Markets go UP & markets go DOWN......
Down is the case right now......
So...what do you do......
Do some homework.....
Why ????
Because ...whenever your comfort level comes back...you will NOT be shooting in darkness....
Knowledge about stocks Fundamental (70%) & technical (30%)health ...gives you the " CONFIDENCE which is absolutely CRITICAL until august 0f 08"
You can always SPOT a growing company by analyzing Sales Growth & EPS Growth.....How can you tell if it IS the-fastest growing company on the face of wall street......????
Check the Year Over Year % growth rate for both Sales & EPS.......
This information is NOT hidden somewhere.........
All the FA is available from Yahoo Finance & must be cross-checked with MSN Moneycentral for ACCURACY ????
Yes....Yahoo sometimes gives "goofy numbers"..like sales & EPS in Chinese Yuan.....
Once you have identified the YOY growth rate.......
Then a final check in FA is PE ratio...sometimes it is a tell tale of things to come...MAY predict UPSWING or DOWNTREND ...depending on the DIRECTION of the markets.....
Then ...you can start checking TA which is the other 30% of research......
What is TA analysis......???
Is the stock trading above 50 or 200 DMA........????
What is the RSI range for the last 90 days...& where it is NOW in that range....
There are many other TA indicators which traders use.....like BB,Stochastics,5,10,20 DMA.....
But I leave those out...because they confuse the indicators.......and you end up ignoring some and using others for decision making.......
I know this is TOO much analysis......for some of you......
So you have a choice of NOT doing it & keep looking for trading IDEAS from IBD,IH,Dan Zanger or much used Message Boards.......
Trading results MAY be based on LUCK but is always BETTER if you are doing your own HOMEWORK.....
Homework is also CRITICAL in giving you CONFIDENCE & CONVICTION......which is NEEDED in this CRAZY markets we are IN NOW......
I have believed for a while now that Solar & Agriculture is the "hottest growth sector"...these are NOT CONCEPT with little sales & negative EPS........
Solar & Ag are having worldwide demand EXPLODING.....
They have Growing Sales & EPS.........
Ok..Ok...I know you want "the MEAT of my thesis"..........$$$$$$$
Here is the relative PE of Solar & Ag sectors for 2008..as of friday close !!!
Solar sector....
FSLR....87.94
SPWR...36.46
STP.....27.92
JASO...27.20
LDK.....20.49
CSIQ...12.45
SOLF...31.15
AKNS...<29>
Ag Sector....
POT...20.92
BG.....17.98
MOS..21.34
AGU..13.48
SEED..15.7
Some other stocks which are doing well have PE of :
MA.....25.27
AAPL...31.39
RIMM..26.36
CMED..31.35
Ok...final test NOW.......
If you have to own five stocks NOW...which ones will give you the CONFIDENCE & CONVICTION..to hang ON till end of 2009......
Not a bad thought process for a sunday morning.......
It is all about KNOWING what you have bought & WHY !!!!!
Yes....... I do own the following stocks :
MA,AGU,LDK,CSIQ & AKNS.....
BLOG does NOT give BUY or SELL.
Enjoy your long weekend with family & friends.......
Saleem
7 comments:
Saleem,
2009 seems like a long way off. The economy of India and China are booming and are expected to continue for the next 5 - 10 years. Companies with exposure in these markets should do well by late 2009. AG has had a good run up, but demand will continue as developing countries continue expansion. Short interest ratio has started to come down as of last week. Still high but turning the corner. That Philly Fed number of -20, has a certain smell to it, like organic fertilizer.
Standards
Hi Standards,
Markets makes the most move UP or DOWN in few days.....
Notice the recent SLUMP in 3 weeks..
Who would have predicted that....
Timing the markets are beyond my capabilities.....
I just work with exposure....my exposure is 50% LESS than 5 weeks ago.....
CSCO ,DELL,INTC,MSFT & SUNW...kept moving UP & UP & UP for 5 straight years doubling every 6 months....
History is a good teacher of sector GAINS $$$$
Saleem
THE ECONOMY
Sentiment holds up in January.
Michigan sentiment was expected to decline, albeit modestly, to 74.5 from 75.5 in December. Instead it jumped to 80.5. An improvement but no reversal of trend. Sentiment peaked to start 2007 and trended lower since. That makes the bump higher in January nice, but it also makes it somewhat of an aberration.
In December sentiment hit its low, down 22% from that last peak. That 74.5 reading just topped the post-Katrina levels (74.2). Feeling good indeed. On the positive side, despite home value declines, high energy prices, and credit worries, sentiment posted its first gain since they all merged just after the July reading of sentiment.
Though sentiment rose for the first time since July, the reading was still below the 81.8 LOW hit in the 2001 recession. That was a mild recession from the consumer standpoint. Recall how consumers continued to buy new homes, remodel, stock and furnish the homes, etc. in the wake of 9-11. Thus the consumer never slowed. It was business that folded the tent in that recession as investment capital died off after Greenspan drained the liquidity pool. Right now it is a confidence crisis in the financial markets that has not been adequately met over 5 months since it arose. That is taking its toll on the business side once again, and it is also starting to spread to the consumer by virtue of all of the added hype the consumer is bombarded with daily in addition to the high gasoline prices, higher food prices (thanks, ethanol), weaker jobs market, and weaker housing market.
And the rush for the stimulus begins.
Of course we have the President, Congress and even Mr. Bernanke all on the same page, agreeing that some short term economic stimulus is needed. Of course, whenever there is money to be given away, the interest groups rush the Hill and the parties start squabbling about who should get what. First the size: $150B, 1% of GDP, was the number set. That in itself was pretty disappointing, maybe worth 30 days of stimulus. Bold move. There are to be tax rebates, but the republicans want to give tax rebates to those actually paying taxes. Leading democrats are already mad because that supposedly leaves 50M people who are not going to benefit of the tax rebates because they don't pay taxes. Hey, if you want to give someone a tax rebate, it is a prerequisite they pay taxes. Otherwise call it a gift or redistribution of wealth or something more accurate. If they feel they will spend it in a way that will create investment in the US and jobs for them to work at, go for it. Just don't call it a tax rebate and otherwise play games with us.
The republicans can go along with 'rebates' if they can get something on the business side as well. And to be fair, many democrats are staunchly supporting tax incentives for business, particularly small businesses, as well. There is a problem, however. You can call a stimulus package a small business package or say they are included in it, but if it fails to provide stimulus, then is it really stimulus?
What is being pushed is accelerated depreciation and/or expensing. This would allow businesses to write off costs faster than usual, thus making buying big ticket items more alluring. Problem is, there are already liberal expensing provisions still in place from the 2003 Bush tax cuts. Businesses can expense $125K in capital goods per year. That is a pretty big nut of expenses for a small business. In other words, most small businesses won't hit that amount in a year. Thus if you bump the expensing up higher that really won't incent small businesses to buy more. If you can afford only $75K of goods, raising the expensing to $200K won't make you buy $125K more of goods. You still have to have the cash or the credit to buy. Oh yes, credit. It is still tight as a tick on a hound dog. That's out. Accelerated depreciation is also being discussed, but that has the same problem: if you can already expense it you don't need accelerated depreciation.
What gives businesses with no incentive to buy an incentive to buy? Art Cashin knows. Friday morning he said that if the President's proposals included tax credits that would get the market in a better mood. No mention of tax credits, and at $150B, the package did not excite investors. Why are credits best? Because if a business is worried about the future, it is not going to spend money just because it can get a deduction for expensing or depreciating something it buys. The pass through is not bad, it just typically doesn't provide enough compensation in tax savings versus the risk in parting with dear dollars in times of uncertainty. A tax credit, however, is a dollar for dollar benefit. If you spend $1,000 and get a $1,000 credit for it then you will spend the money. Why? Because if you don't spend the $1,000 you still have to spend it later when you pay Uncle Same your taxes. If you spend $1,000 on something you need for business you get something for your business and you reduce your taxes by that $1,000. Beats the heck out of just sending the $1,000 to the government never to be seen again.
Credits worked great in the early 1980's with the Regan tax cuts. I remember buying a new-fangled device known as a personal computer. It was unproven, had as much memory as a small lizard, and was as slow as a tree sloth, but that tax credit made it worth investing in. A lot of businesses did that. Boom. Start of the personal computing boom. We already have liberal expensing. We need tax credits to pry the money out of the wallets now. Call your senators and representatives and tell them to get small business on board and spending money again you need tax credits. With CEO sentiment at a 7 month low, this would boost the outlook because it would get billions of dollars moving back into buying capital goods and equipment.
SALEEM Good after noon my friend
wow thanks for the learning module that you posted.
I went to IBD and copied these AG
names so htat you could see the additional names that they show:
L S B Industries Inc LXU
Sociedad Quimica Y Mra A SQMA
C F Industries Holdings CF
Terra Nitrogen Co Lp TNH
Obviously I have a lot to think on and I will be listening to BNN tomorrow to follow the news.
It is 20 degeees in DC today - so I am inside
Peace
Madmax
Japan/China sell off; does not look good for Tuesday...!!
Curious to see what the TSX will do today in view of these numbers:
HANG SENG INDEX -5.49%
NIKKEI -3.86%
Saleem, just a thought about Doug's comment. I think he is right on. I own a carpet company in Illinois & if you don't have the $$$$ to invest for the tax credit @ $125k raising to $200k sur wont help business spending to spur growth but what about IRS letting employer's void the fed withholding from people's paycheck for a month or so to free up some additional $$$ which would surely be spent & make it's way back into the local economies to improve business thus profits, create tax revenue maybe slow unemployment hopefully. If a $800 rebate was given I would throw mine in the bank or give to charity whereas must lower income would blow it on booze beer & broads think Katrina handouts. Some might pay down credit card debt which the banks would get & they sure woul expense it away some how & Gov. gets no tax revenue.
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