Investment Strategies 03 (Jul 13 - Mar 19)

[winston]

The Easiest Way to Turn "Big Picture" Ideas Into Profits By Dr. Steve Sjuggerud

It has happened to most investors at one time or another.

You nail the "big picture." You get the idea exactly right. But your investment of choice turns out to be a dud.

Instead of profiting, you earn nothing… or even worse, you lose money.

Today, we have a simple solution to the problem. By owning ETFs, you have a simple way to capitalize on all of your "big picture" investment ideas.

Let me explain…

One of the simple goals of ETFs is indexing. When you index your investments, you immediately gain the advantage of diversification…

By diversifying, or spreading your bets, you lower your risk of picking the wrong company.

Contrary to what you might think, a rising tide doesn't always raise all ships. There are always companies that run into trouble. And even if you get the "big picture" right, choosing the wrong investment can lead to devastating results.

Even in the recent bull market, certain companies have drastically underperformed… I'm talking about household names. Companies most investors would expect to do well.

Let's look at an example in the health care sector…

Health care stocks absolutely soared coming out of the financial crisis. The sector has more than tripled since the bottom in March 2009. But not all companies profited.

Take drug-making giant Pfizer, for example. Since April 2013, health care stocks in general increased nearly 50%. Anyone betting on the sector should have made a lot of money over the period. But if you'd bet on Pfizer, you'd be kicking yourself.

Over the same period, shares of Pfizer were up just 11%. Take a look…

Betting on the health care sector was a fantastic idea. But betting on the wrong company in the right sector led to minimal gains…

This is why diversification is so important. By getting the "big picture" correct and betting on a broad group of companies, your odds of profiting increase dramatically.

Sure, you won't be able to make the biggest gains possible by diversifying your bets. But in order to make the biggest gains, you have to find the absolute best business. And it has to be the business that the market decides to reward. You're looking for the needle in a haystack.

The safest way to invest is by diversifying. And ETFs offer an easy way to do just that.

If you're interested in health care stocks, you can simply pick up shares of the Health Care Select Sector SPDR Fund (XLV). With one click and one brokerage commission, you own a basket of the largest and most powerful health care companies in the United States.

Getting the "big picture" right isn't enough if you choose the wrong investment. ETFs are the simplest way to avoid this problem.

Source: www.dailywealth.com

[winston]

The Easiest Way to Turn "Big Picture" Ideas Into Profits By Dr. Steve Sjuggerud

It has happened to most investors at one time or another.

You nail the "big picture." You get the idea exactly right. But your investment of choice turns out to be a dud.

Instead of profiting, you earn nothing… or even worse, you lose money.

Today, we have a simple solution to the problem. By owning ETFs, you have a simple way to capitalize on all of your "big picture" investment ideas.

Let me explain…

One of the simple goals of ETFs is indexing. When you index your investments, you immediately gain the advantage of diversification…

By diversifying, or spreading your bets, you lower your risk of picking the wrong company.

Contrary to what you might think, a rising tide doesn't always raise all ships. There are always companies that run into trouble. And even if you get the "big picture" right, choosing the wrong investment can lead to devastating results.

Even in the recent bull market, certain companies have drastically underperformed… I'm talking about household names. Companies most investors would expect to do well.

Let's look at an example in the health care sector…

Health care stocks absolutely soared coming out of the financial crisis. The sector has more than tripled since the bottom in March 2009. But not all companies profited.

Take drug-making giant Pfizer, for example. Since April 2013, health care stocks in general increased nearly 50%. Anyone betting on the sector should have made a lot of money over the period. But if you'd bet on Pfizer, you'd be kicking yourself.

Over the same period, shares of Pfizer were up just 11%. Take a look…

Betting on the health care sector was a fantastic idea. But betting on the wrong company in the right sector led to minimal gains…

This is why diversification is so important. By getting the "big picture" correct and betting on a broad group of companies, your odds of profiting increase dramatically.

Sure, you won't be able to make the biggest gains possible by diversifying your bets. But in order to make the biggest gains, you have to find the absolute best business. And it has to be the business that the market decides to reward. You're looking for the needle in a haystack.

The safest way to invest is by diversifying. And ETFs offer an easy way to do just that.

If you're interested in health care stocks, you can simply pick up shares of the Health Care Select Sector SPDR Fund (XLV). With one click and one brokerage commission, you own a basket of the largest and most powerful health care companies in the United States.

Getting the "big picture" right isn't enough if you choose the wrong investment. ETFs are the simplest way to avoid this problem.

Source: www.dailywealth.com

[winston]

How to Play Economic Climate Change

By Alan gula

Source: Wall Street Daily

http://www.thetradingreport.com/2015/03 ... te-change/

[winston]

What an Interest Rate Hike Means for Stocks

by Matthew Carr

Source: The Oxford Club

http://www.investmentu.com/article/deta ... SsBKtyUf1Y

[winston]

What to Do With Your Money in Today's Market By Brian Hunt and Ben Morris

Today, we're doing something much more valuable than covering a single stock recommendation… or sizing up a commodity trade.

We're doing something that will help you make the right investments, right now…

We're sizing up the big picture in stocks.

Regular Growth Stock Wire readers know we often like to take a step back and look at the big picture. We look at the long-term trend of the market… we look at valuations… and we look at what investors think about the stock market. This big-picture thinking alerts us to both opportunities and warning signs… and it helps guide our trading approach going forward.

After studying the big picture, we may want to increase our exposure to stocks. Other times, we'll want to decrease our exposure to stocks.

Today, we'll look at the market through three different "lenses": sentiment, valuation, and price action… And we'll show you what it means for your portfolio.

Let's start with investor sentiment…

Investor sentiment is what's called a "contrary indicator." Investors are usually very bullish (expecting stocks to go higher) at market tops, and very bearish (expecting stocks to go lower) at market bottoms. So it's a warning sign when folks are wildly bullish… And when they're extremely bearish, it's a sign stocks are probably ready to rally.

One way we gauge investor sentiment is by looking at a survey published by the American Association of Individual Investors (AAII). Each week, it asks its members – mostly "mom and pop" investors – what they expect from the market over the coming six months.

The results of the latest survey aren't bullish or bearish compared with historical results… They're neutral. (You can check the AAII survey, right here. There's an interesting article about using the AAII survey as a contrary indicator on the site, right here.)

Our colleagues, Steve Sjuggerud and David "Doc" Eifrig, have found other evidence showing investors aren't overly bullish right now…

In a recent DailyWealth essay, Steve cited a USA Today article that said less than half of Americans are invested in stocks. According to Steve, "This is important news… The stock market typically doesn't peak until the largest percentage of the population is in the market."

In another recent DailyWealth, Doc showed that investors are buying blue-chip dividend stocks over other types of stocks. It's a sign folks aren't going wild with speculation. They're plowing into the market's most stable companies.

Based on the current market sentiment, there's still room for stocks to run higher.

How about stock valuations?

We like to look at the valuations of individual stocks to help us determine how safe it is to buy them… or to "trade for income" (our term for selling options on cheap, blue-chip stocks). You can do the same with the overall market…

When the stock market is extremely expensive, it's a good idea to sell some stocks and hold more cash. When they're cheap, it's often a good time to buy.

Over the last 60 years, the average price-to-earnings (P/E) ratio of the benchmark S&P 500 index is 16.5. Today, it's 18.4… a little more expensive than average.

But back in January, Steve wrote, "you can't just look at the P/E ratio by itself… You have to look at the economic situation." He shared his True Wealth Value Indicator, which takes interest rates into account. The basic idea is that when interest rates are low, stocks are more attractive by comparison… So they deserve a higher valuation. (Learn more about this idea in his essay: Nearly Six Years In… And Plenty of Upside Remains.)

When you take interest rates into account, stocks still aren't expensive today (relative to their historical average). Again, this means they have plenty of room to run higher.

Finally, none of the above indicators mean anything if the price action is weak…

In January, we told DailyWealth readers the number one thing that would lead us to think a bear market has officially arrived is something called "lower highs and lower lows."

Markets don't move in smooth, straight lines. They move in stair steps. A bear market tends to take a few steps lower… then a step or two higher. The steps backward are larger than the steps forward, and this produces losses over time.

A bull market does the opposite. It takes a few steps higher… then a step or two lower. You'll see that on a chart with a series of "higher highs and higher lows." That's what we've seen in U.S. stocks over the last six years.

Please Enable Images to See this

What should you do with this information?

Investor sentiment isn't extremely bearish… And stock valuations aren't super-cheap… So there's no reason to take out a second mortgage and buy stocks aggressively.

But investors aren't all that bullish, either… And the price action shows stocks are still in a major uptrend.

This leads us to the conclusion that we need to stay long the stock market… especially through conservative, income-producing "trading for income" positions. (If you're not familiar with the idea of selling puts and covered calls, you can learn more about how these strategies work here and here.) This gives us a great blend of upside and safety. It's the right way to trade today's market.


Source: DailyWealth Trader

[winston]

Buffett Takes a Page From the "Inflation King's" Playbook By Jim Rickards

Hugo Stinnes is practically unknown today, but this was not always the case.

In the early 1920s, he was the wealthiest man in Germany at a time when the country was the world's third-largest economy. He was a prominent industrialist and investor with diverse holdings in Germany and abroad.

Chancellors and Cabinet ministers of the newly formed Weimar Republic routinely sought his advice on economic and political problems. In many ways, Stinnes played a role in Germany similar to the one Warren Buffett plays in the U.S. today…

He was an ultra-wealthy investor whose opinion was eagerly sought on important political matters, who exercised powerful behind the-scenes influence, and who seemed to make all the right moves when it came to playing markets.

If you're a student of economic history, you know that from 1922-1923, Germany suffered the worst hyperinflation experienced by a major industrial economy in modern times. The exchange rate between the German paper currency, the reichsmark, and the dollar went from 208-to-1 in early 1921 to 4.2 trillion-to-1 in late 1923.

At that point, the reichsmark became worthless and was swept down sewers as litter. Yet Stinnes was not wiped out during this hyperinflation. Why was that?

Stinnes was born in 1870 into a prosperous German family that had interests in coal mining. He worked in mines to obtain a practical knowledge of the industry and took courses in Berlin at the Academy of Mining.

Later, he inherited his family's business and expanded it by buying his own mines. Then, he diversified into shipping, buying cargo lines. His own vessels were used to transport his coal within Germany along the Rhine River and from his mines abroad. His vessels also carried lumber and grains. His diversification included ownership of a leading newspaper, which he used to exert political influence.

Prior to the Weimar hyperinflation, Stinnes borrowed vast sums of money in reichsmarks. When the hyperinflation hit, Stinnes was perfectly positioned. The coal, steel, and shipping vessels retained their value.

It didn't matter what happened to the German currency – a hard asset is still a hard asset and does not go away even if the currency goes to zero. Stinnes' international holdings also served him well because they produced profits in hard currencies, not worthless reichsmarks. Some of these profits were kept offshore in the form of gold held in Swiss vaults.

That way, he could escape both hyperinflation and German taxation. Finally, Stinnes repaid his debts in worthless reichsmarks, making them disappear. Not only was Stinnes not harmed by the Weimar hyperinflation, but his empire prospered and he made more money than ever.

He expanded his holdings and bought out bankrupt competitors. Stinnes made so much money during the Weimar hyperinflation that his German nickname was Inflationskönig, which means Inflation King. When the dust settled and Germany returned to a new gold-backed currency, Stinnes was one of the richest men in the world, while the German middle classes were destroyed.

Interestingly, you see Warren Buffett using the same techniques today.

It appears that Buffett has studied Stinnes carefully and is preparing for the same calamity that Stinnes saw – hyperinflation. Buffett purchased major transportation assets in 2009 in the form of the Burlington Northern Santa Fe railroad.

This railroad consists of hard assets in the form of rights of way, adjacent mining rights, rail, and rolling stock. The railroad makes money moving hard assets, such as ore and grains. Buffett next purchased huge oil and natural gas assets in Canada in the form of Suncor.

Buffett can now move his Suncor oil on his Burlington Northern railroad in exactly the same way that Stinnes moved his coal on his own ships in 1923.

For decades, Buffett also owned one of the most powerful newspapers in the U.S.: the Washington Post. He sold that stake recently to Jeff Bezos of Amazon, but still retains communications assets. He has also purchased large offshore assets in China and elsewhere that produce non-dollar profits that can be retained offshore tax-free.

A huge part of Buffett's portfolio is in financial stocks – particularly in banks and insurance companies – that are highly leveraged borrowers. Like Stinnes in the 1920s, Buffett can profit when the liabilities of these financial giants are wiped out by inflation, while they nimbly redeploy assets to hedge their own exposures.

In short, Buffett is borrowing from the Stinnes playbook. He's using leverage to diversify into hard assets in energy, transportation, and foreign currencies. He's using his communications assets and prestige to stay informed on behind-the-scenes developments on the political landscape. Buffett is now positioned in much the same way that Stinnes was positioned in 1922.

If hyperinflation were to slam the U.S. today, Buffett's results would be the same as Stinnes'. His hard assets would explode in value, his debts would be eliminated, and he would be in a position to buy out bankrupt competitors. Of course, the middle classes in the U.S. would be wiped out, as they were in Germany.

My advice to you when it comes to billionaires like Buffett is to watch what they do, not what they say. Stinnes saw the German hyperinflation coming and positioned accordingly.

Buffett is following Stinnes' strategy. Perhaps Buffett sees the same hyperinflation in our future. It's not too late for you to take some of the same precautions as Stinnes and Buffett.


Source: Strategic Intelligence

[winston]

How Speculating Is Different Than Investing By Paul Mampilly

Hundreds-of-percent returns in a year… It's impossible for most investors. But for skilled speculators, it can be a reality…

The "speculator" often gets a bad rap in the media. When politicians do something stupid to wreck the financial markets, they often blame speculators for the problem. Or, when the management of a company does something stupid to wreck its balance sheet, it often blames speculators as the ship sinks.

What can you say? Some people don't like to accept responsibility for their actions. They have to blame somebody.

Also, many people think "risk" when they hear speculation. But when you approach the market as a professional speculator would, you actually take on less risk than the average investor… and you'll earn much larger returns…

Over the next few days, I'm going to show how professional speculators achieve these results. And how you can incorporate these strategies into your own investing today.

Let's get started by looking at why speculating can be so powerful and how it can lead to big gains…

The first thing to understand about speculating is how it differs from investing.

The goal of investing is to put money to work over a long time frame.

You can invest in a private business like a restaurant or laundromat. You can invest in a rental property. You can invest in blue-chip businesses like Coca-Cola or Johnson & Johnson.

I'm a fan of long-term investing. I own long-term investments. And for most people, it's the only thing they should do.

But for those of us looking for returns of hundreds of percent a year… We trade. We buy stocks with the goal of selling them to other people at higher prices. And we're not looking to hold our stocks for 20 years like you would hold shares of Coca-Cola. We're looking to cash out of our positions in a few years or less.

And when done the right way, speculating can lead to massive returns.

For example, let's take a look at one of my greatest trades…

In late 2000, I was working for an asset manager with more than $1 billion under management. As a securities analyst, my job was to research companies for a portfolio manager, who made the final decision to buy or sell stocks. That year, one of my recommendations was a tiny company called Intuitive Surgical. At the time, Intuitive was selling a robot that could perform surgery on a human. Many potential investors dismissed it as a "toy." But I was intrigued…

I attended a demonstration of Intuitive's robots at a New York City hospital. Watching the surgeon operate the robot was like watching science fiction. This "toy" was much, much less invasive than conventional surgery. I spoke with surgeons who told me miraculous stories… of patients able to walk out hours after a heart-bypass operation – patients who used to require a week of recuperation.

With Intuitive's machine, surgeons no longer had to crack a patient's ribs open to get to the heart. Instead, the robot made a tiny incision. It healed much faster than broken ribs… caused minimal blood loss… and left minimal scarring.

I could see that this revolutionary technology was going to eventually replace most manual surgery.

I'm a student of innovation. As great as innovation is, humans are conservative when it comes to technology. They hold on to old technologies that are terrible, even when new, better ones are available.

So you're not going to be surprised to hear that in the year 2000, Wall Street and the medical establishment met Intuitive's robots with deep skepticism. You won't be surprised to hear that the portfolio manager I worked for thought I was crazy when I told her she should buy Intuitive Surgical stock.

Fifteen years later, with a market cap of $18 billion, Intuitive Surgical is one of the largest medical-device companies in the world. Its robotic surgeons are considered medical miracles… and they are used all over the world. It is one of the greatest growth-stock winners of the past 20 years.

If you had put $1,000 into tiny Intuitive Surgical at $10, the approximate price I remember recommending the stock, you'd have nearly $50,000. Intuitive is now worth 58 times what it was back in 2000. In other words, an investor who bought and held Intuitive stock has made 5,688%.

I'm not telling you this story to gloat or criticize the naysayers. I'm telling you this story to show you the power of speculating.

In 2000, Intuitive wasn't the sort of company you wanted to pour a lot of money into. But it was a great speculation.

And by following a few strategies, you could limit your risk while setting yourself up to make massive profits.

Tomorrow, I'll show you the first step professional speculators take to limit their risk in trades like this. Even if you don't ever plan on speculating, it's a powerful idea that can prevent you from losing a lot of money.

Source: Growth Stock Wire

[winston]

Top speculator: This is where 5,000% winners come from... by Paul Mampilly

Over my 25-year career, I’ve TRADED all types of asset classes…

I’ve TRADED CURRENCIES, commodities, bonds, options, stocks, and some financial instruments you’ve never even heard of.

But over the years, I’ve found one thing is the most consistent source of huge winning TRADES in the markets: technological innovation.

Let me explain…

In 2002, I was an elite analyst for a multibillion-dollar asset-management company. I recommended a tiny biotech company called Gilead which was selling for about $4 a SHARE. The company had struggled to get its first major drug, Tamiflu, approved by the FDA. And even when it succeeded, investors were nervous that the drug wasn’t selling. (People weren’t used to the idea of a prescription drug for the flu).

Tamiflu eventually became a huge seller… governments around the world began stockpiling it as a counter measure to a flu epidemic. But I saw that the real value of Gilead was in the pipeline of anti-viral drugs it was developing… a pipeline that included huge future blockbusters like Viread and Truvada. Today, Gilead sells for $105, or 2,525% higher. Every $1,000 INVESTED IN Gilead in 2002 is now worth more than $26,000.

Another innovator that was once considered high-risk is Cerner, a company that makes hospital computer systems. In 1996, the United States passed the Health Insurance Portability and ACCOUNTABILITY Act of 1996 (HIPAA). The law required that medical records be confidential, secure, and portable. And that meant they had to be digitalized. Hospitals were forced to spend huge sums to meet the requirements of HIPAA. And Cerner could meet their needs. Today, just about every hospital in the country uses Cerner’s systems for everything from administration to medical records.

But in 2002, when I was looking at Cerner, it was a young growth company with a STOCK MARKET value in the hundreds of millions of dollars. Its growth was already enormous, but the stock was hugely volatile. It was trading for about $5. Today, Cerner is valued at nearly $24 billion, and its STOCK TRADES for $75. That’s a 1,400% gain. Every $1,000 invested in Cerner in 2002 is now worth $15,000.

Or take Illumina… This stock market superstar makes the most widely used systems for DNA analysis and sequencing. Go inside any lab in the world and you’re likely to find a ton of Illumina machines… machines that have helped scientists create incredible new drugs.

But back in 2003, when Illumina was just beginning to release its systems, it was considered too speculative for most investors. You could have picked it up for about $2. Today, a share of Illumina costs nearly $200. Every $1,000 INVESTMENT IN Illumina in 2003is now worth $100,000.

In August 2004, search engine mammoth Google was also considered an incredibly dangerous stock. Financial media warned people to not buy the initial public offering. Google had no real sales or even a business model when it went public. But it became one of the greatest investments of all time. I bought the Google initial public offering for about $50 a share. I put 25% of every dollar I had into it. Those same shares TRADE for about $550. It has gone up 1,051%.

How did I know to buy it? I used Google all day, every day to research stocks. Google made it EASY TO find anything I wanted to know. People all over the world were beginning to use the search engine every day. What used to take months or weeks or days could now could be done in a few minutes. I would have gladly paid hundreds and even thousands of dollars for the speed, accuracy, and ease of using it.

Google decided to keep its service free and now makes billions through simple text-based advertising that shows up alongside your search results. It went from a $23 billion company to a $393 billion company in 11 years.

I could list 100 more success stories like these… but you get the idea. Great innovations can lead to great stock returns.

Source: Professional Speculator

[winston]

How to Determine When to Buy, Sell and Hold

by Marc Lichtenfeld

Source: The Oxford Club

http://www.investmentu.com/article/deta ... XTSH9Kqqko

[winston]

How (And When) to Buy this Market Volatility

You'll need to wait for a few things to happen first, but once these pins start falling, put your cash to work

By Tom Essaye

Source: The 7:00's Report

http://investorplace.com/2015/08/market ... eBN19IirIU