CEGE :) :(

Cheers to getting in at .195... selling at .585... getting nervous as she went up to .64... buying back in at .54... and then plummeting to .46. My head hurts.

Not sure if anyone is still following PSPM but it just hit .70...

CEGE !!!!

Hello my little friend. Welcome home. Now go up to $2.00 and ill be happy

Younger Investor Thoughts and Leveraged ETF's

This may be a longer blog, with a lot of things being said. Hopefully it’s not something you just read, but something you can try to implement.

For those readers of this blog that are younger, mid 20's, who have excess capital, now is the time to begin to accumulate wealth (do not depend on trust funds from mommy and daddy, that would be pure laziness and you'd be missing an opportunity to build your foundation of wealth, on your own). It will not come over night, but you need to start somewhere. Due to our economy, our markets, our countries significance in the global markets, and most important, our time horizon and generation, You would be doing yourself a disservice not to start investing, even if it is just $100-200 per month in a Roth IRA, Traditional IRA (Non-Deductible IRA if you are covered by a Qualified Plan), or through a general Brokerage Account.

Yet, There is no need to feel rushed to buy shares of companies because we are young (inexperienced) and have the time horizon to allow the market price to recover. Yes, the S&P is sitting at 683, and yes, a lot of companies seem to be a great bargain today. But when the S&P experiences a "Mini-Bull-Market", and grows to just 850, we are still far from the 1400 we fell from. Thus, their will still be undervalued equities waiting to be exploited, and the real Bull Market possibly around the corner.

Another reason why it's tough for younger investors to really capitalize on this bear market is because our government is dumping loads of money into the economy, and of course, the markets. I am not sure if that will be a good thing or a bad thing, only time will tell and I believe we need to give it some more time (excluding the credit market). But it's not the money funding new programs and financial incentives to support our countries growth that makes me ponder, it’s the idea that our government, for the 1st time in our Country's history, could own hefty stakes in numerous companies that have been the face of our "Blue-Chip" indexes for the past decades.

Through my studies, I have learned that “buy and hold” is critical when employing your financial plan and that in the long run, a 60-40 allocation will provide the return that a more aggressive allocation could provide, without the volatility and risk (Efficient Frontier Theory). With our government’s actions and my inexperience, I do not know what to buy and hold, as is evident from my initial stake in USO when it was selling at $48 a share (I still own it).

Yet, I have been utilizing other ETF's, and more recently, Leveraged ETF's with success. For one, they are cost efficient in comparison to the expense ratio of Mutual Funds while providing diversification, and, attractively speaking, they can be traded just like stock throughout the day. If you buy them through a Broker (financial advisor), you will most likely pay $20-25 per trade, but if you buy them yourself through a discount brokerage firm, you are looking at anywhere from $7-13 (think about your "true" cost basis when you pay a commission).

If you like the idea of day trading and market timing or if you like the idea of buy and hold, using ETF’s and, more specifically, using Leveraged ETF's is one heck of a way to bolster your returns in the short-term or over the long-haul. My most recent success has been to use Leveraged ETF’s more as an actively traded instrument.

As I mentioned, the S&P is sitting at 683, so one general strategy would be to look at a Leveraged ETF so when the S&P experiences a mini-rally, you walk away with more than just a couple percentage points. Yes, ProShares and Rydex, to name a couple, have some nice leveraged ETF's, but Direxion has some newer leveraged ETF's, some of which will provide you with a 250% - 300% return on your $$$.

Another idea to think about; we all know Energy is our future, but who knows when that future will come to fruition and peak. Why not look at ERX (300%) as something you can hold while continuing to evaluate the external environment.

I am a big fan of Leveraged ETF's, and ETF's in general, and have crafted many "day-long portfolio's" (based on global news, previous trading day events, and morning future prices), "week-long portfolio's", and "buy and hold" portfolio's while maintaining exposure to numerous asset classes, sectors, and securities in general, all through the use of ETF's and Leveraged ETF's.

I will leave you with this; “I am no expert, but I am learning through trying.”

Dougie Fresh

Proprietary trading firms racking up huge profits

http://www.crainsdetroit.com/article/20090126/EMAIL01/901260271/0

Time to Sell BAC?

Something to think about... Field...

http://www.bloggingstocks.com/2009/01/28/should-you-sell-citi-and-bank-of-america-today/

Financial Finger

Coming back strong in the New Year with a riveting article. It seems that our financial success is in our hands (pun intended).

http://www.comcast.net/articles/news-science/20090113/SCI.Financial.Finger/

Altria Group

My next pick may be Altria Group (Sym. MO), which I'm sure you know is the holding company of Philip Morris. It's trading at its 52-week low after the Supreme Court said yesterday that it could be sued for advertising light cigarettes. However, this does not mean that a class action would prevail. Altria is considered highly recession proof and the yield is the highest it's been at 8.5% (it's also one of those stocks that Cramer takes every opportunity to talk-up). More research needed but I'm almost ready to move on this one.

Side note: SLW closed at 5.92 today. Up almost 78% in less than 2 weeks. Expecting volatility to increase but taking this one long-term.

Floor Talk: Taking a look at the auto industry in light of recent news

With so much focus on the automaker bailout recently and a possible decision on an agreement possible in the coming days, we decided to take a closer look at the current status of the plan and the companies that have the most exposure to the big three automakers (GM, F and Chrysler)... To recap, last Thursday night the Congressional relief package for the auto industry collapsed in the Senate due to a dispute over the wages paid to workers at the manufacturing plans. Then on Friday morning, the White House said that it is willing to consider use of TARP funds for automaker aid, which sent stocks soaring. This morning, WSJ reported that the Bush administration is weighing a much larger rescue effort for US automakers than originally envisioned and is discussing a rescue totaling $10-40 bln or more... It is widely known that a bankruptcy among one of the Big Three would lead to a financial mess among the suppliers and other related companies. If that were to occur, there is a high likelihood that some of the major suppliers could follow suit, wracking up millions of potential job losses... It is well known that GM and F will be the most impacted by any potential bailout, but the reaction in their stocks will depend on the terms of any agreement that is reached. If there is a significant equity stake in return for funds (which we would think is likely if TARP money is used), a bailout may not have a positive impact on the automaker stocks. If there isn't a dilutive stake taken, then the automaker stocks could see a relief rally, as the imminent threat of bankruptcy will be eliminated... The related suppliers may be the place to look for volatility. These stocks have seen varying degrees of recent weakness, with some getting hit especially hard over the past few months (AXL, LEA, TRW, VC, TEN, ARM all are down over 50% since Sep 15). Most of these stocks have recently seen a significant bounce off their November lows, but they would likely react to any decision on the automakers

LUVin' It.

Kudos on Brad's thoughts on gold, Todd's play on GGP, and Rod's supple hands. I am considering about buying Southwest (LUV) on its current 52-Week low. A low-cost airline, carrying the most passengers, reorganizing their routes, becoming more efficient, fuel costs down, etc. I know the airlines are feeling the crunch but Southwest could be a nice long-term play and LUV seems like it may be in a position to come out on top.

GGP Gen Growth Prop spikes 74%...

... to 2.50 in pre-mkt trading following news that co completed a mortgage refinancing


I'd like to thank Josh " Da Man" Pitinkin for convincing me to apply for the reallocation of GGP I started quoting it yesterday and bought about 10,000 shares of stock at 1.44 on the close. Thank you JOSH!!!

It's to good to be true..

One Year to Date:

As we all stare in amazement, Joshua ponders ways he can obtain the Senate Seat from our good friend Rod.

"A day after his arrest on charges he orchestrated a wide-ranging pay-to-play operation to enrich himself, Blagojevich sought to portray an air of normalcy by going to work on his 52nd birthday. But his decision to make a rare visit to his office at the Thompson Center downtown left him dodging news media crowds that swarmed the street outside his North Side home."

Happy Birthday Rod!

Doname

Nothing like a nice soft pair of hands to rest your face on!

I sense love in the air...

The Case For Gold

Sorry for the delayed response to BD's Silver post. However, I have been busy and have not had time to write this until now. Don't worry about the run-up the last few days because there is a lot more to come!

This post is about gold but gold and silver are extremely correlated and therefore, can be applied to either precious metal. While the correlation is usually extreme please remember that gold and silver have deviated in the past few years. GLD (the gold ETF) has done much better than SLV (silver ETF) 1 yr. 30% better and 2 yr. 50% better. This may provide an opportunity to play the spread as both are promising in the near and distant future. I am not that educated on the spread between the two and will leave that for another post. This is specifically why you want to be in gold now!

The first observation which is obvious to everyone that is paying attention is that the US government is doing whatever it can to prevent a deflationary spiral. We can ill afford to allow this economy to slip further and the Gov. is doing whatever it can to avoid that. This includes pumping enormous amounts into the economy in attempts to reflate the economy. Money used for TARP, a massive government spending plan and what seems to be the start of an auto bailout, will all contribute to the spending spree.

Take this reflationary attempt and couple that with an already weak dollar and we are seeing the beginning of a gold run-up. But the US is not alone in this economic slowdown. Currencies all over the world are declining in value as other countries slash interest rates in hopes of heading off a recession. Europe and China have already announced their own bailout plans with more to follow. With the world currencies devaluing, the only logical safe-haven is gold.

With such a positive outlook it seems amazing that gold is actually extremely cheap! Since hitting a record near $1,030 an ounce in March, the price of gold has fallen about 25% to $775 as of this past Monday.

Another positive sign is that there isn't an abundance of the metal. There actually may be a shortage! Some estimates have gold production dropping by 5% next year; creating even more demand for your investment.

So what do we do?? There are many ways to play the gold card but here are my suggestions.

I suggest that you invest in a gold ETF. EFTs are becoming the favorite choice for investors as Mutual Funds and Hedge Funds have been annihilated in the past year or two. In fact, investors pulled $66.6 billion out of mutual funds the past month (November) and poured $17.6 billion into ETFs, according to estimates. This should help to drive the ETFs up even faster than before.

Plays:

GLD/SLV: These are ETFs that invest in the metal itself. This is a more conservative play as it wont move on anything except supply and demand. However, this is a wise long-term play as it should reflect the market price of gold.

GDX: This is a Gold Miners ETF and has a basket of miners. This is a more risky approach as these stocks will fluctuate not only on gold demand, but also on earnings and company specific P&Ls.

FAVORITE: My #1 play is PowerShares DB Gold Double Long ETN (DGP). This is a double long play so its not for the weak hearted. The funds goal is:

The investment seeks to replicate, net of expenses, twice the daily performance of the Deutsche Bank Liquid Commodity index - Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.

So this should increase much faster than GLD.

Take your pick but I say buy gold now as it is relatively cheap. Two possible outcomes: 1) Economy gets better, inflation builds, the Billions spent by the government multiplies the inflationary effects and gold skyrockets. 2) The economy gets worse, the government keeps spending, the dollar keeps falling and gold is now the safe haven (not Treasuries). Either way you look at it gold should be headed up!

I thought Josh Patinkin had a copyright on that hair due.

Just add it to the growing list of charges.

By the way, it was a year ago this week that our dutiful Governor looked directly into Julie's eyes and uttered, "Come take a picture with the Govna."

Oh Rod.

At a press conference in Chicago announcing the charges, FBI Special Agent Robert Grant noted that "if [Illinois] isn't the most corrupt state in the United States, it is one hell of a competitor."

Illinois Governor being taken into federal custody

AP reports that Federal authorities in Chicago have arrested Illinois Gov. Rod Blagojevich, and they've accused him of attempting to benefit financially from his position to appoint Barack Obama's Senate replacement. U.S. Attorney's office spokesman Randall Samborn says both Blagojevich and his chief of staff John Harris were arrested Tuesday

SLW

I actually trade SLW...last week there were tons of traders trying to sell the Dec and Jan 2.5 puts and trying to buy the Dec and Jan 5 calls so that usually means they thing its going up. Looks like other people share the same idea as you BD.

Bargain Buy - SLW

Back to business gentlemen. I am taking a position in Silver Wheaton (SLW). A battered piece of action that needs some lovin'. As commodity prices rise next year, this stock is going to move. Thoughts?

My man Jon Najarian thinks the stock could double between now and February as institutional investors start buying. High ho silver!!!

GM at 4.74!!

Did anyone buy GM at 2.85? I did. Did anyone "accidentally" place a stop order at 2.10? I did.

I propose changing our blog's name to: "Too big to fail."

GGP @ $1.50!!!! Activist Investor Bill Ackman

Did anyone buy last week when I recommended the stock at $.50 a share? You'd be sitting with a pretty 300% gain right now.

Woulda, coulda, shoulda.....




http://www.bloomberg.com/apps/news?pid=20601087&sid=a6uFaQ4pPn4M&refer=home

FLOOR TALK - Still a skittish market

It was another treacherous open for the market, marked by the kind of immediate fade of the opening rally that we've seen so many times before over the past several weeks. Given all of the crosscurrents investors have been dealing with this week, here's how we break down the current sentiment:

The Backdrop: The major averages, and literally thousands of individual stocks, are incredibly oversold, and have been since mid-October. Valuations are dirt cheap (although no one in their right mind would trust the forward estimates) and high quality companies are sporting very attractive dividend yields.

The Here and Now: Ever since the Nov 4 election there has been an almost total buyers strike, with the longs essentially ceding the market to the shorts. And once the major averages breached the key support level marked by the Oct-Nov lows two days ago, we immediately started to see a whole new round of forced selling by funds and market risk-reduction efforts by insurance co's. Hartford (HIG) essentially confirmed that insurance co's have been major sellers last night, when it stated that "The company's investment management team is taking a series of actions aimed at repositioning the portfolio in light of current economic outlooks, with plans to enhance the overall credit quality of the general account. The company is currently investing in treasuries and other high-quality securities, and maintaining higher levels of liquidity than it has in recent quarters."

In an ominous turn, the financials are back driving the market again. The plunge in Citigroup (C) this past week has created another round of uncertainty in the Financials. And earlier in the week a major story emerged -- but has surprisingly flown under the radar -- that kicked out the one remaining leg of the stool that the financials were sitting on: There was an announcement that two separate operators, a shopping mall and a hotel, were past due on their payments to their creditors. The commercial property space (as opposed to residential) had been the one remaining "safe" area in real estate, so this announcement caused a rush by lenders to insure themselves in case of default, thus causing the CMBS market to rocket higher, which in this environment is a recipe for panic (we saw an identical panic develop with LIBOR rates a few months ago when FNM, FRE, and LEH were on the brink). As a result, all financial stocks and REITs are getting thrown overboard, the former on concerns of additional portfolio writes-downs and the latter due to concerns that REITs will have extreme difficulty rolling over debt.

Tying these together, since the election the path of least resistance for the mkt has been down, and there really is no way to know when this latest round of forced selling will end. But especially given the oversold nature of this market, the dirt-cheap valuations on high-quality stocks, and the fact that "shorting every rally" has become a far too obvious tactic by now, this suggests that the potential is great for a significant short-covering rally at any time. This is why, despite their recent success, even the shorts are skittish down here