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Hello. As the Editor of The Money Journal (money-journal.com), I have devoted a lifetime to the study of stock, financial markets, investing, and successful money management. I invite you to read my articles and posts, and I hope that you enjoy the advice, guidance and inside secrets that I share.
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  • Why I Love Ford

    I don't drive a Ford. But I love the company. They are doing everything a major automobile manufacturer should: developing new vehicles that are in step with the times, marketing themselves in an intelligent manner, trimming their balance sheet, keeping costs inline, and earning solid profits.

    Plus, the company has plenty of cash on hand, and its new hybrid cars are quickly becoming the market leaders in their niche.

    Not that there haven't been missteps.

    Lincoln is one such mistake.

    Ford just can't seem to compete with Lexus, Mercedes, BMW, or even Cadillac in the luxury market. I want to love the new Lincolns… but I can't. They just don't compare well to the others in this very competitive market.

    Yes, Ford needs to raise the bar significantly and develop a car that will really knock our socks off to compete in the luxury division. Until then, any of the aforementioned vehicles are a better bet.

    But that's not Ford's core market. They don't do luxury well. But they do "family" better than anyone.

    Ford has a lineup of innovative, attractive, well-built cars for young adults, families, and middle-America that are unbeatable. Frankly, where Ford is at their best, they leave GM in their dust.

    Other analysts have given Ford a 12-month price forecast median target of 15.00, with a high estimate of 20.00. I think that is reasonable, but they probably won't reach the high unless we continue to see a strong Bull market, in which everything starts to rise in a frenzy.

    However, even in a small Bull market, Ford has plenty of room to grow. They need to keep executing on their solid ideas, and if they can reinvent Lincoln, they will truly shine.

    Let's hope they can.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: F, f, ford, GM, Toyota, automotive
    May 13 9:29 AM | Link | Comment!
  • Looking For Value Is Rule #1

    What makes a stock a good value?

    A value investor believes that the market isn't always efficient and that it's possible to find companies trading for less than they are worth. However, that's easier said than done. If it were simple to find "bargain stocks," everyone would be doing it - instead of continuing to pour money into the "sheep" stocks that millions buy into.

    Investing, is a quest for an edge. You can certainly invest in a bundle of companies, such as those that make up Standard & Poor's 500-stock index, and achieve market returns -- historically, about 10% a year, on average. But most of us would like to do better.

    That's not easy. The efficient market hypothesis holds that the price of a stock reflects everything that could possibly be known about it right now, including profits anticipated in the future. So you can assume that, for most stocks, today's price is "correct" -- that is, investors are unlikely to be missing important information about a company.

    Clearly, this is not what happens to most stocks on most days. Even Warren Buffett wrote in a letter to Berkshire Hathaway shareholders market was frequently efficient, but not always efficient.

    There are two major areas of inefficiency in the stock universe: micro-cap stocks and value stocks. I am a fan of micro caps, as they offer the opportunity to make a bundle in a short time. However, they can also fall rapidly, so know when to get out before you get it.

    Micro cap stocks also can provide many opportunities to make money on the same stock! Consider the example of Medbox (OTCQB:MDBX), which saw shares surge 3,000% - from roughly $4 to $215 in just 3 days! Clearly, a LOT of money could be made if you got in a $4 and got out at $215. You can probably do the math, but just to make sure you understand - a measly $4000 investment would be worth $215,000 just 3 days later.

    Then the inevitable tumble occurred, and the stock slid down and sat there for awhile. This is another good time to buy, as the bottom was found. Now, the stock is back on its way up - so I'm recommending buying.

    Value stocks, on the other hand, are both inefficient and relatively tame.

    A value stock is one that is unloved. Its price is low compared with the underlying company's net worth or performance. In his classic book What Works on Wall Street, James O'Shaughnessy looked at data over 52 years and found that stocks chosen on the basis of value most often turned out to be winning investments.

    And sometimes, the best bet is to find a micro cap that is also a value stock. By this I mean that the stock is cheap, there is tremendous upside potential, and the stock price is not adequately reflecting the future growth of the company.

    Several stocks fall into this category, including Medbox and another stock I've mentioned in these columns, AVT (OTCPK:AVTC).

    So what's the problem with AVT?

    The company is on an unbelievable journey. Their revenues increase by around 50% each year for the past 4-5 years. Show me another company that achieves that kind of growth and sustains it year-after-year.

    AVT is (like Medbox) in an exploding industry. The space is wide open and companies in it can continue to achieve mind-numbing revenue increases.

    So what's the problem?

    The fact is, AVT stock is just unknown, and lightly traded.

    I think the stock is a bargain at today's prices, yet unlike Medbox, it won't surge to $215. However, it could reach $10 shortly, which would triple your investment.

    In summary, there are bargains out there... some can rise fast (like Medbox) and others seem to have more of a slow growth curve (like AVTC). Either way, these stocks and others like them will far outperform just about any on the SP 500.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 25 1:16 AM | Link | Comment!
  • The Case For Automated Retailing

    What's Automated Retailing? It's a sleek, interactive automated retail store that uses cutting-edge technology to attract shoppers' attention, answer their product questions, run in-depth product demos, guide shoppers through the buying process and close the sale. Oh, and report inventory and customer data back to the home office in a flash.

    Brand-name retailers love Automated Retailing because they expand their brands' visibility, generate revenues and deliver a fast, convenient buying process to customers-without the expense of employees. Airports, malls and other high-traffic retail venues welcome Automated Retailing because they give shoppers expanded product selections, a positive buying experience and generate leasing revenues-in a very small footprint.

    Shoppers love to buy from Automated Retailing systems because the touch-screen technology is approachable and intuitive, they can get as much product detail as they want before making a buying decision at their own pace (without a salesperson as intermediary), and the buying process is instantly gratifying as the robotic arm gently picks up the customers' newly purchased tech gadget (or other product) and deposits it gently in a bin for retrieval.

    With all that love, it's easy to see why Automated Retailing is projected to reach over $1 trillion in sales by 2015.

    Then there are the astronomical sales per square foot. Some systems are so small they may be replacing a potted plant, yet they do $4,000-$40,000 per square foot annually. At one International in a major American city, Apple iPods sales topped $100,000 in just one month. This industry is on the rise and we like companies in this growth sector.​

    Two players dominate this industry: Coinstar (CSTR) and AVT (OTCPK:AVTC). More on those companies in another post.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 19 2:08 PM | Link | Comment!
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