Investment Strategies 02 (Jun 10 - Jun 13)

[winston]

Use this Simple Secret to Find the Best Stocks By Dan Ferris, Extreme Value
Thursday, September 16, 2010


One of the secrets to finding the very best investments is so simple and so obvious, most people don't pay attention to it…

If you'd known about this secret back in 1994, you could have bought Colgate-Palmolive for less than $10 a share and made more than seven times your money.

If you'd known about this secret back in early 1995, you could have bought Microsoft for $4 and made more than six times your money.

If you'd known about this secret back in 2003, just seven years ago, you could have bought McDonald's for $13 a share – and made more than six times your money, including a growing stream of dividends.

When you take into account the crashes of 2000-2002 and 2008-2009, it's especially amazing investors are up this much. What's their secret?

They look for companies with the highest sales in their industry.

I realize this sounds so obvious it's almost laughable. That's just because the real secrets to successful investing aren't complex, like they are in science. They're so simple, anyone can understand them. For example, "Buy low, sell high" is laughably obvious. It's just that almost nobody has the discipline to actually do it.

Selling the most is the definition of success in business. Microsoft Windows runs about 90% of the world's personal computers. Intel sells about 80% of the world's microprocessors. Campbell's sells more than 70% of the world's packaged soup. More than 60% of the world's credit and debit cards say "Visa" on them. Colgate-Palmolive sells more than 40% of the world's toothpaste. These are all excellent businesses with huge, consistent profits.

Once a business sells more than any other company in its industry, it becomes incredibly difficult to compete with. Imagine trying to build a home-improvement business today. You'd have to compete with Home Depot and Lowe's.

Imagine trying to build the world's most popular retailer. You'd have to try to compete with Wal-Mart. Wal-Mart has put dozens of grocery chains and mom-and-pop shops out of business. Imagine trying to make better french fries and sell more of them than McDonald's. Never gonna happen. There's no substitute for being No. 1.

Think about Amazon. It used the Internet to sell more books to more customers than any bricks-and-mortar bookstore chain ever could. Borders and Barnes & Noble are in terrible shape today because they failed to do that. They can't compete with Amazon, because Amazon will always be able to sell more books than them.

If you'd bought Amazon shares just four years ago, when they were less than $30 each, you'd have made nearly five times your money during a time when most stock market investors lost money. Even during the lowest point of the financial crisis, in March 2009, you'd never have lost money. Buying the company that sells the most was all you needed to know.

If you sell a product people like and want and figure out how to sell it to more customers than any other company, you will rule your industry. If investors are smart enough to know what you're doing, they can make a fortune owning your stock.

Whether it's burgers, bandages, or books, investors owe it to themselves to know about the company that sells the most. In most cases, if the stock is cheap enough, the top seller is the best investment you can make in that industry.

Not all the world's best businesses sell more products than their competitors, but many of them do. And these companies should be on your investment radar screen – if they're not already in your portfolio.


Source: Daily Wealth

[winston]

Buy when Full Moon to New Moon ?
Sell when New Moon to Full Moon ?
( And it was the First Day yesterday. Sell ! )


A Lunar Cycle Strategy
By Joseph Meth on September 8, 2010

During the Waxing to Full phase, the moon cooperated by taking a whopping 6.17% beating; during the Waning to New phase which just ended, the market climbed 4.47%.

http://www.dailymarkets.com/stock/2010/ ... -strategy/

This one has not been working well. Since the new moon, the markets have been moving up, not down as suggested by this author.

As the moon is considered Yin energy and since there's no growth when Yin is strong, maybe the theory should be to sell a week before the Full Moon and not be invested until one week after the Full Moon.

However, on going back through the data, the theory does not hold water either.

So no more need to waste time on this one

[kennynah]

winston wrote:Buy when Full Moon to New Moon ?

this brand abalone is ok lah...

[winston]

Ha Ha .. I dont really eat a lot of abalone so I dont know...

[winston]

The Next Great Bull Market Begins on This Date… By Dr. Steve Sjuggerud

"We face another seven years or so of bad times,"Robert Shiller said this week.

Through luck or skill, he's been pretty darn right about these things…

He perfectly timed his prediction of the dot-com bust in his 2000 book Irrational Exuberance. His book on the severe risks in the housing market came out in 2008.

Here in 2010, he says, "We face another seven years of bad times." Seven years would put us in 2017. Shiller's rough guess of seven years fits in with a big-picture idea I have. I call it the Generational Switch…

The key to making a fortune in stocks (and avoiding getting obliterated) is having a basic idea of when stocks might have a long stretch of gains… and when they might do nothing.

This isn't easy to do. But when you look at it over history, a simple pattern does emerge…

Each generation, the pattern switches.

One generation gets obliterated by the stock market, knocking everyone out of stocks. Then the next generation lives through a soaring stock market.

It's not clockwork… but it seems there's more at work than just chance. Take a look:

100 YEARS OF INVESTMENT GENERATIONS
Generation Commodities Stocks Years
1914-1930 -14% +159% 16
1930-1947 +244% -30% 17
1947-1965 -18% +503% 18
1965-1981 +123% +35%* 16
1981-1999 -9% +1,054% 18
1999-2016 +?% -?% 17

* Number would be negative if adjusted for inflation


If you had lived through the Great Depression – if you had lived through an entire generation where stocks lost money (17 years from 1930-1947) – would you ever consider buying stocks again?

Probably not. Yet that's when you should have bought… Stocks rose by more than 500% in the next generation, from 1947 to 1965.

Folks who invested heavily throughout the 1970s learned you could "never" make money in stocks. You needed real assets, like real estate and gold. Boy, were they wrong in the 1980s and 1990s. Gold fell in half from its 1980 peak to 1999.

If the last investment generation ended around 1999, and if the pattern holds, then we could see stocks do poorly for something like 17 years… or until roughly 2016. That's pretty close to what Shiller is saying.

The popular wisdom in 1999 was that you always want to be invested in stocks. Nobody wanted gold. But since the end of 1999, stocks (as measured by the S&P 500 index) are down, as I'm sure you're well aware. Meanwhile, commodities (as measured by the CRB Index) are up over 100%.

The last generation of stock investors is still holding some love for stocks. And they're still a bit afraid to commit to commodities like gold. But they will. History suggests they'll have given up on stocks and be fully loaded in commodities… by 2016.

Looking at the last time we were in a similar cycle, I have two important points to share with you…

1) The March 2009 bottom may be the ultimate bottom in stocks, not 2016. In the last great bear market ('65-'81), the ultimate bottom was in 1974, not '81. Investors spent the next few years giving up on stocks and looking to "the action" in commodities.

2) Commodity prices could go "parabolic" in the coming years. They did in the late 1970s, at the very end of their bull market. It's what happens at the end of great bull markets. It's just like stocks in the late 1990s – they "went parabolic" at the end of their bull market.

So there is some good news…

Commodities could go parabolic from here. And stocks may have already bottomed. So even though it could be years (until roughly 2016) before another rip-roaring bull market in stocks arrives, we may have seen the lows for this generation.

Or none of this could be true, of course… But it has worked roughly this way for the last 100 years.


www.dailywealth.com

[mrEngineer]

It's not clockwork… but it seems there's more at work than just chance. Take a look:

100 YEARS OF INVESTMENT GENERATIONS
Generation Commodities Stocks Years
1914-1930 -14% +159% 16
1930-1947 +244% -30% 17
1947-1965 -18% +503% 18
1965-1981 +123% +35%* 16
1981-1999 -9% +1,054% 18
1999-2016 +?% -?% 17

* Number would be negative if adjusted for inflation

1) The March 2009 bottom may be the ultimate bottom in stocks, not 2016. In the last great bear market ('65-'81), the ultimate bottom was in 1974, not '81. Investors spent the next few years giving up on stocks and looking to "the action" in commodities.

2) Commodity prices could go "parabolic" in the coming years. They did in the late 1970s, at the very end of their bull market. It's what happens at the end of great bull markets. It's just like stocks in the late 1990s – they "went parabolic" at the end of their bull market.

Oooh.. this is really interesting! I should hang this somewhere visible for daily reminder

Another point is probably the next super bull in 2016 will be from BRIC and not so much in US..

[winston]

Oooh.. this is really interesting! I should hang this somewhere visible for daily reminder
Another point is probably the next super bull in 2016 will be from BRIC and not so much in US..

I would not read too much into very long term predictions.

There's supposedly a Kondrateif Cycle which is probably a decade late now.

In the mid 90s, the "experts" were all talking about the Pacific Century and they were all wiped out during the AFC.

Before that, another group of "experts" were talking about the Japan Renaissance and were all wiped out.

And there was also the Tech Revolution where market cap will be determined by the number of clicks on your website

[BlackCat]

100 YEARS OF INVESTMENT GENERATIONS
Generation Commodities Stocks Years
1914-1930 -14% +159% 16
1930-1947 +244% -30% 17
1947-1965 -18% +503% 18
1965-1981 +123% +35%* 16
1981-1999 -9% +1,054% 18
1999-2016 +?% -?% 17

Didn't Jim Rogers say the same thing? About 16 year commodity booms corresponding with secular bear markets. I was quite impressed with his book as it was published before the commodities boom became apparent.

So the odds are that we are in a secular bear market, until maybe 2015....

[winston]

Ha Ha ... Yes, after reading 'Hot Commodities", I went to talk to my relationship manager.

The only Commodities product that they had at that time were some Mutual Funds investing in either Oil or Gold.

Anyway, a lot of the Commodity investors were also slaughtered during the Financial Crisis

[winston]

Timing's everything - in going with flow
Wednesday, October 06, 2010


There are two ways to invest in stocks.
1) One is to buy new low-priced shares and try to guess the bottom.
2) The other is to get stocks that hit their record highs and try to ride on their momentum.

Dr Check is not a fan of the first method.

As for the second, I have some modifications.

Pick a record-high stock that is of good quality and whose valuation is not too high. Then wait until it falls 8 to 14 percent before buying.


Source: Dr. Check, The Standard HK