out horizontal drilling and offshore drilling is well under way. When some big discoveries or larger reservoirs are developed the price may at least stabilize and perhaps decline permanently. The probable answer to high gas prices, specifically, has been plain and simple for a considerable time now. However, environmentalists in the U.S. appear to be running the show shutting down any possibility of building new refineries which take years and billions to complete. What about building a refinery that is dedicated to the production of jet fuel. The next time someone starts crowing about the high cost of air travel or the inconvenience associated with it they might consider this idea. As it turns out, there are more significant environmental issues in the world such as the car that the jokers who believe in their world changing business plan drive. There are also more significant economic issues that require sending an email to politicians who could use some education on managing the economy and supporting small businesses who are the drivers of growth and employment. Investor Boot Camp Online is an investment research service for investors who manage their own portfolios, investment advisors who believe in client account peformance and fund managers who want to do better than the benchmark. Thu, 21 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/for_those_that_hate_the_rich.html http://www.investorbootcamponline.com/blog/for_those_that_hate_the_rich.html The “American Way” is an interesting way. Everybody wants to be rich and claims to be working at it but the average person seems to carry a load of resentment for those that have lots of money. Contrary to Michael Moore and other “know it alls” who know nothing, the issue isn’t that rich people are evil the issue is that we’re not all rich. If we all made five million dollars per year we wouldn’t care that guys hitting baseballs are paid huge guaranteed contracts. What compounds the issue is that the teams pro athletes play for, and specifically the stadiums they’re playing in, are usually funded by public money. So the average guy not only has his pay cheque drained by taxes but the taxes go to support the local pro sports teams so players can be over paid. Then Mr. Average gets to go down to the game and spend $100 before he even walks through the stadium gates along with the rest of the lemmings who have no control over the matter. During the credit crisis many geniuses came out of nowhere posting poorly made videos on the internet about the evil central banks. They apparently want you to believe that banks are “making money” out of thin air and that is the root of all kinds of problems. However, for anybody who really believes that here’s what you do. Go buy a house and pay for it with cash. You may not have a mortgage because that would conflict with the idea that lending money is evil. If you don’t like the central banking operations that have almost entirely on its own, raised the standard of living over the last 98 years then don’t borrow any money, and get rid of all your possessions. You may buy a tent. As outlined in A Divided Economy, the big issue is inefficiencies or waste. Governments, in particular, are wasting enormous amounts of money. But the people who complain about the rich are voting in those very governments and failing to make them accountable for destroying wealth; your wealth!Canada has a federal election on May 2nd, again, because the opposition parties in the minority government need to feel important. By the way, that’s another $250 million out of the pockets of Canadian taxpayers who already pay nearly 50% in income taxes out of every dollar they earn, and another 13% in taxes on every dollar they spend.In the early days of Canadian federal party leader Stephen Harper's reign, his minority government decided to axe the income trust structure. At the time you would have wanted to believe that is was motivated by the demands of the left wing parties. Regardless, it's worth knowing that some very knowledgeable experienced analysts, such as Dennis Gartman, think it was the worst financial decision ever made by any one in the world in the position of Finance Minister. How does destroying the wealth of investors work for the good of the people who pay taxes and drive the economy? As it turns out, the loss in the market related to the decision wiped out the taxes that the government thought they were going to collect. When Canadians go to the polls on May 2nd hopefully they'll think about their candidate's position on managing the economy so all Canadians may improve their financial well being not just the rich.Tue, 19 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/a_divided_economy.html http://www.investorbootcamponline.com/blog/a_divided_economy.html The interesting thing about economics is it is considered a social science that analyzes the production, distribution, and consumption of goods and services. But unfortunately, attempts to predict changes in the economy and human behaviour frequently fall flat. There is a growing divide in Canadian and American society between the government and the rest of the labour force. You can’t see it, you can’t measure it but you hear it in the comments that are becoming more frequent in living rooms, coffee shops and the work place. People are becoming increasingly fed up with ongoing government waste and inefficiencies. It’s not that what is being accomplished is an issue or that the various government agencies and functions shouldn’t exist. But the issues are it costs too much money and, perhaps more significantly, for those that have to deal with various government agencies they are far too often dealing with what may be labelled stupidity.The issue business people and investment market analysts have cited since the credit crisis is the increasing influence of government. It’s not just the excessive cost but the bureaucratic monster's participation in various industries and markets creates a dynamic that is too slow moving and frustrating for people to deal with especially for businesses.The dynamics of the Canadian economy are a much more left wing structure, than the U.S. Canada has a larger and growing base of government employees who are paid a relatively significant salary. Their salary allows them to pay for, amongst other things, housing which drives prices higher or at least keeps them elevated. Meanwhile, those who are self employed are taking the risks of running a business, investing their own capital, paying their employees salaries and benefits, their workmen’s comp. costs, their vacation pay, rent, marketing and sales expenses and if they make any money high taxes. Those taxes support the numerous government employees who can’t think for themselves and refuse to budge to help out those who are the drivers of the economy and their pay cheques.Most people won’t care about this and that’s the point. But there is a rising tide of discontent with government waste. You can’t see the backlash in the numbers, but what is becoming increasingly evident, to business people at least, is the pot is approaching the boiling point.Fri, 15 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/google_earnings_growth_is_average.html http://www.investorbootcamponline.com/blog/google_earnings_growth_is_average.html Google Inc. (GOOG) first quarter earnings were reported at $8.08 missing analyst estimates by four cents. But it was enough to send the stock down $47.81 or 8.3%. That might seem cruel for a company whose earnings were still up 20% on a 27% jump in revenues. But that’s what happens to the stock trend of companies whose days of big growth are behind them. It’s the same story with Research in Motion (RIM, RIMM) and, more importantly, it’s going to be the situation for many of the current bull market’s big winners. Google (GOOG) looks like a deal for a company that analysts project growth of 17% in 2011 earnings and 16% for 2012. Its current price earnings ratio (P/E) is just 19. That’s near the low of the five year range of 12-48. Despite current earnings at nearly twice the earnings in 2007, the stock has fallen 29% since then. The P/E was 48 when the stock peaked at $747/share in 2007. Big investors start to unload their positions when they are no longer willing to pay higher premiums for a company that expects, and reports, mediocre earnings growth. Eventually this will happen to Baidu.com (BIDU), Priceline.com (PCLN), Netflix (NFLX), Lululemon (LLL, LULU) and others. Their gains are substantially more than the 834% gain GOOG logged from its August 2004 I.P.O. In fact, LLL-tsx is up twenty times from the bear market low. For now, the projected growth in these four companies is much higher than Google’s and at levels that are unsustainable long term (see the table below). That keeps the up trend intact as profits keep rolling in.The bull market has been the white knight riding in to save investors from the bear market fuelled by the credit crisis. But investors would be well served to recognize that historically the trend typically changes, to down, long before the view that earnings growth is declining becomes apparent. CompanySymbolProjected Annual EarningsGrowthQuarterEarningsGrowthQuarterSalesGrowthGoogleGOOG17%20%27%Baidu.comBIDU62%174%101%Priceline.comPCLN40%71%35%Netflix NFLX49%55%34%LululemonLLL-tsx, LULU29%60%53%Wed, 13 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/free_hires_saves_the_economy.html http://www.investorbootcamponline.com/blog/free_hires_saves_the_economy.html Government deficits, government debt and high unemployment are daily headlines. Assuming there is a single solution that solves all these issues is likely unrealistic but here's one that might work. A government initiated private sector hiring program that puts the unemployed back to work and the government pays them. U.S. unemployment stubbornly remains at twice the rate from just before the credit crisis. There are more than 8 million people out of work but the actual unemployed may be substantially higher since reported statistics only account for claims. Some people are no longer eligible and some have given up looking for work, effectively removing them from the work force. If the Obama administration implemented a "Free Hire Saves All" program this is what the economic impact might look like. Scenario A: The government pays 8 million people to go to work at an average salary of $47,500. This salary figure is the average output per person in the U.S. Realistically, the actual average salary for the program should be lower. VariableCost or Revenue Government salary outlay($380)billion Income taxes @ 28%$106.4 billion Taxes collected from increased economic activity$300 million Taxes collected from boost in housing market0 Net Cost$213.6 billionAssumptions: The U.S. economy is $15 trillion and the average tax rate 28%. The effect of increased economic activity is 2% of the size of the economy and the tax rate on this particular economic activity increase is 20%. That's the equivalent of a 2% change in G.D.P. There are no taxes collected on the boost in the housing market due to tax loss carry forwards (for at least the first year of program). The net cost of the program, based on numerous assumptions and ignoring interest on the timing of cash flows, is $273 billion. However, it would be unnecessary and unwise to put the entire pool of unemployed to work. If half the unemployed, four million, were hired by the private sector, this is what the net cost might be.Scenario B: Half the unemployed are hired (four million).VariableCostorRevenueGovernment Salary Outlay($190) billion Income taxes @ 28%$53.2 billion Taxes from increased economic activity$300 billionNet Cost($76.8) billionIf a 1% G.D.P. impact is used the net cost to the government would be $106.8 billion. The annual costs outlined here are, in any of the three projections, much lower than the governments stimulus spending programs over the past two years. Clearly, the actual economic impact would not be exactly as it's projected here. But consider this; if the "Free Hires Saves All" program had been initiated in 2009, the Federal Reserve Board would not have undertaken such a massive quantitative easing program. The government would not have had to borrow as much as they did, and still are, because this single program effectively cuts off the need for financing misguided programs. From a policy position, heavy spending cuts could be implemented on the justification that "everybody" is working and shouldn't need the government to prop them up. It would be hard for business to refuse to pay benefits when new employee salaries or wages are being paid by the government. Private sector initiative would be substantially boosted which, after all, is the American way. With this program, the flow through impact in the economy is far more significant than current alternatives. Sat, 09 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/dbox_rocks.html http://www.investorbootcamponline.com/blog/dbox_rocks.html D-Box Technologies (DBO-tsx) is an emerging company that provides motion systems to the entertainment industry. The company offers potentially significant upside as they gain market share in an emerging niche. Technology has brought 3-D films to a point where they are achieving critical mass. However, there are risks. Emerging companies may be the riskiest proposition for all publicly traded companies. The company is Canadian which typically presents challenges for penetration into the U.S. market. They are also still unprofitable. However, it is worth noting the numerous deals the company has made just in 2011. See below for the list with the headlines of press releases. The company is clearly getting attention as the premier supplier of motion systems to the entertainment industry. The revenue stream appears to be at an inflection point in ramping up their scalable and recurring revenue business model. They are achieving their expectations. Company OverviewD-BOX Technologies designs and manufactures leading edge high-technology motion systems mainly suited to the needs of the entertainment industry. With its unique, patented technology, « D-BOX Motion Code™ » uses motion effects specifically programmed for each film, TV series or video game, which are sent to a motion generating system integrated within either a platform or a seat. The resulting motion is perfectly synchronized with all onscreen action, creating an unmatched realistic immersive experience. To date, D-BOX Motion Code™ is available on more than 900 titles. Accordingly, many prominent Hollywood studios have started embedding D-BOX Motion Code™ on many Blu-ray™ format and theatrical releases. By reaching agreements with the leaders of both the motion picture and gaming industries, D-BOX’s award-winning motion technology is gradually proving itself as a new global standard in the entertainment world. Sector Overview3-D entertainment is beginning to gain critical mass as technology improves to the point where major film producers are producing films in 3-D versions. Avatar is an example that had huge box office success.Customer DealsThe company has signed numerous deals in 2011 to install their technology in a number of theater chains. D-Box to install 29 seats at Emagine Michigan theatre D-Box Technologies to sell 22 D-Box seats to RC D-Box to sell two D-Box products to Larry H. MillerD-Box to supply MFX seats to two Muvico theatresD-Box to equip German theatre with 50 MFX seatsD-Box to upgrade two theatres in NetherlandsD-Box to install MFX seats at Hong Kong theatreD-Box Technologies to sell MFX seats to PremiereD-Box to provide motion technology for Focus film HannaD-Box to install 120 seats in four Cineplex theatresD-Box shakes up L.A., Tampa theatres with motion seatsD-Box signs fourth movie motion effect deal with SonyD-Box to install 30 MFX seats in second Utah theatre D-Box to sell 22 more D-Box MFX seats to PremiereD-Box to provide Cinema Beloeil with 20 MFX seatsD-Box Technologies to provide CineLux with MFX seatsThu, 07 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/universal_display_PANL_sells_off.html http://www.investorbootcamponline.com/blog/universal_display_PANL_sells_off.html On April 4th Travelzoo (TZOO) was flagged for a extended price condition based on cycle limits. On April 6th another stock underwent a clear process of peaking as it also reached historical price limits. Universal Display Corp. (PANL) develops OLED light technology for use in flat panel displays, lighting and organic displays. The stock has been a big winner running from the bear market low of $4.86/share to $63.58, an advance of more than 1200%. Like Travelzoo (TZOO) the stock had reached an extended price condition relative to its long term trend line (the 200 day moving average). See TZOO Triggers Sell. The historical measure is, typically 70-100% above the 200 day moving average. In the current bull market many stocks have reached beyond 100% above as PANL did. But within less than two hours of reaching this lofty plateau PANL sold off. You can see the 200 day moving average, circled at just under $30/share. The share price on April 6th reached 118% above the 200 m.a. before reversing and closing lower in heavy volume. It's not the heaviest volume on record for the stock but the action is a bearish reversal. Combined with the extended condition based on this historical measure the stock has indicated two significant sell signals. Tue, 05 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/live_long_and_profit.html http://www.investorbootcamponline.com/blog/live_long_and_profit.html The great investor Mr. Spock used to tell investors “live long and profit” by managing your portfolio well. In numerous speaking engagements across the galaxy, he spoke about the importance of marketing timing, trading patterns and the significance of relative out performance amongst sectors.The stock market recently renewed its up trend following a correction that was relatively brief and shallow. Nonetheless, it was a correction which was significant on many levels for its implications on managing portfolios. The trading environment has become, plain and simply, more complex. Sector rotation has pushed technology out of favour. Energy, real estate and industrial sectors such as machinery manufacturers and metal processors have risen to the top of sector performance comparisons. Most of the market’s hot stocks, the leaders, are very extended on intermediate and long term measures. Stocks such as BIDU, NFLX, PCLN, LLL (LULU) and others have surpassed the best percentage gains that they, and other hot stocks, have ever reached. Sell signals are not always obvious. In particular, stocks 100-120% above their long term trend lines (200 day moving average) are common but it is a measure that can be used to effectively sell on the way up. See TZOO Triggers Sell for more on this.Unfortunately, those in the “un-neutral zone” failed to heed the profound investment expertise of Mr. Spock. But investors now have an opportunity to seize the moment in what may be the final moments of the most powerful bull market surge following a bear market. It won’t last forever but investors who employ effective trade execution tactics and strategies may propel their portfolio to the stars. Mon, 04 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/tzoo_triggers_sell.html http://www.investorbootcamponline.com/blog/tzoo_triggers_sell.html Travelzoo Inc. (TZOO) has been the market’s hottest stock over the past month with a 110% gain from the February 23rd low. Since September 1st, which was day one of the renewed up trend following the 2010 correction in the stock market, TZOO has gained 317%. Nice run! But TZOO is now a sell. Historically, stocks that exceed their long term trend line, the 200 day moving average, by 70-100%, have reached the limits of a powerful up trend. In this market, many stocks have ramped up to 100% or slightly more than their 200 day before peaking. TZOO is 110% above its 200 day moving average which is currently $32.98/share. Stocks don’t have to follow the textbook on stock action since the first chapter of that book says they’ll do the unexpected and averages are irrelevant. But TZOO has already exceeded short term cycle limits by a long way. The trading action Monday April 4th doesn’t look like a top despite the very heavy volume in a gap higher. It can be interpreted as a climax run but the gain was not huge. Perhaps its day one of a two or three day burst which characterizes a climax run. Through out history, this event has marked the top in stocks with huge gains. The good news is investors are presented with an opportunity to sell a big winner on the way up. It’s not the easiest transaction to execute psychologically, especially in the current bull market, but it’s still good portfolio management. Sun, 03 Apr 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/uranium_stocks_nuked.html http://www.investorbootcamponline.com/blog/uranium_stocks_nuked.html The March 11th earthquake and tsunami in Japan was reported to have damaged at least two nuclear reactors which we now know is increasingly serious at the Fukushima Dai-Ichi facility in Onagawa.Following the disaster, uranium stocks in North American markets suffered gigantic declines.Uranium stocks were one of the bigger resource sector winners in the rally from the fall of 2010 until their February 2011 peaks. In the first session, Monday March 14th, following the news from Japan, nine uranium stocks fell nearly 25%, followed by a repeat performance the next day. To put the declines in perspective, Energy Fuels (EFR-tsx) plunged nearly 50% in a net two day decline and that followed a decline from the February peak that was already 50%. CompanySymbolGain from 2010 rally% Decline from Peak Energy FuelsEFR430% 75% UEX Corp. UEX190% 56% Uranium OneUUU150%52%Uranium Fund UF.UN110% 45% Cameco Corp. CCO, CCJ64% 37% Following a few sessions grinding it out near the low, a bounce of just two days developed. But that was it, and since then the drift lower is nearly two weeks long. Most uranium stocks have come close to revisiting their lows with some, such as UEX, undercutting it. There is something for investors to learn from this. Extremes tend to persist; revisiting the low is normal following a very deep decline. Historically, extreme weakness leads to repeated visits to the low. Given the undercutting of the low by even a couple of the more significant uranium stocks is a sign that the late March lows may not be the ultimate low for this group. Another sector that continues to struggle in the same manner, near the lows, following deep declines are fiber optics. A deep correction, and bear market, has two components; one is the large percentage decline from the high and the other is the ongoing difficulty in attempting to profit from trading bounces until either everybody is worn out or bored. How stocks trade through a base is somewhat unpredictable. Uranium stocks might eventually put in a big bounce from the low before wilting or they may trade in a tight range near the low. Regardless, the bull market is still in good shape and much better opportunities are available elsewhere. Until more time has gone by the evidence has already told investors that this sector is an unreliable trade. Thu, 24 Mar 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/move_japan_to_detroit.html http://www.investorbootcamponline.com/blog/move_japan_to_detroit.html More than 360,000 people have been evacuated from Northern Japan, 500,000 are homeless, 250,000 homes are with out electricity and more than one million homes are without water. At least 100,000 children are homeless.This fall out from the Japanese earthquake and tsunami becomes increasingly serious with each passing day. On the other side of the planet, Detroit Michigan is an impoverished shadow of its former self with extreme economic weakness. The housing market that has seen prices plummet has an extraordinary supply of houses for under $20,000. The situation is so bad the City of Detroit is offering deals on homes to police officers to move into certain areas of the city. There are entire neighbourhoods of houses that sit empty as unemployment remains near 11%.So here’s an idea; why not move the dislocated in northern Japan to Detroit. It's a city with an established infrastructure that could accommodate most if not all of the dislocated Japanese. Hundreds of thousands of people could immediately live in homes with water, roads with just a few potholes, and an economy that could fit them in. In fact, the influx of hundreds of thousands of people is just what Detroit needs. Why not take it a step further, reopen moth balled auto manufacturing plants, and put the non unionized Japanese immigrants to work building Japanese cars and trucks. The American unions would fight it, but some will say its the needed knock out punch for the auto unions who are largely responsible for their own demise. Culturally, this is an idea that could work. The U.S. and Canada are built on neighbourhoods, some of them large, of people from the same cultural background who emigrated over the decades. Some might argue the Japanese won’t fit in with the rest of the community in Detroit. But like other communities the Japanese may choose to live together in relatively empty neighbourhoods so they would be, to a degree, still together as they were in Japan. This may be a solution to different problems. It could also be the overdue foreign policy home run for the U.S. that the rest of the world thinks they need.Cynics will undoubtedly argue the Americans are just doing it to serve themselves since Detroit seems to otherwise be a lost cause. But this is a much bigger issue than economics. Japan is becoming increasingly irradiated and the lives of many Japanese are in danger.Thu, 10 Mar 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/how_far_will_stocks_fall.html http://www.investorbootcamponline.com/blog/how_far_will_stocks_fall.html February 23rd was a significant blow to the stock market’s incredibly powerful up trend. Numerous top stocks displayed more signs of cracking followed by a decisive blow March 7th as the averages undercut a buy signal that occurred just two sessions prior. In the Thursday March 10th session, leading averages undercut support levels on the seventh day of heavy selling in thirteen sessions. The question now is how far will stocks fall? The bull market has been nothing short of spectacular. Like the knight in shining armour riding in to save the day the huge gains have been a, perhaps, surprising rescue for millions of investors who felt doomed to working beyond planned retirement. But now our prediction for 2011 is beginning to present itself. The prediction, in A Disaster is Coming for Investors, was this year was going to be a disaster for too many investors. Not because the market was going to be bad but rather many investors who bought in late wouldn’t sell to protect their capital when an inevitable correction showed up. A number of indications have been cropping up that a correction was underway. Some of them have been lingering for a long time. The market's hot stocks had logged gains so large that they had reached previous historical limits. Those include Priceline.com (PCLN), Netflix (NFLX) and Baidu.com (BIDU). Interestingly enough, PCLN and BIDU remain in good shape. It's a testament to a powerful bull market but risk management has replaced the winning strategy of staying with the market's leaders.One of the market's hottest sectors has been fiber optics. On February 14th the leading stocks from this sector, Finisar (FNSR) and JDS Uniphase (JDU-tsx, JDSU) appeared to peak in a high volume bearish reversal. Like other great performers these stocks were more than 100% above their long term trend lines (the 200 day moving average). This has been a consistent sell signal through out history. Both stocks hung in until February 22nd when more evidence of a correction kicked in. But they appeared to be in recovery mode at the same time the Nasdaq triggered a confirmation rally. That is another historic event that accompanies renewed up trends. But the Nasdaq's apparent up trend broke down as it retreated to a close that was lower than the confirmation rally session of March 3rd at 2800. On March 9th, FNSR plunged 35% and JDU was rocked for an 18% loss. Investors who had enjoyed a long ride of feeling good were shocked by a stunning decline in FNSR that was ten times its normal trading volume. The message was clear. Big investors are leaving the party and fiber optics stocks are not alone. Most stocks are very extended on a number of historical measures. Cycles analysis suggests that based on percentage gains and the length of time in powerful up trends there are two possibilities in a developing correction. Declines may be deep with percentage losses that can be very large if only because of the size of gains preceding it. The other possibility is, stocks will trade in ranges that may not be deep but will persist for a long time. Or, perhaps we'll get both. Tue, 01 Mar 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/real_estate_stocks_are_hot.html http://www.investorbootcamponline.com/blog/real_estate_stocks_are_hot.html It was suggested in "Today's Financial Markets Defy Headlines, Logic" that investors consider switching bond investments to industrial and commercial real estate stocks. That was October 25th, 2010 in the CBC's MoneyTalks section. Now we're seeing real estate stocks, including R.E.I.T.'s power higher. It's not that this sector of the stock market has been weak. In fact, it has been one of the better sectors in the Canadian stock market. But it is just coming to life in the U.S., and standing out for superior performance on a relative basis.It's significant action as it serves to give this very powerful bull market new life. Sector rotation is frequently the backbone of a sustained up trend. The chart below is the TSX traded Ishares Cdn. Capped REIT Index fund unit with the symbol XRE. The green circle highlights the renewed up trend in this E.T.F. that represents the Canadian industrial and commercial real estate industry. XRE has already doubled since bottoming out early 2009. CB Richard Ellis (CBG-n.y.) is a U.S. based company providing property investment management, loan servicing and origination and leasing advice around the world. CBG's performance in the last 52 weeks puts it in the top 10% of all U.S. traded stocks. Accelerating growth in revenues is a good explanation for stellar stock performance as the credit crisis is becoming a thing of the past. Many Canadian R.E.I.T.'s offer yields over 5%. That makes this group not only a good choice for growth investors but one of the best and highest quality yield possibilities anywhere in the world. As suggested in the CBC MoneyTalks page the bond market has proven to be one of the worst investment areas since the fall. Investors who manage their own portfolios, including fixed income investors, could have done very well switching out of bonds and picking up better yield and growth performance.Investor Boot Camp Online is an unbiased investment research service for investors who like to out perform the alternatives. Research and strategy expertise is market timing and identifying the most powerful, but professionally risk managed, markets and securities.Mon, 28 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/transparency_wont_work.html http://www.investorbootcamponline.com/blog/transparency_wont_work.html The root of the credit crisis can be traced to what is essentially a lack of information on the nature of securitized investment products. In the case of a mortgage back security (M.B.S.) an investor, and therefore a lender, have no idea about the mortgages that make up that particular security. There was no paper trail supporting the security.So the solution was obvious; provide a useful document with some details of the security and the credit markets would be back in business. Or would they? With relevant back up, providing disclosure and transparency of the numerous securitized investment products, investors and lenders would be able to make a reasonable assessment of risk. The issue during the height of the credit crisis was lenders were unwilling to provide debt for nearly everything based on a lack of transparency on the assets backing the loan. Leveraged hedge funds including commodity funds were faced with an urgent need to liquidate their positions to pay back debt. That was the catalyst for the rapid decline in markets from September to October 2008. If lenders had this information in the first place the credit crisis would undoubtedly followed a less drastic progression. But full disclosure won’t work. If you knew that a mortgage backed security was full of over leveraged properties owned by low income earners who are effectively bankrupt with a house that is 40% below their purchase price, would you invest money in the security? Probably not! That would render these securities nearly worthless or at least substantially below their issue price. With most properties down 40% in any region of the U.S., it would destroy any chance of avoiding extensive bankruptcies and the opportunity to issue new securities. Ironically, the solution might destroy the fabric of American capitalism. It would ruin the lives of many home owners and bankrupt lenders who may have potentially huge loan losses. Entire neighbourhoods would become waste land with little hope of future investment. Investment dealers and banks would see a lucrative income stream dry up. That might not break many hearts but the financial services industry is as big a part of the economy as residential real estate is. If you’re an investor in mortgage backed securities, and you want to have some fun, ask your dealer for a detailed report on the mortgages in the pool. When they laugh it off, tell them you’re going to work with a different dealer.Sun, 27 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/tfsa_or_rrsp.html http://www.investorbootcamponline.com/blog/tfsa_or_rrsp.html In 2009, the Canadian government introduced a new investment account called the Tax Free Savings Account (T.F.S.A.). This account provides for tax free capital gains and income with tax free withdrawals. Contributions of capital, up to $5,000/year per person, are a great way to make money without giving a piece of it to the tax man. It also raises an issue in regards to annual contributions to R.R.S.P. accounts. T.F.S.A. contributions do not provide a tax deduction, in the year of contribution, the way R.R.S.P. contributions do. Accordingly, R.R.S.P. deductions provide a deferral of taxes to the year capital is withdrawn from a registered account and taken into annual income. The issue with withdrawals from an R.R.S.P. or R.R.I.F. is the gains, capital or income, earned in the account is taxed fully at the marginal tax rate. It is quite possible that the deferral benefit of R.R.S.P. contributions is offset by a higher tax rate. There are too many variables to make a generalized calculation of the relative benefit or cost of R.R.S.P. contributions, up to $5,000/year, versus contributing to a T.F.S.A. The flexibility of T.F.S.A. accounts, for example, is not subject to a calculation. But there are compelling reasons for some taxpayers/investors to consider the T.F.S.A. over ongoing R.R.S.P. contributions. The anticipated annual rate of return from the investments made is one factor.Fortunately, taxpayers are not restrained by required contributions to either account in any given year. Both provide unused contribution carry forward options. In 2011, a taxpayer who has not opened a T.F.S.A. may contribute $15,000 ($5,000 for each of the three years of contribution eligibility). The T.F.S.A. offers significant flexibility for planning related to tax minimization, income splitting, retirement and estate planning. It is well worth researching the possibilities to see how it fits with your personal circumstances. Investors interested in addressing their possibilities with T.F.S.A.’s and retirement accounts are invited to contact; info@investorbootcamponline.com , (647) 349-6777 or through “live chat” on www.investorbootcamponline.com . Investor Boot Camp Online is an unbiased investment research service for investors who like to out perform the alternatives. Research and strategy expertise is market timing and identifying the most powerful, but professionally risk managed, markets and securities.Fri, 25 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/canadian_banks_dont_know_their_clients.html http://www.investorbootcamponline.com/blog/canadian_banks_dont_know_their_clients.html The Financial Action Task Force is currently meeting to address anti-money laundering and anti-terrorist financing practices for the Canadian banking industry. The government created group is, according to the Globe and Mail on Friday Feb. 25th, hearing that Canada has made significant progress. There are apparently tougher requirements on customer due diligence and wire transfers. But you'd never know it as a customer of the Canadian banks.How many Canadians experience the feeling that they're being treated as though they are attempting to commit a fraud? You deposit a cheque from a relative, who banks at the same bank, and they hold the cheque for five to seven business days? You do some banking at a different branch of your bank and you're treated as though you're a new customer. You deposit a U.S. dollar cheque and they hold the cheque for twenty eight days. Seriously!The Canadian banks are being placed on a pedestal because they are stand outs for avoiding the credit crisis calamity many countries and their banking systems were buried under. There's nothing wrong with managing risk of course especially if you're in the business of lending money. But the Canadian banks don't know anything about their clients. What business survives and thrives not knowing something about their rretail clients? The other day I accompanied a relative in a meeting with a loan officer at one of the Canadian chartered banks. The loan officer, a "kid", started, conducted and finished the meeting as though something important was being interrupted. Maybe he had been texting his girlfriend when we showed up. The relative has been a been a client of the bank long before this kid was a twinkle in his dad's eye. But he didn't know that, he didn't bother to check it out during the meeting and he begrudgingly gave the standard responses from a bank. Besides the fact it was not compelling customer service it's not very good business. How does this industry survive without compiling a history of meaningful information about their clients?The answer of course is that the banks can do whatever they want. The regulated environment they live in permits them to put the stranglehold on whoever they want, when they want. But if terrorists are going to be rooted out of their financial holes, the banks can start by rubber stamping who their regular long time clients are and separating them from riff-raff. Maybe then, they may expose the shady criminals who make banking difficult for all of us. Thu, 24 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/oil_shock_more_than_economics.html http://www.investorbootcamponline.com/blog/oil_shock_more_than_economics.html Oil has jumped from $87.09 to $103.41 in just six sessions due to unrest in the Middle East.The price of gasoline has risen accordingly boosting fuel costs by more than 18% over the same period.The issues in Libya are an oil shock to the global economy.But it’s more than grumbling at the pumps when you fill up the gas tank for the S.U.V.The economic ramifications are significant as energy is required to product virtually every product or service anywhere and everywhere in the world. At a time when economic growth in some regions is tepid at best it’s a blow to an economic recovery that was on the verge of progressing to the next phase. It’s a political matter involving everybody whether they realize it or not. The world is now a global economy. No longer can a country be viewed as a separate economic region in isolation. The emergence of 40% of the world’s population into the economic community links the economic variables of each region into a complex web of global economic activity. It’s the first time in history that economics can be viewed this way. From now on, it is vital that it is viewed this way particularly from a policy perspective. That puts a new spotlight on leadership.Poor decision making has more than a negative impact on the country it originates from. It affects everybody financially.There was a great deal of backlash, from Americans in particular, on the U.S. led invasion of Iraq. But since 911 there hasn't been a single terrorist attack in the U.S. Internationally, terrorist attacks are at multi-decade lows. This outcome was the direct result of someone in a position of power making a decision to remove a leader who makes bad decisions. Now it’s apparent there are others clearly displaying poor leadership. It’s time to clean up the world’s leadership for many reasons. If this were the year 1011, it would be different. But it isn’t. This is a time when the internet, wireless communication and a massive move to economic prosperity characterizes global economics and politics. Poor leadership can’t hide anymore. This is about more than oppression and murder. It’s also about economics that affects everyone. The next time you fill up the gas tank, think about the direct impact someone like Muammar Gaddafi is having on your wallet.To use former President Bush’s line, “we are either with them or we’re against them”. Tue, 22 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/bunt_for_profits.html http://www.investorbootcamponline.com/blog/bunt_for_profits.html Baseball is a game of strategy.Sports enthusiasts might say the strategic element of baseball distinguishes it from other sports where athleticism tends to be a more defining feature. A routine play in baseball features the offence laying down a bunt to move a base runner into scoring position. In this game situation, the batter is sacrificed to put the man at first on second base. Some fans find the play baffling as a perfectly good hitter is seemingly wasted for one potential run. Why not try and get a hit possibly scoring two runs in a single swing of the bat and not give up any outs? The same interpretation is accorded the defense as they throw out the batter at first rather than throw to second and erase the lead runner. But the strategies taken by both the offence and the defence follow the same principle. Take the high percentage play.One of the great myths of investing is the belief higher risk produces higher return. While there is validity to how this is statistically determined, the reality is strategies used by retail investors seeking big returns frequently do not work out. Traders take the strategies of buying penny stocks and stocks in downtrends believing the upside is more likely and greater than it might be in high priced stocks. But the reality has been high priced stocks tend to not only persist in long term up trends but they are far more profitable. High priced stocks of big winners provide a higher percentage of success. Buying them, as a strategy, tends to be much more reliable and ultimately provides superior growth in a portfolio. Investors might consider why one company trades at .10 while another one trades at $100/share. The high priced stock didn’t I.P.O. at $99! Big investors, who conduct plenty of research, drove the stock up to $100/share. If they thought it wasn’t worth more than this they’d be selling. When that happens, and it will, then investors may reduce their positions and look for another more reliable trade. Investor Boot Camp Online is an unbiased investment research service for investors who like to out perform the alternatives. Research and strategy expertise is market timing and identifying the most powerful, but professionally risk managed, markets and securities.Mon, 21 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/inflation_or_rising_prices.html http://www.investorbootcamponline.com/blog/inflation_or_rising_prices.html There appears to a be a widespread belief that inflation is coming. The premise of this view is that inflation is a monetary phenomenon created by central banks. Accordingly, the extensive actions of the U.S. central bank, the Federal Reserve Board or “Fed”, is thought to be stoking what will ultimately be a huge long term trend in rising prices. The counter argument to this theory is that the Fed., and the similar actions of other central banks, is an effort to counter deflationary forces and, in particular, support a recovery in the banking sector. Theoretically, low interest rates and quantitative easing are not monetary tools that fuel inflation. A boost in the money supply is however and there was an unprecedented massive jump in the money supply in early 2009. But that was two years ago. Since then the growth in the money supply has been historically on average. Fears of rising food prices are believed to be one of the symptoms of inflationary monetary policy. Impoverished nations, such as Egypt amongst others, have had riots due to an insufficient supply in certain foods such as rice. Rising food prices isn’t an issue for the rich since food is a relatively small percentage of their cash outflows. But for the poor it is usually their only cash outflow. The matter of an increasing world population, with at least 40% of the population emerging from economic quicksand to a more diversified financially improved status, has been the backbone of several investment themes. But rising prices is not the same economic phenomenon as inflation.Prices may rise, for a long time, due to rising demand or, accordingly, an equivalent decrease in supply. Usually, as is the case with food and a growing population, it is increasing demand. In a normal functioning marketplace, rising prices serves as an incentive for suppliers to increase supply. This provides incentive to attract new business operators who seek to profit from an improving business environment.The individuals mired in financial hardship who face rising prices surely couldn’t care less about this. In fact, it has a negative perspective as it appears others are profiting at their expense. However, without rising prices, and the incentive it provides for new business, there is no trigger for supply to increase and meet rising demand. Americans will remember the good old days in the housing market when prices kept going higher and banks kept handing out mortgages. What wasn’t as apparent is nobody cited this market action as inflationary. Everybody was quite happy to see the “great American dream” spread by low carrying costs, easy credit, a significant change in capital gain tax law related to housing and a red hot market that never stopped going up. Despite short term struggles, rising food prices is what the world needs to feed everybody and feed them well. But that doesn’t imply an inflationary cycle is in play. Boot Camp Banter is a regular series featuring insights into the complexities of investing, the investment markets, the economy and business. Wed, 16 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investing_for_the_long_term.html http://www.investorbootcamponline.com/blog/investing_for_the_long_term.html How many times do you hear a portfolio manager say we like this stock because of its long term potential? How many investors ride corrections and bear markets lower because they’re in it for the long term? Investment stances, such as these, are neither logical or rooted in basic math. It's also not supported by historical evidence.The idea there is a reward for investors who allow a 25-50% hole in their portfolio is not rooted in reality. There was no trampoline at the bottom of the bear market springing beaten down portfolios into the stratosphere and vaulting them over those who were in cash.There were plenty of indications enabling investors to move out of the equity markets starting as early as November 2007.In fact, from our observation, it was clear and compelling that portfolios operating on objectivity protect their capital by committing to the sidelines. Anybody who cared about their money could have taken action on signals from the real world. Long term investing is different for fund managers than it is for individuals. Funds that place capital into a stock often take years to build a position. Individuals may follow the evidence and build a full position in two minutes. It takes just as long to eliminate the position when a trend change is indicated. The bigger issue is always timing. Why invest in something because there is an opinion of long term potential? If the stock and its entire sector aren’t trading well the opinion is worthless. If, and when, the stock starts a powerful up trend there is plenty of time to get in near the beginning and ride the wave higher. How many investors continue to sit with their “water plays” and nothing has happened? Value is a theme for fund managers who use portfolio theory to manage funds under a certain mandate. It does not apply to individuals who are trading their own margin or retirement accounts. In the U.S. equity market, effective reduction of systematic risk requires twenty two stocks. In the Canadian market, thirty three are required. That’s too many stocks for any retail investor portfolio. It’s also unnecessary. Retail investors are in a different business that mutual funds. A mutual funds’ objective is to avoid going bust. That’s not the primary objective for managing an R.R.S.P. or 401K. Making money in the markets starts with the shorter term cycle. The current short term cycle began September 1st, 2010. Short term cycles roll into intermediate term cycles which are a component of the longer term cycle. Too much damage is being done to portfolios that ignore the short and intermediate term cycles for the long term "pot at the end of the rainbow". It’s a matter of simple math. Wed, 16 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/currency_trends_reflect_credit_risk.html http://www.investorbootcamponline.com/blog/currency_trends_reflect_credit_risk.html The currency markets have been, through out history, measures of the net affect of many factors including, primarily, capital flows across borders. But now it appears currencies may be acting much more like bonds. Their primary characteristic is they reflect credit risk. This isn’t a new concept particularly simply an observation of the relative trends between various currencies. What is significant is how dominant the credit risk characteristic is in the trend of the major currencies. The Canadian dollar is a reflection of the strongest banking sector in the world. Canada has a residential housing market that continues to feature higher prices. The “loonie’s” gain since early 2009 is 26%. The Euro, on the other hand, has added just less than 4% against the U.S. dollar. Europe is a weaker economic region but it is also plagued by government debt issues in the countries referred to as the P.I.I.G.S. The Yen isn’t much better than the Euro with a 7% advance in just over two years. But the big winner is the Australian dollar. Its advance of nearly 29% is better than the Canadian dollar by 3 pts. Currency movement has shifted over the past three to six months. The Australian dollar has been range bound and the Canadian dollar has been choppy. This may be a reflection of the credit crisis issues becoming late cycle. It’s more than two years since the markets were roiled and central banks stepped in to resurrect the banking sector. The implication is the next decisive move by currencies may be the beginning of more significant price swings as the global economy shifts gears. Investor Boot Camp Online is used by investors for market timing, portfolio management strategies and the identification of the strongest markets and the best performing stocks. Use Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Mon, 14 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/proof_the_credit_crisis_is_over.html http://www.investorbootcamponline.com/blog/proof_the_credit_crisis_is_over.html You want proof the credit crisis is over? Here it is. But first let’s review, for those that don’t know, the unique characteristic of the credit crisis. Essentially, lenders put up a “closed for business” sign. Anybody trying to borrow money, including creditworthy borrowers who were refinancing, was potentially thrust into the threatening position of not being able to obtain funds. The reason the stock market gets crushed in this kind of event is that the stock market is, in its primary function, the shopping mall for financing. Small emerging and unprofitable companies were cut off from their life line. Exploration firms with decent properties who raise capital at least once per year for drilling programs effectively became non-existent. Hence, share price declines of 80-90% or more were the ravage of the bear market. The scenario drove a stake into the heart of capitalist western society. But now we have an economic environment that is approaching an extreme the other way. Publicly traded companies that have recently completed financings have seen their share prices rip higher by 20% or more within a short period following the close of the financing. In some cases, the stock runs higher before the deal is completed. This is highly unusual. This didn’t even happen during the late ‘90’s when a C.E.O. could show up at an investment dealer with a company that ends in .com and obtain whatever amount of capital seemed like a cool number. If a savvy investment banker asked for the business plan, one would be scrawled on toilet paper in the middle of their meeting. Done deal! As December rolled around last year, we highlighted there was considerable risk to investors buying stocks that were undergoing a financing. With any kind of gain, the investors who bought into the financing could have quickly sold their stock off and bagged a quick gain. Gains in many stocks were already three times or more in just four months. If warrants were part of the share structure the investor who participated in the financing could take their capital out and hold the essentially free warrants for possible gains. The risk is the stock peaks and falls sharply over time as heavy selling emerges. But that hasn’t happened, at least, not yet. The bull market lives on. The effects of the credit crisis may still linger but the stock market leads an economic resurgence. However, investor sentiment is approaching the opposite extreme. When the fun runs out, watch out below. The reason for the pending decline will be different than 2008, but the damage to investor portfolios who don’t respond accordingly may be equally devastating. Sun, 13 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/the_wacky_economics_of_pro_sports.html http://www.investorbootcamponline.com/blog/the_wacky_economics_of_pro_sports.html Professional sports are the envy of every working person. It’s also the scourge of most people as professional athletes appear to be full of themselves but far too often poor managers of their personal lives. Pro sports are an unusual industry for the dynamics that govern not only team development but the economics. There are only about eight hundred jobs and thirty teams depending on which sport is considered. Except for major league baseball, there is a salary cap and yet many players make ten million dollars per year or more.You’d think the owners would be in control but the unions are seemingly as tough to deal with as any union anywhere. While fans and the not so much fans watch the spectacle of the business of sports some of the unique characteristics have actually become accepted. Take the example of a player who says he will not consider dealing with a multi-year contract offer from his team during the regular season. Now think about this for a second. A guy could be offered a contract, all dollars guaranteed, of one hundred million dollars or more and he won’t deal with it. How ridiculous is that? That’s like me saying I won’t talk to investment dealers Raymond James, Scotia McLeod or Goldman Sachs about our advisor centre complete with research and business support services for a few hundred thousand per year because I’m writing this article. Wait till I'm done!The issue with the monstrous earnings pro athletes pull in isn’t that they’re making lots of money it’s because most of the rest of the work force is struggling to make ends meet. Business owners work sixteen hours per day, invest every nickel they have and, on the road to going broke, they’re paying salaries, suppliers and the government the taxes they demand. The average investor had their retirement account cut in half because the financial community can’t attach a paper trail to the securitized investments they created and made trillions with. But the government bails the banks out of their own mess and the investor is left to sort it out for themselves. It's worth mentioning that some of those investors can't get jobs now either.If everybody made five million dollars per year, the average person wouldn’t care about the economics of pro sports. But an economist might counter that the high level of skill and the lack of jobs in sports creates a demand supply equation that is basic economics. However, that implies the average person, in their more common job, is lacking skills. Surely, that doesn’t sit very well either. Perhaps the wacky world of professional sports economics is just the cover story for deeper economic issues in a system that isn’t working as well as people theorize. Fri, 11 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/what_are_you_prepared_to_do.html http://www.investorbootcamponline.com/blog/what_are_you_prepared_to_do.html What are you prepared to do to be in the top 5% of all investors? Perhaps the idea of engineering portfolio results that are better than just about everybody hasn't even occurred to you because it seems like a fantasy. But the reality is, you can do it. This isn't a pep talk either. The entire premise of the research in this online service was developed over many years and refined to provide investors with the tools to nail market timing, the best performing securities and the portfolio management tools to pull it off. The information, strategies and trade execution needed to power your performance is all here in this investment research and portfolio management service for investors who manage their own portfolios. So are some tips on "keeping your head in the game". We call it mindset management. But in order to succeed, and excel, you need to follow some critical principles. Do not let losses grow. If a purchase of any kind of security from any market undercuts your purchase price sell it. Our suggestion is to pull the trigger when the market price is 4-6% below your purchase price. No questions asked. Just do it. This is the most important principal to follow. Violating this will produce mediocre results and anguish. Buy right! Precision in buys is a key to reducing the need to sell losers. Too many investors are just buying stocks based on random timing or an opinion. These are speculative tactics. Can you imagine Warren Buffett going on CNBC and telling everyone, "I became rich because I buy stocks based on what some guy said on t.v."? Just the Facts Mam! The information in this research service is very precise. It is based on many variables. While we would like to tell everyone all about them the reality is, it is very extensive and possibly too complex for investors who have not been trained over a period of at least ten to twenty years. The process, and the output, is not random and it is certainly not based on opinion. It's based on cold hard evidence accumulated from the study of thousands of stocks over many decades. A simple guide for investors is this. We'll do the work, you make the trades. Follow the lead in our Time the Markets, Buys and Sells and you'll be amongst the best investors in the world. The markets commentary on the member's home page is updated numerous times during the day to keep you on top of your game. Tue, 08 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/AAA_barnburner.html http://www.investorbootcamponline.com/blog/AAA_barnburner.html Allana Potash Corp. (AAA-tsxv) is a BarnBurner. The stock is up nearly five times in less than three months. That qualifies the stock as truly one of the hottest of the hot stocks in a bull market that has been as good as it gets. The company is a potash exploration firm with significant drilling results from their Ethiopian property. They have released numerous drill results since June 15, 2010 with three substantial drill holes since December 6, 2010. AAA has also raised money three times, one on a rights offering, since November. That alone is a sign of significant investor interest which continues to appear insatiable. Average trading volume has gone from insignificant to more than 2.5 million shares per day since early January 2011. There have been eight sessions with volume over 7.5 million shares. The stock has had two clear break outs which isolates the resurgence of an up trend and a buy price. The first one occurred in late November just days before the announcement of the completion of a financing with a significant shareholder. The announcement of the financing was six days before a huge drill result was made public. The gain on the stock was nearly 35% from the November 22nd break out to the December 6th drill result press release. This is quite a coincidence. This type of trading coincidence was addressed in "Coinstar Investigated for Illegal Insider Trading". Of course, nobody complains about suspicious trading activity when people are making money. AAA has the potential for an enormous gain far beyond the five times it has already undergone. But investors may need some help trading it. BarnBurners is a proprietary trade strategy system for stocks that are unusually powerful. Several studies, which led to the development of the strategy, indicated not only is it profitable but the reliability of the trade surprises traders who are fearful of a collapse in an incredibly hot stock. Tue, 01 Feb 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/coinstar_investigated_for_illegal_insider_trading.html http://www.investorbootcamponline.com/blog/coinstar_investigated_for_illegal_insider_trading.html Insider trading has a nasty connotation. The average investor thinks it is all illegal trading while some more active traders think it is a buy or sell signal triggered by the trades of management's personal holdings. As it turns out, neither is accurate. But the insider trading that is illegal is the story behind many investigations and headlines including Martha Stewart’s case which cost her jail time. Over the years, our observation of thousands of stocks leads us to some stock trades where trading action has the appearance of illegal insider trading. Now we may have spotted another one. DVD kiosk rental firm Coinstar Inc. (CSTR) plunged January 14th on a press release announcing preliminary 2010 fourth quarter results and updated full year 2011 guidance. The disappointing outlook sparked a massive volume decline of 27%. Unfortunately, that’s trading life in the small cap. U.S. market. However, in the session prior to the release there was very heavy trading volume with only a minor price change. That’s a little bit too much of a coincidence! Further investigation with four different sources of data, and their charts, didn’t provide any useful information. The obvious explanation was after market volume was huge since the press release came out at 4:30 p.m. e.s.t. But this volume would normally show up in the reported intraday volume for that date. It also would have been part of the 27% decline which is relevant to the trades on the 14th, not the 13th. With at least two reputable services, their intraday data, 9:30 a.m. – 4:00 p.m. e.s.t., was significantly different than their reported daily volume data. It simply didn’t add up. The daily volume for the 13th was also significantly different amongst the four different sources. The Nasdaq did not respond to our inquiry. There may be a perfectly good explanation but it seems to be elusive. It’s a little hard to believe that a number of big investors who escaped a huge decline in the nick of time was a coincidence. Unfortunately, many unsuspecting investors were sideswiped by another huge decline while some who were apparently “in the know” got out. For those that interpreted the timely sell signals in mid December they avoided it. But other investors, attempting to manage their portfolios, didn’t.Where are the regulators with a public statement that they are at least investigating? Coinstar (CSTR) could do the same since management is supposed to report to shareholders. But they’re otherwise engaged as numerous law firms are chasing after them for other issues. Thu, 27 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/its_time_for_monthly_financial_reporting.html http://www.investorbootcamponline.com/blog/its_time_for_monthly_financial_reporting.html The spirit of the laws related to reporting for publicly traded companies is to provide disclosure and transparency. The standard is intended to be above the requirements of private companies which are governed by contract law only and the scope of an audit if they have one. But quarterly reporting of financial statements isn’t enough. It’s time for monthly reports. Management of publicly traded companies might think it’s too much work to release monthly statements. But that would imply they aren’t producing the data for management purposes. If that’s the case, they have no business dangling their stock in front of investors. Quarterly statements are unaudited so there’s little reworking of numbers on a monthly basis. Perhaps monthly reporting would lead to more accurate and complete quarterly statements. Individuals and companies in certain relationships with a company are well aware of potentially significant changes to a company’s business results before public disclosure. Suppliers and shippers, for example, may see an increase or decrease in orders. Releasing quarterly statements more than a month after the statement date is not the most timely information some investors think it is. The stock has usually digested the changes in business operations long before CNBC and BNN attempt to dissect it. The overly constrictive rules on disclosure would be more effective if data was reported more frequently. What good are analysts if management can’t tell them something that is already old news for the company because of the laws around public disclosure? What comfort can investors take, realistically, from analysts’ reports when the analyst cannot disclose information that may have a significant impact on the stock price? The idea that any information has to be withheld is contrary to the spirit of the law. Investors in many private companies have far more timely information than investors in any publicly traded stock from Vmware (VMW) to Lululemon (LLL, LULU). This issue has been a driver in the growth of private equity funds. Investors in these funds, and the management behind them, know all too well that they can get around the nearly useless disclosure laws and costs of being publicly traded. Significant institutional investors may be satisfying their information requirements. But the average retail investor is left out in the cold to deal with being unnecessarily late with their buy and sell decisions. Use Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Wed, 26 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock_pickers_market.html http://www.investorbootcamponline.com/blog/stock_pickers_market.html In the first phase of the bull market, which blasted off March 2009, "the tide lifted all boats". Most stocks renewed up trends with the only significant distinction being the selection of the most likely big performers or leaders. The indications for buys in these stocks occurred between February-April 2009. As of January 2011, these stocks are up ten times from their credit crisis lows. But the market is different now. Since late 2010, it has become a stock picker's market. Companies with poor fundamentals have become significant laggards with an increasing number entering down trends. There has been significant sector rotation which has kept active traders busy. But timing has been critical. In fact, the market has become somewhat complicated requiring an extensive amount of observation and real time studies identifying emerging strength. The market timing of Investor Boot Camp Online's research has been accurate at least 95% of the time including the 2010 correction. But it's not just an assessment of the accuracy in buys and sells but the execution of new trading strategies. The members who have followed both the trade indications and strategy changes are in the top 5% of performance on any comparatives. It is increasingly evident that success is reliant on strategy and trade execution (they’re related). This is a distinction, for the current investment environment, which many investors will undoubtedly overlook including mutual fund and hedge fund managers. One of the key elements of our research, and input to the members, is reliability. In baseball, hitters who are the best are the ones who do not swing at every pitch. They are extremely selective and frequently keeping their bat on their shoulder. For investors, if a trade from our extensive screening process is indicated it is inherently considered to have a high probability for working. Otherwise, investors will strike out too frequently. As we progress through 2011, what investors don't do may be more significant than the trades they actually make.Until last fall making money was easy. But now trading mistakes are going to be exposed. There is plenty of opportunity in recognizing it’s a stock pickers market with higher trade turnover than holding the hottest stocks for more than a year and a half. Portfolio management practices following some of our strategies such as “Trade Up’ and “Adding to Winning Positions” is proving to be the winning strategies.Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Mon, 24 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/bad_stock_advice.html http://www.investorbootcamponline.com/blog/bad_stock_advice.html Back a number of years ago I decided to teach a seminar on investing. Not long after that, I decided to take the message behind the course to the media. Since then I have done at least three television interviews per week. The course, Investor Boot Camp, and the media work was the product of a single intention which was to debunk the myths and flawed assumptions of investing. I’m not out to slam someone else or their organization around because of their ideas or statements. But having been an Investment Advisor my client’s, and my business, was prey to some nonsense that was most certainly not rooted in the facts. Eventually, I began to separate the facts from fiction. Since then, the lack of guidance that investors face, particularly, the average trader, is, from my perspective, rampant. Occasionally you hear someone making a good pitch that you should invest in something that you know. Suppose for example, you have a big family and you’re constantly shopping at the grocery store. Somebody might tell you, “you like that grocery store, you like what they’re doing, so buy the stock!” It's also ridiculous! Just because you are familiar with a company’s product or service and have a relationship with them, as a customer, doesn’t mean you know anything about running their business. To compound the issue, the random decision to buy the stock doesn’t fit with good timing. If random purchases of stocks based on a lack of true business knowledge was successful investing, that would imply there is no risk and we’d all be rich. The reality is that in a business such as the technology industry, it is virtually impossible for any investor to get a handle on the complexities of the underlying business. The other misguided route is to look at the economy and draw a conclusion on what makes sense. When unemployment nearly doubled, it was a seemingly sensible call to predict that many workers would go back to school and retrain for a different career. Looking at the fundamentals of the numerous U.S. traded private education centers or schools you’d think this would be a slam dunk. But operating on such a whim would have been disaster for those who acquired Strayer Education (STRA), Devry (DV), or Apollo Group (APOL). Success in the stock market comes to those who operate as technicians of the market and the business of managing their portfolio. To do otherwise is to engage in excessive speculation that is neither good market timing, strategy or effective trade execution. It most certainly does not ensure effective risk management that keeps a portfolio alive for times when up trends build capital. Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Wed, 19 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/investor_sentiment_is_bearish_for_the_market.html http://www.investorbootcamponline.com/blog/investor_sentiment_is_bearish_for_the_market.html Despite the headlines of ongoing unemployment and Euro zone debt problems there are plenty of bullish stock investors. In fact, the spread between bulls and bears is extremely wide and nearly the widest in history. The Investor’s Intelligence Survey is a survey of investment newsletters. It categorizes their investment stance as bullish or bearish. Like other contrarian indicators when the crowd is on the same side of the fence it tends to coincide with a change in the trend. When most investors are bullish, there are an insufficient number of bears left who may change their mind and make new buys. The process of accumulation effectively becomes exhausted. Bullish Investment Newsletters57.3%Bearish Investment Newsletters19.1%The bear reading is historically low and the spread between bulls and bears is at a historical extreme. After nearly two years of explosive gains in the market averages and many stocks it would be hard to imagine that an investor could continue to remain bearish on investment conditions. Contrarian indicators are not the best market timing indicators as far as precision is concerned. But they may be used effectively to prepare for a change in the market’s trend. We use them as a component of cycle’s analysis, combining it with decision making on the timing of buys and sells. After gains of more than ten times in Baidu.com (BIDU), Netflix (NFLX), and Priceline.com (PCLN), investors who are initiating buys now are flirting with portfolio management failure. A winning strategy has been to hold big winners but the signs of a near term peak are flashing warning signs. Like winning coaches in sports, be prepared! Wed, 19 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/apple_has_peaked.html http://www.investorbootcamponline.com/blog/apple_has_peaked.html Apple Inc. (AAPL) was big news Tuesday January 18th on the announcement that Steve Jobs was leaving the company. It was noted, in No Bad AAPL, that in the trading that followed the announcement the quick recovery in the stock and marginal decline was a sign of the strength in the stock and the market overall. The market has been so strong that bargain hunting in the market's hot stocks has been a fantasy. But the follow up session presents another view. AAPL appears to have peaked. The bulls may argue that the manufacturer of the ipod, iPhone 4 and Mac computers is continuing to display signs of strength. As of mid session on Wednesday Jan. 19th, the decline from the high was less than 2%. But the stock is churning and historically churning near the high after a big gain has marked the top.AAPL's short term gain is 48% and the gain from the bear market low is nearly 3.5 times. In three prior intermediate term rallies the stock advanced by 3.5 times, 1.6 times and 3 times (see the table below). The stock hasn't come close to testing its long term trend line during the big run and is now as stretched from that technical measure as it has ever been. It is not unlike other hot stocks in the bull market that has saved many retirees from going back to work if they could find it. RallyDec. 2003May 2005July 2006Jan. 2009Low10335078High4586203348Gain350%160%306%346%The market has been nothing short of superb. But cycle analysis, thinning leadership, and excessively speculative trade action with the associated extremes in sentiment measures is flagging a near term top. The best strategy has been to stay with the best performing stocks and let profits run. But when the peaks in stock prices occur, investors will be tested to keep their gains. Tue, 11 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/bad_stock_picking.html http://www.investorbootcamponline.com/blog/bad_stock_picking.html Imagine you’re the general manager of your favourite professional sports team. Your dad says you should sign a free agent to your team. Are you going to do it? Now you’re an investor. Your dad says you should buy a certain stock. Using Bombardier as an example, he says, the company is going to build bigger jets. Bombardier has expertise in building smaller jets but now they’re going to take on competitors in the larger commercial airline manufacturing business. Are you going to buy the stock (BBD.B-tsx)? The difference in the management of portfolios between retail investors (individuals) and mutual funds is, generally, substantial. Mutual funds have a number of well trained, supervised analysts and managers who spend many hours every day working full time on analyzing companies. Some of them are also good stock pickers. But many individuals are picking stocks with superficial random information. In fact, it’s often not information but something that is subjective. Ask yourself these questions: Why would building bigger jets make BBD.B a desirable stock? Why would BBD.B suddenly become one of the hottest stocks in the market? The answer, in both cases, is it wouldn’t. It’s just business for Bombardier the same way getting a contract, for any company, is part of doing business. It doesn’t make the stock a good candidate for a 401K plan, an R.R.S.P. , your T.F.S.A. or margin account. Picking stocks is similar to placing a bet on your favourite professional sports team. You wouldn’t place a bet on the Toronto Maple Leafs to win the Stanley Cup, but many investors choose stocks that are amongst the worst relative performers in the market. This isn’t about taking shots at BBD.B specifically. But there is clear evidence on what stocks have been the best performers since the bull market blasted off in March 2009. Largest percentage gain, on a relative basis, in the highest growth companies is a similar measure to teams that sit near the top of the standings. Investors who are betting on long shots end up like gamblers – broke. Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stoThu, 06 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/a_disaster_iscoming_for_investors.html http://www.investorbootcamponline.com/blog/a_disaster_iscoming_for_investors.html Here’s a prediction for 2011. Far too many investor portfolios are going to become a disaster. This isn’t a prediction of any market trends. In fact, we will predict, against our better judgement, that the stock market will generally be healthy once again as it was in 2010. But the massive gains that many stocks have staged will end this year and significant declines will follow. The issue is many investors won’t sell. For those that buy late in the up trend it’s a double whammy. Resource stocks, in particular, have risen three times, or more, since August. That’s an unusually powerful advance in any short term cycle. Add in the gain already incurred since the markets bottomed out March 2009 and you have numerous stocks extended on a short and intermediate term basis. These stocks cannot keep going higher forever. If a stock that tripled retraces half the gain, the decline from the peak is 33%. If the stock retraces the entire gain, the loss is 66%. Some stocks have staged substantially bigger gains than a triple. For lesser quality stocks, they may give the entire gain back and more. To make matters worse, the deeper the decline is, the longer it will take to recover. If other stocks are in up trends, which is a distinct possibility, investors may see their beaten down holdings wallow while other stocks shoot higher. The psychological pounding of holding losers is worse for some investors than the financial loss. 2011 will be far more challenging for traders than 2010. Sector rotation is already in play so far this year. The differences in the condition of sectors are the most diverse in memory. For investors who are unaware of how to define stocks by condition and trade effectively it could be a very rough year.Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Wed, 05 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/gold_is_not_a_safe_haven.html http://www.investorbootcamponline.com/blog/gold_is_not_a_safe_haven.html Gold and gold stocks have been amongst the hottest stocks. Internet websites have been pounding the table on lofty gold price targets of $2,500/oz. or more. Recently, a reputable media source ran the headline “gold is a safe haven”. They’re wrong! Gold is not a safe haven. It’s a market just like any other market such as housing, the bond market, stocks, the U.S. currency, art, or collector cards. The idea that investors in gold are safe is ludicrous. A rising market is certainly safer than one that is going down. Regardless of statistics, or what the regulators think, the historical evidence is that a rising trend is less risk than a falling trend. Gold stocks have been a better choice over the past four months than the traditionally lower risk bond market has. The facts prove it. Gold and gold stock investors have surely taken comfort in that. But all up trends eventually end. Many stocks have logged huge gains since the bull market blasted off in March 2009. Gains since late August 2010 have been particularly large. The implication is that many stocks are extended, or close to it, on a short term, intermediate term and long term basis. Resource stocks have been nothing short of spectacular. Given their above average volatility and correlation to the market the declines will be equally spectacular. How safe will investors feel after riding a financial and psychologically devastating down trend? Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Tue, 04 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/spectacular_out_performance.html http://www.investorbootcamponline.com/blog/spectacular_out_performance.html There are a number of pieces that need to fall into place for investors to make profitable trades. One of them is a broad market up trend. The other is conditions need to be conducive to success which involves defined entry points (buys) and a large enough gain before a sell is executed. But there is something that is overlooked by far too many investors in the process of making money in the markets. Strategy and trade execution are critical. The current market environment has been a superb real time case study in the importance of how a portfolio is managed. Here are the strategies we have emphasized that have worked extraordinarily well for investors who used them.Hold the best performing securities.Add to Winning Positions.Trade Up.It's great there are lots of hot stocks. But the investors who are in the top 5% in portfolio performance, compared to anyone, are the ones who used these strategies. Their profits have been spectacular!We detail a number of strategies in the Trading Strategies section of our Investor Tool Kit. The ones that are appropriate are commented on in the market news updates and the links from the dashboard (available to members). Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks.Mon, 03 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/tsx_closure_is_bush_league.html http://www.investorbootcamponline.com/blog/tsx_closure_is_bush_league.html Investor Boot Camp Online's Market News noted on Friday, December 24th, that the U.S. markets would be open in full trading sessions on Monday Dec. 27th and Tuesday the 28th, but the Canadian markets would be closed. That’s two straight days of being unable to make a trade when the reality is if the U.S. markets are open, the Canadian market should be too. The impact was considerable. Rare earth and silver stocks not only logged big gains, they underwent what is technically renewed up trends. That’s when buys are most timely. The precious metals group led the U.S. markets Tuesday the 28th while the Canadian market, which is rife with gold silver and platinum and palladium stocks, was closed. This was very costly for Canadian investors. There is a law in Canada that banks cannot be closed for more than four consecutive days. When the banks reopened Wednesday Dec. 28th, it was day five which conformed to the law. The law doesn't apply to the financial markets but, really, what difference does it make? Canadians can go to an A.T.M. and make deposits and withdrawals. But investors can't do that in the stock and bond markets! The issue, with trading in the financial markets, isn’t the length of time the market’s closed, but rather the matter of trading Canadian listed securities when the U.S. markets are open. Canadian investors were handcuffed for not one day but two in a row. What if the markets had collapsed from sovereign debt defaults (Portugal or Spain) or some other major calamity erupted. The TSX was closed again, on January 3rd, while the U.S. market kicked the New Year off with a bullish bang. Canadians can trade U.S. securities in their brokerage house accounts but the discount brokers won't convert currencies on statutory holidays. How much more did it cost investors when conversion is done? It’s not just an issue for Canadian investors. American investors who hold Canadian listed securities were unable to trade. It’s another thorn in the side of the poor image of the Canadian market. Foreign investors see Canada as an orphan market. For a while, they saw it as invisible. When the TSX and TSX Venture re-opened on Wednesday December 29th, they failed to report data for at least the first nine minutes. The stock market is a computer. It doesn’t require a full department of people to work on a statutory holiday. In fact, since it was a holiday, investors may have had more time to work on their portfolios than they might normally have. Wouldn't that have been helpful in the fall of 2008 as the credit crisis destroyed people's pension investments? Now would be a good time for investors to express their displeasure.The TSX: shareholder@tsx.comThe CanadianFinance Minister: jflaherty@fin.gc.caVisit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks. Sat, 01 Jan 2011 09:00:00 ESThttp://www.investorbootcamponline.com/blog/market_performance_2010.html http://www.investorbootcamponline.com/blog/market_performance_2010.html 2010: It Was a Good Year for the MarketsCorrection, it was a great year!Equity Markets% ChangeNasdaq17%TSX15%S&P 50013%S&P 400 and 60025%The "Three C's"Commodity (E.T.F.'s)% ChangeCotton (BAL)96%Coffee (JO)65%Corn (CORN)55%Other Commodity Markets (E.T.F.)% ChangeTin (JJT)59%Grains (JJG)30%Sugar (SGG)25%Currency Markets (E.T.F.)% ChangeAustralian Dollar (FXA) 14%Yen (FXY)14%Canadian dollar (FXC)5%Euro (FXE)-7%Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information and trading strategies service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks. Wed, 29 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/huge_gain_with_free_stock_pick.html http://www.investorbootcamponline.com/blog/huge_gain_with_free_stock_pick.html How many websites have you come across that offer free stock picks? How many claim their picks have provided massive returns that are well above average? How many of them charged for the stock pick? There are thousands of websites that don’t charge anything for their input into your portfolio. What businesses have you ever come across that offers a product or service and doesn’t charge for it? As both research analysts and consumers our observation is the tendency for companies in today’s economic environment to charge for each component of their service is high. It’s called up selling. Organizations, such as Rogers, will charge you more money, in absolute dollars, to bundle services, and then charge more again for fewer components of the service when you attempt to unbundle. The insurance industry has skilfully done the same particularly with car insurance. As operators in the online investment research business, we have come to know the online competitive environment in depth. Internet advertising is dominated by larger firms that have the budget to conduct advertising campaigns using keywords that are exorbitantly over priced. More importantly, to investors, the internet is full of websites that are not investment research companies. They’re marketing machines. They will say anything to get you to sign up for free information on how you will be worth as much as Warren Buffett by next Thursday. Add in CNBC and BNN’s free input and thousands of investors are convinced they’ve covered all the bases. Generally, there is not a single person who is working full time behind these websites that is actually analysing something with experience or knowledge. Who is conducting the alleged research, what is their track record, what real world investment industry experience do they have and what are they doing to put themselves and their business on the line in the name of serving investors? You might have heard this one before: You get what you pay for! Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. See, Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks. Fri, 24 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/two_for_one_membership.html http://www.investorbootcamponline.com/blog/two_for_one_membership.html Last minute shopping made easy! Here you go! Choose the gift, enter the email address of the person you're giving the gift to, set up a password (it can be changed later), and complete the membership gift.Wed, 22 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/make_a_killing_in_the_stock_market.html http://www.investorbootcamponline.com/blog/make_a_killing_in_the_stock_market.html One of the benefits of observation from spending many years studying stocks is certain distinctions can lead to superior portfolio performance. One of those distinctions comes from a study of stocks that have undergone powerful uptrends. Stocks that have logged big gains have a high probability of recovering from their first consolidation and utimately renewing their uptrend. Intuitively this is not hard to grasp. But traders, including fund managers, frequently overlook the high reliability of adding to, or initiating, a position in the stock. A position can be accumulated during the consolidation and completing the position by adding to it on the break out from the consolidation. Ideally, accumulation during a consolidation should be done near the low, if possible, when there is some indication the stock has bottomed out. This is an example of a stock (NXPI) that provided a clear break out from an established base (range), a powerful gain (53%), a constructive shallow consolidation, and a clear break out from the consolidation. The investment environment in the stock market is ripe with many stocks that have logged big gains. You might not have known that most of them were going to trade this well from their original break outs. But you can profit from concentrating capital in a proven winner at the right time. Our research compiles a short list of the highest quality stocks that are displaying precisely the right action that has proven itself throughout history. Then we identify the break out on the day it occurs. This has been an extremely profitable trade since mid 2009.Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. See, Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information service for investors who manage their own portfolios with a specialty in market timing of Canadian and U.S. stocks. Tue, 21 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/xmas_gift.html http://www.investorbootcamponline.com/blog/xmas_gift.html XMAS Gift OfferGive someone the gift that pays for itself, countless times over!Memberships to the premier investment information and trading strategies service, Investor Boot Camp Online, start at just $39.99/mth. The annual membership is an even better deal working out to just over $33/month.This is a gift investors to manage their portfolios. Improve performance and pay for the subscription countless times over! Personal consultation comes with every membership. Easy to do too.Since we're in the gift giving mode too we'll double the membership time. The Proof is Out TherePerhaps you're not sure if you should give this gift! Fair enough. See the extensive information that is in the public domain about our investment knowledge, and portfolio management skills. Very few people have it out there for everyone to see including investment advisors and fund managers.Use the information that is in the public domain to verify our market timing, winning strategies and portfolio management techniques that our members build their portfolios with. Find out why what we're doing is not what thousands of other sites are doing. Here it is;Real time Market News information that is relevant to portfolios. Frequent media appearances including BNN. Videos archive. Numerous articles with timely investing/trading information and commentary, and Boot Camp Banter on investment and economic insights. For more media records see Track Record of Success. Let's Get Started. Mon, 20 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/gold_trade_too_easy_now.html http://www.investorbootcamponline.com/blog/gold_trade_too_easy_now.html Gold has been a hot market. It's now at a technical buy point following a brief decline. Technical indicationssuggest buy, but this trademay have become too obvious. At this point, who doesn't know that gold and gold stocks have been hot? It's been a dream not only for traders but those who were smart enough to overweight precious metals mutual funds. Now another buy point is indicated based on systematic signals. You can see how the price of gold has pulled back to the 50 day moving average (the red line). Like other markets, and stocks, this has been a reliable place to make new buys or add to existing positions. The most recent pullback, to this intermediate term trend line, was in November. It's also a retreat to a mid October short term peak. The reality is that despite two new highs gold has not made any progress. That can be taken as a negative, but the grind in the last two months supports a buy after shaking out weak investors. Looking at a longer term chart on gold you can see the price is extended from the long term trend line (marked in blue). There are 2 vertical red lines displaying the distance the price exceeds the long term trend line. It's not as stretched as it was in late 2009, but the November peak has proven to keep gold restrained.The gain in gold from the late 2008 low is nearly a double (not shown).Gold has retreated to just above the long term trend line twice since then.But it has not undercut nor it did spend any time of significance at this price level. That's a long time to not challenge investors.The fuel behind gold's big advance is well known. Anybody who might be a gold investor has probably already taken a position at some time in the last 1.5-2 years. Who's left to come in as a late investor pushing prices to new highs? Perhaps the risk has become too high for gold bugs based on investor psychology and normal cycles. Visit Investor Boot Camp Online's Market News for real time investment information that affects investor portfolios. See, Stocks and Markets to Watch and Boot Camp Banter for economic and investment market insights. Investor Boot Camp Online is the premier investment information service for beginner and intermediate investors with a specialty in market timing of Canadian and U.S. stocks. Thu, 16 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/market_crosswinds.html http://www.investorbootcamponline.com/blog/market_crosswinds.html The stock market has been superb. It is also becoming a challenge. Investors are faced with numerous crosswinds which may render a significant impact on performance results. Managing the portfolio requires categorizing stocks by condition. This isn’t a new idea since successful investors already know that in a growth oriented environment, such as this one, stocks that are out performing tend to distance themselves from the rest of the herd. But cycle’s analysis indicates the market’s greatest stocks are stretched to their historical limits and ripe for a significant correction. Sports fans, who place bets, will understand this. It would be easy to pick the New England Patriots to beat the Buffalo Bills. But in organized gambling there is a betting line on games which may change the bet. If the line is excessive, in the bettor’s opinion, they may take the Bills based on the spread. That’s the way the stock market has become. The greatest stocks are no longer worth the risk. Baidu.com (BIDU) is a real time example. The stock was in a constructive seven week consolidation. But on December 15th, the stock violated a support level that has served as a reliable secondary buy point. On the 16th it fell further. An objective systematically determined sell signal has been triggered. Following a gain of more than ten times, the stock has entered a correction of significance. Like other hot stocks, it’s not worth the risk. Gold stock bugs take note. Then there are stocks that have recently broken long down trends with powerful short term and intermediate term up trends. Fiber optics, featuring Finisar (FNSR) and JDS Uniphase (JDU, JDSU), are two stocks from a sector seeing significant ramp up in fundamentals. Another condition is defined by stocks that are trading in ranges. The ranges may be defined as the more shallow consolidation or a base which is marked by a decline of at least 20% from the high to the low. These stocks may eventually go on to renew up trends but they are increasingly under pressure as they trade through their range. There’s essentially no reason to trade them until their up trend is clearly underway and fuelled with momentum. Knowing the difference and following objective trade execution may prove to be the difference in performance in 2011. Attributing success, or the lack thereof, to the broader market looks like a meaningless generalization. Wed, 15 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/currency_trading_why_bother.html http://www.investorbootcamponline.com/blog/currency_trading_why_bother.html Has there ever throughout history been a single market that has been talked about more than the U.S. dollar? It’s not just investors who debate the alleged issues of the world’s benchmark currency, but economists, governments, central banks and the average person who seems to think it is affecting their life. The dollar has been in a significant down trend for a number of years. Mainstream thinking seems to believe it’s a problem. It’s not. In fact, the dollars decline is the perfect solution for an economic system that has many spokes in the wheel. But that’s not what is being addressed here. The issue being addressed now is why trade any currencies at all.This doesn’t imply the currency desk at Goldman Sachs, and others, should head out for the holiday break early and come back in a few years. The analysis is about a relative comparison of possible trades between currencies, commodities and the thousands of hot stocks that investors can jam into their portfolio. This isn't a suggestion that currency markets are going to go flat. It's based on the increasing deterioration in the relative strength of currencies and the increasing out performance in several commodity markets and top performing stocks. One of the better performing currencies is the Australian dollar. It has been consolidating since early November, nearly completing a full recovery. But its relative strength line continues to decline. In fact, relative strength (R.S.) has been falling since August 27th. That's a sell signal.This is not unlike our recent analysis, and conclusion, of the bond market which is to ask, why attempt to go bottom fishing in the bond market? Anybody who has done so in the last two months has paid the price for it. For the average investor, investment advisors, and most fund managers who have the flexibility the far more reliable and profitable trades are in the stock market. We have been pounding the table on several commodity markets which can be traded with E.T.F.'s. Those include cotton (BAL), coffee (JO), corn (CORN), sugar (SGG) and tin (JJT). That's certainly not at the exclusion of gold, silver and copper. But the R.S. line the E.T.F.'s of these commodities are also in decline or flat lining. That's because the stock market has taken over!Mon, 13 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/big_winners_ripe_for_signficant_declines.html http://www.investorbootcamponline.com/blog/big_winners_ripe_for_signficant_declines.html The bull market has been great! After the devastation of the credit crisis, the stock market’s remarkable recovery has been a fairy tale with the white knight riding in to save investors. But some of the market’s biggest winners are ripe for a significant down turn. Everyone knows the big gains won’t last forever. But who’s talking about it, or more importantly, trading on it? There’s a conspicuous lack of discussion around normal cycles from the media and fund companies. In the case of the fund companies, it’s not a surprise. Following their widespread failure to protect their portfolios, they’re not about to come out and douse the flames of good news. After all, this kind of market action is what attracts new investment in their funds. But two of the market’s top performers are at, or near, the limits of previous cycle gains. Chinese internet firm Baidu.com (BIDU) and online video rental firm Netflix (NFLX) are both up slightly more than ten times from bear market lows in late 2008. In the previous bull market, their biggest intermediate term gains were fifteen times for NFLX and nearly nine times for BIDU.CompanySymbolCurrent GainPrevious Early Bull AdvanceBaidu.comBIDU10.4times8.7NetflixNFLX10.5 times15.4 timesTraders could imagine more gains for NFLX, given the precedence, from its first leg up in the bull market’s resurgence in 2002. But a closer examination of NFLX shows a bearish reversal on heavy volume on a weekly basis. The day to day action isn’t as indicative which makes the sell signal subtle. Want another sell signal? Netflix was on the cover of Fortune magazine December 6th, 2010. Appearing on a major magazine cover has provided a surprising consistency with the peak in share price. Perhaps these stocks will continue to go higher as the current bull market is into the second leg of one of the most powerful bull markets in history. But a relatively new dynamic in the market is a rotation in stocks as an increasing number of big winners, from early 2009, are beginning to fall out of favour. NFLX and BIDU may be next. But that’s not something to cry about. What may be much more unfortunate is the fairy tale recovery in the market may have countered a valuable lesson for investors. The lesson is to avoid riding bad markets, and individual securities, lower as they go through major declines.Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Wed, 08 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/hot_stocks_to_watch.html http://www.investorbootcamponline.com/blog/hot_stocks_to_watch.html Hot stocks tend to remain hot. When the first significant consolidation or its deeper counterpart a correction occur it is probable the stock will eventually recover. That makes the first decline worth watching for the opportunity to buy in. Many stocks have undergone gigantic runs since late August. Satellite and space systems manufacturer Loral Space & Communications (LORL-nasdaq) is one of them. The stock broke out of a range November 4th adding 50% for a one year gain of 150%. The stock is thinly traded but 1.3 million shares traded hands on Nov. 19th launching the stock 25% in one day. Notice how the power is increasing as the gain gets larger. This is a characteristic of the bull market that rose from the ashes of the credit crisis March 2009. Given the superb action, it would be easy to overlook what is even more impressive; the nature of the consolidation since the enormous single session gain that marked the stock's $86 peak. The stock is only 11% from the high in an orderly constrained pullback. That shows investors are willing to hold their positions with very few taking profits. It's becoming increasingly evident the pullback is forming a rounded shape as it gradually declines, quietly bottoms out and subtly begins to move higher. That is, historically, a very bullish set up to higher prices. Trade strategies are an element of portfolio management that we stress regardless of what is traded or general conditions. This type of trading pattern offers investors the potential opportunity to build a position adding incremental buys as profits build.Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Mon, 06 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/which_one_is_risky.html http://www.investorbootcamponline.com/blog/which_one_is_risky.html The bond market has returned to recent lows established as early as mid November in the case of U.S. bond prices. It's our sense that many fixed income investors are not aware of the significance of risk, at this pivotal time, for the management of fixed income portfolios. Many fixed income investors hold bond funds. The price of their bond fund may be used to assess the trend in total bond market returns but a more accurate and easy to use tool are exchange traded funds (E.T.F.'s). There are many of them available, but here are some representative E.T.F.'s that are appropriate to use in both the U.S. and Canadian markets.Long term Canadian maturities: XLB and HTU.Short term Canadian maturities: XSB.Long term U.S. strip maturity: EDV.20+ year U.S. maturities: TLT.The Canadian bond E.T.F.'s recent declines don't look particularly severe. But take a look at the Powershares U.S. Long Term Plus Core Municipal Securities index. (PZA-u.s.). The decline in this municipal bond market representative accelerated November 9th in what looks like a "crash". It is similar to the plunge in the fall of 2008 that marked the height of the credit crisis. The extreme decline appears to have been isolated to the municipal bond market. But the broader decline affecting government bond prices is deep enough that it may be the tip off to the beginning of a longer term up trend in interest rates and the related decline in bond prices. There are several issues for investors to consider now and not later. This indication comes from the recent decline that has been relatively severe taking bond prices, and E.T.F.'s, under their long term trend lines. The implication is any rebound in prices will be short term and an ultimate recovery, if in fact it does develop, will take a considerable period of time. The issue with wating to see what's going to happen is that even a 5% further decline in bond prices would take more than a year to recover with interest income and that's assuming prices don't fall any further. What if prices fall 10%-15% in the next year? What will bond investors do then? For pensioners who no longer work their nest egg may be significantly eroded that recovering the set back may be permanently impaired. Portfolio Restructuring Isn't WorkingBond portfolio management, including the management of bond funds, usually suggests investors structure their portfolios to overweight short term maturities. Capital loss may be completely avoided and rising market rates provides higher rates on reinvestment. But short term bond prices, and E.T.F.'s such as XSB, have also been falling.Risk-Return Profiles Have Become ReversedSome investors may argue that bond prices will recover from here and current prices are in fact an opportunity to add to holdings. That may prove to be true. But given where we are in both the long term and intermediate cycle as well as current interest rate levels, how much money can be made buying into the bond market? The potential return is relatively small, for the average investor, but the risk of further decline and a potentially large decline is increasing. The risk-return profile of bonds is now at its worst in more than twenty years.Meanwhile, the stock market is on fire! Many factors are contributing to what we believe will be a long term bubble in the stock market. Many people construe a negative connotation of bubbles, but bubbles provide an opportunity for huge returns. The stock markets first leg returns were predictable and the resumption of the powerful up trend was also indicated.The risk in the stock market appears to be historically low while the risk in the bond market appears to be historically high. This confronts the traditional beliefs on what is safe and what isn't. If investing followed the text book program we'd all be rich. However, it doesn't worth that way. Using averages, for example, is a relatively meaningless approach because the averages include the extremes. What matters in the current time is the nature of or condition of real time markets. Fixed income investors who continue to hide from this reality may face serious financial consequences. Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Fri, 03 Dec 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/not_all_stocks_are_appetizing.html http://www.investorbootcamponline.com/blog/not_all_stocks_are_appetizing.html Despite the fertile stock market many stocks that are undergoing significant buying are not good investment candidates. They would be if you were a mutual fund manager but that's not what individuals do with their trading and retirement accounts. The business of running a mutual fund is considerably different than managing an individual's portfolio. Fund managers use portfolio theory, you shouldn't. It doesn't apply since it can't be effectively used.Here is an example of a stock that has recently come to life. Krispy kreme Doughnuts (KKD) is up 34% in four sessions, to Dec. 2nd, on volume nearly four times the daily average of just over 700,000 shares. The company reported a profit of .03 vs. a loss of .01 on an 8% revenue increase. Big deal! They make doughnuts! There's nothing new about running a doughnut chain nor is there anything new going in that business that would produce a significant increase in revenues. It might be fun to go there but it's not an appetizing investment possibility. When you see heavy buying of many stocks it's evidence of good conditions and an expanding rally. It's a confirmation or verification of adding capital in the top ranked stocks. The best performing stocks with triple digit growth in earnings and sales are the ones that will out perform over time. Ask yourself, why would Krispy Kreme Doughnuts (KKD) be the best stock from now until the end of the rally? What do they have that cloud computing companies, networkers, and oil companies don't? The tide is lifting all boats in a bull market that will shock people on how much money it's going to make. But that doesn't mean you randomly throw money at something, believing it was a good choice. Now is the time to take advantage of the best market in more than ten years. If you would like a personal consultation on managing your portfolio, please accept the invitation to email us at info@investorbootcamponline.com. This is the time to strike! When the rally comes to an end, you can go for a coffee and doughnut to celebrate. Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Wed, 24 Nov 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/as_the_derivatives_wheels_turn.html http://www.investorbootcamponline.com/blog/as_the_derivatives_wheels_turn.html The stock market peaked on November 9th and has added more evidence, Nov. 23rd, of a consolidation that is deepening. But the action is mixed with a number of stocks continuing to undergo massive buying. So which is it, a rally or a pullback of some kind? Analysts can dissect this one with all kinds of technical interpretations. We do the same citing continuing new highs, powerful high volume break outs, break outs that hold up and constructive declines that are consistent with the second up leg of the bull market. But it’s clear the market averages are under pressure with a return to recent lows probable. So what’s going on? This is what’s going on; the re emergence of another chapter in the credit crisis has greased the wheels of debt financing and, most importantly, derivate markets. On the surface, it looks simple as Ireland proposes how much money they’re going to raise, what the budget looks like and the debt downgrade by the always late Standard & Poor’s debt rating. But the financial services industry is having another “hay day” as credit default swap activity takes off. Money is essentially shuffling around as mutual funds take the usual precautionary stance of reducing equity positions until we arrive on the other side of the Ireland debt story. Likewise, the bond market spins around and retail investors sit around wondering what they should do, typically only making a trade when it’s too late. Investors could use an indicator that measures precisely the relationship of capital flows between markets and activity in derivative markets including the options markets. Many of the current time trades are not necessarily investment related meaning a change in view nor are they adding to positions based on existing views. It’s a matter of “pair trades” that many funds and other big investors are undertaking as part of a more sophisticated approach to managing portfolios. Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Wed, 24 Nov 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/wheres_bono_now.html http://www.investorbootcamponline.com/blog/wheres_bono_now.html It is widely expected the Irish government will change their mind and engineer a bail out of the Bank of Ireland. Ireland’s debt rating has just been lowered two steps by debt rating service Standard & Poor’s as Ireland proposes issuing more debt to finance the bail out. This is another chapter in the European sovereign debt issues but it has the twist Ireland had been adamant they weren’t going to undertake any bail outs or accept foreign funds. There’s another side to this emerging story. Ireland is home to super rock band U2. Their lead singer, Bono, has been a long time proponent for the forgiveness of emerging country debt. In fact, he has gained considerable notoriety attending major financial conferences and meeting with financial leaders around the world. The credit crisis raises the same question Bono has been raising “why don’t we forgive the heavy debt loads that economies are unable to bear”. If you believe in Bono’s thesis, why should a line be drawn in the sand separating emerging countries from developed countries? Why not just flush the excessive debt loads down the drain and start over again? It satisfies the need Bono emphasizes which is to stimulate growth in those who are unable to do so thanks to overwhelming debt loads. It’s both a right wing and left wing solution wrapped into one. It certainly works culturally for Greece, and it works for taxpayers in every country who would otherwise pay for it for generations.The idea might seem preposterous primarily because of the idea that emerging countries are weak and incapable, like children, whereas the developed countries are capable and should know better. But the countries identified by the acronym P.I.I.G.S., can’t handle their debt loads any better than Afghanistan or Haiti can. An increasing number of financial analysts believe the bail outs are effectively putting long term handcuffs on most countries that undertake them.The difference lies in the sophistication of the financial structure of developed countries. The investment industry, the banks and numerous hedge funds, operate on the business model of taking a slice of securitized products, or derivatives, such as credit default swaps and mortgage backed securities. If massive debt loads were eliminated from the balance sheet of many countries, the so called sophisticated structure of developed economies would collapse. But isn’t that precisely what happened with the onset of the credit crisis in 2008? The weaknesses of the system came back to bury many companies, governments and markets. The core issues have never been resolved and now another nail in the coffin of the system is being hammered in place. Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Fri, 19 Nov 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/diggers_for_investors.html http://www.investorbootcamponline.com/blog/diggers_for_investors.html Caterpillar:; Everybody knows who they are. The great big yellow construction equipment you see on every job site that young boys know as diggers! Growth investors know them as an old stalwart that mutual funds and pension funds may own but they would typically avoid. Not that it’s a bad company or anything like that just that an old company with extensive market penetration has seen its days of growth come and go. Until now! Caterpillar is not unlike many companies who have experienced a turn around in operating results as the economy improves. Earnings and sales growth changes are noted below; Quarter ending Dec. 31, 2009 March 31, 2010 June 30, 2010 Sept. 30, 2010 Earnings change 0 +28% +51% +184% Sales change -39% -11% +31% +53% The turnaround is dramatic with 2010 earnings forecast of $3.91/share looking like an easy target to beat. The first three quarters of 2010 have netted $2.81/share with third quarter earnings of $1.22/share. Caterpillar’s recent take over of heavy construction equipment manufacturer Bucyrus Int. (BUCY) is strategically brilliant. Credit Suisse believes that BUCY will be accretive to CAT earnings in the first full year net of acquisition costs. The stock market is catching on to CAT’s excellent results. The stock sports an 85 relative strength. Not spectacular but it ranks it in the top 15% of all stocks in the last fifty two weeks. On a short term basis CAT stands out for its superior action during the recent market slide. The stock is less than 1% from the fifty two week high and only $2/share from the all time high of $87/share in July 2007. Caterpillar may still not impress growth investors given the fertile choices in the market. But it is a shining yellow testament to the economic recovery, the strength in the stock market and the ability for solid companies to emerge and grow from the ashes of the credit crisis. Investor Boot Camp Online is an independent investment information/research service for investors and advisors. Market News is the only real time investment news service with events that affect investor portfolios.Tue, 02 Nov 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/terror_threats_and_terror_stocks_still_active.html http://www.investorbootcamponline.com/blog/terror_threats_and_terror_stocks_still_active.html On October 18th, “Is The Stock Market Tipping Off A Biological Terror Threat?” highlighted the unusual powerful action in several anti-terror stocks. The message in that story was the stock market frequently provides insights into future events and developments. On September 29th, it was reported that a plot to attack numerous European cities was thwarted, and packages with explosives destined for the U.S. were discovered. But once again, the market appears to be indicating the threat isn’t over.The two stocks cited for the terror threat tip off remain in good condition indicating more upside is probable. Siga Technologies (SIGA) is less than 8% off the high, in a tight consolidation (below). Pharmathene Inc. (PIP) has broken through the bottom of its consolidation but a financing appears to be the catalyst. Management has decided to take advantage of a share price that jumped nearly five fold in less than a week. Another stock blasted higher on the day the terror threats were made public. Chemical firm Tor Minerals (TORM) ripped higher on volume fifteen times its average and has since held the gain. TORM is a company that produces various chemical based products that are used, in amongst other things, flame retardants. Tor Minerals fundamentals are improving but the heavy buying in a stock like this is unusual and suspicious. Since the October 26th 42% gain the stock has formed a bullish trading pattern that, historically, has turned into more big gains.Good trading action remains in these stocks but so, apparently, does the threat of more terror attacks. Mon, 18 Oct 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/stock_market_tipping_terrorist_threat.html http://www.investorbootcamponline.com/blog/stock_market_tipping_terrorist_threat.html Does Homeland Security know something about a possible and perhaps imminent security threat? If it does it hasn’t told the public but the stock market may be tipping us off as the stock market often does. On October 13th, it was announced that Siga Technologies Inc. (SIGA), had been selected for the possible award of a contract to deliver 1.7 million courses of smallpox antiviral for the Strategic National Stockpile. Since the announcement, the stock has gained 66% in just four sessions. Buying has been massive with volume exceeding twenty times the average on Oct. 13th. The announcement doesn’t imply there is a known biological terrorist threat. After all, being preventive is a mandate for Homeland Security. But on the 14th, PharmAthene Inc. (PIP) jumped 15% on volume more than three times the average. PharmAthene is a developer of medical products designed to counter biological and chemical weapons including anthrax. The catalyst, allegedly, was a press release outlining a compliance plan with the exchange, the N.Y.S.E. Amex, of PIP’s ability to meet listing requirements. The exchange granted PIP an extension until January 2012 to demonstrate compliance. But the stock added another 18% on volume six times heavier than the average in the following session, 61% the next session and another 33% on the 18th (by 12:00 e.s.t.). Volume in the session, on the 18th, was 28 times higher in just the first 2.5 hours of trading. This is the reaction of a simple exchange listing matter? Two stocks, both producers of counter biological terrorism weapons have added 66% and 195% in just four sessions. To add more evidence that something is going on, both stocks took off on the same day. Doesn’t this seem like too much of a coincidence and extreme reaction nine years after 9/11? Note; following the posting of this article, it was noted that Cleveland Bio Labs (CBLI) has gained 75% since late August on very heavy volume. CBLI is developing treatment for radiation poisoning. Investor Boot Camp Online is an independent investment information and trading strategies research service for retail investors and investment advisors.Market News is the premier real time information source for investors who manage portfolios.Wed, 13 Oct 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/whats_wrong_with_the_economy_is_whats_right.html http://www.investorbootcamponline.com/blog/whats_wrong_with_the_economy_is_whats_right.html The headlines have been so full of terrible economic news for so long it has become boring. High unemployment, U.S. residential real estate is terrible, Canadian real estate is slowing, borrowing money is harder than ever, it's worse than the stats, and, once again, the economy is starting to slow. But investment markets, the stock market in particular are telegraphing an important message. The economy is fine! The stock market has been on fire since September 1st. Many big winners continue to romp higher and now an entirely new group of stocks are emerging on very heavy buying. These stocks, and their sectors, are signs that the economic expansion is moving into its second phase.Railroads: CP reports a 96% increase in earnings on a 20% increase in revenues. Fiber optics, the worst sector over the last ten years, is suddenly undergoing a powerful recovery. This sector, as much as any other sub sector of technology, shows the importance of technology and its growing force as a driver of the current economy. The mutual funds and pension funds who are the drivers of the financial markets aren't stupid. They are undertaking heavy buying of many stocks and will continue to add to their positions over time. This is the way markets, and fund managers, have been for decades. Why would it change now? But the bears, and the headlines, continue to report what they think are problems. But they're missing a significant point. The point is that the economy's apparent problems are a silver lining and the driver of the economic expansion and bubbles in several investment markets.High unemployment: That keeps payrolls down, profits up and share prices moving higher. Why would any business race out and add new staff if they don't have to. Obamanomics isn't the recipe for good business and businesses are not going to step up and pay the high costs of benefits on top of salaries and wages. The inflationary action of central banks: Gold bugs think it's the beginning of the end of the monetary system as we know it. But the trillions of dollars pumped into the financial system are boosting markets because investor appetite for risk is about as low as it gets. When investors decide to take a risk on financing an emerging business, more financings will be done through the usual mechanisms of overpaying investment bankers. The credit crisis was centered in the banking and investment communities and the recovery must be accelerated from these sectors. Meanwhile, the inflationary implications of central bank action is not showing up in the behaviour of consumers, or businesses where inflation is perpetuated. So it's not a problem. What might be a problem is investors aren't taking advantage of the potential for above average gains in stocks and certain commodity markets. Some are of course, but many retail investors will wait until everybody acknowledges the markets have been good. That will be at the peak. This response isn't likely going to change any time soon, although we have been doing our part to educate and direct investors into the best markets early.Investor Boot Camp Online is an independent investment information and trading strategies research service for retail investors and investment advisors.Market News is the premier real time information source for investors who manage portfolios.Fri, 08 Oct 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/research_duds.html http://www.investorbootcamponline.com/blog/research_duds.html One of our research staff came up with two stocks that he was excited about for their investment potential. Both companies are small caps. that can be classified in the same sector. They are capitalizing on a growing trend in internet marketing and related services including email marketing. What added to the attraction was their huge decline from recent highs offering investors a potentially lucrative buy-low opportunity. One of them, Supermedia Inc. (SPMD), peaked at the beginning of the correction so you could dismiss their down turn to the broader trend. Supermedia is also a consistently profitable company. But Dex One Corp. (DEXO), which is four times larger than SPMD, underwent a reorganization and a massive loss which undoubtedly consisted of one time house cleaning expenses. So far both of them appear to be possible buys. The analysis of these two companies is a perfect case study in the importance of insightful research. There is a big difference between looking at companies and possible investments from the outside as opposed to knowing the industry. As it turns out, coincidentally, one of our research staff knows this industry well. What we know about it all too well since we operate in the internet space is that there are a lot of companies making money off internet based businesses. The problem for internet service companies, in the long run, is that they are operating without true insight into the business of their clients. It’s easy to come out with a cookie cutter approach and make it work in the early days of an industry cycle but as the business matures the dynamics change. In this industry, you’re going to see a massive shake out of many operators who are operating mechanically without being able to service their clients. This isn’t a criticism of either Supermedia or Dex One. But this just isn’t an industry for investors, at least not for investors in the secondary market, i.e. the stock market. It’s the conclusion of research that has the overriding importance of linking to decisions made by investors. It's a crucial distinction that is often lost not only by investors but analysts. As you can see, the stock market may have already figured it out by crushing these stocks. The best tip off to great investments trends has always been the out performance by a stock compared to alternatives. In many companies and their stocks, somebody made money along the way but they initiated their positions, and possibly sold them, prior to the peak in their stock prices. It’s always like that, or at least it should be. Issuing securities in the stock market is an investment plan that is distinctly unique and separate to the operations of the business. A business might be great for the people who work there, and perhaps private investors who preceded the I.P.O., but that doesn’t necessarily make it a good stock for the average investor who doesn’t have that insight. To contact the writers of this story: Gautham Kuppampatti at G.Kuppampatti10@Rotman.Utoronto.Ca, and, Paul Thornton at paul@investorbootcamponline.com.Investor Boot Camp Online is an independent investment information and trading strategies research service for retail investors and investment advisors.Market News is the premier real time information source for investors who manage portfolios.Sun, 03 Oct 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/cause_of_flash_crash_good_news_for_investors.html http://www.investorbootcamponline.com/blog/cause_of_flash_crash_good_news_for_investors.html The U.S. Securities and Exchange Commission and the Commodity Futures Trading commission released an exhaustive report, Friday October 1st, on the cause of the “flash crash”. They concluded the devastating plunge in stocks was the culmination of several factors contributing to a lone computer driven trading sell program of $4.1 billion. The sell program’s directive was to feed sell orders into the market at a pre determined level of volume equivalent to a fraction of the volume recorded in the prior minute. The algorithm isn’t particularly unusual but the ripple effect was as volume in the futures market dried up. Investors might feel relief it wasn’t some grand manipulation. They might also take comfort that U.S. regulators have done something about it. The S.E.C. has apparently introduced new measures to prevent a repeat. Circuit breakers have been instituted for a wide number of stocks, which mandates a five minute halt to trading if the stock falls by more than ten percent in five minutes. But this isn’t going to work. In fact, it's a terrible idea. After all, weren’t circuit breakers introduced after the 1987 crash? High Frequency Trading Is Here To StayHigh frequency trading is becoming more common as many institutional traders are adding it to their repertoire of trading strategies. It’s also good news for retail investors who may feel victimized by both the flash crash and the bear market triggered by the credit crisis. The possibility of another significant sharp decline remains high. But individual investors may take advantage of it by placing buy orders that are substantially lower than the current market price. Institutional investors can do the same but their orders aren't likely going to be filled at least not entirely. Instead, the smaller retail orders are being filled ahead of larger orders and that is a growing complaint from institutional money managers. Too bad! On the surface retail investors appear to be falling further in the chain of importance and significance in the investment markets. But their relative insignificance is actually giving them more power to manage their portfolios substantially better than mutual funds who neglectfully buried many retirement accounts in 2008. For starters, a little market timing can have a dramatic impact for retail portfolios. Mutual funds and pension funds can’t place their billions into cash in one day even if they wanted to. High frequency trading gives retail investors another advantage. For those who are willing to take a minute to place open orders at absurd prices, higher and lower than the current market, they just might hit the jackpot. Investor Boot Camp Online is an independent investment information and trading strategies research service for retail investors and investment advisors.Thu, 30 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Market_Changing_Seasons.html http://www.investorbootcamponline.com/blog/Market_Changing_Seasons.html Investment markets are in an interesting state right now. They're also challenging as changes prompt timely decisions by investors who want to position themselves in significant new trends. The stock market began phase two of the bull market on September 1st. The rally has been powerful with a gain of 14%, on the Nasdaq, in just one month. The renewed up trend is hugely significant since it marks the break out of stocks from their bear market ranges. More importantly still, a number of stocks, primarily technology, are establishing their first meaningful up trends in ten years. Investors who spot these up trends early have an opportunity to get into what could turn out to be a massive long term gain. The stock market's advance since the lows of the bear market has been powerful. The best stocks have made a huge amount of money. They're also extended on a short term and intermediate term basis. They're ripe for a sell off. But this may seem to be a contradiction since a renewed and powerful rally implies these stocks, in particular, should continue to romp. Perhaps they will, but the more likely scenario is these stocks will enter relatively long and unpleasant bases while other stocks take over the role of top performers. It's precisely what our research has identified in the last two to three weeks and Thursday's bearish reversal in the market averages and top performers adds more evidence to the developing trend. Trading strategies is the difference between investors who get rich and the rest of the herd who go through frequent periods of struggle. How many investors missed the big gains in the bond market because they fell for the story about rising rates? Shuffling the deck and placing money in stocks and other markets with new up trends is a real time strategy that is gaining traction. In fact, the hot commodity markets, which includes "The Three C's", are triggering sells while they undergo new consolidations. The Three C's are cotton, coffee and corn all of which can be traded with E.T.F.'s. The ability to trade E.T.F.'s in almost any market including bear market conditions provides investors with the flexibility to profit in any environment. But timing is everything and the desire to succeed is crucial.Investor Boot Camp Online is an independent investment information and trading strategies research service. Sophisticated active traders use the precise market timing and trading patterns information while novice investors tap into the vast Investor Tool Kit. Tue, 28 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Resource_Stocks_Are_Higher_Risk.html http://www.investorbootcamponline.com/blog/Resource_Stocks_Are_Higher_Risk.html Investors should know the relative differences in the risk of stocks as defined by several categories. Risk may vary based on;Sector Company size Market (i.e. exchange or country) Average daily volume Market condition This list is by no means exhaustive, but it is a good starting point. What many Canadian investors don't seem to acknowledge is that resource stocks trading in the Canadian markets are very volatile and far riskier than alternatives. Owning three resource stocks from different sub sectors does not lower risk. For example, an investor buys a copper stock, a gold stock and a coal stock. Believing that diversification has been accomplished and the portfolio is lower risk is likely false. It is the objective of our research to isolate big winners but not at the expense of risk which includes the ability to manage the trade. As it turns out, high risk does not equate to high return. This principle has been emphasized in different ways including a recent feature on buying higher priced stocks. Resource penny stocks are profitable; not for investors who trade them but for the investment bankers and advisors who peddle the financings and the management of the company's who pocket six figure salaries. They're essentiallly lottery tickets that draw people into buying them because they are hooked on the idea of making a lot of money. You can make a lot of money in the stock market. It may be your best opportunity to significantly increase your wealth. But don't drill a hole in your portfolio trying to do it. Tue, 21 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Profits_or_Shares.html http://www.investorbootcamponline.com/blog/Profits_or_Shares.html When you talk to institutional investors including pro traders and market makers you’ll discern a viewpoint they have about retail investors. They think retail is uninformed and prone to trading on emotion. When they see retail investors buying or selling, en masse, it’s interpreted as a contrarian indicator that the top, or bottom, is developing and the trend is about to change. Unfortunately, that viewpoint is far too accurate. One of the shortcomings in the retail investors trading is the idea they can’t buy high priced stocks. If the stock is too high, based on their subjective limit, they won’t buy it because they won’t get enough shares. Here’s why this thinking is mathematically incorrect. Suppose the investor wants to buy something with $5,000. Their choices are ABC at $2.50/share or XYZ at $200/share. If they bought XYZ they would only acquire 25 shares. A buy of ABC, however, would require 2,000 shares. But what is the inherent objective? Is it making money or is it acquiring shares? It isn’t the number of shares that goes higher, or lower, it’s the price of the security. If ABC and XYZ both go up 10% the return on capital is exactly the same ($500). Now we get to the linked belief that lower priced stocks have a better chance of going higher and a better chance of making much more money than a lofty priced stock. But that raises some other questions. Do the mutual funds and pension funds, who conduct extensive research, sink tens of millions of dollars into high priced stocks because they collectively don’t know what they’re doing? If penny stocks made everybody rich, why doesn’t Warren Buffett just buy them all up? If it worked, he would have done it already. The reality is these companies have stocks that are worth nearly nothing for a very good reason. If it weren't for speculators, they would be worth nothing. Priceline.com (PCLN), was a top pick at $85/share. It’s currently $347 which is a gain of about four times. In mid July, another buy of PCLN was indicated at $215/share. The gain on that buy is now about 70%. How many lower priced stocks have performed this well?The trends, along with their corresponding buy and sell signals, are far more reliable on higher priced stocks than they are on lower priced stocks. They’re also less choppy as day traders and short sellers tend to avoid them. If high priced stocks were too expensive, the smart money would be selling them not buying them. Thu, 16 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Whos_Left_Holding_the_Bag.html http://www.investorbootcamponline.com/blog/Whos_Left_Holding_the_Bag.html Ally Financial, formerly GMAC Inc., has apparently publicly stated that the proposed G.M. I.P.O will net them a profit. By selling their position, profitably, they will be able to repay the $17 billion they received in aid from the U.S. government. The story, from Bloomberg and others, marks the arrival of the exit plan for recipients of bail out funds as well as the completion of the government’s bail out financings. That much is obvious but the significance of it is worth revisiting for the millions of retail investors who were side swiped by the credit crisis. After all, those investors, who put money into retirement savings accounts year after year, didn’t receive any direct bail out from anybody. Many people believe there are conspiracies engineered by powerful organizations including the government. Investors are, hopefully, more than aware that “big money” plants their seeds in businesses and markets early so they can make a big profit selling it to someone else typically right at the peak. The bail out of the banking sector in conjunction with central bank operations is a conspiracy. It’s not covert but it is a conspiracy nonetheless. When organizations and individuals who were the recipients of bail out funds sell their positions, they are completing the cycle of placing their bets and reaping the rewards. So ask yourself “what’s next”? For those that buy these positions how is their investment, initiated in transactions such as an I.P.O. of G.M., going to perform? The success of the bail out effort might make people feel good but paying a substantially higher transaction price, and relieving powerful money of all risk, isn’t necessarily going to be a profitable trade. Why would buying G.M. be a good deal particularly when it’s stacked up against alternatives? Individual investors who are still upset about their portfolios getting hammered in late 2008 and early 2009 might want to think about who’s going to be left “holding the bag”! Thu, 09 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Bank_of_Canada_Rates.html http://www.investorbootcamponline.com/blog/Bank_of_Canada_Rates.html The Bank of Canada is the only Group of Seven central banker to raise interest rates in 2010. In a September 9th article from The Globe and Mail, they used the headline, “Carney’s choice: Keep them guessing”. They aren’t the only ones who wonder why the Canadian central bank continues to raise their key interest rate. The obvious answer is economic strength has been strong enough to prompt monetary policy to reign in building inflationary pressures. After all, the Canadian housing market has stood alone for its shocking strength despite the weakness in nearly every other country. The extreme weakness in places such as the U.S, England and Spain is well known. But now there are signs the Canadian economy is weakening. The housing market has clearly peaked with a decline in sales activity and, more significantly, prices. The Canadian dollar has become very volatile as traders battle it out as to the underlying condition of the both the U.S. and Canadian economies. A characteristic of the current economic cycle is that many will say the statistics do not tell the story. Their argument is the economy is in worse condition than the statistics indicate. Another behind the scene story, until recently, is the Canadian government has been concerned about the heights of the Canadian housing market. If that’s the case, why make it harder for stretched mortgage holders to carry the debt load? The answer is this; The Bank of Canada is creating some wiggle room to deal with a weak economy. By raising rates, now at 1%, that gives them the opportunity to lower rates later if they need to. The U.S. has virtually no latitude this way. How much lower than .25% can you go? Cycles, being as they are, suggest the Canadian housing market was due to roll over. There are reports that this significant segment of the economy is in a sharp decline which, again, is not truly reflected in older statistics. The affordability of Canadian housing is at an extreme unlike any other in history. Like the U.S. government, the Bank of Canada sees the distinct possibility of their need to lend a helping hand. They’ll do it by dropping rates later so banks can lower mortgage rates. Sat, 04 Sep 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Interest_Rate_Boom_to_Bust.html http://www.investorbootcamponline.com/blog/Interest_Rate_Boom_to_Bust.html The current phase in the cycle of interest rates markets is a huge opportunity for those that take advantage of it. For every other fixed income investor it may turn out to be a financial disaster. The Fed. has sent a clear signal, again, that they are holding their key rate at a record low indefinitely. So what does that mean for the bond market where interest rates are established and price trends play out? It’s obvious that short term interest rates have virtually no room to go lower. Accordingly, in the long run they can only go higher. As interest rates rise, the market value of bonds decline. The longer the term to maturity the greater the impact is. Longer dated bonds have greater leverage on price. The issue is that many retail investors don't pay attention to the biggest risk to a bond portfolio.The idea that sitting, passively, with a fixed income portfolio to earn interest is sound. But there are pivotal turning points in interest rate cycles. The next one is coming and it may be here at any time. Interest rate cycles tend to be twenty years in length. Rates peaked in 1989 at lofty double digit levels. Twenty one years later the bottom in rates is on the horizon. It may have occurred August 25th when bonds peaked after a torrid four month run up in price that netted a capital gain near 10%. But what if your bond portfolio loses 10% or more? It would take years to recover the loss in capital and that’s assuming there isn’t more erosion due to rising rates. So what does the Fed. have to do with it? By making it evident they are holding short rates down it gives investors a chance to profitably restructure their bond portfolios. Bond investors are, in a sense, getting lucky with a chance to go through a process of selling longer dated debt instruments and reinvesting into shorter terms. Both ends of the market are making money right now. Sophisticated institutional investors are taking advantage of it. When rates start going higher, across all maturities, investors in shorter term maturities won’t suffer a capital loss (assuming they hold to maturity which presumably most would). When short term bonds and T-Bills mature, investors may reinvest at a higher rate. That’s an increasingly profitable bond portfolio at work. But investors who sit with their long term bonds may suffer potentially large losses over time. Paul Thornton is the Chief Research Strategist with Investor Boot Camp Online, an independent investment information service offering trade strategies and tips for managing portfolios. He can be reached at paul@investorbootcamponline.com.Fri, 27 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Stop_The_Stop_Loss.html http://www.investorbootcamponline.com/blog/Stop_The_Stop_Loss.html Investors with trade experience will know what a stop loss order is. For those that don’t it’s a sell order at a price lower than the current market that is executed when the market value of the security declines to the price specified in the order. The stop loss order has the specific purpose of protecting capital in the event of further decline. Unfortunately, it works against retail investors far too frequently. One of the issues with stops is the price the order is filled at may be substantially lower than the price specified in the order. Technically, the order becomes a market order as soon as the security’s market value trades once at the price set in the order. In some cases, the security may be trading far below that price and the lower fill on the order is directly related to the action in the security. However, that’s just the way the security is trading which doesn’t make the type of order the issue. The three issues associated with stop loss orders are as follows; You can specify a stop limit order but they are frequently not accepted by most discount brokers or ECN’s (exchanges). Even if they are accepted, they will be overlooked and potentially remain unexecuted if market conditions are volatile.Industry pros, i.e. traders and ECN’s, will take advantage of small stop loss orders and use them to make a potentially much larger profit than normal. To them, the stop loss is an invitation to make as much as they can. During periods of extreme volatility, such as crashes, stop loss orders may be filled at the lows of the session. Complaining about it will accomplish nothing because the price on the order will remain unchanged. Stops Are "Sitting Ducks"Last but not least, the other issue with stops is the risk of the "sitting duck" sell. Larger volume traders, or market makers, in a security may be well aware of the quantity of stop orders. In certain circumstances, they might decide to trigger a quick and deep decline in the price of the security, sweeping all the stop orders out buying the stock up at much lower prices and then running the stock higher again. If 100,000 shares over a $3 price range are executed, that’s a quick gain of $150,000 to the vulture trader (at an average fill of $1.50 lower).The numbers can of course be much larger over many securities in a system wide sell off as they were in the “flash crash”. The stop loss is useful if you are in the jungles of Borneo and completely out of touch. But the rest of the time investors may be better off paying attention to their holdings and entering a live order when protecting capital is necessary. In certain circumstances, why wait for a lower price? Sell the security now and avoid the risk. Wed, 25 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Energy_ETFs_Trading_Badly.html http://www.investorbootcamponline.com/blog/Energy_ETFs_Trading_Badly.html Want to know what’s trading badly? Energy; Oil has broken its up trend following the lows of the bear market and natural gas is at an all time low after a four month attempt to put in a bottom. You’d think alternative energy would be chomping higher but First Trust Wind Global Wind Energy E.T.F. (FAN-u.s.) is at a 52 week low and closing in on the all time March 2009 low. The weakness in energy markets is somewhat perplexing. The global economy is recovering and the dark days of the credit crisis are farther behind us than the headlines care to admit. The U.S. government’s role in converting G.M. to Green Motors seems to have catapulted electric vehicles (E.V.) into the critical mass phase of advancement around the world. But others will argue energy is acting as a leading indicator for the economy with the implication the economy is headed for the dreaded double dip recession. There’s more to the story when it comes to the markets. In fact, it’s a bigger issue that applies to E.T.F.’s beyond the energy sub sectors. As of late August, the markets, stocks and otherwise, are at a pivotal juncture in their trend. Technically, some markets are past that pivotal price level as they have entered down trends. But bear, or inverse E.T.F.’s, haven’t exactly flashed the green light that they are in solid up trends. You’d think with two times performance E.T.F.’s they'd be screaming buys. But they’re not. Some of them look like they’re still running into technical resistance. E.T.F.’s have provided investors with the benefit of variety and access to markets they previously couldn’t trade particularly in registered accounts. But E.T.F.’s are better business for the issuers, not investors. Issuers make their fee on their bull and bear E.T.F.’s regardless of the direction of the underlying market. But contrary to what many of them are telling investors, two and three times performance E.T.F.’s do not track the underlying market the way investors think they do. They trade like options with decay in price that is magnified depending on momentum in the underlying market. Many E.T.F.’s are baskets of securities (stocks) or trade based on an index which is a basket of securities. Those securities may change without notice. How do investors know it’s to their advantage? There are no rules on how this is handled. Some E.T.F.’s may be sexy because the sector is relatively new and promises great long term growth. However, price performance has been hampered by various fund components, i.e. companies that are essentially experimenting with other people’s money. Tue, 17 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Credit_Card_Rates_Are_Excessive.html http://www.investorbootcamponline.com/blog/Credit_Card_Rates_Are_Excessive.html The yield on 10 year Irish government bonds is 5.33%. The spread on yields between financially ruined Ireland and Germany is 290 basis points. Accordingly, German government bonds are yielding 2.43%. This is the bond market’s assessment of the additional return required to compensate for the significantly higher default risk of the Irish government compared to the German government. Preceding the credit crisis corporate bond yield spreads were very narrow implying the market had been strong and investors were willing to accept low returns for higher risk. Corporate bond yields from Turkey, for example, were only 5-10 basis points above U.S. government bond yields. Clearly, the market’s assessment of risk was due for a correction. Credit Card DebtSome credit card companies offer balance transfers with rates as low as 2.99%. But these loans are short term, typically less than a year. On the other hand, the standard interest rate on balances carried beyond the payment due date is around 22%. Compare that to the ten year Canadian government yield of 2.92%. The spread is nearly 19 basis points or more than six times higher. Consumers who resort to carrying debt with a credit card are, technically, on the road to bankruptcy. A significantly higher rate on unpaid balances represents the risk of possible default. But there are some serious issues with a 22% rate applied to everybody including those whose banks fail to transfer online credit card payments on the day indicated. How many people, realistically, are going to default on their credit card payments and go bankrupt? Furthermore, credit card companies, such as Visa and Mastercard, do not carry the default risk. They securitize or insure credit card debt and sell it off to investors and other third parties. They couldn’t care less if someone defaults or not.The ridiculously high spread, and rates, for credit card debt is out of step with the stats. and the economic environment. Meanwhile, the U.S. government and Secretary Treasurer are spending their political capital looking at ways of kicking the banking sector and investment industry around. Hundreds of billions of dollars has been wasted trying to revitalize the economy. What obviously needs to be corrected, and is completely off their radar, are the practices of credit card companies. How much economic stimulation would be generated if consumers saddled with credit card debt weren’t being gouged to death? Sat, 14 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Stock_Market_Technical_Outlook.html http://www.investorbootcamponline.com/blog/Stock_Market_Technical_Outlook.html The stock market suffered a sharp three day decline that, at first glance, appeared to be driven by comments from the Federal Reserve Board. The Fed. rekindled the belief the economy is headed for a double dip recession. Surprising weakness behind the Chinese trade surplus and a drop in U.S. productivity in the second quarter added to the fuel behind the sell off. All is not lost in the stock market, if you’re a bull. The market is still trading within a relatively narrow range. Volume during the decline was below average on the New York Stock Exchange and TSX and average on the Nasdaq. However, the price-volume relationship has proven to be unreliable as a secondary indicator since last September. Eventually, the low volume on price advances is going to catch up to many stocks. Perhaps this is it! The market has offered a range trading strategy, rather than momentum driven, since establishing a low on May 26th. It may continue that way if the current price level holds. Mark that as the 2140-2165 level on the leading Nasdaq. The S&P 500 is still nearly 3% above the bottom of its range and, frankly, it doesn’t look very good. Thursday and Friday the 13th indicated this broad average is unable to climb above the 50 day moving average. The market’s best performing stocks, “the leaders”, are typically a better indication of near term trend. Many of them were hit hard but are holding in their up trends. However, semiconductors, which have been the big guns in the rally, suffered, in many cases, huge declines putting them at risk of being effectively removed from investor’s radar for a considerable time frame. What is going to replace technology as the preferred choice? It could be resource stocks but those stocks are still battling the overhead from the big sell off in April. The correction, which started April 26th, and featured the “flash crash”, looks like a “handle” on the longer term base that represents the bear market. A handle is the final point of absorbing overhead selling before launching a new up trend. However, with individual securities it’s supposed to be a quiet low volume period. The big picture for the markets has not fit that criterion. But if the market can hold its ground in the short run and turn boring, we would have the final chapter before launching a major long term up trend. But be aware the ten year picture is against a renewed bull market. Long Term View Is DownThe Nasdaq along with the semiconductor index are near the top of their now ten year secular bull market. Fundamentals may finally serve to snap the decline but for now, investors need to stay alert. Another round of selling would trigger a bear market with a further intermediate term decline of over 30% on the horizon. But that's the picture for growth stocks. Resource stocks are still in a secular bull market and should take the reins of leadership. They are, by nature, volatile so further declines may represent a huge "buy low" opportunity.Thu, 12 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/No_Confusion_Here.html http://www.investorbootcamponline.com/blog/No_Confusion_Here.html Following a short but perhaps surprisingly constructive rally in the stock market, the market has been blindsided following the statement of the Federal Reserve Board. The sell off seems confusing. The comments from the Federal Reserve Board makes the Fed. appear confused. The outlook on the economy may also appear confusing. Mainstream thinking has been calling for a double dip recession while others think the global, and U.S. economies, are in a mild gradual recovery mode. The Fed. have triggered a sell off because they, along with some stats., suggest the economic recovery is sputtering. The trillions of dollars pumped into the system doesn’t appear to be working. But that’s not a surprise to those who live and die in the capital markets. Quantitative easing (Q.E.), pumps money into the markets which has served to drive markets higher since the bottom on March 9, 2009. The money has been used by hedge funds and investment dealers to make pair trades where they can lock in a net gain for a predictable period of time. They can, and have, made millions trading that way at a time when U.S. government action is predicted to bring down the American financial empire. The Fed. Has Done Their JobThe Federal Reserve Board’s actions over the last year and a half have been specifically directed at resurrecting the banking system. What it does for the economy is incidental to their efforts. Not that a healthy banking system doesn’t lead to better economic activity. But the Fed. isn’t going to publicly tell us that. The apparent confusion, to certain observers, can be quickly resolved by recognizing the position of the U.S. central bank. Managing The PortfolioDoes the confusion have to mess up traders? No, not at all. If you’re canoeing down a winding river and rough waters suddenly show up deal with the current wave and rock. You don’t need to concern yourself with what’s farther down stream until you get there. Individuals can take advantage of the ability to be nimble by micromanaging their positions. In fact, take advantage of it. If a security continues to go lower, sell it and target a buy it back at a lower price. A modest 10% from the selling price is potentially a 10% gain in your pocket rather than a hole in the portfolio. There’s nothing confusing about that. Tue, 10 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Wealthier_Canadians.html http://www.investorbootcamponline.com/blog/Wealthier_Canadians.html BMO Capital Markets pointed out that U.S. household net worth relative to disposable income has plunged and based on this measurement Canadians are now wealthier than Americans. The beating in the U.S. housing market is of course the reason for the dramatic decline in U.S. household wealth. The credit crisis and collapse of U.S. housing markets has brought the Canadian banking system out of the shadows with many around the world trumpeting its stability and sensibility. But this isn’t, completely, something to crow about! The banks are cited for their differences from the U.S. banking system which has been kicked around for apparent recklessness. Conservative lending practice by the limited number of excessively dominant Canadian banks is perhaps a reflection of the polite and not so risky approach that Canadians seem to embody. At times like this, it’s easy to say that it has paid off. But Canadian business, and the economy, could use a dose of risk taking. Flexibility and resourcefulness is the backbone of productivity and making money. But Canada is awash in red tape and social economic policies. If a small emerging business manages to make money, they’ll give up a big chunk of it in taxes as does the Canadian consumer’s pay cheque. Canada’s strong economic position hasn’t been because of brilliant economic engineering. It’s because the nation has the world’s mightiest economic power right next door. Canadians have been living in a economic mirage for a long time. The belief that Canada has a better health care system than the U.S. is blind ignorance. So is the idea that a Liberal government is good for the relatively large percentage of the population who are immigrants. Lower tax rates, and more efficient programs administered by business not government could go a long way to improving the quality of life and economic status of most Canadians. Canada has a huge opportunity to emerge as the word’s strongest western economic power.But it isn’t going to happen with the status quo being what it is. Regional governments would do well to look at the dynamics of their economies and target areas of productivity and creativity to fire up a weakening economy. Canadians may be wealthier than the U.S., for now, but don’t expect it to last long. The U.S. has risen from the ashes of recessions on their resourcefulness before and they’ll do it again. Sun, 08 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Semiconductors_Stand_Out.html http://www.investorbootcamponline.com/blog/Semiconductors_Stand_Out.html Many analysts and economists continue to stress the huge wave of growth in the emerging markets. Investors see the opportunities in resource markets from huge demand for everything from food to base metals and industrial products. However, the big play in the markets isn’t in emerging markets nor is it in resources. The huge growth, fundamentally and stock market action is technology and semiconductors in particular. There are a remarkable number of semiconductor related companies reporting triple digit growth in earnings and sales growth. That’s the fuel for gigantic stock returns. Not that it’s a problem, but there are so many solid semiconductor stocks that isolating just the best one or two is difficult. That’s a problem investors can live with! The issue for Canadian investors is there are very few Canadian traded semiconductor stocks. That’s typical for the Canadian equity market which is thinly traded and dominated by managed products with little to offer outside of resources.But that’s not a problem. Investors around the world are envious of the opportunity Canadians have for trading in the fertile U.S. market where not only U.S. companies trade but many other inter-listed companies from around the world. The technology group has been out of favour, in the stock market, for ten years. That, on is own, isn’t a reason for investors to be attracted to it. But it does imply that institutional money is in the early phase of capital inflows to technology following the crushing bear market of 2000-2002. With interest rates at multi decade lows and a new cycle in semiconductor sales underway, this sector could go a lot higher before the sun sets. Semiconductor stocks are an emerging markets play as new high growth markets emerge for products and services that have been advancing and undergoing refinement since the froth of the ‘90’s. But the advantage, for North American investors, is these hot stocks are traded in their own back yard.Sat, 07 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Telemarketing_And_Spam_Marketing.html http://www.investorbootcamponline.com/blog/Telemarketing_And_Spam_Marketing.html In our capitalist, free market, sales driven action oriented economy businesses get kicked around for some of their sales practices. In particular, telemarketing and so called spam emailing. These two widely used tactics continue to, apparently, bother people or two reasons; 1. They work. 2. The rules related to telemarketing and spam marketing are both ineffective and, to some degree, idiotic. Telemarketing: A “do not call” registry is created with the intention that telemarketers will not call those who have asked to be added to the registry. Great idea! But there’s one issue with telemarketers using the lists. They are exorbitantly expensive. Why would a company, especially a small one that pays your salary, pay $100,000 for a list of who not to call? They’re better off to take their chances and build their own internal do not call list that is organized with the systems their staff choose to use. Spam Email Marketing: Email recipients and internet host providers are too quick to jump to a conclusion that the sender of an email is a ‘bad guy”. Since when is a communication on a product or a service a bad element in our dollar driven society? If junk mail shows up in your mail box what do you do with it? You throw it out! Therefore, the next time an email shows up in your in box and you don’t want it, click on unsubscribe. It’s at the bottom of the email. Do it once and the autoresponder that sent the email will remove your email address permanently. The issue with this is that opening the email may trigger a virus to invade your computer. But where are the government and consumer protection agencies when it comes to this particular matter? They’re invisible. If you are adamant about reducing the so called spam you’re receiving then send your local politician a note (not an email of course). Tell him or her that you want tougher laws accompanied by a serious attempt to enforce the laws on those who are sending malicious viruses. The rules around spam email are absurd. It’s clear that no one has really taken the matter seriously since the internet is technically still in its infancy. But you cannot allow an internet host provider to black list an email sender because the return address, provided for direct communication purposes, is different than the website address the autoresponder is operating from. Guaranteed, there will be a law suit over this one of these days. Here’s what it comes down to; we have a nicely organized list of who not to call, which businesses won’t pay for, and another list (i.e. email addresses) that businesses pay for that the rules prohibit them from using! Now you know why the so called rules aren’t working! Fri, 06 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Laughable_Obamanomics.html http://www.investorbootcamponline.com/blog/Laughable_Obamanomics.html The Obama governments handling of matters related to the economy is so bad that it would be laughable if it weren’t such a serious matter. Of course, most U.S. media won’t tell it that way unless it’s programming that targets business people. But CNBC telling viewers that good economic management matters is preaching to the converted. U.S. citizens, left wing and right wing, can only hope that the fall elections bury the Democrats. This column could be dedicated to the economic policy foul ups by government for the next hundred days. However, we’re not going to list the specific issues or explain them at any length. What we are going to revisit is our position for some kind of an agency to manage fiscal policy at the federal level. You wouldn’t hire a politician to run your business, so why are we wasting time voting for politicians to run the country’s finances? Monetary policy is run by central banks in most reasonably civilized countries in the world. Nobody questions this on a serious level except for the occasional renegade who thinks lending money is a bad idea.The point is that professionals with academic training and real world experience need to manage the massive and often complex task of managing a country’s finances. The road to changes in policy related to the credit crisis could have taken a much different route. What would have been useful is to recognize that finance ministers, on all government levels, should be people with experience in the investment industry. The importance of the capital markets to the entire economy doesn’t seem to be recognized by even those who work in them. This isn’t a suggestion to give the markets more importance but to recognize that those who are knowledgeable and experienced in dealing with the capital markets more frequently than not understand the impact of economic and market policies on the real world. There are still a lot of investment bankers and investment advisors out of work thanks to the bear market, investment industry bankruptcies and an aversion to risk by investors. Why not assemble a committee of them and give them some useful work like running the country. Wed, 04 Aug 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Improving_Trading_Results.html http://www.investorbootcamponline.com/blog/Improving_Trading_Results.html An unfortunate hurdle in the process of improving trading results is psychological self analysis. But there are different approaches to analysis that may not trigger the failure issue. One possibility for self research is to go back and compare actual results against what might have transpired if a previous sell had been bought back. A simple statistical comparison would be the performance of a previous sell as if it had been held. There is a tendency amongst stock traders to move capital around from one stock to another. This shows up in two ways; Available cash in the portfolio is allocated to a different security increasing the total number of securities in the portfolio. When a security is sold, it is rarely bought back. The longer the elapsed time from a sell, the less likely the same security will be bought back. There may be a misconception on imputed performance in buy and sell transactions. Traders are assuming that they can do better moving capital around.It is obvious that selling a security going into a deep down trend and repositioning the proceeds in a security with an ongoing up trend is a superior decision. This principle, referred to as “trading up” is difficult for some retail investors but this is a different matter for another day. It's a strategy Investor Boot Camp Online "pounds the table on"!Suppose a trader has been buying and selling securities that are amongst the stock market’s best performers. Consider a buy and sell of Green Mountain Coffee (GMCR), a buy of Baidu.com (BIDU), and subsequently sold, with the capital redeployed into Netflix (NFLX). Was performance better with these transactions or would performance have been better if; GMCR was bought back with possible subsequent sells and buy backs of GMCR, or, GMCR had been held from the original purchase. These securities all occupy the same category based on relative condition. This study looks at trade decisions of securities in the same condition.A comparison of results, as proposed, may be quite illuminating for investors who manage their own portfolios.It's possible one or more assumptions never considered may be hindering better performance. Fri, 30 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Penny_Stock_Scams.html http://www.investorbootcamponline.com/blog/Penny_Stock_Scams.html Every investor wants to land the big one. We want that one stock that makes a huge amount of money. It’s the lure of the stock market. It can also be a trap for investors whose uncontrollable greed sucks them into garbage companies that have become nothing more than a marketing program. We have come across a heavily promoted company whose stock is one of the worst investments you’ll ever see. But there’s nothing illegal with their marketing efforts. They’re not breaking securities laws by saying something that implies some pie in the sky type of return. After all, it is possible the stock may blast higher. But it is so unlikely that only gullible uninformed investors can get drawn into it. The only reason we’re not telling you about it is because we’re not going to draw more attention to them. The obvious question is “how do you know if it’s nothing more than a marketing scam”? When it comes down to it, you don’t. Unless there is no operating company, it has some business merit. But a quick look at two things will tell you if you’re wasting your time and your hard earned money. The price trend: Is the stock in a consistent down trend that has shaved a significant percentage off its value from the high? If the stock is worth only pennies and it was substantially more at one time this is not the next Google. Don’t kid yourself about that. Great companies have stocks that trade higher from the first day they I.P.O. and they are worth at least $25-$35/share. The higher the price the stock is the more likely it is going to continue to go higher. These are the ones you get rich on! The capital structure: Somebody has a vested interest in paying for a heavy internet marketing campaign. Where are they located and what percentage of the stock do they hold? Most importantly, what did they pay for their position? Even though the stock may be down substantially it could be very profitable for them to sell the stock to you at .02. if they acquired their original position for .01. If you can’t tell what they paid for it, pass on the stock. They’re lining their pockets at the expense of naive retail investors. True investments are not lottery tickets. If you’re thinking about wasting what you think is a little bit of money on a long shot spend the money on lottery tickets. Your payoff is much greater and the odds of losing all your money on both are just about the same. Wed, 28 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/No_Transparency_No_Analysts.html http://www.investorbootcamponline.com/blog/No_Transparency_No_Analysts.html The public markets are intended to provide transparency and disclosure. There is plenty of legislation and the enforcement departments of the regulators are forever buzzing around looking for violations. That’s the difference between investing in publicly traded securities and private companies. In an effort to gather meaningful information, for the purpose of making money, investors may look to experts. That would include investment industry analysts. However, there is a problem with this process and the reason is analysts are inherently useless! The inability to deliver timely and useful information is not the fault of the analyst. Most analysts are well above average in intelligence with personalities characterised by diligence and detail. The problem lies in the legislation that was intended to ensure transparency and disclosure. Imagine a routine effort by an analyst to gather information on the company they publish reports on. He or she calls up the C.E.O., or some other management person, and asks pertinent questions. This is how the conversation might go; Analyst: George, how is earnings growth shaping up this month? Management: Can’t tell you! You’ll see it in the quarterly report. Analyst: You recently said that you will be considering growth through acquisition, are there some targets you are negotiating with? Management: Can’t tell you! If, and when, it happens you can read it in the press release. How is this the outcome of increased transparency? How do investors make money when all investors receive limited information at exactly the same time and, as a result, the effect is priced in? U.S. traded stocks are far too frequently a land mine in someone’s portfolio when earnings are released. Thanks to legislation it is too risky to hold stocks following an earnings report. If you call up the management of a private company, they are typically quite eager to tell you what’s going on. They are under no obligation to do so and some of them may lie through their teeth but eventually their investors will disappear. That’s no different than publicly traded companies who also have a history of management that isn’t exactly telling it like it is until it’s too late. When was the last time management of a publicly traded company told us that, basically, “we stink”? Where is that disclosure?Many people will argue it’s not fair that someone who calls up management gets information that others aren’t privy to. But what’s unfair about it? Nobody is stopping others from calling them. If you, or your chosen analyst, make the effort to get some information, you should have the right to get that information. What industry operates on holding information back and succeeds? If capital markets are going to serve investors, and issuers, information flow should be free and easy. The lack of transparency is precisely what triggered the credit crisis. The more efficient information flow is the faster poor management, including the criminals, will be revealed.That’s the advantage the public markets could have. Fri, 23 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Weekend_Investor_Volume_2.html http://www.investorbootcamponline.com/blog/Weekend_Investor_Volume_2.html Markets The stock market ground investors down and then suddenly, extremely heavy buying came into the market’s top rated stocks. South American stocks, banks in particular are very strong. Technology stocks remain in play particularly in the semiconductor sector. Commodity markets appear to be coming out of a long funk. Top commodity markets are oddballs with coffee, sugar, and tin. Copper is also regaining upside momentum. Canadian mining giants were early buys with momentum as the market turned higher.The Yen remains the best trading currency. The Canadian dollar remains both range bound and volatile. Sentiment Investment market pessimism hits extremes. Markets responded right on cue by bottoming out and barging higher. That's why sentiment, at its extremes, is a contrarian indicator.Economics Euro Banks facing “stress test”. U.S. and Canadian central banks suggest the economy is fragile and unpredictable. Bernanke says rates will stay low for a long time but the Bank of Canada raised rates again, by .25%. A number of countries around the world have been raising rates including Australia.Earnings season has been a disappointment for some, explosive for others. Overall, many companies continue to report excellent growth in earnings and sales.For up to date reporting on events in the financial markets including trend changes read Market News: Useful, timely portfolio management information for investors who care.Thu, 22 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/You_Can_Play_Too.html http://www.investorbootcamponline.com/blog/You_Can_Play_Too.html The interesting thing about the stock market, or investing in general, is that anybody of legal age can open an account, deposit any amount of capital and trade. It’s a game that everybody can play.The other interesting thing about it is that just about everybody who plays thinks they're an expert.The markets are dominated by some very sophisticated deep pocketed managers who know a lot more about everything from economics and finance to the inside workings at a publicly traded company than most individuals can dream about. The rest of the herd operates as if the miniscule random piece of information they picked up somewhere is significant.Investing isn’t like being an armchair quarterback on Monday night football. Sports fans understand it is perfectly normal to think and talk like you’re smarter than the coach, you can make better trades than the G.M. and feel free to criticize players like you’re some kind of guru scout. It’s fun even though most people are aware they are nowhere near capable of playing or managing in professional sports. But those same people don’t handle their investment accounts accordingly. The reality is, the investment markets are a professional’s game and millions of amateurs are deluding themselves as if they were watching another sport.If you think that’s bad, just about anybody can be an investment advisor and the enforcement staff at the regulators are people who just happened to have dropped off a resume at the right time.The next time the stock market is making headline news the untold story will be that millions of amateurs are swimming in shark infested waters. Just like other times in history, the amateurs won’t recognize they are operating on a lack of evidence preferring instead to believe things that are essentially psychologically motivated. Institutional pros watch the herd behaviour of retail investors as a timing mechanism. Unfortunately, for those retail investors they’re on the wrong side of the trades.In the last ten years, a number of developments in the markets have created the appearance the retail investor is at the mercy of institutional investors more than ever. But the reality is probably the other way around. If individuals managed objectively, they could easily out perform big money.Tue, 20 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Earnings_Galore.html http://www.investorbootcamponline.com/blog/Earnings_Galore.html With the economic headlines and the stock market’s challenging year, you’d think capitalism is coming to an end! But the stock market is actually abundant with companies reporting strong earnings growth.What's remarkable is the way the stocks of these companies are amongst the worst performers. It’s clear that investors have adopted the belief the economy is in trouble and a double dip recession is probable. The tilt to selling, since September 2009, is the process of pricing in an underperforming economy. It’s not the first time the stock market has acted like this. It’s a case of “sell now, we’ll see how things shape up later”. From a stock technician’s perspective, the process that is clearly in play is the shift from optimism to pessimism. It’s a variable in the stock market that has a way of overriding nearly every other influence including fundamentals. In fact, understanding the cycle of the psychological pendulum is a key to successful transacting. There are several hundred companies out of China that trade in North American markets. More than 30% of them have earnings and sales growth that any business manager strives for. The rest of them are well above average. Yet, these stocks continue to drift lower in what have become ugly bearish trading patterns. The drift has been going on for so long that it is tiresome watching them for a break out. But a “break out” will eventually occur and when it does watch out. The headlines have already proven to be wrong on several fronts. While another recession may yet develop, it hasn’t yet and we are half way through 2010, nearly two years since the credit crisis took hold. Everybody was calling for interest rates to shoot higher and while several countries are raising central bank rates, there has been a very profitable rally in the bond market especially in the U.S. The cry of inflation by gold bugs has trapped a great deal of money in gold stocks that has turned out to be one of the biggest underperformers since last fall. Given the market’s track record of being wrong, why can’t these high growth companies that continue to wrack up great growth eventually turn out to be gigantic stock winners? Those who are full of doom and gloom are trying to make the rest of us believe the trillions of dollars injected into the economic and financial system is a bad thing.Think about it; trillions of dollars falling out of the sky, 40% of the world’s population is turning capitalist and interest rates are at multi decade lows. How horrible can it be? Mon, 19 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Parking_Tickets_Wars.html http://www.investorbootcamponline.com/blog/Parking_Tickets_Wars.html What is it about parking tickets? Big cities rake in significant revenues from them along with paid parking. Economically, charges for parking make more sense than other taxes because it is a user fee. But parking in your own back yard has the feel of being restrictive to the point of punishment. Some cities, such as Toronto, have been getting press on how certain streets have been off the hook for receiving parking tickets. The Toronto Star, a left winged newspaper, takes the view that this is some kind of evil favouritism. But what about the rest of us? Wouldn’t you like to have your street where you live or some other street you park on frequently exempt from parking fines? Toronto is an expensive place to park, especially in higher traffic areas such as the downtown core. If you park on the street and get hit with a fine it’s $30. That’s not cheap by any measure. In the City’s defense (mismanagement aside), they need the revenues to meet the billions in expenses in their annual budget. It seems to me that you should not have to feel like a criminal for getting a parking ticket. I don’t know what the solution is because I’m certainly not going to suggest getting rid of parking fines. That would just shift the cost burden elsewhere and that doesn’t make sense. But perhaps some kind of middle ground would be a compromise. What if the cost of a parking ticket was reduced by the parking paid on the date of the fine? If, for example, you paid $2.50 in parking, the $30 parking ticket would be reduced to $27.50. Someone might argue that reduces the city’s revenues. However, those who are up on their gaming theory might reason the city may receive substantially more in revenues. There must be thousands of big city drivers who routinely play parking roulette in an attempt to avoid high priced parking costs. If they thought they could reduce the impact of a potential fine, they might be more willing to pay for parking. Or perhaps, a parking account, set up with a credit card, could be used where drivers are offered air miles, coupons or some other incentives to pay up. That would save the city millions in administration costs by eliminating the involvement of over paid unproductive employees. Why do I have to think of everything? Investor Boot Camp Online is a premier investment information service providing timely market information with useful portfolio management concepts including portfolio management, trade execution and mindset management strategies.Sat, 17 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Feed_The_Food_Industry.html http://www.investorbootcamponline.com/blog/Feed_The_Food_Industry.html Canadian grocery chain Loblaws (L-tsx), has apparently decided to revisit their quarter chicken deli dinner due to high levels of sodium. Somebody did a good job of putting the heat on Loblaws, rather than the chicken, to get them to actually consider giving the chicken the hook. They got some press out of it too. But despite the obvious serious health consequences, food producers continue to serve a side dish of food with your main course of death by salt.Subscribers to Nutrition Action are used to reading about the onslaught of unhealthy new food products as well as the creative deception in the labelling and advertising of the products. It’s not that the food companies are breaking the newer labelling laws, but rather, they are using misdirection the same way magicians do. It isn’t new either. There is a cereal ad that is at least 40 years old that says” A bowl of (the cereal) with 8 oz. of milk is a good source of protein”. Of course it is because milk is a good source of protein. The cereal itself has not protein content at all. Like most businesses, they’ll say they are simply giving consumers what they want. Next time you’re in a shopping mall visit the food concourse and you’ll find a line up at McDonalds but you won’t see one at Cultures or the Mom and Pop operation that serves an excellent fish with vegetables and salad. But how do the accountants and cost conscious C.E.O.’s justify the cost of salt they load their products with? Why don’t they eliminate it, save money and take advantage of an advertising and image opportunity? Energize The EconomyPerhaps the government has to kick the food industry around the same way they seem to have taken over the gas guzzling auto industry and turned G.M. into Green Motors. But what are the food companies waiting for? Do it yourself and make more money from serving better food. The purpose of adding salt, originally, was to use it as a preservative. But this isn’t 1950 anymore. There are refrigerated rail cars, refrigerated tractor trailers, computer controlled refrigerators in warehouses, retail outlets and grocery stores and customized inventory control systems. If the shelf life of the salt bomb beverage labelled as V-8 juice has its shelf life reduced because of no added sodium then don’t stock so many of them. If the expiry date has come and gone, recycle it by using it as fertilizer. It’s the cost of doing business and throwing out old food products is not new. Put a creative spark into the labelling and advertising businesses with a simple communication that says “tastes great, fresher than ever and live longer”. What impact would that have on the economy? Why do I have to think of everything? Wed, 14 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Credit_Crisis_Issues_Unresolved.html http://www.investorbootcamponline.com/blog/Credit_Crisis_Issues_Unresolved.html The credit crisis was exacerbated by an inability to assess market value of securitized securities. That included mortgage pools, credit default swaps (C.D.S.) and other derivatives. Since then, the U.S. government has looked at options for reform to the banking sector as well as the capital markets. Investor Boot Camp Online undertook an extensive analysis of the matter including a study to determine what might be the best solution to the issue. Our observation of the government and the investment industry’s response to the matter has frankly been shocking. The possibilities that they might have at least proposed don’t seem to have even come up for consideration. The investment industry has been strangely silent as though they are hiding. Given the U.S. government’s use of the media to bludgeon Wall Street, it’s not a surprise. The issues that led to the credit markets putting up a “closed for business” sign in late 2008 still appear to be in play. Our proposal for ensuring a relatively effective and efficient market valuation mechanism of securitized investments is to provide useful disclosure of the individual assets in the pool. What it comes down to is quite simple. What’s in it? Our proposal is to provide the following classifications on mortgage pools allowing for cross pool comparisons. Average percentage down payment relative to property value. Average term to maturity of the mortgage. Number of individual mortgages in the pool. Average mortgage size. Geographical location. Given these classifications, you can impute a reasonable market value on a relative basis. The following two pools are an illustration where Pool A would be worth considerably less than Pool B. Investors will be able to make reasonable relative comparisons with publicly available information. Information for disclosure Pool APool B% down payment/property value 4% 58% Term to maturity 6 months 4 years Number of mortgages 375 225 Average mortgage size $205,000 $440,000 Geographical location FloridaVancouver, B.C. The investment industry could have made billions of dollars with government money, back in 2008, proposing the government pay them to assemble the paperwork of every single mortgage in every single mortgage pool. The government would have spent far less on misdirected bailout money and the money would have hit the bullseye resolving the issue permanently. This doesn't address C.D.S.'s and other derivative products but the beleagured housing market may be in much better condition if mortgage pool disclosure followed something like the proposal here. Fri, 09 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Weekend_Investor_July_9.html http://www.investorbootcamponline.com/blog/Weekend_Investor_July_9.html Markets The stock market is attempting a recovery from a blindsided ten day downturn that undercut the lows of the correction. Investor Boot Camp Online’s “Trade Risk” indicator is now very high against a backdrop of a potentially weakening global economy and no apparent catalyst for the stock market to spark a rally. The bond market peaked July 1st following an impressive run up that has pushed rates to 2009 levels. Coffee emerges as the strongest commodity market. The Canadian dollar, Euro and the Yen are the stronger currencies in global currency markets. Economics Last week: Slowing economy. This week: Improving economy. Sentiment Relatively high level of pessimism but not at extremes. Headline News Barron’s claims the Russian spies arrested in the U.S. were sabotaging the stock market. The government sells a large portion of its common share holdings in Citicorp. Investor Boot Camp Online believes the government, and possibly Citicorp, may have violated securities laws. Basketball star LeBron James signs with the Miami Heat in a television exploitation of the hype in sports. James makes more money than everybody else. He plays a game. Central banks sell more gold reserves than anticipated. Canada recovers all of the job losses during the recession. Unemployment statistic is 7.9%. H.S.T. in effect in B.C. and Ontario. U.S. mortgage rates at multi decade lows. What’s coming up? Report on why another mess is brewing for investors. E.T.F.’s will be the next target for regulators after investors finally blow the whistle on two times and three times performance E.T.F.'s.For up to date reporting on events in the financial markets including trend changes read Market News. Useful, timely portfolio management information for investors who care.Thu, 08 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Bounce_These_Numbers_Around.html http://www.investorbootcamponline.com/blog/Bounce_These_Numbers_Around.html It’s free agency time in the N.B.A. and the big stars are getting huge media attention. But it’s not just basketball fans who are watching. The dollars that some of these players will receive in new contracts has just about everybody’s eyeballs rolling. Many people, including sports fans, can’t get their heads around the money the players receive especially when the owners are crying about annual losses. But it’s actually quite simple and it has nothing to do with sports. It’s a matter of numbers. In North American sports, there are approximately 600-700 player positions available depending on the league. For every one of those positions, there are tens of millions of guys dreaming of playing. Contrary to the fantasy of many men, there are considerably fewer who are remotely capable but the pool of talent that has a chance is still very large compared to the number of paid positions. Doctors make substantially more money than most people. It’s no wonder given the very rigorous academic standards, a long education process (the farm team), and a limited number of graduates determined by the medical profession. In the U.S., there are less than three doctors for every thousand people in the population. That’s why it’s one of the highest paying professions. What percentage of the population is available to work in a manufacturing job? If you are a plumber, a receptionist, or a customer service person there are, perhaps, millions, of jobs available. If you quit your retail job, the store will quickly fill the spot with minimal investigation into the new employee’s skill. There is no farm team for construction workers or sales people. Pro Athletes: $3 million/year. Doctors and other professionals: $250-$500K/year. Everybody else: $45,000/year. Tue, 06 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/No_More_Free_Work.html http://www.investorbootcamponline.com/blog/No_More_Free_Work.html Unemployment might be the number one economic issue. It certainly has the headlines and the efforts of governments around the world especially in the U.S. The financial markets seem to react to every jobless claims and unemployment statistic as if it’s a major catalyst for trading. The official unemployment number remains just above 9%. However, some economists estimate that, in the U.S., the “underemployed” statistic is closer to 22%. That includes those who have given up looking for work and are ineligible for jobless benefits. But there is another element of the economy. The new economy is characterized by; People, and companies, working for free or significantly less than the true value of their services or product(s). Potential customers and clients who want products and services for free. There is some economic merit to this dynamic. It’s “prove it and I’ll pay for it”. But it’s a process that can only go on for so long, and it has been going on for nearly two years. It doesn’t pay the bills. Companies looking for customers who actually pay are going to have to end their free marketing campaigns and demand a payment or cut the contact loose. Working for free doesn’t actually accomplish anything in the long run and it doesn’t help the customer. Over time, a recipient of free goods or services has become conditioned to getting things for free. Ask them for a small payment and they’ll move on because they won’t see the value. The reality is people want to pay for things in order to impute value. In fact, people want to pay a lot of money for some things because they think it makes their purchase valuable and emotionally special. Otherwise, nobody would pay $250,000 for a Ferrari. Perhaps the log jam in the economy, and the underemployed issue in particular, is for businesses and individuals to stop offering freebies. Charge for it and rev up the engine of the economy which has always been “doing business”. Mon, 05 Jul 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Ten_Percent_Doesnt_Exist.html http://www.investorbootcamponline.com/blog/Ten_Percent_Doesnt_Exist.html Look in the business section of national newspapers and you’ll find one or more companies advertising investment returns of 10% p.a. Here’s the background on why I’m bringing this matter up for investors everywhere. It has to do with the millions of ordinary investors out there who feel, rightfully, that they have been ripped off. The U.S. government has put in place reforms in the banking industry. Investment industry regulators have been busier than usual with Ponzi schemes. Credit rating agencies are under fire for failing to disclose the risks of securitized investment pools. The issue of clearing and improved transparency in securitized investments remains unresolved. Bear markets that wipe out portfolios during the credit crisis creating the worst mutual fund performance in history. With interest rates still near historical lows, investment alternatives offering 10% per year, or more, are available. What is missing from the ads is the headline “great returns for suckers”, or “If you are so naive to believe this, then we have a deal for you”. There is nothing illegal about these ads. They aren’t saying anything that is factually incorrect or in violation of security laws (I’m assuming). But hear this, “you can’t make 10% per year in guaranteed profits”.Most of these advertising investment plans are in real estate related products such as mortgages. Suppose, an investor places $25,000 with one of these products; how can they say you’ll receive 10% per year? Very simple! It can show up in one of the following ways; Cash flow of $2,500 is paid out in the first year. That’s easy to do when they have $25,000 of the investor’s money. $2,500 is paid out consisting of a blend of capital and income. The income component might be miniscule. In fact, it could be zero. Year two, or three, comes around and perhaps another $2,500 is paid out. Or maybe it isn’t. Did the fine print say anything about year two? The company you invested with then explains that the mortgages were reinvested and the terms of those mortgages changed. Perhaps the regular payment from the mortgages decreased or stopped entirely or any other perfectly legitimate explanation that anybody who knows real estate would understand. Or here’s another plausible answer. The 10% per year, stated in the ad, is projected to be capital. So when no payment shows up in the first year it’s because the security, whatever it is or isn’t, has been sold or hasn’t matured and therefore there is no payment. That doesn’t mean there won’t be but the 10% per year may be a long way down the road assuming it is ever realized.Perhaps the 10% per year is a projected blend of income and capital but again the capital gain can only be a forecast.This isn’t intended to slam the companies offering these securities despite their questionable marketing tactics. They know it will attract investors who are well entrenched in naivety. Rather, it is a sad reminder that no matter what regulation, transparencies or disclosures are made the naive will never be sufficiently served and somebody will prey on them. Fri, 25 Jun 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/G20_Is_Worth_The_Billion.html http://www.investorbootcamponline.com/blog/G20_Is_Worth_The_Billion.html Canada is center stage at the G8 and G20 meeting held in Toronto. Up for discussion is a proposal for a bank tax to provide funds to bail out the banking industry, if and when, they run into trouble again. Canada is also front and centre since not only are they the host but they are leading the argument there shouldn't be a bank tax. Canada’s public argument is that Canadian banks didn’t suffer during the credit crisis so why should they be taxed.It’s a valid point. However, members of the self regulated investment industry in Canada pay into the Canadian Investor Protection Fund (C.I.P.F.) and that includes larger payments from larger firms who are unlikely to ever need a bail out themselves. Bank account holders are also protected up to $100,000/account by a fund that the banks contribute to in the event that a bank fails. But should the Canadian situation extend to contributions to a fund that is global in nature?The drawback to a global fund is that it is inherently a socialist program. Countries like Canada and the U.S. have little impact on the structure of the banking system in other countries and even less in individual financial service firms. Domestically, Canadians have been questioning the merits of spending nearly $1 billion to host the summit. It seems like a colossal amount of money for something that can hardly be expected to produce any tangible results. After all, how are twenty different interests, many of them very different, going to come to an agreement about anything? But this event is a huge opportunity for Canada to shift economic and political trends in the global economy. Canada has seemingly had a back seat on the international stage particularly with big brother, the U.S., dominating. But the U.S. is beginning to lose its shine thanks to the credit crisis and the dismal state of affairs in the housing market. Now is Canada’s chance to assert their influence. What better timing to do so than the G20 summit hosted right at home? The long term implications of Canada rising to the occasion are much greater than a $1 billion price tag. It is a “must seize opportunity” for Canada to launch itself as the dominant Western nation in a global climate of emerging market growth. Mon, 21 Jun 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/BPs_Dividend_Payment_Would_Be_A_Bad_Sign.html http://www.investorbootcamponline.com/blog/BPs_Dividend_Payment_Would_Be_A_Bad_Sign.html BP Plc’s costs are rising as rapidly as oil and gas from the bottom of the ocean as the deadly rig explosion continues to defy solutions. BP has apparently paid out $105 million to claimants for related damages and that doesn’t come from the $20 Billion fund they recent agreed to set up. Meanwhile, BP’s share price (BP-ny) has plummeted nearly 50% without any kind of a bounce since April 26th. So, “what’s a shareholder supposed to do”? Answer: File a claim in the “victim” fund. It would seem that shareholders have suffered a huge loss, many of them substantially more than the business and individuals in the Gulf. Those claimants appear to be poised for a quick cash payment from the fund in a process not unlike the fund set up after Hurricane Katrina. But the idea of shareholders making a claim in the fund is preposterous! It's an absurd idea, made tongue in cheek in a matter that is not the least bit funny. Let's not forget that eleven people were killed in the rig explosion. But the victim fund money is coming from BP, not the government. BP’s obligation is first and foremost to their shareholders. Why shouldn't they be compensated? There is an argument that could only be made by BP shareholders that management should not have agreed so quickly to the huge $20B. victim bail out fund. It’s a valid point. But BP management may have succumbed to public pressure, the President of the United States and the desire to fix the problem. On June 3rd, we suggested in “American’s Oil Crisis Thickens”, that BP may not have been fulfilling their fiduciary duty to shareholders by disclosing the full extent of issues related to plugging the well and the material costs that now seem to have no end in sight. In a June 21stpress release, BP says “it is too early to quantify other potential costs and liabilities associated with the incident”! Is that because they won’t say, or do they continue to be caught off guard with the sequence of events from the time of the explosion and collapse of the rig?BP appears to want to console shareholders by committing to making quarterly dividend payments. But this message may be interpreted differently. When you consider BP’s seemingly sheepish position on the spill, they might actually be indicating to shareholders that they are ultimately going to fail as a going concern. Through dividend payment(s), they are taking the easiest and, realistically, only route to making good to shareholders. After all, if you’re going to go bankrupt due why not pay out the cash you have in the form of dividends? This is another example of shareholders being left in the cold to suffer the consequences of unforeseen risks. While many Gulf residents will be compensated, more or less, shareholders who hang onto the stock in blind hope may be left with nothing. We’ve seen this many times before. Most recently, it was Bear Stearns, Countrywide Financial and GM. Unfortunately, the hard working investor who is effectively an uninformed investor takes the brunt of the “fall out” when things go wrong. Investment advisors frequently do the same. Wed, 16 Jun 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Stock_Market_Reenergizes.html http://www.investorbootcamponline.com/blog/Stock_Market_Reenergizes.html After nearly two months, of a sometimes violent correction, the stock market has triggered a buy signal. The buy signal, from a meaningful market average, is referred to as a confirmation rally. This event is a gain that must be large enough, 1.5% in the current environment, on higher volume than the day before, typically four to seven days from the low. William J. O’Neill & Co. have identified this event at the beginning of every rally since the mid ‘50’s. On June 15th, the Nasdaq led all averages with a 2.76% gain.Not all confirmation rallies, or buy signals, work. In fact, the June 2nd confirmation rally from the Nasdaq failed just two days later. There’s no guarantee that this one will work either. But investors don't have to use the market averages in isolation when making buy and sell decisions. The "Leaders" Are The Market's Crystal BallA more meaningful indication of the market’s true underlying conditions is the action of certain high quality companies accompanied by the right kind of trading action. We are now getting that heavy buying, strong percentage gains action along with a significant number of “break outs”. The “break out”, as we call it, is a powerful gain on heavy buying, measured by volume, that clears a range referred to as a base. It marks day one of a renewed up trend. Many stock investors ignore bases and their significance at their peril. For seasoned investors who categorize a stock’s condition into either an up trend, down trend or a base know a base is one of the most significant indicators for gauging a stock’s health and the ability to trade it successfully. Since the bear market ended March 9th, 2009, the stock market’s advance has been a classic rally in that the most powerful stocks outperform everything else. They also undergo a trend change before the rest of the herd follows. Hence, the term “leaders” for the markets hot stocks. Members of Investor Boot Camp Online who bought them profited nicely. Early picks following the bear market included Green Mountain Coffee (GMCR), Netflix (NFLX), Baidu.com (BIDU), Priceline.com (PCLN), Canadian construction company Churchill (CUQ), and Chinese online video gaming company Perfect World (PWRD). Some of these stocks are no longer leaders. But historically, the group of stocks to emerge as the big winners tend to repeat their performance over the long term cycle. After all, they have massive sales and earnings growth to propel their stock to great gains. New entrants may emerge at the beginning of new up trends such as the one that appears to be underway. There is also an interesting new commodity market that is suddenly hot and there is always a powerful trend in the currency markets. A wise man once said “timing is everything”. This appears to be one of those times for investors to evaluate their portfolios and position themselves. Ignore the noise and follow the tracks of heavy buying, and selling, left by “big money”. Tue, 08 Jun 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Investors_Injured.html http://www.investorbootcamponline.com/blog/Investors_Injured.html The latest two day decline in the stock market established a new closing low for the growth oriented Nasdaq. In the process, investor hopes for a new rally have been quashed. The stock market had held at correction lows seven times before undercutting them June 7th. That makes this decline particularly significant since it adds increasing bearishness to investment conditions. It’s possible the current action will serve as a “shake out” which prompts nervous shareholders to sell and then the market sweeps higher. But the recent return to the lows is consistent historically with the nature of severe declines that precedes it. Whenever the market, or security, suffers either a significant percentage decline or a rapid decline, or both, the market (price) has a tendency to return to the low. In the process, portfolios and investor psyche are damaged. The deeper the decline is the more extensive the financial and emotional impact is. The effect is not unlike an illness or injury. The more severe the injury is the greater the probability of having bad days and a longer healing period become.Think Of Market Declines Like An Injury.A paper cut might make you cry like a baby for a minute but then you get back to what you’re doing. Break your leg and you know that even when the cast comes off there is a lengthy convalescence. Falling stocks have the same impact on investor behaviour. It’s unreasonable to think a new sustainable up trend can develop following a sharp sell off such as the “flash crash”. Historically, it just doesn’t happen that way. There are other indicators, also from historical precedence, that it has been too early to launch a new up trend. The basing period, i.e. the price trend since the peak, is too short. After some very lofty gains in a fourteen month advance, at least two months of basing are needed. Most markets have been inversely correlated to the U.S. dollar. Given the extreme weakness in the Euro and related strength in the dollar, the stock market is challenged to run higher. It doesn’t have to stay that way forever, but until it does a rising dollar means falling markets. Sentiment has been deteriorating but bullishness still exists with many investors. Until it is truly wrung out, the selling cycle has not been completed. The declines from June 4th and 7th don’t technically end the chances for a new rally but the confirmation rally from June 2nd is effectively dead. This event, which is a buy signal from the market index, has been identified by Investor’s Business Daily as a common characteristic of new rallies. However, they don’t all work. Given the failure of the first confirmation rally attempt it has implications for a longer correction rather than a shorter one. Just like the tendency to return to the low, a failed rally attempt implies more is coming. The trading pattern in the market since the mid April peak is reminiscent of the same pattern in the fall of 2008. It has implications for going lower. The “bears” have been calling for a double dip in the economy and stock market since the rally began March 2009. They should be careful what they wish for, they just might get it! Thu, 03 Jun 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Americas_Oil_Crisis_Thickens.html http://www.investorbootcamponline.com/blog/Americas_Oil_Crisis_Thickens.html The Obama government has apparently opened criminal and civil investigations into the Gulf of Mexico oil spill. The target of course is BP PLC but the reality is it’s another attack on the entire American oil industry and the American people. The stock market is, once again, putting the impact of decisions on full display. BP’s stock getting hammered is understandable but look at the severity of declines in exploration/production companies and the drillers. They are getting blasted! Ensco (ESV) has plunged 32%, Pride International (PDE) 34%, Atwood Oceanics (ATW) 34%, Plains Exploration (PXP) 44% and Anadarko Petroleum (ADP) 44%. These declines are extreme thanks to the government and Attorney General’s office who are wagging the Oil Pollution Act and the Clean Water Act just to name a few. The wind power industry might want to monitor legal proceedings against BP under the Migratory Bird Act in case there are more lawyers than dead birds at the base of their turbines. This disaster is Hurricane Katrina all over again for the government's slow response. While Obama cries foul about the evil oil companies, what has the government done about the potentially devastating ecological and economic disaster? The polluted shorelines are the same shorelines they are supposed to protect. Meanwhile, shareholders in BP suffer from actual and perceived consequences. Has BP failed to disclose the extent of the very material clean up and litigation costs? Have they avoided their fiduciary duty and legal obligations to shareholders because the press and government are hanging over them like vultures looking for evidence of alleged wrong doing? What is remarkable to some Canadians is the internal trashing Americans pile up on each other. For whatever reason the media seems to have taken a very left wing Democrat position on just about everything.Predictably, the U.S. media will do nothing but trash BP and the rest of the oil industry rather than pursue a different angle. The newspaper journalists who drove to work could suggest that producing more oil domestically would lower the trade deficit, but they won’t. American T.V. programming could point out that the oil industry is a big employer of Americans, but they won’t. They might even suggest that eliminating American dependency on foreign oil may allow for a change in foreign policy and the American involvement in fighting terrorism. But apparently, they don’t think that sells advertising to American companies who employ Americans targeting American customers to buy their products and services.Politics and the extreme nature of the stock market are creating a potentially huge investment opportunity in certain U.S. traded oil stocks. It might even be BP. When the well is finally plugged and the spill achieves some kind of containment, a huge rally may drive some of these stocks to massive short term gains. Tue, 25 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Revisiting_Diversification.html http://www.investorbootcamponline.com/blog/Revisiting_Diversification.html Every investor understands diversification and can easily provide examples of how to accomplish diversification. It’s an investment principle that doesn’t seem to need teaching. Unfortunately, it’s so implicit in every investor’s approach that no one ever questions the application of diversification strategies. Some investors are hurting the performance of their portfolio because they are failing to make adjustments that are the purpose of diversification - to reduce risk. Take the standard diversification practice of spreading money out over three asset classes; equities, bonds and cash. Investors who follow this will leave the allocations as they originally established them. But this approach ignores the impact of bad markets. If, for example, the stock market is in a correction or bear market, that portion of the portfolio is losing money, guaranteed. That’s not reducing risk. If an asset or market is doing poorly, removing capital from that area is the only risk managed approach that makes sense. Growth investors with stock portfolios may hurt performance by acquiring too many stocks particularly in certain market conditions. May 2010 has been a case study illustrating the importance of protecting capital by either, being entirely in cash or, concentrating capital in one or two of the absolute best performing securities. An increasingly apparent characteristic of poor markets is that virtually all stocks trade the same way; down! Investors who sell a loser then buy another stock because they think "this one's different" have been proven wrong. The issue with building a position in a single increasingly larger, and profitable, position is psychological. But mathematically, the portfolio is relatively lower risk and the math is how risk is measured. Rather than buy extremely high risk stocks, investors who want to “hit home runs” may consider the strategic use of transaction sizes and the number of securities in their portfolio. By doing so, they may generate significant profit in higher quality stocks. Most individual investors are randomly deciding what they believe is an appropriate number of securities. Studies show twenty two stocks are required for effective diversification in the U.S. market and thirty three in the Canadian market. That’s too many for an individual to hold in a self managed portfolio. Furthermore, individuals are not, and should not, be employing portfolio theory the way mutual funds do. Building a position in one or two of the best performing securities by strategically adding to the position as profits are achieved can produce big returns for the entire portfolio. During the recent correction restricting capital to an inverse or bear E.T.F., such as the volatility index (VXX or VXZ), would have been quite profitable. Every other stock regardless of country, sector or underlying fundamentals was a losing venture. By deploying capital into strength, investors stay focused on what is actually working and, by default, keeping capital out of weaker markets and securities based on flawed investment practices. Fri, 21 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Credit_Crisis_Market_Again.html http://www.investorbootcamponline.com/blog/Credit_Crisis_Market_Again.html It looks like the credit crisis market all over again. After a little more than a month in the current correction there are similarities that are eerily like the market from October 2008-March 2009. For investors they may want to be prepared. After all, trends and patterns repeat themselves and it’s only a little more than a year later. The ComparisonsMarket Phase Credit Crisis Bear Market Correction: 2010 The initial decline The stock market suffered the worst week in history in October 2008. The “Flash Crash” shaved nearly 1000 pts. off the Dow in less than an hour. Second decline The stock market undercuts the October lows undergoing a three day shake out before undertaking a bullish reversal (higher) November 21st. The stock market undercuts the low of the “flash crash” in a huge volume two day sell off before reversing higher in a classic bullish reversal, May 21st. Following the November 21, 2009 climax sell off, or shake out, the market went through several large rallies (+30%) and declines of 30-35% before another new low and bullish reversal in March 2009. The market effectively traded in a range with progressively lower rally peaks. It remains to be seen how the current correction will play out. But it is already showing a pattern of lower peaks in rallies. More importantly, two characteristics are nearly identical to the credit crisis; sharp, severe sell offs and massive volume shake outs. We’re also seeing other markets, i.e. commodities; fall with the stock market as the U.S. dollar and bond markets undertake rallies. The credit crisis bottoming out phase following the October blast was a trader’s market. Retail investors were conspicuously absent except to sell near the lows as fear mounted. Retail investors have struggled with the market for several months now, perhaps since September 2009, and may find the current market too much to handle. That’s another match to the credit crisis market. Wed, 19 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/The_Message_From_The_Flash_Crash.html http://www.investorbootcamponline.com/blog/The_Message_From_The_Flash_Crash.html The “Flash Crash” was a message. It was intended for retail investors everywhere from the uninformed and disinterested investor to the active trader. The message is simple, you have to actively look after your money! Far too many investors have used the “I’m in it for the long term” line when their hard earned money takes a pounding. Following the credit crisis, many older investors cried that they were going to have to work longer than anticipated because their retirement money had been crushed. Unfortunately, another routine exercise is a migration to televisions and the internet to find out what caused a big decline. But the “flash crash” has made something clear. The reason is irrelevant. The “flash crash’ is a message of supernatural proportions. The huge one hour decline that dropped the Dow by nearly one thousand points serves as a wake up call to manage money with timely defensive tactics. Investors who were aware of them had reduced their exposure before the “flash crash” through selling, and fund switches. The same timely response could have easily kept investors out of the wipe out that unfolded in the fall of 2008.There are too many clichés about investing that simply don’t work. Diversifying by spreading capital over numerous sectors, stocks, or other markets like commodities is one of them. Investors would be better served by putting on “blinders” to filter out the noise and focus on the real world trading action in markets and individual securities. Try it! The next time the investment world goes into a state of turmoil, you’ll like the view from the sidelines.Tue, 18 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Why_Corrections_Happen.html http://www.investorbootcamponline.com/blog/Why_Corrections_Happen.html The Goldman Sachs (GS-ny) scandal broke on April 16th sending the stock into a dizzying decline of $23.57 to $160.70 by the close. It sent the market lower and many stocks broke their distinctive bullish behaviours on that very day. Shortly afterwards, on the 26th, the stock market peaked and began a correction that has also featured the “flash crash”. Did Goldman Sachs trigger a correction that has crushed many stocks in a short period of time?It’s unlikely the issues of a single company, as significant as they are, would bring the global markets to its knees. The same thinking would suggest Enron caused the gruesome bear market from March 2000-October 2002. The contributing factors to the current correction include credit tightening in China, debt issues with Greece and the P.I.I.G.S. and U.S. financial market reform. Goldman Sachs played the role of fanning the fire on the financial market reform issues. But these issues were all known to the markets, some of them for quite a while before the market hit a wall in mid April. So why would the market crack when it did and what made it so violent?Clearly, issues in Greece reached the point where the markets hit the panic button. Traders in the debt markets were whipping Greek bonds up to 25% yields and the failure to reach a bailout agreement was getting to the “make or break” point. But something else was developing that quietly punctuates turning points in market trends; the desire for something new.Investment industry participants may have a sense of this. The market’s fourteen month up trend was becoming stale. There was very little news that wasn’t old news regurgitated. The economy had been gradually improving for some time and interest in the bears crying about the “false rally” had fallen off.Investment markets are often driven by the investment industry itself. Think about the cycles among industry participants. Most mutual funds and hedge funds, who were participating, were fully invested. Investment advisors had plenty of time to work their client books over numerous times. Even those with the biggest books would have worn out their opportunities with client portfolios. That means their monthly commissions were starting to drop. The solution to this is simple – change your mind and start selling.As markets fall viewpoints start to shift providing fresh energy. The stock markets characteristic of vigour and power is restored. Unfortunately, for the bulls the price direction is the wrong way. But, the non volatile boring up trend had exhausted itself allowing for the perfect storm to whip up new action. When the current cycle of increasing pessimism and the related selling, exhausts itself the correction will end and a new rally will kick in.Mon, 10 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Nice_Timing.html http://www.investorbootcamponline.com/blog/Nice_Timing.html Interesting! The stock market gets hammered over a few days and then, to finish off the pounding, inexplicably plunges. It recovers most of the wipe out on the same day, the day that was just in time for the German government to vote on bailing out Greece. But on that day, Friday May 7th, we don’t hear anything and the market gets rocked again with many stocks getting hammered. Mercifully, the weekend shows up. Over the weekend the European Union, (emphasize union), decides to collectively bail Greece out. The market rips higher on Monday and the sky is no longer falling. Let’s party! But this doesn’t add up. First of all the “fat finger” story that was immediately addressed as “we’ll be cancelling some trades” has turned into a mystery. Then, to add salt to the wounds of investors who are trying to make some money back after getting crushed in the credit crisis thanks to the shortcomings of various investment industry operators, they lose more money on Friday as the German vote becomes a non event. That sounds like more bad news putting everybody on edge as they pile up the cash they have left from selling. But instead, a deal is made over the weekend. It’s not a deal decided by one country, it’s numerous countries that couldn’t decide on a deal over many week days over many months. But they can make the deal on a weekend that was perfectly timed to follow the week of trillions of dollars of losses. If we add up the losses, particularly those from Thursday afternoon when the Dow fell 9% in an hour right through to the close of trading on Friday, somebody made a lot of money buying during that time. Somebody was on the other side of those losing trades. Funny how the money lost is more than enough to bailout Greece.Don’t forget that governments and central banks, U.S. and otherwise, have put a lot of money into the economy in order to revitalize the banking system. Don’t expect them to announce they’re pulling their money out so they can take their profits. We’ll all be left speculating on it after another financial market beating with no explanation. Sat, 08 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Theres_Market_Risk_and_Market_Risk.html http://www.investorbootcamponline.com/blog/Theres_Market_Risk_and_Market_Risk.html The risk investors face in the stock market is more than factors related to economies, governments and corporate earnings. There’s the risk of a failure in the functionality of the market itself. Think about it this way; you want to go shopping so you go to a mall but you don’t like the stores or they don’t offer something that interests you. It happens. But another risk is the mall, not the stores in it, doesn’t have the lights on, there’s no heating or cooling or perhaps it’s closed when it's supposed to be open. That’s a risk you don’t expect. The credit crisis that crushed the stock market in 2008-2009 was a problem related to market function. We've also said on a number of occasions the solution lies in better relationship management. On May 6th, Boot Camp Banter addressed the market’s one hour collapse ("Not Again!") that can be summarized as poor linkage between separate market related activities and firms (relationships again). But a comment in that blog was "cancelling trades is the right thing to do". This idea needs to be revisited. The issue with cancelling some trades in the stock market is that other securities are connected to those trades. That may include options, futures markets and E.T.F.’s. Cancelling the impact in all areas is too complicated and effectively unenforceable. All markets, including derivative products, need a central mechanism for pricing.That would have limited the domino effect from the “fat finger” swoon. But don’t count on the investment industry, or the government, to solve investor’s problems related to market functionality. Despite the carnage in the bear market, the short sell rule in U.S. markets has still not been restored to the up tick rule. The up tick rule was eliminated in 2007 in the same week mortgage stocks began to crater. Feel Like A Victim?The individual investor may feel victimized again. But retail investors, versus institutional accounts, may be the ones that can best deal with market risks of any kind. They can easily enter orders, perhaps well ahead of time, and have them executed without affecting the market. Investor’s Business Daily reported in their Monday May 10 edition, “After Stocks Blow Fuse, Circuit Breakers?” that big institutions complain tiny bid ask spreads make it easier for small investors to jump ahead of big block trades.The reality is timely trading can be managed far more effectively by individuals than institutional accounts. Take advantage of it. It is highly unlikely the public will get any satisfaction from the government or the investment industry after cutting its own throat once again. Thu, 06 May 2010 09:00:00 ESThttp://www.investorbootcamponline.com/blog/Not_Again.html http://www.investorbootcamponline.com/blog/Not_Again.html The credit crisis can be attributed to people working in the investment industry who essentially failed to do the right thing. But now we’re finding out that the incredible and unexplainable plunge in stock prices in the afternoon of Thursday May 6th is attributable to a reaction by investment industry professionals that is essentially ridiculous. The emerging story of the latest market meltdown is being attributed to a trade error in a sell of one million Procter and Gamble shares (PG-ny). Apparently, the order entered was for one billion shares but one million shares was the intended order size. Since the order size effectively swamped all the open buy orders, the bid plunged to .01. Then, a domino affect kicked in; with traders selling everything they could as though “the sky was falling” and they didn’t even know why. This is absurd! Why would anyone believe that Proctor and Gamble, which closed at $60.75 on May 5th, would trade at .01? Second, the organization that initiated the sell order should have some kind of a safeguard i