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Investing Thread

It's Warren Buffet's Birthday! HBD dude! =D

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More reasons to expect a surprise rally extremely soon: Insider selling is at it's lowest point since April of 2009.

http://www.marketwatch.com/story/insiders-reaction-to-augusts-decline-2010-08-31

By Mark Hulbert, MarketWatch
CHAPEL HILL, NC. (MarketWatch) -- Cheer up, beleaguered stock market investors!

Corporate insiders have cut back on the pace of their selling of shares of their companies' stock -- and increased the pace of their buying.

They, therefore, are betting the market will soon rally.

In fact, insiders' behavior at the end of August was more bullish than at any time since late March and early April of 2009, when the bull market was just three weeks old.

Corporate insiders, of course, are a firm's officers, directors and largest shareholders. We are able to closely follow their behavior because the law requires them to more or less immediately report to the Securities and Exchange Commission whenever they buy or sell their companies' shares.


One company that gathers and analyzes the SEC data is Argus Research, whose findings are published in the Vickers Weekly Insider Report. Each week, Vickers calculates a ratio of the number of shares that insiders have sold over the previous week to the number that they have purchased.

According to the latest issue of this service, published Monday afternoon, insiders in the week ending last Friday sold 1.02 shares of their companies' stock for every one than they bought. The resultant sell-to-buy ratio of 1.02-to-1 is well below the long-term average of between 2 and 2.5-to-1 -- and solidly bullish.

In fact, Vickers notes, this latest week represents the third in a row in which the ratio has fallen.

To put the recent week's reading in context, consider that the insiders' sell-to-buy ratio at the market's low in early July stood at 1.58-to-1. At the early June low, the ratio only got as low as 1.26-to-1.

To find a sell-to-buy ratio that was any lower than the 1.02-to-1 from last week, in fact, you have to go back to the week that ended April 3, 2009.

To be sure, you may object, even though the readings in early June and early July weren't as low as the most recent one, they nevertheless were bullish. And yet, the stock market since then hasn't exactly been very impressive on the upside.

But don't be too quick to dismiss the message of the insiders. After all, it's worth remembering that, though the stock market's performance has been disappointing recently, it nevertheless is higher now than it was at the market's lows in early June and early July.

Furthermore, for a variety of reasons, including the desire to avoid regulatory or legal scrutiny for buying or selling immediately prior to good or bad news, insiders tend to act early. So, to at least that extent, the jury may still be out on their bullishness from earlier this summer.

Of course, the insiders aren't always right. They were spectacularly wrong during much of the bear market that began in 2007, for example.

Still, over the last several decades, they have been right more often than they've been wrong.
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Come on nao! I know I'm not the only one that likes to gamble or invest with the market. I know a few mods here have Diplomas in the field. Y'all are holding back for no reason. Day trading, long-term, 401k, wtfever. Share. ;)

Updates on picks I've made good or bad:







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GenericMind said:
Or "How to make a lot of money quickly and lose it even quicker: By GenericMind" ;)
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Hahaha! I like that title. I still feel happy about my post inspiring this thread. Not to sound conceited.

I'd reply to some of your investment ideas, GM, but I unfortunately lost all my investing income in a car crash two weeks ago. I'm okay. My car wasn't. It is now, but yeah--Spare funds rebuilt the bumper and tire section of my car. Waiting to get reimbursed.
 
Cheers! The market will always be there for you when you have extra cash to play with in the future.

Yesterday was a pretty significant day in the markets imo. I've never seen such a stubborn resistance level as the S&P 1130-1133 level has been for the past few months, but we broke above that finally. What's more, people are still overly skeptical of this September Rally. It's super popular to be bearish on the market and the economy right now which continues to look like a nice Contrarian signal for the market to keep going up. I'm excited. =D
 
Just posted on SeekingAlpha:

3:32 PM The cat is out of the bag: Nvidia (NVDA +6.3% ) shares are too cheap, and the stock leads S&P gainers today. Pacific Crest analyst Michael McConnell says the stock is trading at an EV/sales multiple of 1.3, vs. a historical median of 3.9 since 2005. While he says Nvidia has long-term challenges, the company can move to a 1.5 multiple, which would push shares up to $12-$13. Comment!
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Nice! =D
 
Adobe(ADBE) posted pretty crappy Q2 earnings after the bell last night and the stock is down an unbelievable 20% in premarket this morning which is ridiculous. If I had any extra cash I'd buy it in a heartbeat.


EDIT: Just for giggles, if I'd had money this morning I would have purchased the ADBE October 10th $27 Strike calls which are down a whopping 91% this morning to $0.58 per contract. Let's keep track and see if we could have made any money. =D
 
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GenericMind said:
Anyone else currently active in any short-to-medium turn trades? My trades right now:

-RIG January 2011 $70 strike calls: Purchased at $1.38 per contract
-NVDA March 2011 $11 strike calls: Purchased at $0.42 per contract
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I decided to unload my NVDA options yesterday after that report came out and the stock shot up 6%.

Total investment time: 2 months
Purchase Price: $0.42 per contract
Selling Price: $1.59 per contract
Profit: Almost 400%
 
listen if your not well versed on equities than i would trust mutual funds. they charge next to nothing nowadays less than 1% for most funds. for that 1% you get

1) research!
2) diversified exposure
3) active management
4) and the peace of mind of knowing you dont have to do shit when the market moves b/c thats what you pay for.

the reason they are able to to charge such low fees is the volume... look at some "vanguard" funds maybe large cap diversified. i can post more suggestions if desired.

the reason
 
Action in Dr. Copper further confirms what I believe is the market getting ready to rip higher, possibly for months straight.

Bling Bling Motherfuckers.
 
ChemicalSmiles said:
Im 26, dont have any credit card debt. I do have a 1600 dollar judgement against me from a past landlord but since I have so few possessions and such a small amount in the bank currently they can't take shit now.

I have no real savings in the bank and am saving 900 dollars for dj equipment right now... but I needed to upgrade my stuff and maybe I can make extra money dj'ing. Maybe this isn't the best idea, but I have a passion for music.. but I sure as hell don't want to be 40 and not have a house. I dont want to live in apartments forever.
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Thank you for your contribution to the investing thread. Before I plow all my money into a stock purchase I will surely think to myself "This is an excellent opportunity and I know that because ChemicalSmiles is saving $900 for DJ equipment and he doesn't want to live in an apartment forever!"

I'm traveling right now, otherwise my money would be in the stock market and real estate. Do not waste time paying fees to financial advisors. They don't know shit, and the S&P 500 has outperformed these so-called professionals since the beginning of time. They are a totally useless parasitic growth. If you have the intelligence of an average circus elephant, like GenericMind, you should be able to manage your own money just fine (just kidding GM, you're at least as smart as a clown!).

Generally the safest thing to do is invest in a fund with low maintenance fees that is pegged to one of the major indexes. These indexes have returned, on average, something like 10% a year over 70 or 80 years which is decent. If you have the money and tolerance for more risk, than do your research and experiment. Learn how to read a balance sheet and financial statements. Read up on Price/Earning ratios. Don't buy on margin. Read read read! Figure out if you want to be a value investor, like Warren Buffet, or a day trader, like GM. Day traders, it should be noted, are notorious for losing money in the long run.

Don't listen to financial media outlets where the priority is to fill air time but not necessarily with good advice. Personally, when the market crashed in 2008 I plowed money into funds that were pegged to the major indexes. Market crashes and terrorist events and things like that drive the market down because people get skittish, and those are the best times to invest! The hard part is knowing when the bottom is about to fall out and moving your investments into something else. Markets behave irrationally because people are stupid, emotional creatures so always keep that in mind and pretend you're a robot.

I'm skeptical of the quick recovery we experienced in the wake of the financial crisis, but it has sustained itself pretty well. Worth noting that in the 1930s after the market crashed they also experienced a quick recovery followed a year or two later by another crash. The Chairman of the Federal Reserve is a scholar of the Depression so maybe the steps they've taken will help us avoid that. Interesting to see how it all plays out! Also I should mention that I'm not actually following the economy that closely right now, other than keeping an eye on the exchange rate to calculate how many prostitutes I can purchase.
 
Stock alert to the 0 people that read this thread:

M&T Bank(MTB) is down 10% since Friday because of stupid rumors that even if true won't negatively affect the value of the company. It's currently trading at just under $82/share and is a definite BUY at this level imo.


EDIT: If I had free cash to play this trade I'd be buying the following barely-in-the-money $80 Jan 2011 calls. Let's see how it would have worked out:

Purchase price: $7.45 per contract

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Man, Transocean(RIG) has been on an absolute tear these past 3 days. It's officially made a breakout above resistance with a long way to go until the next ceiling. It's up an amazing 26% since I recommended it here on 7/19. The options are up a staggering 150%. =D

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