Investment Strategies 03 (Jul 13 - Mar 19)

[winston]

(Other) Investors Will Hate You for Using This Investment Strategy

By Michael A. Robinson

No. 1: Focus on Quality

No. 2: Work Your Shopping List

No. 3: Make Split Entries

Source: Money Morning

http://moneymorning.com/2014/09/22/othe ... dium=email

[winston]

How to Build a Fortune With One Decision a Decade By Amber Lee Mason

Can you make huge, consistent returns by making just one investment decision every 10 years?

The answer is "yes"… as long as you focus on big trends.

Let me explain…

Bill Bonner, founder of Agora (the parent company of my publisher), recently visited our office. I've been working with him on his new project, The Bill Bonner Letter.

Bill is a brilliant "big picture" thinker… and it has made him a wealthy man.

Talking with Bill and reading his work is an outstanding education on how the world really works. So today, I want to share one of the most useful ideas we discussed… I'll call it his "one decision" strategy.

As Bill explained, making just one great investment decision every 10 years or so can lead to giant returns. You simply need to make that one great decision… and then give it time to work.

In Bill's book on building wealth, Family Fortunes, he walks readers through an idealized example of how the "one decision" strategy can play out…

You start 40-some years ago, when Richard Nixon took the dollar off the gold standard. "It didn't take much imagination to see what would happen next," he writes… Higher inflation. Higher gold prices.

Gold rose from $35 an ounce at the beginning of the decade all the way to more than $800 by 1980. But you didn't need to call the bottom or the top, Bill points out. "You had years of opportunity to buy gold at a low price." Assuming you got in at $50 and out at $500, you made 10 times your money.

In the early 1980s, the head of the Federal Reserve was cracking down on inflation. Again, you didn't need to know much to see what was coming next. Lower interest rates are bad for gold, good for businesses… and good for stocks.

From the early 1980s to the late 1990s, the Dow Jones Industrial Average rose from about 1,000 to over 11,000 – a tenfold return. Assuming that you got in late, at 1,500, and out early, at 7,500, you made five times your money.

By the turn of the millennium, stocks were way overhyped. And at inflation-adjusted prices, gold was down 80% or 90%. "What should you have done?" Bill asks. "You should have sold stocks and bought gold again."

From the early 2000s to 2011, gold went from about $250 an ounce to about $1,900. If you got in at $300 and out at $1,500, you made five times your money.

Altogether, you could have turned $10,000 into $2.5 million – with three decisions in four decades.

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That return amounts to nearly 15% a year, about double the average buy-and-hold return for the stock market. You could have done that without precision timing… just by getting the "one decisions" right.

And it didn't require you to read the future, Bill notes. "All [the decisions] in this example could have been made over many months or many years. You don't really have to do much guesswork, in other words. You can wait and let the markets tell you what is really going on."

So what's the latest "one decision"?

Let's say you got out of gold at $1,500 in early 2011. By that time, stocks had suffered the 2008-09 collapse and were on the rebound. You didn't have to guess where the next uptrend would be. It was already in place.

And if you bought the S&P 500 in late 2011 around, say, 1,200, you've made 75%. No, you didn't buy at "once in a lifetime" values in 2009. But as the chart above shows, you don't have to catch the bottoms to make lots of money on the big trends.

So if you made the "one decision" to be long stocks over the last few years, you're in great shape. That's exactly what we've done in my Daily Wealth Trader service… Since our launch in early 2012, we've been consistent "big picture" bulls on the market. And we still are…

Remember, big trends tend to last longer and go farther than anyone can imagine. In the early 1970s, no one imagined gold would go to $800. In the 1980s, no one imagined the Dow would cross 10,000 before the bull market was done.

I can't say how long our decision to be in stocks will remain a good one. I don't have a crystal ball. But the hallmark of this strategy is there's no rush to make a new decision… We can wait and let the markets tell us what the next big decision will be.

Source: Growth Stock Wire

[winston]

Your Investment Script as Interest Rates Rise By Dr. Steve Sjuggerud

Interest rates are headed higher in 2015… and most investors see that as a bad thing for the U.S. stock market.

But is it?

I don't think it is…

I think we still have plenty of upside potential from here.

Let me explain…

For years now, our working script has been that we're in "the Bernanke Asset Bubble."

The basic idea of our script has been that the Federal Reserve would keep interest rates lower than anyone could imagine for longer than anyone could imagine. And that would cause asset prices – like real estate and stocks – to soar higher than anyone could imagine.

That's exactly what has happened. Rates have been near zero since 2008… six long years. But we're now much closer to the end of near-zero rates than the beginning.

The Federal Reserve has achieved its goals… low unemployment and mild inflation. And higher interest rates are likely starting next year.

So what will happen when the Fed finally raises interest rates?

Most investors think the rate hike will kill the stock market boom.

Their basic thought is: "Stocks are going up because of the Fed's low interest rates and money printing. Once those end, the fun is over."

Logic says that higher interest rates should hurt stocks. After all, higher rates raise borrowing costs for companies, and they allow you to earn more money on your cash in the bank (which creates competition for stocks).

But history tells a different story… Rising rates are actually a good thing for stocks.

In the last quarter-century, the Fed has only had three major cycles of rising interest rates. (Those started in 1994, 1999, and 2004.)

In each of those cycles, the stock market followed roughly the same pattern…

First, the market went up in the months before the interest-rate hike.

Next, it had a short-term correction of roughly 7%.

Then, stocks started going up again – with a significant rally after the correction.

This is the script we need to follow today.

I expect stocks to rally in the months before the rate hike. After the first rate hike, we could see a correction in the 7% range. Then, stocks will surprise everybody, taking off as they enter the ninth inning of this great bull market.

You can see how our script could play out, based on the last three major cycles of rising interest rates, in the chart below:

Yes, interest rates will rise in 2015. But that doesn't mean the end of this bull market in stocks. It actually gives us a great opportunity to make money, based on history.

This is all just a working script, of course. I have no investing crystal ball (and neither does anyone else). But it is the working game plan I'm using today.

My readers have made a lot of money the past few years because we got the big picture right. Looking ahead, the big picture says that rising rates won't ruin our fun in U.S. stocks.

I urge you to stick with history, stick with the script, and stay invested in stocks right now. We should still have plenty of upside left.

Source: Daily Wealth

[winston]

A Company’s First Profit Can Mean Big Profits to Investors By Kevin Matras

With earnings season set to begin next week (Wed. 10/8), now is a great time to take a look at my ‘First Profit’ stock screen. The concept for this one is to find companies that have recently shown their first quarterly profit within the last year.

The idea is to find companies that havenot shown a profit for at least the previous 4 quarters, but have just recently produced their first profit this last quarter.

I run this screen after every earnings season. And here we are again.

Some of these companies will be relatively new, and this recent profit may be the only profit in the company’s history so far.

Other companies may have a long history of profitability, but for whatever reason haven’t seen a profit in a while — but has finally returned to profitability.

I like this concept because, if the trend has been one of improvement, there’s a good chance the trend will continue. This is true whether you’ve been profitable or are just getting profitable.

But some people (like myself for example) dislike buying companies that cannot show a profit. And there are many others who won’t even consider a stock unless it’s making money.

Losing less than the previous quarter is indeed an improvement. And in that respect, by definition, it is growth, i.e., they’re growing less unprofitable. And it’s even better if the losses are less and less in each sequential quarter.

But there’s something entirely different about growth AND being profitable. And those are the stocks that will likely see the best new demand from new investors; people who are now, all of a sudden, willing to take notice of, and pay attention to, the stock.


Source: Zacks Investment Research

[winston]

by behappyalways

Investment strategies for a down market

http://www.nracapital.com/research/limt ... ct2014.pdf

[winston]

In sum, the four rules of crisis trading are:

1. Wait for the price to stop falling.
2. Use a tight stop.
3. Keep your position size small.
4. Give the trade a few chances to work out.


Source: Growth Stock Wire

[winston]

CDCC: This “indicator” could be the next best thing to a crystal ball for the economy by Chris Kimble

I am keeping a very close eye on the CDCC “indicator” for macro signs about the economy right now.

When it comes to performance this year, nothing is hotter than coffee and cattle, as they are up 83% and 43%, respectively, as of this morning.

The 4-pack below looks at these hot performing assets and two other key assets as well.

CLICK ON CHART TO ENLARGE

When it comes to investing, global confidence or lack thereof is very important. This 4-pack above looks at cattle, the Dow, coffee, and copper.

Cattle is facing resistance at the top of rising wedge pattern, the Dow is at the top of a megaphone pattern and could be breaking support, coffee might be forming a monthly bearish wick at its 61% Fibonacci retracement level, and “Dr. Copper” looks to be forming a bearish descending triangle that two-thirds of the time results in lower prices.

With technology being what it is, none of us are lacking for information… if anything it is easy to be overwhelmed by it. This 4-pack simply looks at pattern messages from some key assets of our lives, that say a ton about confidence or lack thereof.

In my humble opinion, what the CDCC indicator does in the weeks ahead is very important for the macro picture!

Source: Kimble Charting Solutions

http://thecrux.com/cdcc-this-indicator- ... 37gMXBU%3D

[winston]

5 Traits the Best Investors in the World Share

You can use strategies of history's best investors to boost your own portfolio

By John Divine

Source: InvestorPlace

http://investorplace.com/2014/10/best-i ... Eg1MFcxiik

[winston]

10 Pillars of Investing Wisdom

1. Avoid losses at all costs.
2. Every investment must provide a reliable flow of dividends or interest income… with a history of regular payout increases.
3. Understand and embrace the awesome power of compounding interest over time.
4. Choose solid, blue-chip companies, selling products with great brand loyalty, in markets with high barriers to entry.
5. Ask ”What’s the worst that can happen?”… before making any investment. Feel comfortable with the answer to that question.
6. Determine your tolerance for risk. Do not exceed that level.
7. Let your investment strategy work for you. Let time work for you.
8. Invest. Don’t speculate. Understand the difference.
9. Don’t try to time the market.
10. Don’t change course without a heck of a good reason. “If it ain’t broke — don’t fix it”.

Source: Intelligence Report

[winston]

"The biggest gains come when things go from "bad" to "less bad."

- Steve Sjuggerud