sky2evan

Green Mountain, Google Could Surprise Investors Despite Volume Trends

Mr. Gordon,
I can agree with your overall assessment, but I fail to understand why you would buy more. IMO, Averaging Up is as dangerous as Averaging Down. Piling on to a Losing Stock just sinks extra Capital, and Piling on to a Winning Stock just sinks extra Capital + current Profits. Both types of Averaging depend on More Time to recoup losses or gains. Why not just let your current Winners run, & find other Winners?

The saying goes, "Cut your Losses, and let your Winners Run."
I'm sure there's a reason why it doesn't say anything about Adding to your Winners.

Besides, GMCR seems too "hot" & overbought. Plus, it doesn't seem to be participating very well in today's rally, which to me isn't a good sign.

It's Time for Post-Apocalyptic Pricing

I recommend stop predicting where the Market "should go" or "is supposed to go", and just go with the flow of wherever it's going.

That said, IMO recent resistance for the Dow was 8500, and support was 8200-8300. Since recent activity was more Bullish, it made more sense IMO to stay In or Buy if you were Out. Personally, I increased my position last week from 35% to 85%.

That said as well, I don't plan on Buying more at this point.

5 Stocks Selling At a Discount to Fair Value

I think Seeking Alpha needs to "diversify" its Investing Ideas section.

Dividend Investing might deserve a special section all by itself, but it certainly isn't the only way or the best way to Invest or Trade (a bad word to Buy-and-Hold types).

The author contrasts his preferred Dividend Investing against Buy Low-Sell High "Trading", as if all Traders were Market Timers searching for Bottoms & Peaks. This is a gross mischaracterization & generalization of Traders, which is understandable since the author has most likely had little or no experience & success with Trading.

There are all types of Traders: swingers, scalpers, trend followers, faders, etc. None of the ones I've heard of are "Market Timers". Successful Traders don't try to time the Market, they just "go with" the Market. They go in & out, taking advantage of short-term price movements which can last anywhere from minutes to months. I think the very best ones don't care which way the market goes, they just "read" what the market is currently doing and act accordingly. They don't try to "time" anything.

I daytraded for 1 month in January 2009. I only made 1 or 2 trades a day, on average. I certainly wasn't Timing the Market or the stock. I made about 12%, using only 50% of my Investment Capital & no special software. But I stopped, because daytrading isn't personally fulfilling for me.

I switched to short-term trading ("fundamental trend following") in late April. I had taken a break, so I missed the March market bottom. Anyway, if I sold all my current holdings now, I'd be up a total of +25% for the year. And no, I didn't lose money last year.

Most semi-competent traders should not have lost too much money in 2008, because they're supposed to have stop procedures specifically to avoid loss.

Personally, I think many of these Buy-and-Hold types want to persuade others of the validity of Buy-and-Hold in order to avoid confronting the flaws of this style & avoid admitting that they made a mistake by not selling sooner. That's why so few of them will publicly tout their 2008 losses.

But of course, most of them don't have the courage to admit that. And I speak from experience - I'm an ex-Buy-and-Holder myself, from the days of the Internet Bust when I lost 50%. I should have sold near the highs, or soon after my stocks started tanking - but I didn't. So I learned my lesson: Holding through thick & thin, for better or for worse, is for a marriage - not for stocks.

3 Stocks to Put This Global Crisis in Perspective

I don't see the point of being so US-centric when it comes to Investing. Hasn't it been proven by others that International equities have performed better in the last 10 years, and are expected to perform better than US equities in the future?

Just take a look at the past 3 months since the March bottom.
The author mentions Nucor, I picked Arcelor Mittal (MT, #1 steel producer in the world). MT beat NUE 53% to 17%. Sure, MT's dividend is only 2% compared to NUE at 4%, but who cares when you're getting 53 vs. 17%?

Then the author mentions WMT, which has gone up 3% from $48 to $50. You could have picked Tesco (TSCDY, UK competitor), which has gone up 21%, from $12 to 17, and also sports a dividend of 4%.

If you're going to invest only in American stocks out of some sense of misguided "patriotism", "familiarity", or belief in the "superior American way", you're going to miss a lot of better opportunities & sell yourself short.

Think Global, not Local.

Personally, I am 70% weighted in International stocks (ADRs). I love ADRs - they are slightly less followed, and more undervalued (NUE P/E = 10, MT = 7). I tend to find that they have a lot more room to grow than American Monster Caps. Plus, ADRs act as a small hedge against the weakening USD.

Disclosure: I'm American, & I own MT.

Why I'm Exiting Cisco

Selling at 25% in 2 months with no other momentum drivers is prudent. It's much better than potentially losing money, or even missing an opportunity to make more. Lost Opportunity is much better than Lost Money, as most people probably know by now.
So congratulations to the author.

CSCO is a "safe" stock balance sheet-wise, but just like its INTC & MSFT brethern, it is a Monster Cap, and hard to budge. During the last 10 YEARS, excluding the Internet Bubble, it has only barely touched $30 once. Worse yet, no dividends so you don't even get paid to wait for it to budge. There are tons of stocks that have much better charts (and earnings growth prospects), & quite a few that have great dividends.

Whether your time frame is Long or Short-term, it's difficult to tell whether the market (or economy) will go Up or Down. Predictions that CSCO will be at $30 in 1 or 2 or 5 years, they're all just predictions - usually motivated by what we want to see & hope to happen, as opposed to what will actually happen. The recovery could be sooner or later, fast or gradual, long or short - who actually knows for sure?

Personally, I buy based on fundamentals & technicals. But after that, I just do whatever the Market (or the stock I own) tells me to do. Strong price action = hold. Weak price action = look to sell. I prefer to hold Longer, but if I have to Sell, I will. The Market is an Ocean... it's unwise to fight the ocean & insist on your own opinions & forecasting - especially in Hurricane season.

Buy-and-hold-and-forge...
Buyer beware.

Dividend Investing vs. Trading

There is no one strategy that will work all the time in every decade for every Market. Obviously, Buy-and-Hold or Dividend Investing didn't quite work so well for the past 10 years. So everybody should just stop bashing different Investing-Trading styles.

And all these people who are pushing their own Investing style, they always seem to use historical numbers based on hypothetical investments beginning with, "If you had Invested X amount in Year Y, you would have made Z%...."

They never offer up the success or failure of their own Investment experience.

So, I'll share mine: During the last 4 years I've been Investing, I've tried Long-Term, Short-Term, & even DayTrading (for 1 month). I made money on all 3 styles, posting a gain every year from 2006 (# of Trades):
25% (10), 8% (2), 7% (1), and 15% (37) for 2009.

Personally, I prefer Short-term (days, weeks to months). Obviously, if the stock is performing well, I'll hold it Longer. And I never buy any stock that I'm not willing to go Long, so it has to have Value or Growth, & good Fundamentals.

My point is, you can benefit from examining & adopting aspects of the other styles, and it might make you a better Investor-Trader.
Short-term Traders can benefit from holding some positions longer than they're used to, while Long-term Investors can benefit from more Management & Risk Control, like having mental Stops in place to avoid -30% losses like most people in 2008.

Find a style that works for you, & the only way to do that is if you're Open-minded & Flexible.

Hedge Crude Oil Exposure While You Dance the Contango

Daniel Yergin is a buffoon.

He thought (and probably still does think) there is so much oil out there, that it'll last another 30-40 years before supply starts declining and affecting price.

This is, of course, one of the main reasons why he currently thinks oil will stay "near 40-60" in the foreseeable future. It may stay near here as long as the economy is in recession, but when the economy picks back up, as long as no new substitutes are in place, oil will rise.

There is simply no new cheap oil left (as in low cost of production). That's why most of the rare new discoveries you hear about are all in the middle of the ocean somewhere.