NOTE : HSI up 330.54 or (1.68%) to finish at 20,019.24 ON 28OCT11 DOW up 23 points, or (0.2%), to finish at 12,231.11
"It's a kind of sobering-up after a day of partying," said Jerry Webman, chief economist with Oppenheimer Funds in New York. "We got back to what's more of a square position, closer to where we want to be, and now we're going to take a couple of deep breaths and reassess what this really means."
There are still plenty of obstacles to overcome before the crisis is resolved. One troubling sign: Borrowing costs for Italy and Spain increased, signaling that traders remain worried about their finances.
http://finance.yahoo.com/news/Stocks-finish-mixed-after-apf-3972903983.html?x=0&sec=topStories&pos=3&asset=&ccode=
Sunday, October 30, 2011
Friday, October 28, 2011
European debt deal lifts Dow by almost 340 points
David K. Randall and Stan Choe, AP Business Writers, On Thursday October 27, 2011, 5:19 pm EDT
NEW YORK (AP) -- An agreement to contain the European debt crisis electrified the stock market Thursday, driving the Dow Jones Industrial average up nearly 340 points and putting the Standard & Poor's 500 index on track for its best month since 1974.
Investors were relieved after European leaders crafted a deal to slash Greece's debt load and prevent the crisis there from engulfing larger countries like Italy. The package is aimed at preventing another financial disaster like the one that happened in September 2008 after the collapse of Lehman Brothers.
But some analysts cautioned that Europe's problems remained unsolved.
"The market keeps on thinking that it's put Europe's problems to bed, but it's like putting a three-year old to bed: You might put it there but it won't stay there," said David Kelly, chief market strategist at J.P. Morgan Funds.
http://finance.yahoo.com/news/European-debt-deal-lifts-Dow-apf-2182810507.html?x=0&sec=topStories&pos=main&asset=&ccode=
NEW YORK (AP) -- An agreement to contain the European debt crisis electrified the stock market Thursday, driving the Dow Jones Industrial average up nearly 340 points and putting the Standard & Poor's 500 index on track for its best month since 1974.
Investors were relieved after European leaders crafted a deal to slash Greece's debt load and prevent the crisis there from engulfing larger countries like Italy. The package is aimed at preventing another financial disaster like the one that happened in September 2008 after the collapse of Lehman Brothers.
But some analysts cautioned that Europe's problems remained unsolved.
"The market keeps on thinking that it's put Europe's problems to bed, but it's like putting a three-year old to bed: You might put it there but it won't stay there," said David Kelly, chief market strategist at J.P. Morgan Funds.
http://finance.yahoo.com/news/European-debt-deal-lifts-Dow-apf-2182810507.html?x=0&sec=topStories&pos=main&asset=&ccode=
Thursday, October 27, 2011
The Market Mindset
..Valuing Large-Cap Stocks
By Will Ashworth | Investopedia – Tue, Oct 25, 2011 8:57 AM EDT
Investors seeking to preserve capital in volatile markets might want to consider large-cap stocks, those companies with market capitalizations greater than $10 billion. Doing business globally, they tend to pay dividends, have solid balance sheets and exceptionally large amounts of cash. While perceived to be slow growing, many have the financial might to take advantage of business opportunities that smaller companies just can't. Whether you invest in individual stocks, mutual funds or ETFs, large caps ought to represent a portion of your equity investments.
Why It Should Be Included In Your Portfolio
Conventional wisdom suggests that dividends account for approximately half a stock's total return. Some believe this number is as high as 90%. Clearly, whatever the percentage, dividends are an important weapon in any company's arsenal for rewarding shareholders. Because large-cap companies tend to possess greater free cash flow, their ability to increase the dividend payment each year is, also, greater. A rising dividend, combined with a multinational business possessing pricing power, which is the ability to raise prices routinely, provides investors with a certain amount of inflation protection that many mid- and small-cap stocks don't have. With operations in various parts of the world, large caps are able to go where the growth is, which is why you find many operating in the emerging markets of Brazil, Russia, India and China. In addition to geographic diversification, large caps provide investors with currency diversification. As the U.S. dollar weakens, companies are able to sell their products more competitively overseas. Smaller businesses are less likely to benefit because a majority of their revenue, often, is domestic in nature. Lastly, and most importantly, many large caps possess solid balance sheets with little debt and large amounts of cash. For many professional advisors, they are the core holdings in any portfolio.
Attributes of a Winning Large Cap Profitability
Whatever the size of company, investors averse to risk should only consider those businesses making money now, and most probably in the future. While reported earnings is the most common way to assess the profitability of a company, there are other tools available to investors such as return on equity and return on capital employed. Whatever investors use, to assess profitability, it's even more important to determine the sustainability of those profits because that is what drives stock prices higher. Some guesswork is required. However, it's not as scary as you might think. Many large-cap stocks have been public companies for a significant number of years, possessing a track record of increasing profits. The goal, here, isn't necessarily to find a business with an unblemished profit record, but one that is consistent enough that you feel comfortable making a long-term investment. In the end, the best large-caps are, generally, those with good business models and significant competitive advantages over their competitors. Warren Buffett, one of the world's greatest investors, believes the purchase of stocks be made as if you were buying the entire company, not just a piece of paper. While the numbers are important, it usually comes down to quality.
Financial Health
Like any household, a large-cap's financial health is the key to success. It's not enough to be profitable, it should also own more than it owes and be bringing in more cash than it sends out the door. If it isn't doing this, profitability is fleeting. The balance sheet, which details a company's assets, liabilities and shareholder equity, is the first place investors look for an indication of financial health. The capital it employs, to grow its business, comes at a cost. Generally, debt tends to be less expensive than equity because the interest payments are tax deductible. As a result, large caps often have a lower cost of capital, due to easily obtained financing, providing an advantage over smaller companies. While debt can be advantageous to issuing stock, it can also put a business into bankruptcy if its debt gets out of control. Many investors look for a margin of safety, such as total debt less than shareholder equity. In addition to a company's capital structure, investors should concern themselves with free cash flow, the amount of cash generated after covering operational costs and capital expenditures. A good way to judge this is by calculating free cash flow yield. Similar to the earnings yield (inverse of P/E ratio), it measures free cash flow as a percentage of market capitalization. When comparing companies from different industries, it's wise to replace market cap with enterprise value, which takes into account differing capital structures. While there are definite exceptions, the strongest businesses tend to be those with high free cash flow and increasing shareholder equity.
Dividend Growth
Mentioned previously, dividends are an important component of a stock's total return. That goes double for large caps. Standard & Poor's has an exclusive club it calls the Dividend Aristocrats, a small group of companies that are part of the S&P 500 and have increased dividends for 25 consecutive years. Most of the businesses on the annual list are large caps. Interestingly, the top 10 companies on the S&P 500, all large caps, have historically accounted for half the total cash on the balance sheets of all 500 companies. Since cash is a vital component when paying dividends, investing in any one of those 10, while not a guarantee, is a good bet for obtaining annual dividends on a long-term basis. Furthermore, evidence suggests that companies that payout a greater portion of their earnings, in the form of dividends, end up generating higher earnings, which in turn generates even greater dividends. When evaluating large caps, it's advisable to seek out those companies whose dividends are large and getting larger. Growth is the key.
Reasonable Price
Every investor's definition of "reasonable" is different. Value investors tend to want to pay significantly less than a stock's intrinsic value. Growth investors will pay more than that in the belief that earnings will grow faster than average, creating a new, much higher intrinsic value. Those in the middle are "GARP" investors because they look for growth at a reasonable price. Whatever your philosophy is, it's also important to consider where large-cap stocks are in the current market cycle. Small caps have tended to outperform their larger brethren in recent years. Eventually, everything reverts to the mean. While it's important to determine what constitutes a reasonable price to pay for a stock, it's equally important to understand whether large caps, as a whole, are cheap, fairly priced or expensive. Once you've answered this question, simply identify those stocks that meet your criteria.
The Bottom Line
Often it's not so much a question of choosing one market cap over another, but, rather, how much to allocate to each. Investing in large-cap stocks is an excellent way to provide a core foundation upon which you build the remainder of your portfolio.
http://beta.finance.yahoo.com/news/valuing-large-cap-stocks-134535203.html
By Will Ashworth | Investopedia – Tue, Oct 25, 2011 8:57 AM EDT
Investors seeking to preserve capital in volatile markets might want to consider large-cap stocks, those companies with market capitalizations greater than $10 billion. Doing business globally, they tend to pay dividends, have solid balance sheets and exceptionally large amounts of cash. While perceived to be slow growing, many have the financial might to take advantage of business opportunities that smaller companies just can't. Whether you invest in individual stocks, mutual funds or ETFs, large caps ought to represent a portion of your equity investments.
Why It Should Be Included In Your Portfolio
Conventional wisdom suggests that dividends account for approximately half a stock's total return. Some believe this number is as high as 90%. Clearly, whatever the percentage, dividends are an important weapon in any company's arsenal for rewarding shareholders. Because large-cap companies tend to possess greater free cash flow, their ability to increase the dividend payment each year is, also, greater. A rising dividend, combined with a multinational business possessing pricing power, which is the ability to raise prices routinely, provides investors with a certain amount of inflation protection that many mid- and small-cap stocks don't have. With operations in various parts of the world, large caps are able to go where the growth is, which is why you find many operating in the emerging markets of Brazil, Russia, India and China. In addition to geographic diversification, large caps provide investors with currency diversification. As the U.S. dollar weakens, companies are able to sell their products more competitively overseas. Smaller businesses are less likely to benefit because a majority of their revenue, often, is domestic in nature. Lastly, and most importantly, many large caps possess solid balance sheets with little debt and large amounts of cash. For many professional advisors, they are the core holdings in any portfolio.
Attributes of a Winning Large Cap Profitability
Whatever the size of company, investors averse to risk should only consider those businesses making money now, and most probably in the future. While reported earnings is the most common way to assess the profitability of a company, there are other tools available to investors such as return on equity and return on capital employed. Whatever investors use, to assess profitability, it's even more important to determine the sustainability of those profits because that is what drives stock prices higher. Some guesswork is required. However, it's not as scary as you might think. Many large-cap stocks have been public companies for a significant number of years, possessing a track record of increasing profits. The goal, here, isn't necessarily to find a business with an unblemished profit record, but one that is consistent enough that you feel comfortable making a long-term investment. In the end, the best large-caps are, generally, those with good business models and significant competitive advantages over their competitors. Warren Buffett, one of the world's greatest investors, believes the purchase of stocks be made as if you were buying the entire company, not just a piece of paper. While the numbers are important, it usually comes down to quality.
Financial Health
Like any household, a large-cap's financial health is the key to success. It's not enough to be profitable, it should also own more than it owes and be bringing in more cash than it sends out the door. If it isn't doing this, profitability is fleeting. The balance sheet, which details a company's assets, liabilities and shareholder equity, is the first place investors look for an indication of financial health. The capital it employs, to grow its business, comes at a cost. Generally, debt tends to be less expensive than equity because the interest payments are tax deductible. As a result, large caps often have a lower cost of capital, due to easily obtained financing, providing an advantage over smaller companies. While debt can be advantageous to issuing stock, it can also put a business into bankruptcy if its debt gets out of control. Many investors look for a margin of safety, such as total debt less than shareholder equity. In addition to a company's capital structure, investors should concern themselves with free cash flow, the amount of cash generated after covering operational costs and capital expenditures. A good way to judge this is by calculating free cash flow yield. Similar to the earnings yield (inverse of P/E ratio), it measures free cash flow as a percentage of market capitalization. When comparing companies from different industries, it's wise to replace market cap with enterprise value, which takes into account differing capital structures. While there are definite exceptions, the strongest businesses tend to be those with high free cash flow and increasing shareholder equity.
Dividend Growth
Mentioned previously, dividends are an important component of a stock's total return. That goes double for large caps. Standard & Poor's has an exclusive club it calls the Dividend Aristocrats, a small group of companies that are part of the S&P 500 and have increased dividends for 25 consecutive years. Most of the businesses on the annual list are large caps. Interestingly, the top 10 companies on the S&P 500, all large caps, have historically accounted for half the total cash on the balance sheets of all 500 companies. Since cash is a vital component when paying dividends, investing in any one of those 10, while not a guarantee, is a good bet for obtaining annual dividends on a long-term basis. Furthermore, evidence suggests that companies that payout a greater portion of their earnings, in the form of dividends, end up generating higher earnings, which in turn generates even greater dividends. When evaluating large caps, it's advisable to seek out those companies whose dividends are large and getting larger. Growth is the key.
Reasonable Price
Every investor's definition of "reasonable" is different. Value investors tend to want to pay significantly less than a stock's intrinsic value. Growth investors will pay more than that in the belief that earnings will grow faster than average, creating a new, much higher intrinsic value. Those in the middle are "GARP" investors because they look for growth at a reasonable price. Whatever your philosophy is, it's also important to consider where large-cap stocks are in the current market cycle. Small caps have tended to outperform their larger brethren in recent years. Eventually, everything reverts to the mean. While it's important to determine what constitutes a reasonable price to pay for a stock, it's equally important to understand whether large caps, as a whole, are cheap, fairly priced or expensive. Once you've answered this question, simply identify those stocks that meet your criteria.
The Bottom Line
Often it's not so much a question of choosing one market cap over another, but, rather, how much to allocate to each. Investing in large-cap stocks is an excellent way to provide a core foundation upon which you build the remainder of your portfolio.
http://beta.finance.yahoo.com/news/valuing-large-cap-stocks-134535203.html
Europe crafts debt deal as banks take Greek losses
Note : HangSeng up (2.25%) 19,496.27 +429.73,(US Future at 144 uptrend at 15.21PM dd 27-10-11(Malaysian Time)bullish at the moment - DOW UP (1.39%) 162.42 (11,869.04)
BRUSSELS (AP) -- European leaders clinched a deal Thursday they hope will mark a turning point in their two-year debt crisis, agreeing after a night of tense negotiations to have banks take bigger losses on Greece's debts and to boost the region's weapons against the market turmoil.
After months of dawdling and half-baked solutions, the leaders had been under immense pressure to finalize their plan to prevent the crisis from pushing Europe and much of the developed world back into recession and to protect their currency union from unraveling.
The euro surged on the news of the full plan -- an early sign that investors may welcome it.
"We have reached an agreement, which I believe lets us give a credible and ambitious and overall response to the Greek crisis," French President Nicolas Sarkozy told reporters after the meeting broke Thursday morning. "Because of the complexity of the issues at stake, it took us a full night. But the results will be a source of huge relief worldwide."
The strategy unveiled after 10 hours of negotiations hit upon the three points expected for weeks. These include a significant reduction of Greece's debts, a shoring up of the continent's banks, partially so they could sustain losses on Greek bonds, and a reinforcement of a bailout fund so it can serve as a euro1 trillion ($1.39 trillion) firewall to prevent larger economies like Italy and Spain from being dragged into the crisis.
After several missed opportunities, the hashing out of a plan was a success for the eurozone, but the strategy's effectiveness will depend on the details, which will have to be finalized in the coming days and weeks.
"Will the sound of 1 trillion euros do the trick and 'wow' the markets or will the markets perceive this as smoke and mirrors?" Heather Conley, director of Europe program for the Center for Strategic and International Studies, asked before the official announcement of the plan. "If the past two years has told us anything, it never appears to be sufficient."
The most difficult piece of the puzzle proved to be Greece, whose debts, the leaders vowed, would fall to 120 percent of its GDP by 2020. Under current conditions, they would have ballooned to 180 percent.
To achieve the reduction, private creditors will be asked to accept 50 percent losses on the bonds they hold. The Institute of International Finance, which has been negotiating on behalf of the banks, said in a statement that it was committed to working out an agreement based on that "haircut," but the challenge now will be to ensure that all private bondholders fall in line.
It said the 50 percent cut equals a contribution of euro100 billion ($139 billion) to a second rescue for Greece, although the eurozone promised to spend some euro30 billion ($42 billion) on guaranteeing the remaining value of the new bonds.
The full program is expected to be finalized by early December and investors are supposed to swap their bonds in January, at which point Greece is likely to become the first euro country ever to be rated at default on its debt.
"We can claim that a new day has come for Greece, and not only for Greece but also for Europe," said Greek Prime Minister George Papandreou, whose country's troubles touched off the crisis two years ago. "Let's hope the worst is over."
Since May 2010, Greece has been surviving on rescue loans worth euro110 billion ($150 billion) from the 17 countries that use the euro and the International Monetary Fund since it can't afford to borrow money directly from markets.
In July, those creditors agreed to extend another euro109 billion -- but that plan was widely panned as not doing enough to right Greece's finances and wean it from the bailout.
Now, in addition to euro30 billion in bond guarantees, the eurozone leaders and IMF said they will give Greece euro100 billion in new loans.
With the banks being asked to shoulder more of the burden, though, there were concerns they needed more money in their rainy-day funds to cushion their losses. So European leaders have asked them to raise euro106 billion ($148 billion) by June.
The last piece in the complicated plan was to increase the firepower of the continent's bailout fund to ensure that other countries -- like Italy and Spain -- don't get dragged into the crisis. The third- and fourth-largest economies of the eurozone are too large to bail out.
To that end, the euro440 billion ($610 billion) European Financial Stability Facility will be used to insure part of the potential losses on the debt of wobbly eurozone countries like Italy and Spain, rendering its firepower equivalent to around euro1 trillion ($1.39 trillion).
That should have the effect of making those countries' bonds more attractive investments and thus lowering borrowing costs for their governments.
"These are exceptional measures for exceptional times. Europe must never find itself in this situation again," European Commission President Jose Manuel Barroso said after the meetings.
In addition to acting as a direct insurer of bond issues, the EFSF insurance scheme is also supposed to entice big institutional investors to contribute to a special fund that could be used to buy government bonds but also to help states recapitalize weak banks.
Such outside help may be necessary for Italy and Spain, whose banks were facing some of the biggest capital shortfalls.
Using the insurance promise, the eurozone also hopes to attract big institutional investors from outside the eurozone, such as sovereign wealth funds, to contribute to a separate fund that would back up the EFSF.
Sarkozy was due to speak to Chinese President Hu Jintao later Thursday. On Friday, the head of the EFSF Klaus Regling will travel to China, which has huge cash reserves, to detail the insurance set-up.
DiLorenzo contributed from Paris. Juergen Baetz and Geir Moulson in Berlin, and Raf Casert, Don Melvin and Robert Wielaard in Brussels, and Sylvie Corbet in Paris also contributed.
http://finance.yahoo.com/news/Europe-crafts-debt-deal-as-apf-249701896.html?x=0&sec=topStories&pos=main&asset=&ccode=""
BRUSSELS (AP) -- European leaders clinched a deal Thursday they hope will mark a turning point in their two-year debt crisis, agreeing after a night of tense negotiations to have banks take bigger losses on Greece's debts and to boost the region's weapons against the market turmoil.
After months of dawdling and half-baked solutions, the leaders had been under immense pressure to finalize their plan to prevent the crisis from pushing Europe and much of the developed world back into recession and to protect their currency union from unraveling.
The euro surged on the news of the full plan -- an early sign that investors may welcome it.
"We have reached an agreement, which I believe lets us give a credible and ambitious and overall response to the Greek crisis," French President Nicolas Sarkozy told reporters after the meeting broke Thursday morning. "Because of the complexity of the issues at stake, it took us a full night. But the results will be a source of huge relief worldwide."
The strategy unveiled after 10 hours of negotiations hit upon the three points expected for weeks. These include a significant reduction of Greece's debts, a shoring up of the continent's banks, partially so they could sustain losses on Greek bonds, and a reinforcement of a bailout fund so it can serve as a euro1 trillion ($1.39 trillion) firewall to prevent larger economies like Italy and Spain from being dragged into the crisis.
After several missed opportunities, the hashing out of a plan was a success for the eurozone, but the strategy's effectiveness will depend on the details, which will have to be finalized in the coming days and weeks.
"Will the sound of 1 trillion euros do the trick and 'wow' the markets or will the markets perceive this as smoke and mirrors?" Heather Conley, director of Europe program for the Center for Strategic and International Studies, asked before the official announcement of the plan. "If the past two years has told us anything, it never appears to be sufficient."
The most difficult piece of the puzzle proved to be Greece, whose debts, the leaders vowed, would fall to 120 percent of its GDP by 2020. Under current conditions, they would have ballooned to 180 percent.
To achieve the reduction, private creditors will be asked to accept 50 percent losses on the bonds they hold. The Institute of International Finance, which has been negotiating on behalf of the banks, said in a statement that it was committed to working out an agreement based on that "haircut," but the challenge now will be to ensure that all private bondholders fall in line.
It said the 50 percent cut equals a contribution of euro100 billion ($139 billion) to a second rescue for Greece, although the eurozone promised to spend some euro30 billion ($42 billion) on guaranteeing the remaining value of the new bonds.
The full program is expected to be finalized by early December and investors are supposed to swap their bonds in January, at which point Greece is likely to become the first euro country ever to be rated at default on its debt.
"We can claim that a new day has come for Greece, and not only for Greece but also for Europe," said Greek Prime Minister George Papandreou, whose country's troubles touched off the crisis two years ago. "Let's hope the worst is over."
Since May 2010, Greece has been surviving on rescue loans worth euro110 billion ($150 billion) from the 17 countries that use the euro and the International Monetary Fund since it can't afford to borrow money directly from markets.
In July, those creditors agreed to extend another euro109 billion -- but that plan was widely panned as not doing enough to right Greece's finances and wean it from the bailout.
Now, in addition to euro30 billion in bond guarantees, the eurozone leaders and IMF said they will give Greece euro100 billion in new loans.
With the banks being asked to shoulder more of the burden, though, there were concerns they needed more money in their rainy-day funds to cushion their losses. So European leaders have asked them to raise euro106 billion ($148 billion) by June.
The last piece in the complicated plan was to increase the firepower of the continent's bailout fund to ensure that other countries -- like Italy and Spain -- don't get dragged into the crisis. The third- and fourth-largest economies of the eurozone are too large to bail out.
To that end, the euro440 billion ($610 billion) European Financial Stability Facility will be used to insure part of the potential losses on the debt of wobbly eurozone countries like Italy and Spain, rendering its firepower equivalent to around euro1 trillion ($1.39 trillion).
That should have the effect of making those countries' bonds more attractive investments and thus lowering borrowing costs for their governments.
"These are exceptional measures for exceptional times. Europe must never find itself in this situation again," European Commission President Jose Manuel Barroso said after the meetings.
In addition to acting as a direct insurer of bond issues, the EFSF insurance scheme is also supposed to entice big institutional investors to contribute to a special fund that could be used to buy government bonds but also to help states recapitalize weak banks.
Such outside help may be necessary for Italy and Spain, whose banks were facing some of the biggest capital shortfalls.
Using the insurance promise, the eurozone also hopes to attract big institutional investors from outside the eurozone, such as sovereign wealth funds, to contribute to a separate fund that would back up the EFSF.
Sarkozy was due to speak to Chinese President Hu Jintao later Thursday. On Friday, the head of the EFSF Klaus Regling will travel to China, which has huge cash reserves, to detail the insurance set-up.
DiLorenzo contributed from Paris. Juergen Baetz and Geir Moulson in Berlin, and Raf Casert, Don Melvin and Robert Wielaard in Brussels, and Sylvie Corbet in Paris also contributed.
http://finance.yahoo.com/news/Europe-crafts-debt-deal-as-apf-249701896.html?x=0&sec=topStories&pos=main&asset=&ccode=""
Stocks end higher on reports of help for Europe
Stocks turn positive in afternoon trading after reports that China will buy European bonds ...
http://finance.yahoo.com/news/Stocks-end-higher-on-reports-apf-967181251.html?x=0&sec=topStories&pos=main&asset=&ccode="
http://finance.yahoo.com/news/Stocks-end-higher-on-reports-apf-967181251.html?x=0&sec=topStories&pos=main&asset=&ccode="
Monday, October 24, 2011
Germany sees EFSF above 1 trillion euros: report
By MarketWatch
FRANKFURT (MarketWatch) -- Germany expects the euro zone's bailout fund to see its firepower leveraged to more than 1 trillion euros ($1.39 trillion), the Associated Press reported Monday, citing German opposition leaders who attended a briefing with Chancellor Angela Merkel. The measure comes as the 17-member euro zone attempts to find a way to boost the 440 billion euro European Financial Stability Facility's lending ability in order to help prevent the region's debt crisis from overwhelming Italy and Spain. Frank-Walter Steinmeier, parliamentary leader of the opposition Social Democrats, said leverage could be achieved through a combination of measures, including having the fund insure a portion of possible losses or involving the participation of entities such as the International Monetary Fund ...
FRANKFURT (MarketWatch) -- Germany expects the euro zone's bailout fund to see its firepower leveraged to more than 1 trillion euros ($1.39 trillion), the Associated Press reported Monday, citing German opposition leaders who attended a briefing with Chancellor Angela Merkel. The measure comes as the 17-member euro zone attempts to find a way to boost the 440 billion euro European Financial Stability Facility's lending ability in order to help prevent the region's debt crisis from overwhelming Italy and Spain. Frank-Walter Steinmeier, parliamentary leader of the opposition Social Democrats, said leverage could be achieved through a combination of measures, including having the fund insure a portion of possible losses or involving the participation of entities such as the International Monetary Fund ...
Sunday, October 23, 2011
It's Your Money, Take Control !
BY ROBERT DEEL
Taking control in the management of your money in today’s world is perhaps one of the most important financial imperatives facing us all. This checklist should serve you well, and possibly keep you from becoming a victim of the market and false media information.
In my twenty-one years of trading experience I have found these rules to be an invaluable way of keeping me focused on the trade. Deel’s 15 Rules of Investology
1. TRADE WITH A PLAN
Set objectives before you ever buy. Define all outcomes—not only what
you will do when it goes right, but what you will do if you are wrong.
Determine the amount of capital you are willing to lose and conversely,
define when you will take profits. Letting the market take away your
profits by holding on to a losing trade is not a good strategy. Write out
a trading plan on paper and follow it. Do not become a causality of
emotionally involved buy or selling. Trade with a plan.
2. SCREEN YOUR TRADES
To select trading vehicles you must have a predefined method. Select a
method based on price momentum and trend. Don’t guess what the
future is going to be, trade the current trend direction. Your method must
consider your individual time frame and risk tolerance. Always address
liquidity, sector rotation, and technical factors when screening stocks.
3. ALWAYS LOOK AT A CHART
Never buy a stock without looking at a chart of the stock first. Look at
the one-year trading range. Ascertain where you currently are in the
trend and what that trend is. Also determine if the chart reflects a stock
split. Never trade against the trend. Buying and selling decisions are
technical in nature. Fundamentals will never tell when to buy or sell a
stock. Always look at a chart for entry and exit timing decisions.
4. STAY WITH A TREND
Your probabilities of success are far greater if you stay with a definable
market trend. Statistically, these trends provide better profit potential
with a lower amount of risk. A good rule of thumb is to watch a 50-day
exponential moving average of the close. This moving average represents
the intermediate trend of a stock. A 12-day exponential moving average
represents short-term trend. The use of these two moving averages
should yield excellent results in keeping you in the trend. If you perceive
the trend beginning to change, act accordingly by taking profits or plac-
ing stops to protect your capital and locking in a profit.
5. USE MONEY MANAGEMENT TECHNIQUES
Determine the probable dollar losses of your trading plan or investment
style based on your trading record for the current year. Then devise a
way to generate income through passive sources.
Cutting a loss quickly is the best money management you can have.
Too many times traders fall in love with stock, holding on as the stock
begins to decline. Never use a hedging strategy, such as options, to
justify holding on to a losing position.
The use of money market, bond, and stock dividend income to off-
set losses in your trading portfolio is an excellent technique.
Covered call options may be an appropriate way to generate income
for your portfolio to offset losses. Be careful here because you can write
covered calls into oblivion. If the stock is going against you, sell it.
If you are going to hold a trade overnight, never risk more than 3%
of your available capital. If you are going to day trade, an excellent rule
of thumb is to only risk 1% of your capital in any one trade.
6. BUY AND SELL ON CONFIDENCE
Many times you won’t feel quite right about a buy or sell decision.
If this feeling persists after you have done all your research and you have
followed the rules to this point, don’t take the trade. Too many times
individuals try to rationalize a decision. Don’t try to find a good reason
for making a bad decision. Your decision must be a confident one.
7. BUY ONLY LIQUID STOCKS AND LIQUID MARKETS
Stay with major markets and stocks with millions of shares in the float.
Make sure the average trading volume is enough for you to sell all of
your position on any given day. By following this rule you should be
assured of a reasonably good execution of your trade. Don’t buy stocks
trading at the lower end of the price range. Generally speaking, do not
buy stocks that don’t have good trend characteristics or predictability.
True professional traders avoid them and so should you.
8. DON’T BUY OR SELL ON HOT TIPS
More money has been lost on hot tips than is in the U.S. Treasury. While
this is an exaggeration, it does make the point clear. If someone tells you
about an investment or trade, research the recommendation before you
put your money into it. Most novice investors and traders fall victim to
tips every day. Please don’t fall for the story no matter how good it
sounds. Always use technical analysis to make your buy and sell deci-
sions, and buy or sell based on facts.
9. DO NOT DOLLAR COST AVERAGE
If your timing decision was wrong on an aggressive stock, don’t make
the problem worse by trying to buy a stock that is going lower. The prob-
ability is that you will only compound the loss. I call this technique
disaster cost averaging. Don’t buy a stock until the trend is evident.
Dollar cost averaging is good for your broker, but if you continue this
technique, the ‘broker’ you will become.
10. NO ONE WINS 100 % OF THE TIME
Many people enter the stock market focused only on the profits and do
not consider the losses. If you think for one minute you are going to
win one hundred percent of the time, you are wrong. Losing is just part
of the cost of doing business. Your goal is to make sure you control the
risk and not blindly put your money at risk, like a buy and hold
investor. You must come to the realization that you will never learn how
to win until you first learn how to lose. How you handle loss psycholog-
ically is truly the difference between an amateur and a professional.
Professional traders don’t react the same way as an amateur to loss.
When a professional trader loses, he or she simply says next.They don’t
take the loss personally.
11. ALWAYS USE STOPS
The proper use of stops will protect profits and limit your losses. Look at
stops as profit and loss insurance. When you enter a trade, you place a
stop to limit the loss in case the trade goes against you. When the trade
becomes profitable, you use them to lock in a profit.
Anyone who would argue against risk control by discouraging the
use of stops is a fool indeed. In effect they are saying you should put
your capital at unlimited risk. Does this make any sense to you? Of
course not, but that is exactly what a buy and hold investor does all the
time. Most investors do not use stops because they are afraid of being
stopped out. This is a psychological problem of not wanting to be
wrong, or having to admit to yourself you lost on a trade. It certainly
isn’t based on logic or strategy. Remember, always use stops if you are
carrying a trade over night.
12. I DON’T HAVE TIME
Make the time or suffer the consequences. If you are too busy to man-
age your money, maybe you’re too busy. Take a look at your portfolio
and if you lost half of your money without knowing it, you can congratu-
late yourself on being too busy. Was it worth it? Probably not. It doesn’t
make much sense to work yourself to death and have nothing to show
for it. You must take time to educate yourself and take control of your
future.
13. BE PATIENT AND LET TIME BE YOUR FRIEND
Making money safely takes time. The only time to hurry is when you’re in
trouble. Remember, “Everyday is not a trading day”. Only trade when
the sector, market, and the correlating stocks are in trend. Just because
you want to trade doesn’t mean you should. Only trade when the proba-
bilities are in your favor, and let the market come to you.
The market is going to do what it is going to do and what you want is
irrelevant. Don’t become addicted to the action. You are not an action
junky. You are a high probability trader. Profits are made the old fash-
ioned way, one trade at a time. Be patient and make time your friend
instead of your enemy.
14. LEARN FROM YOUR MISTAKES
The most successful traders and aggressive investors learn from their
mistakes. Many even go as far as writing down what went wrong and
analyzing the problem. Mistakes can be costly, so use them as learning
experiences and don’t make the same mistake twice.
Unfortunately a large number of people are doomed to make the
same mistakes over and over again. This behavior is usually a sign of
emotional reactions to price momentum and the absence of any well
thought out strategy. My father once told me that the best education
was to learn from the mistakes of others. Most people fail in the market
not because of technology or a lack of information, but because of
emotional reactions, and never learning from their mistakes and the
mistakes of others.
15. FOLLOW THE RULES
Some people are doomed to make the same mistakes over and over
again. Using this set of 16 trading rules, which has been compiled
from over 20 years of experience, should keep you from making many
common mistakes.
If you follow Deel’s Rules of Investology, you have a much better
chance of success than someone who doesn’t. Always remember, there
is never any guarantee of success. But if you are properly educated and
develop the correct mindset, you have a major advantage. Don’t
become one of the sheep led to the slaughter by media nonsense.
You must make your own fortune and control your financial destiny.
Always remember, it’s your money. Take control…and follow the rules
Therefore, you are The Investor, Trader or Gambler ?!
Taking control in the management of your money in today’s world is perhaps one of the most important financial imperatives facing us all. This checklist should serve you well, and possibly keep you from becoming a victim of the market and false media information.
In my twenty-one years of trading experience I have found these rules to be an invaluable way of keeping me focused on the trade. Deel’s 15 Rules of Investology
1. TRADE WITH A PLAN
Set objectives before you ever buy. Define all outcomes—not only what
you will do when it goes right, but what you will do if you are wrong.
Determine the amount of capital you are willing to lose and conversely,
define when you will take profits. Letting the market take away your
profits by holding on to a losing trade is not a good strategy. Write out
a trading plan on paper and follow it. Do not become a causality of
emotionally involved buy or selling. Trade with a plan.
2. SCREEN YOUR TRADES
To select trading vehicles you must have a predefined method. Select a
method based on price momentum and trend. Don’t guess what the
future is going to be, trade the current trend direction. Your method must
consider your individual time frame and risk tolerance. Always address
liquidity, sector rotation, and technical factors when screening stocks.
3. ALWAYS LOOK AT A CHART
Never buy a stock without looking at a chart of the stock first. Look at
the one-year trading range. Ascertain where you currently are in the
trend and what that trend is. Also determine if the chart reflects a stock
split. Never trade against the trend. Buying and selling decisions are
technical in nature. Fundamentals will never tell when to buy or sell a
stock. Always look at a chart for entry and exit timing decisions.
4. STAY WITH A TREND
Your probabilities of success are far greater if you stay with a definable
market trend. Statistically, these trends provide better profit potential
with a lower amount of risk. A good rule of thumb is to watch a 50-day
exponential moving average of the close. This moving average represents
the intermediate trend of a stock. A 12-day exponential moving average
represents short-term trend. The use of these two moving averages
should yield excellent results in keeping you in the trend. If you perceive
the trend beginning to change, act accordingly by taking profits or plac-
ing stops to protect your capital and locking in a profit.
5. USE MONEY MANAGEMENT TECHNIQUES
Determine the probable dollar losses of your trading plan or investment
style based on your trading record for the current year. Then devise a
way to generate income through passive sources.
Cutting a loss quickly is the best money management you can have.
Too many times traders fall in love with stock, holding on as the stock
begins to decline. Never use a hedging strategy, such as options, to
justify holding on to a losing position.
The use of money market, bond, and stock dividend income to off-
set losses in your trading portfolio is an excellent technique.
Covered call options may be an appropriate way to generate income
for your portfolio to offset losses. Be careful here because you can write
covered calls into oblivion. If the stock is going against you, sell it.
If you are going to hold a trade overnight, never risk more than 3%
of your available capital. If you are going to day trade, an excellent rule
of thumb is to only risk 1% of your capital in any one trade.
6. BUY AND SELL ON CONFIDENCE
Many times you won’t feel quite right about a buy or sell decision.
If this feeling persists after you have done all your research and you have
followed the rules to this point, don’t take the trade. Too many times
individuals try to rationalize a decision. Don’t try to find a good reason
for making a bad decision. Your decision must be a confident one.
7. BUY ONLY LIQUID STOCKS AND LIQUID MARKETS
Stay with major markets and stocks with millions of shares in the float.
Make sure the average trading volume is enough for you to sell all of
your position on any given day. By following this rule you should be
assured of a reasonably good execution of your trade. Don’t buy stocks
trading at the lower end of the price range. Generally speaking, do not
buy stocks that don’t have good trend characteristics or predictability.
True professional traders avoid them and so should you.
8. DON’T BUY OR SELL ON HOT TIPS
More money has been lost on hot tips than is in the U.S. Treasury. While
this is an exaggeration, it does make the point clear. If someone tells you
about an investment or trade, research the recommendation before you
put your money into it. Most novice investors and traders fall victim to
tips every day. Please don’t fall for the story no matter how good it
sounds. Always use technical analysis to make your buy and sell deci-
sions, and buy or sell based on facts.
9. DO NOT DOLLAR COST AVERAGE
If your timing decision was wrong on an aggressive stock, don’t make
the problem worse by trying to buy a stock that is going lower. The prob-
ability is that you will only compound the loss. I call this technique
disaster cost averaging. Don’t buy a stock until the trend is evident.
Dollar cost averaging is good for your broker, but if you continue this
technique, the ‘broker’ you will become.
10. NO ONE WINS 100 % OF THE TIME
Many people enter the stock market focused only on the profits and do
not consider the losses. If you think for one minute you are going to
win one hundred percent of the time, you are wrong. Losing is just part
of the cost of doing business. Your goal is to make sure you control the
risk and not blindly put your money at risk, like a buy and hold
investor. You must come to the realization that you will never learn how
to win until you first learn how to lose. How you handle loss psycholog-
ically is truly the difference between an amateur and a professional.
Professional traders don’t react the same way as an amateur to loss.
When a professional trader loses, he or she simply says next.They don’t
take the loss personally.
11. ALWAYS USE STOPS
The proper use of stops will protect profits and limit your losses. Look at
stops as profit and loss insurance. When you enter a trade, you place a
stop to limit the loss in case the trade goes against you. When the trade
becomes profitable, you use them to lock in a profit.
Anyone who would argue against risk control by discouraging the
use of stops is a fool indeed. In effect they are saying you should put
your capital at unlimited risk. Does this make any sense to you? Of
course not, but that is exactly what a buy and hold investor does all the
time. Most investors do not use stops because they are afraid of being
stopped out. This is a psychological problem of not wanting to be
wrong, or having to admit to yourself you lost on a trade. It certainly
isn’t based on logic or strategy. Remember, always use stops if you are
carrying a trade over night.
12. I DON’T HAVE TIME
Make the time or suffer the consequences. If you are too busy to man-
age your money, maybe you’re too busy. Take a look at your portfolio
and if you lost half of your money without knowing it, you can congratu-
late yourself on being too busy. Was it worth it? Probably not. It doesn’t
make much sense to work yourself to death and have nothing to show
for it. You must take time to educate yourself and take control of your
future.
13. BE PATIENT AND LET TIME BE YOUR FRIEND
Making money safely takes time. The only time to hurry is when you’re in
trouble. Remember, “Everyday is not a trading day”. Only trade when
the sector, market, and the correlating stocks are in trend. Just because
you want to trade doesn’t mean you should. Only trade when the proba-
bilities are in your favor, and let the market come to you.
The market is going to do what it is going to do and what you want is
irrelevant. Don’t become addicted to the action. You are not an action
junky. You are a high probability trader. Profits are made the old fash-
ioned way, one trade at a time. Be patient and make time your friend
instead of your enemy.
14. LEARN FROM YOUR MISTAKES
The most successful traders and aggressive investors learn from their
mistakes. Many even go as far as writing down what went wrong and
analyzing the problem. Mistakes can be costly, so use them as learning
experiences and don’t make the same mistake twice.
Unfortunately a large number of people are doomed to make the
same mistakes over and over again. This behavior is usually a sign of
emotional reactions to price momentum and the absence of any well
thought out strategy. My father once told me that the best education
was to learn from the mistakes of others. Most people fail in the market
not because of technology or a lack of information, but because of
emotional reactions, and never learning from their mistakes and the
mistakes of others.
15. FOLLOW THE RULES
Some people are doomed to make the same mistakes over and over
again. Using this set of 16 trading rules, which has been compiled
from over 20 years of experience, should keep you from making many
common mistakes.
If you follow Deel’s Rules of Investology, you have a much better
chance of success than someone who doesn’t. Always remember, there
is never any guarantee of success. But if you are properly educated and
develop the correct mindset, you have a major advantage. Don’t
become one of the sheep led to the slaughter by media nonsense.
You must make your own fortune and control your financial destiny.
Always remember, it’s your money. Take control…and follow the rules
Therefore, you are The Investor, Trader or Gambler ?!
Sunday, October 16, 2011
So ...What is Next !
Losing the Battle ...Winning the War !!!
Times are changing, so are the moods. The global economic situation today represents a giant python and all and sundry are just mere spectators waiting to see where it turns next and who it gobbles up as its next victim ...
So...What is Next !
Ayer ...http://youtu.be/ak4YJjkdFRY
Times are changing, so are the moods. The global economic situation today represents a giant python and all and sundry are just mere spectators waiting to see where it turns next and who it gobbles up as its next victim ...
So...What is Next !
Ayer ...http://youtu.be/ak4YJjkdFRY
Cheeky Quotes ...
Cheeky Quotes ...
I went to school, you know. I was in grammar school. Once we were taking a test. I was copying this other kid's paper, and I guess the teacher heard my Xerox machine. And she said, "Emo, am I stupid or were you cheating?" I said, "Ah, yes and no."
Emo Philips
I went to school, you know. I was in grammar school. Once we were taking a test. I was copying this other kid's paper, and I guess the teacher heard my Xerox machine. And she said, "Emo, am I stupid or were you cheating?" I said, "Ah, yes and no."
Emo Philips
Saturday, October 8, 2011
Ongoing Transformation ?
Focus on people in drive towards high income economy !
Budget 2012 highlights
http://thestar.com.my/news/story.asp?file=/2011/10/7/nation/20111007162147&sec=nation
Budget 2012 highlights
http://thestar.com.my/news/story.asp?file=/2011/10/7/nation/20111007162147&sec=nation
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