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Do You Buy A Stock Because You Like Its Revenue?

Sep 18

Posted by admin in Stocks Mutual Funds

Many investors are interested in revenues that a Corporation generates. Yet if you really are concerned with performance, you will look at only the earnings. If you are especially savvy you only care about winning or profit, cash flow and on-going customer base. Do not be dazzled or baffled. I only care about winning, which means customers lined up at the door with real money, low overheads, total efficiency, work ethic from management to line worker, no one is living on the fat.

A company?s job is to make money, keep customers happy and spending and coming back until the end of time. When customer buying behavior changes so do we. It has to be that way, bullshit has to walk, read Warren Buffet essays, to get an idea of my thinking. Many investors and even financial journalists think a company with robust revenues are healthy, growing and a bucks up company. Yet, I have always believed in the term \”Professional Parasites\” Accountants, attorneys, etc. always trying to get us to believe some dump reality for some other mile marker. Look I am reality based and only care about winning, not any of the other. With all the BS forms, tax papers, audits and all the over abundance of data you might actually start to believe such crap, yet those are not real. If you are doing everything right, your numbers will be good, not need to fake it and shout about revenue from the tallest mountain. Many an executive will their numbers look just as they are suppose too, like everyone else\’s chicken scratch, thanks to some maneuvering by their accountants and lawyers. Do not get me wrong accountants are a necessary evil in the game of it all, but only because the game is messed up. I think I liked Rockefellers accounting best. I am so unimpressed with accountants I cannot tell you. These accountants walk around like Gods because of their elevation by government regulators and their perceived mandate via Sarbanes Oxley. Until someone is the best in the world at what they do, they do not have any business telling me how to run my company. So, if one runs their company solely for the accountants point of view or solely for the attorneys point of view they have added way too many factors for long term compromises between customers, shareholders and franchisees (in my company). More people should be thinking here.

Lance Winslow

Writen By : Lance Winslow

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Red, Green, Yellow – Or – Stop, Go, Go Very Fast: Which Describes Your Online Trading?

Sep 11

Posted by admin in Finance, Investing, Stocks Mutual Funds

Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I\’ve noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals.

In the USA, where I live, all the traffic lights are red, yellow, green -
red for stop, yellow for slow down or caution and green for go.
The lights always change in order from red to yellow to green
and back again to red after a time.

How drivers relate to the changing lights is NOT always the same.
There are three types of drivers and responses to seeing a green light:

Type one drivers believe the light will change to red at any moment. In
anticipation of the change, they begin to slow down far in advance.
I call them \”Red Lighters.\”

Type two drivers know green means it\’s ok to go. They continue on
their present course and speed, making no changes at all as they approach
the light. I call them \”Green Lighters.\”

Type three drivers know the light could turn yellow at any moment,
so they step on the accelerator to catch up to the light as quickly
as possible, not wanting to miss it. I call them the \”Yellow Lighters.\”

Many people apply these same approaches to most of life\’s opportunities,
including online trading. Maybe you do the same thing.

If you see an opportunity approaching, do you slow down, believing that
since it won\’t last you shouldn\’t be too hasty or you could be stuck in a
bad deal? \”Red Lighter.\”

Or, do you see the opportunity coming, and just let it come at its own
pace, taking your time and accepting whatever happens when it reaches
you? \”Green Lighter.\”

Or, do you rush to it, knowing that it could be gone at any moment so
best to jump on it immediately so you don\’t miss out? \”Yellow Lighter.\”

Each of these approaches has its risks, and its rewards.
Red Lighters take no risks, and therefore never \”push their luck\”
by hurrying into anything. On the other hand, what risks are they
actually taking by potentially missing out on opportunity?

Green Lighters just want to travel safely and smoothly.
They don\’t mind what happens along the way so they just keep
going with the flow of traffic. Sounds smart, doesn\’t it? Yet, what
real gain is there in being \”just like everyone else\”?

Yellow Lighters don\’t want to miss any opportunity so will do
whatever is needed to capture the potential reward. But how big is
their risk in being first?

Each is going the same direction, and could even be in the exact same
type of vehicle, but none is actually any more guaranteed to arrive at their
destination than the other. The Yellow Lighter will probably get there the
fastest, but could also get into an accident along the way from so much
speeding. The Green Lighter will arrive safely in a reasonable time, but
will likely arrive with the rest of the crowd and never be early. The Red
Lighter will probably always be late, and will typically spend so much time
on the road that they never get to fully enjoy their destination.

Which are you? Which do you want to be? How do you assess risk and reward
in your financial decisions, your daily activities, your life? Like it or
not, everything we do every day has a risk and an associated reward.

Getting in a car each day and driving to work carries with it the very real
risk of death from a traffic accident, with the reward on the other side of
the commute being a paycheck. Everyone must assess the risks and rewards in
their life for themselves on an ongoing basis, something that I myself do
constantly every day and that I encourage you to do as well. You just might
be surprised at the trades you find yourself making unconsciously.

I invite you to notice your trading style and adjust it according to the
results you wish to achieve. Being conscious of our behavior patterns
and changing them when appropriate can make all the difference in
online trading success.

Jonathan van Clute is a
full time investor, educator, speaker, and online options and sports arbitrage
trader. In addition to his business activities, he is also a musician, video
editor/animator, and one of the world\’s greatest Segway Polo athletes. He
can be reached via email at jonathan@PMLinvestments.com and is speaking at an upcoming teleseminar, visit http://snurl.com/vclights for details.

Writen By : Jonathan Van Clute

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Price To Earnings Ratio – P/E

Sep 9

Posted by admin in Investing, Stocks Mutual Funds

After finding the price of a particular stock, usually the next number everyone looks at is the P/E ratio.

P/E is the ratio of a company\’s share price to its per-share earnings.

A P/E ratio of 10 means that the company has 1 of annual, per-share earnings for every 10 in share price. (Earnings by definition are after all taxes etc.)

A company\’s P/E ratio is computed by dividing the current market price of one share of a company\’s stock by that company\’s per-share earnings. A company\’s per-share earnings are simply the company\’s after-tax profit divided by number of outstanding shares. A company that earned 5M last year, with a million shares outstanding, had earnings per share of 5. If that company\’s stock currently sells for 50/share, it has a P/E of 10. At this price, investors are willing to pay 10 for every 1 of last year\’s earnings.

P/Es are traditionally computed with trailing earnings (earnings from the past 12 months, called a trailing P/E) but are sometimes computed with leading earnings (earnings projected for the upcoming 12-month period, called a leading P/E).

For the most part, a high P/E means high projected earnings in the future. But actually the P/E ratio doesn\’t tell a whole lot, but it\’s useful to compare the P/E ratios of other companies in the same industry, or to the market in general, or against the company\’s own historical P/E ratios.

Some analysts will exclude one-time gains or losses from a quarterly earnings report when computing this figure, others will include it. Adding to the confusion is the possibility of a late earnings report from a company; computation of a trailing P/E based on incomplete data is rather tricky. (It\’s misleading, but that doesn\’t stop the brokerage houses from reporting something.) Even worse, some methods use so-called negative earnings (i.e., losses) to compute a negative P/E, while other methods define the P/E of a loss-making company to be zero. Worst of all, it\’s usually next to impossible to discover the method used to generate a particular P/E figure, chart, or report.

Like other indicators, P/E is best viewed over time, looking for a trend. A company with a steadily increasing P/E is being viewed by the investors as becoming more speculative. And of course a company\’s P/E ratio changes every day as the stock price fluctuates.

The P/E ratio is commonly used as a tool for determining the value of a stock. A lot can be said about this little number, but in short, companies expected to grow and have higher earnings in the future should have a higher P/E than companies in decline.

For example, if a company has a lot of products in the pipeline, I wouldn\’t mind paying a large multiple of its current earnings to buy the stock. It will have a large P/E. I am expecting it to grow quickly. A rule of thumb is that a company\’s P/E ratio should be approximately equal to that company\’s growth rate.

PE is a much better comparison of the value of a stock than the price. A 10 stock with a PE of 40 is much more \”expensive\” than a 100 stock with a PE of 6. You are paying more for the 10 stock\’s future earnings stream. The 10 stock is probably a small company with an exciting product with few competitors. The 100 stock is probably pretty staid – maybe a buggy whip manufacturer.

It\’s difficult to say whether a particular P/E is high or low, but there are a number of factors you should consider!

First: It\’s useful to look at the forward and historical earnings growth rate. (If a company has been growing at 10% per year over the past five years but has a P/E ratio of 75, then conventional wisdom would say that the shares are expensive.)

Second: It\’s important to consider the P/E ratio for the industry sector. (Food products companies will probably have very different P/E ratios than high-tech ones.)

Finally: A stock could have a high trailing-year P/E ratio, but if the earnings rise, at the end of the year it will have a low P/E after the new earnings report is released.

Thus a stock with a low P/E ratio can accurately be said to be cheap only if the future-earnings P/E is low.

If the trailing P/E is low, investors may be running from the stock and driving its price down, which only makes the stock look cheap.

Ioannis – Evangelos C. Haramis was born in Greece in 1951 and he studied in Greece, USA and in Belgium. He has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the publisher of http://www.greekshares.com/

Copyright ? 2005 I.E.C. Haramis

haramis@greekshares.com

Writen By : Ioannis – Evangelos Haramis

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My Neighbor Got A New Car

Sep 1

Posted by admin in Stocks Mutual Funds

I don?t know what kind it is, but I saw it
on TV running full speed along the shore (I don?t
live near the shore) throwing up spray or maybe
it was that one climbing up the steep mountain
trail thru the mud, rocks and snow. Very
exciting. (I don?t live near the mountains
either.) WOW! Just what I need.

But there are a few obstacles.

It costs about $28,000. (That?s close to the
average annual wage.) I have perfect credit and
they?ll give it to me for no money down. All I
have to do is make the monthly payments for the
next 5 years of only $541. Maybe it won?t be
that much because I?ll be trading in my car and
I have it almost paid for it.

I can see me now headed for the beach or
climbing that mountain in that shiny new car.

I tell my wife.

She says, ?So?.

I say, ?Waddayamean ?so???

She elaborates that our car is almost paid for
and hasn?t a scratch on it. It looks like new
when it is washed and waxed and runs great. She
whacks me with if I want a different car we can
have this one repainted and put on new slip
covers. The transmission and AC have both been
replaced and it has less than 100,000 miles on
it. She remembers the engine is rated for
200,000 miles and the tires are good for another
50,000 miles. How does she recall those
statistics? I can?t win for losing with this
woman.

There is a tone in her voice that I know
means finality when she iterates, ?You might want
a new car, but we don?t need one?. My reply is the
car might break down and may cost thousands to
fix?. Her lightning reply, ?Well, it won?t cost
$28,000 and our insurance bill won?t go up
either. If you want payments you can make an
extra mortgage payment each month. Better yet
let?s knock down that credit card debt.?

I hear the air hissing out of my balloon.
No beach. No mountains. Forget all that practical
stuff like saving for retirement or having some
extra cash put away for emergencies. Damn.

BUT – my neighbor has a new car.

Al Thomas\’ best selling book, \”If It Doesn\’t Go
Up, Don\’t Buy It!\” has helped thousands of
people make money and keep their profits with
his simple 2-step method. Read the first chapter
and receive his market letter at
http://www.mutualfundmagic.com and discover why he\’s
the man that Wall Street does not want you to
know. Copyright 2005

Writen By : Al Thomas

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Guide to buying Office Space in Houston

Jan 22

Posted by admin in Real Estate

According to Collier’s International’s office overviews report, Houston’s commercial real estate closed the first quarter with optimal results. Houston’s office market has continued to profit from stable job growth and a demanding need for office space.

The citywide occupancy rate is up at an impressive 87.7% rate, which is an increase from 85.4% this time last year. Leading suburban office regions have continued to surpass the market’s average with six sectors reporting occupancy levels at 90% or higher in the first quarter, including The Medica Center, The Woodlands, South Felipe-Voss, The Galleria/West Loop, Kingwood and The Katy Freeway/Energy Coridor. A strong tenant demand, increasing numbers in employment base and minimal available space imply that the local commercial real estate region will yet again obtain a clear-cut contradiction to the shrinking national market expected this year.

If you’re thinking of buying commercial real estate office buildings, especially in the Houston area as an investment, this can create a positive cash flow, however, business owners in need of office space just to run a successful business, may want to consider leasing rather than purchasing., Potential property investment could consist of a modest single tenant domicile to the metropolitan high-rises that represents the cities sky-line. You must first decide which type of property is going to be both cost effective and profitable to your assets. For those who are new to this domain, it can be a complex exertion full of unfamiliar and innovative terms. With adequate research and diligence, however, it is possible to become articulate in office space lingo and prepared for your first deal.

It is essential to know the ABC’s of office buildings which are sorted into three distinct groups, recognized as Class A, B and C. Buildings are given a Class A identification, if the construction and overall appearance is of the highest essence, they are appealing to superb occupants and professionally managed. Class A structures are located in predominant areas that require the most expensive payments in the market. Imagine an exquisite glass skyscraper in the financial district occupied by prestigious law firms, stock brokers and other distinguished tenants all longing to achieve unmeasured success- that is a Class A building. Class B buildings are merely an older version of Class A buildings. These structures, although often well preserved and custom designed, tend to offer lower rental rates than Class A buildings and may be located in less expensive business parks or districts. The third and final group is the Class C buildings, which have the tendency to be more efficient than inventive and are typically over 20 years old; however, they are steady occupied. They are often located in mixed used buildings, on an upper level above retail or service type businesses as well as industrial parks. Class C buildings are generally 20 percent lower in rent than any given market. It is important to note, that there are many requirements to be categorized within a specific building class, however, no formula is used to determine the classification and a judgment call may be made in the final analysis.

The following components if applicable to your situation, may lead you to conclude that unless you are an investor, leasing office space rather than purchasing office space in Houston would make better sense. Your current cash flow is vital, and leasing a space to operate your business successfully, may me a much more practical than purchasing from a cash flow outlook. This is because upfront expenses associated with an office space lease are usually much less than those required with a property purchase. With leasing the commercial property, your main outlay should only be a security deposit and the first month rent, however, with a purchase, you have to pay the negotiated purchase price or at least a down payment on a mortgage. You will also be responsible for all maintenance duties that provide prolong durability to your structure as well as any renovations to improve the overall appearance of your facility.

The most important thing to do in buying or leasing any office space in Houston, is to hire a reputable and professional commercial real estate agent that will work diligently to provide you with the proper information and resources needed based on your specific needs.

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Trading As A Business

Aug 31

Posted by admin in Stocks Mutual Funds

What can I expect to make my first year of trading?

We get questions like this one quite often. We find that most aspiring traders don?t have a clue as to what to expect from the market. Yet here they are, putting up their money. Most are going to learn the hard way.

We have no idea in the world what you can expect to make in your first year of trading, or any other year, for that matter. What we can tell you is that without proper guidance and help, you are probably going to have some very bitter experiences. Why? Because your anticipations are almost completely wrong.

Futures traders, especially beginning traders, often open an account with unrealistic expectations of trading performance. These expectations could be formed by the sales literature for a trading program that emphasizes its profitability, by reports of success stories by top traders or by some brokers within the industry. In all cases, you are rarely made aware of the many other times when performances were considerably worse. In other words, you are a victim of selection bias.

Most advertisers of courses, systems, books, etc., will mislead you into thinking that you just can?t lose if you buy what they are selling. We are talking here about hype, major hype ? as much as the authorities will allow them to get away with.

Selection bias is a term well known within the social sciences and occurs whenever some undesired screening factor leads to a misrepresentation of a population sample. For example, traders seldom express their losing trades with as much enthusiasm as their winning trades. Consequently, a random selection of letters or phone calls received by a company that sells a trading program often will overstate the proportion of traders who are doing well.

Sometimes the cause of the selection bias is not obvious. For instance, let\’s say that a trader who purchases a very expensive price and charting package is more profitable than another trader without it. The merits of the package seem obvious. Maybe not. It could be that the individual who can afford to purchase the package is better capitalized than the other trader and this is the reason for the better performance.

Starting off your futures and options trading experience with unrealistic expectations inevitably will lead to frustration and disappointment. It\’s better to face reality now. It will make life as a trader easier down the road. Here are just a few facts to dispel those unrealistic expectations.

1. More traders lose money than make money. The figures are fuzzy, but it is 80% to 90% (maybe more) who end up losers and leave.

2. Within the industry, only a small percentage of retail traders are profitable on a consistent basis. Moreover, if you are just starting out, you should expect to incur some loss strictly due to error on your part as you climb up the learning curve. Increased trading knowledge and experience combined with trading strategies that have superior risk/return characteristics can help put the odds of success in your favor. So, it is important to study the markets and educate yourself before trading or, alternatively, you can rely on the support of your broker professional. Another option you may also want to consider is paper trading. It\’s a viable option because it\’s a lot cheaper to make a mistake in a fictitious account than a real one.

3. You will have losing trades. In fact, most of your trades will be losing trades. It is impossible to predict price movements every time. Even when the technical and fundamental factors are in agreement, the market often moves in an unexpected way. This can even happen several times in a row. For this reason, it is always important to make sure that loss is limited on every trade and that you have sufficient trading capital to withstand several losing trades without being taken out of the game.

4. Don\’t expect to become financially independent. It\’s unrealistic to expect a small-sized account, especially one under $5,000, to generate consistent income to replace regular employment. While this may be possible for a very low percentage of traders, it does often require high-risk trading. High-risk trading means that if you are one of the many who lost money, then you probably lost your money very quickly and you may end up owing even more money to the clearing firm. High-risk trading should be avoided, especially by the beginner. Rather, concentrate on low-risk, low-frequency trading and devote appropriate effort to increasing your knowledge and understanding of futures trading.

Keep in mind that, as a beginner the emphasis should be on learning and proceeding slowly. By that, I mean practicing in a paper trading account and confining your trades to those that have low risk. The expectations of huge profit that many beginners start out with may be realized, but only after you invest the requisite time and energy and only after a slow and realistic start.

Book recommendation: If you choose trading for a living as your desired career, then it is vital that you read the book \”Trading Is a Business\”

http://www.tradingeducators.com/books.htm?source=ezinearticles

Joe Ross, trader, author, and educator, has been an active trader since 1957, when he began his trading career in the commodity futures markets. In 1982, when it became possible to day trade the S

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The Three Little Pigs Went To The Stock Market

Aug 18

Posted by admin in Stocks Mutual Funds

Three little pigs went to the market to stock
up for the future.

The first little pig liked chips so he went to
the DOW market. He was told by everyone you
could always rely on their products. They were
always good. The manager told him you could put
them away and forget about them.

The second little pig liked spicy things. He
shopped at the NASDAQ market where they had
unusual products. He said that his purchases
were good to put away even though they had some
strange ingredients. He took his home and said
he did not need to worry about them even though
others had told him to be careful.

The third little pig went to both of those
markets. He would pinch the tomatoes and squeeze
the Charmin. He was a very careful shopper. Many
times he would put things in his shopping cart,
but later take them out because they were not
\”just right\”.

Our first little piggy brought home his
purchases, put them away and many times forget
about them. The store manager had told him they
would always be good and he believed him so he
did not bother to check on them periodically.

When the second pig got home he also put the
things he picked out at the market on his shelf
and would brag to his friends about the great
things he would have in the future when he was
ready to retire. He would have more than he
would ever need. He rarely looked in the pantry,
but once in a while he knew that one of the
products was spoiling. That didn\’t worry him
either, as he knew they would still be fine some
time in the future when he wanted them.

The third little guy put his purchases away,
but regularly checked to see that they were all
right. If one of them was not \”just right\” he
would take it back to the market. Our third pig
made sure that none of his market purchases went
sour.

Time passed and our first little pig got to the
point that he needed to start eating out of his
savings. To his dismay he found many of his
guaranteed chips has spoiled. There were still
enough there so he could eat, but not the way he
had before.
Our second pig also no longer bought at the
market, but when he went to the pantry he found
almost all of his purchases had become rotten.
In order to eat at all he had to take a job at
Wal-Mart as a greeter.

Mr. Third Pig\’s purchases all were good because
every month he had checked to be sure nothing
was going bad and if it was he would get rid of
it right away. He was able to enjoy being at
home or playing golf because his pantry was
full.

It seems it doesn\’t make any difference where
our 3 pigs did their shopping ? DOW or NASDAQ
markets. The important difference was that the
one who checked to be sure his purchases never
went bad was the one who ended up with plenty.

Al Thomas\’ book, \”If It Doesn\’t Go Up, Don\’t Buy It!\”
has helped thousands of people make money
and keep their profits with his simple 2-step method.
Read the first chapter at http://www.mutualfundmagic.com
and discover why he\’s the man that Wall Street does
not want you to know.

Writen By : Al Thomas

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