Friday, October 3, 2008

Still Waiting

I suppose today we will find out if the so-called bailout bill passes the house. Either way, we are still in for a rocky ride as the market tries to find its footing in all of this mess. I still think there is real value out there, one just has to be careful and research their picks.

One way I find value is to look at a stock's P/E multiple to price. If a 18 dollar stock has a P/E of 6, then it is trading at 3X it's price to earnings ratio. Stocks with the lower multiple tend to be the best value. Anyway, expect a sharp rally when the bill passes. Have a good one.

- Roger

Tuesday, September 30, 2008

Ouch! That Hurt

What a day. The Dow down 770 in a record setting sell-off as the house votes down the bail out lan with a revote not occurring again until Thursday. Stock futures point to somewhat of a rebound this morning, but that can turn on a dime as the day goes on.

The market is a mess right now, but I actually enjoy sell-offs, to some degree, as it always me to buy more at a very discounted price. I keep a little "sell-off" fund set aside just for moments like this. Although yesterday's market action was a little extreme, this type of erratic movement will be the norm until this plan is passed in the house.

- Roger

Sunday, September 28, 2008

Beware of Penny Stocks

I thought I would mention my personal views about penny stocks, although there is a well-stated statement on the home page of Stock Assualt. Have you ever heard of "pump and dump"?

That's essentially what penny stocks are about. I get faxes at my office, from time to time, about monster stocks ready to explode. If you ever receive one, throw it in the trash immediately. Someone is sitting and waiting for a flood of buyers to come and drive the price up so that they can dump it for a huge gain, leaving the unsuspecting buyers "holding the bag".

When you hear the term "bag holder" posted on forums, they are talking about people on the bad end of a dump, or people with a bad deal in general. The AI of Stock Assault 2.0 will never get you into a penny stock, but will always choose valid companies ready to turn upwards in price.

That in itself is extremely reassuring to me, especially the part about impending price appreciation. That's what we are all in this for price appreciation. Have a good one!

- Roger