Archive for August, 2008

by Alex Kolb
One of Zacks several trading services, the Breakout Trader, recently received a boost in the form of a 19% return on a stock that was in the portfolio for a holding period that was a couple days short of just one month. The stock was American Science & Engineering (ASEI), and its share price is still rising.
Impressed by American Science & Engineering’s results, I set out to find similar plays, making sure the fundamentals were strong. After browsing several companies, it became evident that my screening strategy should be narrowed down to companies that, like ASEI, serve industrial markets.

With the use of Research Wizard, I found AZZ incorporated (AZZ) and Teledyne Technologies, Inc. (TDY). I also discovered that all three companies are makers of industrial electronic equipment or components, bringing to mind the only memorable part of the lyrics to the Electric Slide song…”it’s electric.”
These companies, however, are more than just “electric.” A closer look at the fundamentals and technical momentum behind these three stocks reveals that they are also electrifying.

American Science & Engineering, the impetus for this investment idea, boasts a history of contributing innovative technology to the fields of astrophysics, defense, education, medicine and security since 1958. Today, the company provides X-ray inspection systems and continues to innovate, create and develop new products by investing in new ideas through research and development.

American Science & Engineering’s (ASEI) X-ray inspection systems are used by governments and corporations around the world to combat terrorism, drug and weapons smuggling, illegal immigration, and trade fraud.

Technically, the Zacks #1 Rank (“strong buy”) company looks great. During the past 3 months, it’s share price spiked by 29% as the broader market fell.
The fundamental picture is a little mixed. Earnings misses over the past 4 consecutive quarters indicate that there is certainly room for improvement. However, rising Wall Street estimates for ASEI’s fiscal second quarter, third quarter and full year signal prosperity ahead. Analysts’ earnings expectations for the year ending March 2009 were up 1.3% over the past 30 trading days.
For the next 3 — 5 years, the company’s earnings per share are projected to grow by 17.5%.

If the company’s share price advanced on results that came in below the consensus estimate, should ASEI meet or surpass future forecasts, shares could skyrocket.

AZZ incorporated (AZZ), a global leader in the engineering and manufacture of electrical and industrial products, provides products and services to worldwide industrial markets with emphasis toward the generation, transmission and distribution of electrical power and the prevention of corrosion damage to steel products by hot dip galvanizing.

The company offers products through two distinct business segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment.

Of the three stocks, AZZ has seen the biggest return over the past 3 months as shares jumped 44%.
This company is also a Zacks #1 Rank (“strong buy”). On the fundamental front, the company has done well. It topped Wall Street estimates 3 times out of the past 4 straight quarters, matching the other time. On average, AZZ was ahead of analyst forecasts by 27% during the 4 quarters.
Projections are also on the rise for this pick. For the full year, Wall Street is calling for earnings of $3.00 per share, versus the $2.37 two months ago.
The company’s earnings per share are expected to grow by 12% over the next 3 — 5 years.

Teledyne Technologies (TDY) provides sophisticated electronic components, instruments & communications products, including defense electronics, data acquisition & communications equipment for airlines and business aircraft, monitoring and control instruments for industrial and environmental applications and components, and subsystems for wireless and satellite communications.
This company, a Zacks #2 Rank (“buy”), has seen a share price rise of 13.5% over the past 3 months.

TDY eclipsed the consensus estimate by an average of 12% over the past 4 consecutive quarters. As the case with the aforementioned, Wall Street sees higher earnings ahead. Analysts hiked full-year expectations by 6% from last month’s level.

Earnings per share are expected to grow by 14% over the next 3 — 5 years for TDY.

The industrial space these companies operate in is an appealing one right now even in the face of a slow economy. For more insight into the industrial products sector and additional plays on the field, check out a recent Zacks Industry Rank Analysis column written by Zacks.com Senior Market analyst Charles Rotblut, CFA. There you will find Charles’ written and video commentary on why manufacturers of industrial products, such as Cooper Industries (CBE), Mettler-Toledo (MTD) and Woodward Governor (WGOV), are enjoying positive business conditions.

Alex Kolb is an Editor at Zacks Investment Research for more information please visit http://www.zacks.com.

Article Source: It’s Electric

by Charles Rotblut
The final week of August will feature earnings reports from S&P 500 members Big Lots (BIG), Dell (DELL), Novell (NOVL), Sears Holding (SHLD) and Tiffany (TIF). Overall, it will be a quiet week for earnings with 77 companies confirmed to report.

The economic schedule is pretty full, led by the minutes from the August Fed meeting. I don’t anticipate any surprises from the notes. Other key data will include:

• Monday: July existing home sales

• Tuesday: July new home sales, August Conference Board consumer confidence index, August Fed minutes

• Wednesday: July durable goods orders, weekly crude inventories

• Thursday: Preliminary second-quarter GDP, weekly initial jobless claims

• Thursday: July personal income and spending, August Chicago PMI, revised August University of Michigan consumer confidence

• The Federal Reserve’s web site does not list any upcoming speeches.

• The U.S. financial markets will be closed on Monday, Sep 1, in observance of Labor Day. Ahead of the holiday, I expect volume to remain modest, at best.

• Don’t use the quiet markets as an excuse to stop researching new investment ideas. The most successful investors look for new ideas everyday and so should you.

• Companies That Could Issue Positive Earnings Surprises during the Week of Aug 25 - 29

• A trend towards thriftiness has helped Big Lots (BIG). The closeout retailer preannounced a 1.9% increase in sales to $1.096 billion. Same-store sales rose 2.8%. Nearly all of the covering brokerage analysts raised their second-quarter forecasts in response, pushing the consensus earnings estimate four cents higher to 27 cents per share. BIG has topped expectations for 9 consecutive quarters. Big Lots is scheduled to report on Tuesday, Aug 26, before the start of trading.

• Dollar Tree (DLTR) preannounced second-quarter sales of $1.09 billion, a 12.5% increase over a year prior. Same-store sales rose 6.5%. The majority of the 9 covering brokerage analysts responded with revised profit projections. These revisions led to a 4-cent increase in the consensus earnings estimate to 40 cents. DLTR has exceeded expectations for 3 consecutive quarters. Dollar Tree is scheduled to report on Wednesday, Aug 27, before the start of trading.
• Companies That Could Issue Negative Earnings Surprises during the Week of Aug 25 - 29

• Last quarter, Omnivision Technologies (OVTI) missed earnings expectations by 3 cents with profits of 17 cents per share. Brokerage analysts are bracing for another disappointing earnings report. During the past 30 days, 5 of the 9 covering analysts cut their fiscal first-quarter projections. These cuts have led to a 3-cent drop in the consensus earnings estimate to 16 cents per share. The most accurate estimate is more bearish at 15 cents per share. Omnivision Technologies is scheduled to report on Thursday, Aug 28, after the close of trading.

Charles Rotblut is the Vice President of Web Content for Zacks Investment Research and the Senior Market Analyst for Zacks.com. He oversees the editorial staff, manages the market-beating Focus List, Timely Buys and Top 10 portfolios, and plays an instrumental role in the development of new products. For more information, visit http://www.zacks.com

Article Source: Earnings Preview for Aug 25 — 29

by Charles Rotblut
Despite all of the news flow, the major indexes aren’t moving much. Rather, stocks are stuck in a typical late-summer environment.

Volume has been unimpressive at best. I saw some stocks trade at less than half of the average daily volume this week. It’s neither good nor bad, but rather just what often happens this time of year.

Late-summer vacations and the end of earnings season are both big reasons why many traders are sitting out. The uncertainty about the economic environment is also playing a role. Then there is Russia, which has become more militarily aggressive.

In environments like this, I feel sorry for people like Jim Cramer who feel obligated to make something out of nothing. This is a quiet market environment and nothing else. My advice is let events unravel and see what trends develop after Labor Day.

The markets will change from day-to-day; your investing strategies shouldn’t.
And part of your strategy should be to always maintain some exposure to stocks. Those who try to time the markets are often the ones who take large losses and miss out on the big gains. Conversely, the most successful investors never stop researching stocks.

Financial Stocks
As I have previously stated, we have intentionally kept financial stocks out of the Focus List. Earnings estimates continue to be cut for both 2008 and 2009 as the credit crisis continues. Banks still don’t know what is on their balance sheets, making it impossible for brokerage analysts to do little more than guess what future earnings will be.

The other big problem, that is not getting as much press, is the damage being done to shareholders. The actions taken by many financial companies to stay afloat are dilutive, at best, to existing shareholders. Unfortunately, many firms have gotten themselves into such a large mess that they don’t have much choice.

Lehman Brothers (LEH) is talking to Korea Development Bank because it can’t find other suitors. Fannie Mae (FNM) and Freddie Mac (FRE) are in need of massive taxpayer help because they have been so mismanaged. These are the type of situations that investors should avoid rather than using the latest rumor of salvation to pick up shares at discounted prices.
Always remember that just because something is cheap doesn’t mean it is a bargain.

The Markets
The late-summer environment is evident in the charts of the major U.S. indexes, which show trading ranges.

Focus List Updates
Parker Hannifin (PH) was sold because of a drop in profit projections for fiscal 2009. The company remains fundamentally strong, but we are concerned that there could be additional short-term weakness in the stock.

We are watching shares of Central European Distributors (CEDC). Our presumption is that the recent weakness in the stock is being caused by the military situation in Georgia. Earnings estimates are up during the past 30 days and CEDC is a Zacks #2 Rank (”buy”) stock.

We are looking for new additions, as we would like to increase the number of stocks within the portfolio to about 35.

Charles Rotblut is the Vice President of Web Content for Zacks Investment Research and the Senior Market Analyst for Zacks.com. He oversees the editorial staff, manages the market-beating Focus List, Timely Buys and Top 10 portfolios, and plays an instrumental role in the development of new products. For more information, visit http://www.zacks.com.

Article Source: Late-Summer Trading

by Jim Giaquinto
The five best performing stocks on the Zacks #1 Rank List last week were: Terra Industries (TRA), CF Industries Holdings, Inc. (CF), Massey Energy Company (MEE), Innophos Holdings, Inc. (IPHS) and Bucyrus International, Inc. (BUCY).

Earnings estimates for Terra Industries (TRA) have gained 9.2% in two months and 1.4% in the past 7 trading days. In addition, analysts currently expect next year’s EPS to advance approximately 21.2% from this year. Shares of TRA increased 13.6% for the week ended Aug 22, making this fertilizer company one of the top performing Zacks #1 Rank companies.

Despite lower commodity prices, agribusiness remains a hot sector, as evidenced by TRA’s second-quarter report from late July. Fueled by higher selling prices for nitrogen products, the company announced that revenues jumped almost 22% year over year to $843.1 million from $692.5 million. Furthermore, earnings per share easily topped both the consensus and year-ago result. As for the future, TRA believes that strong demand will continue for the rest of this year.

CF Industries Holdings, Inc. (CF) is another fertilizer company that had a strong performance last week. Its stock price has been quite volatile of late, but was able to rise approximately 12% and make the Zacks #1 Rank Top Performers List. Over the past month, earnings estimates for this year moved higher by 24%. Also, analysts currently expect 2009 EPS to be about 26% better than that of 2008.

In its second quarter, CF announced that price increases for all products helped net sales surge to a record $1.16 billion, or 37% better than the previous year. Excluding items, earnings per share of $4.10 marked an EPS surprise of almost 15.2% over the consensus. It also accounted for a solid advance from the year-earlier performance. CF has an excellent record of beating Wall Street’s quarterly earnings expectations, and has amassed an average surprise of almost 29% over the past 4 quarters.

Massey Energy Company (MEE) had a good week ended Aug 22, as shares advanced approximately 10.9%. Investors snagged shares after the company’s price moved lower in reaction to a correction within the commodities markets. MEE also enjoyed a brokerage upgrade during the week. Earnings estimates for this year are up 7.3% in the past month.

Excluding a charge, the company announced second-quarter earnings per share of $1.15 late last month, compared to 43 cents a year earlier. The result bettered the consensus by as much as 42%. In addition, produced coal revenue gained 38% to $710.3 million and produced coal tons sold advanced 8% to 10.8 million.

Innophos Holdings, Inc. (IPHS) announced a strong second quarter in late July, which included an earnings per share surprise of almost 215%. The phosphate producer reported $2.74 per share, while analysts were only expecting 87 cents. The result also reversed a year-ago loss. Meanwhile, selling price increases led to revenue growth of almost 74% to $264 million.
Earnings estimates have been trending higher for IPHS. Expectations for this year are up approximately 146% in two months, which includes a jump of 34% in just the past 7 trading days. The company made the Zacks #1 Rank Top Performers List for last week with a gain of 10.1%. IPHS was also featured for the week ended Aug 1.

Bucyrus International, Inc. (BUCY) reported second-quarter earnings per share of 83 cents in late July, versus the year-earlier result of 40 cents. The result marked an almost 26% surprise over the consensus. Sales rose to $621 million from $374.8 million. The company is enjoying strong demand from its products and services, thanks to high international commodity prices and strong markets for commodities mined by its machines. BUCY also benefited from its acquisition of DBT GmbH last year.

BUCY shares moved higher by 9.7% during the week ended Aug 22, which was enough to put this mining equipment company on the Zacks #1 Rank Top Performers List. Earnings estimates for this year are up 12.5% in the past month. Also, analysts are expecting next year’s earnings per share to improve upon this year’s by as much as 32%.

James Giaquinto is an Editor at Zacks Investment Research for more information please visit http://www.zacks.com

Article Source: Top Performing Stocks for the Week Ended Aug 22

by mcomo
Having traded stocks for over 20 years I can tell you this is not a question taken lightly. If I had to think of one word that makes the difference between a successful stock trader and one that looses money it would be discipline.

You are probably asking yourself discipline what do you mean? Most people end up loosing money in the stock market, because they don’t have the discipline to create a plan for any stock they may invest in, set a stop and have the discipline to take a small loss and move on. In most cases whether you make money-trading stocks or not is determined by how you handle your losses. Anyone can make a profit, although you do need the discipline to take a profit at the right time, not acting out of greed and hanging on.

Many times people will see their stocks go up whereby they have made a nice profit, hang on for more out of greed, only to end up seeing it drop back below the price they paid for it. When this happens the stock has normally gone through one or more stages where it should have been sold and will head lower. These same people will hang on, because they don’t have the discipline to pull the trigger and sell it until the last minute. When they do eventually sell it the one time profitable stock has turned into a huge loss wiping out he gains of many other stocks and pulling their portfolio lower and lower until there is nothing left.

I will be writing many articles on this subject, but I decided to do some research to see if I could find a piece of software that could help people overcome some of the problems that are common to most of us and help us determine when to buy and sell.

I am happy to say that if you do your research you can indeed find software out there that will give you entry and exit points so that you have a much better chance for success.

When doing my research I came across one piece of software that I found very interesting. It offers a Revolutionary Trading Software Guaranteed To Generate Profitable Winning Trades On Autopilot In Only An Hour A Day Using State-Of-The-Art Artificial Intelligence.

The beauty of it is that the cost is minimal and you can get a demo right online. Now days with many people are looking to handle their own investment portfolios I believe this can be an invaluable asset. This program runs in the background evaluating stocks giving you the important buy and sell signals. This can saves hours of time researching data on stocks and really opens up the stock market in a very unique way to the people that may only have a minimal amount of time to trade stocks for money. Very interesting indeed. Please feel free to read both this article or one of my many others by visiting my link in the resource box below. I always enjoy getting emails pertaining to my articles or my site. Your feedback is important to me.

I wish you the very best.

Michael Comeau has been owner of many successful businesses over the years including his current online business which can be viewed at http://www.workfromhome4dollars.com/Article-How-To-Trade-Stocks-For-Money.php You may also find more articles by Michael Comeau at http://www.workfromhome4dollars.com

Article Source: How to Trade Stocks For Money

by Jon Arnold
Most people understand what a mutual fund is and think a hedge fund investment is the same thing. They are correct in that a hedge fund is a group of investors that pool their money, just like a mutual fund. Hedge funds, however, don’t have the same type of regulation that the mutual fund has. In fact, you have to have a specific amount of wealth to invest in a hedge fund and a required amount of investment savvy. A hedge fund investment is not a public offering, but often a private limited partnership with the fund manager as the general partner.

Hedge funds do things because it is a private investment, which regular mutual funds can’t do. One example is the ability to sell short. This is a risky technique especially if it’s a naked short sale. The short sale is when you sell a stock in hopes of purchasing it later at a cheaper price to fill the sale.

A naked sale is one where you sell a stock you don’t own. To comply with government regulations you must be able to borrow it from someone before you sell it. The reason that it’s so risky is that the price could skyrocket after you sell the stock. Then you must pay huge amounts to fulfill your obligations to the buyer.

When large hedge funds use the techniques, often they drive the price down artificially in the sale of the stock and minutes later, can make a quick profit with the purchase and delivery of the cheaper stock. This is one way a hedge fund investment brings higher income than the traditional mutual fund.

The original purpose of a hedge fund was to hedge against the market’s swings. The combination of different types of investments provided an equation against falling markets. The change came as hedge funds became more popular. Today, they provide not just a hedge against loss but an edge for gain.

The typical hedge fund investment contains derivatives that are high yield and debt from companies considered risks, so they have to pay more to borrow, or their loans sell at discounted rates which means the yield on the return is higher. If you use a $1,000 loan as an example, with the company loan rate at 8%, that is a decent comfortable return. Now, if that same company gets behind on the loan and the lending institution panics, they might sell it at a 50 percent reduction of the balance to the hedge fund. This in effect means that not only does the fund get 16 percent interest, but if the company actually pays the loan in full, they make a 100 percent gain on that money.

If you have plenty of money already, you may be the perfect candidate for a hedge fund investment. These types of investments are supplementary to normal investments. They attempt to defeat bear markets and bring in money while they also take advantage of the bull market and yield a higher return. There are risks in a hedge fund, ones that the average investor would never take. With the onset of a bear market, the technique of short selling is one of the best ways to hedge the bad market and take the lemon that the economy handed you and make lemonade.

For more insights and additional information about profits in a Hedge Fund as well as getting free reports about hedge fund investing, please visit our web site at http://www.hedge-fund-advice.com

Article Source: Profits In Hedge Fund Investing

by jacob.c123
Life settlement means that the senior citizen can sell the unwanted life insurance policy in return of a single cash payment. The senior citizen will receive a cash amount which would be greater than that he would have received on surrendering his life insurance policy to the insurance provider. He can use this lump sum amount for paying his dues or buying a house or a car, for a vacation etc.

In times of need, money can be received from the secondary market, instead of going to Life Insurance Company. After this you do not have to pay any premiums and there is no obligation to the life insurance policy. It becomes difficult for the policy holder to pay premiums or his heath condition changes, while he purchases the new insurance such as long term care coverage, retired key man, surrender policy, resolution of company or partnership, liquidity of assets due to bankruptcy.

Call the life settlement company and express him your interest. The life settlement company will be able to quickly analyze based on the self report information. That is according to your age and the health status. The type of the insurance policy selected and what is its value. When the Application form is completed: The policy holder should have completed the form and given details to the life settlement company regarding the type of insurance and medical information. It is important for the policy holder to give the life settlement company, personal information with signed authorizations. The medical records will also be evaluated. The life settlement company will collect all the information from the doctors and insurance company and provide this information to qualified buyers. The life settlement company will provide upto date information to the policy holder regarding his best proposal. The closing process will close when the documents are presented by the buyer and seller and all the formalities are fulfilled.

Senior life settlements can be eligible for citizens who are 65 or older. The face value of the insurance policy should at least be $250,000. All types of insurance policies are eligible like the variable life insurance, key-man life insurance, universal life insurance, term life insurance.

A viatical settlement means the sale of a life insurance policy. If a person has terminal illness he/she will give the insurance policy to the viatical settlement company for a lump sum cash payment. The viatical settlement company may sell the policy to the third party investor. The vertical settlement company or the third party investor will pay the premium amount; collect the face value amount after the original policyholder dies.

The viatical settlement company will set its own rules before it decides to buy the life insurance policy. He will buy only those policies which is owned by the policy holder for a minimum of two years, when he is terminally ill or when the policy holder can beneficiary sign a release or a waiver. This product has helped thousands of seniors tap the liquidity of an unwanted asset.

Jacob Christopher is a seo copywriter for Life Settlements and Life Insurance Settlement. He has written many articles in various topics like Viatical Settlements, Ideal Life Settlements, Life Settlement. For more information visit http://www.securelifesettlements.com/ Contact him at jacob123seo@gmail.com

Article Source: Overview on life settlement

by
Unfortunately, defaults on mortgages and property repossessions are becoming an unpleasant fact of life for many homeowners in the United Kingdom. However, what is indeed a tragic event for one could turn into a profitable opportunity for another. For first-time home buyers looking for a reasonably-priced dream home or property investors seeking a profitable investment, repossessed properties can be a good option.

Now that you are convinced of the merits and profits of repossessed properties, you might want to start an investment of your own. For most first-time home buyers or property investors, a good question is where to begin. My answer: scour around for a repossession list — a catalogue of the repossessed properties in your chosen area.

A repossession list, whether an auction catalogue or an online mailing list, can be a good source of first-hand information on the properties in the market as well as a way for you to compare prices to find the cheapest and best deals in town. Check to make sure the list is current and you are not charged much if at all for access.

Aside from a repossession list available through some property websites or estate agents, your neighbourhood newspaper or local housing authority could have some information regarding the availability of repossessed properties in your area. Now that you are all set to start your search, the perfectly-priced property may not be far away. Following these leads, you’ll soon find out that repossessed properties at bargain properties are indeed everywhere — if you only know where to look.

Many of the repossessed properties can be viewed and purchased at an auction sale. Most of these auctions are conducted quietly and without much publicity. Buying repossessed homes at auctions is definitely profitable if you know how to play the game.

First of all, keep in mind that a property auction is not a gamble or a game wherein the object is to win the prize at whatever cost. Remember that you are supposed to get a cheap property at an auction. Stick to your maximum bid price and do not go higher if you cannot afford it or if the price will eat away at your profits. Repossessed properties are supposed to be cheaper than new-builds or brand new ones. If the price is too high, then it is time to put down the paddle.

The property investment arena is one of the best avenues to earn a hefty profit in a relatively short amount of time. However, like most investment opportunities, there are some risks and potholes involved. Minimise these hazards by choosing your investment wisely and carefully.

Before you sign on the dotted line and hand over your hard-earned cash, make sure that you have done primary research on the property. Have you done a drive-by and checked the neighborhood where the property is located? Have you inspected the interiors of the property thoroughly and meticulously? Have you checked the legal papers of the property and are satisfied that there are no legalities that could give you trouble later on? Do the figures add up to still give you a lucrative profit or healthy savings?

After a healthy dose of research and some wise strategising, you could now be on your way to a profitable investment in the world of property.

Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - http://www.Property-System.com

Article Source: Investing in Repossessed Properties: Get Started

by Barry Wallis
Stock analysis, when done correctly, will change your life! It will help you to turn a small amount of personal savings into a quickly snowballing trading account. Analyzing stocks correctly has the potential to free you from work, debt and a feeling of “want” into one of the rare people who are truly independent, can live anywhere in the world they like and need only to work a few hours each week. It is for these reasons that many people seek to master the stock markets. Learning how to do stock analysis the right way is the first step on a liberating journey of self discovery and personal fulfilment.

Let me take you on a little voyage of discovery….jump into my time machine.

What is “the right way” to do stock analysis? Simple…the right way is the way which has produced the best returns over a long period of time. The feature I love most about the stock market is everything is recorded! We can literally jump back in time to great traders, high performing stocks and market conditions and learn from them. How do we do it? We look for patterns and common denominators. Once we have those, we try and incorporate them into our trading.

This is what Warren Buffet did. It’s what Peter Lynch did, Jim Slater did it too, and so did Marc Faber, George Soros, Jesse Livermore, William O Neill and Nicholas Darvas. The list could go on and on.

They researched why stocks behaved the way they did, cherry picked the winners and then went out and looked for them!

Their first step, to a man, was stock analysis…more precisely, fundamental analysis. Fundamental analysis is about which type of stocks we choose. It revolved around the company that’s underneath the quarterly reports. Great fundamental analysts look at factors, like earnings, profit margins, operating profits, sales growth, product pipelines, management quality, the competitive position, debt to equity ratios, and many more. These fundamental factors tell us about the company as a business.

There is another type of analysis…technical analysis. It revolves around the strength of the industry group of the stock, who is buying it right now, and how much they are buying, technical analysis of the stock chart, its performance over a period of time against its peer group and the market in general. Now, most people who rely on fundamental analysis have dirty raincoats and big overdrafts in my experience. Many people, though not all, who rely on fundamental analysis suffer from ever increasing market swings.

Most highly successful sophisticated investors look at both types of analysis…it’s a kind of techno fundamental analysis. The balance in this method is heavily weighted to fundamental analysis….about 80% with technical analysis being about 20% of the weighting. It’s more important to buy good companies than it is to jump on great entry points in the stock charts of poor companies.

As investors, we all want to have the “margin of safety” which Benjamin Graham talked about. Buying stocks in outstanding enterprises goes a long way to providing this so that our downside is limited. However, on its own, this isn’t enough protection. Great companies like Cisco have gone through stomach churning corrections of almost 90%. The missing part here was technical analysis…buying the best companies at exactly the right time instead of simply buying htebest companies.

When you put both pieces of this stock analysis puzzle together, buying great companies and buying them at precisely the right time, your success in the stock markets is almost assured.

So when you think about investing in or trading stocks, use both technical and fundamental analysis. Keep your overdraft low and your rain coat clean by doing stock analysis the right way!

Barry Wallis has been teaching beginning and struggling traders to profit from stock market research for 4 years. Find out how more and more people are changing their lives fast with his easy to apply book on stock analysis.

Article Source: Stock Analysis - Would you like to change your life with stock analysis?

by Rob Forbes
The magic of options trading is that allows for a variety of strategies to be matched with different stock trading philosophies. Each strategy has a different profitability and risk tolerance level, and using a variety of strategies can spice up a portfolio very nicely! In this article, I will outline four different stock trading strategies, and how they can be matched with corresponding options trading strategies which you can apply to your portfolio. The main idea is to first focus on an underlying stock trading strategy, and then add significant leverage and power to the trade by using options.

The most important factor when considering each of these strategies is the concept of TIME DECAY. The value of any option declines over time, until the day the option expires. This concept can be the major enemy of any option trade, eating into its profits, or it can be the key to successful and profitable option trading.

Firstly, which Strategy?
There are generally four different strategies employed by stock traders, each of which has implications when applied to options:

(i) Position Trading
Traders buy a stock and hold it for long periods of time, based on good fundamentals of the company. They will often wait for a stock to reach really good value, and then watch for institutional or insider buying before making a move. As the stock price increases, they look out for other buyers to step in and move the price even further.

APPROPRIATE OPTION STRATEGY
Buying calls and puts is NOT appropriate, because you pay large premiums for time value, most of which could be wiped out over time even as the stock gains in price. TIME DECAY is your enemy.

Selling covered calls each month in the option cycle on the stock you already own can significantly reduce the cost you paid for the stock in the first trade. Even if the stock goes down, you can still come out a winner!

(ii) Momentum or Trend trading
Once a stock has made clear move or breakout, the Momentum traders step in, and ride the stock up along a trend to its first major reversal. They hope to make shorter term profits from a rapid move in the price. Holding periods range from six weeks to six months.

APPROPRIATE OPTION STRATEGY
Buying calls and puts is NOT appropriate, because you pay large premiums for time value, most of which will be wiped out over time even as the stock gains in price. TIME DECAY is your enemy with Momentum Trading, unless you have a particularly strong and fast moving trend.

Selling Naked Puts is a good strategy, and can be even more profitable than selling credit spreads. However, it leaves you a position of possibly having to buy a lot of stock if the trade goes against you, and so your broker requires you to have a lot of margin.

(iii) Swing Trading
Swing Traders buy and sell swings or oscillations within a trend. Holding times are from between 2 and ten days. This is a shorter term trading technique that is more dependent on the trend direction than it is on fundamentals or technical indicators.

APPROPRIATE OPTION STRATEGY
If you have mastered the skill of identifying reversals or swings within a trend, and know how to plan an exit strategy, you will be able to start buying calls and puts, or DITM options, which will take you to real profits! With Swing Trading, holding times are short (2-10 days) and so you minimise the effect of your arch enemy, TIME DECAY.

(iv) Day Trading
Day traders focus on the many small moves that happen during the trading day, mainly shown up by candlestick patterns. This strategy has a broker’s requirement of a minimum of $25,000 to qualify, which knocks out many beginners.

APPROPRIATE OPTION STRATEGY
Option trading is not appropriate with this strategy. Broker fees for options trading are quite high, and Day Traders end up paying vast sums to their brokers.

In Summary:
If you own at least 100 units of a stock that is not particularly trending in any particular direction, sell Covered Calls each month in the option cycle. You can reduce the net price that you originally paid for the stock by between 5-12% each month.

If you have at least $1,000 in your account, and can identify a trend, you can easily sell Credit Spreads or Sell Naked Puts each month in the option cycle.

If you have mastered Swing Trading principles, especially the idea of planning entries and exits, you can start to buy Calls and Puts, or DITM options and make phenomenal profits.

Want to learn more? There is more information with pictures at www.swing-trading-options.com

Article Source: How to choose the best Options Trading Strategy