The Big Picture ...
O.K. It's time to paint you a big picture.
It is very easy to get lost in the forest when you keep looking at the trees next to you. Too many investors are lost in the forest of various news, emotions and personal issues. That's why they worry about the very stock they bought. Simply put, people quickly forget why they bought it in the first place. So please try to remember why you place your hard earned money at risk by buying stocks. It is not too much to ask that you keep a small notes for your self. Now let me help you get the story stright.
The U.S. Economy: Think of the U.S. government as if it is your household. You have income and expenses just like the government. You also have debt and some debt are good debts like a mortgage on your house or money borrowed to increase your business. Of course some debts are bad debts, like you buy drugs on your credit cards - you get the picture. Basically, the United States is performing very well. We are the richest in the world. Our business is booming, more people are working, we are more productive than ever, inflation is low, money is easy to borrow and we have a stable government. There are only two potential problem I see : the interest rate is climbing (would you risk your money and invest in companies if you can safely get 7% from the bank with no risk?) and U.S. dollar is falling (if the value of our money compared to other nations is falling, do you think others will keep lending us the money?). As you know, if you have low credit rating, banks stop lending you cash or they will charge you a heavy interest to compensate for the risk. But overall, we are in a great shape.
The stock market: All parts of the stock market is in an excellent shape. The large/medium/small stocks are all performing. In fact, the Dow30 will hit all time high soon (11,700 level). Even countries like China, India, Russia, Brazil are all doing well. Did you know that even Iraq's economy is booming? Korea, Turkey, Austria too are doing a superb job of growing the economy. So what do I see? We will hit new highs in our stock market soon. Which means your money better be in the stocks rather than other low interest bearing instruments. Of course this party won't last forever, but until then we need to ride it. I will tell you when the party is over. We will change our strategy then.
Gold and Oil: Long term, both gold and oil will go up. It is a simple math. We only have so much gold and oil (by the way, with our advanced technology, we still can not make gold or oil, intersting huh?) and there are more people who want it and now more people can afford it. Having said that, it went up too quickly too soon I think. So in the short term I think both gold and oil will have to take a rest. There are money to be made in this situation.
Regular readers know that I have a short (betting that price will fall) position in KRY (gold producer). I first shorted it on 4/11 at $5.3 (gold was $590) then I shorted more on 4/25 at $5.92 (gold went up to $621). I covered 1/3 position in KRY on 5/3 at $4.5 (gold was at $664) making myself a respectable 24% profit. I still have 2/3 position with me currently.
But, do you see what I see? If you look at the above trade carefully, you will notice that the gold price went from $590/oz on 4/11 to $664/oz on 5/3. However I was able to generate a profit selling short! As of today the gold is at over $700/oz. KRY is going for $4.89/sh. I think KRY is going to low $4's. That means over 33% gain for my trade in about a month. So, as you can see, some investors are not betting that gold will keep going up stright up without a rest. I have an automatic order to cover 1/3 of KRY at $4.29 and other 1/3 at $4.11/share. We shall see.
If you still do not own IDWD (read my past notes on IDWD) you just might want to before May 18th. That's the record date for which IDWD shareholders are going to receive a special dividend. On top of that the company will probably have an IPO of 995ad.com business that they own. Please try to visit 995ad.com and see for your self. It is supposely valued at over $100 million dollars. If everything goes right, this will be a homerun. However, remember that this stock is the most risky one I own. It is a small company with limited proven history and it is very volatile. If you can afford to risk some I think this fits the bill. High risk - high return.
Lastly, Silicon Lab (SLAB) looks interesting. I will trade this tomorrow. This is a short term quick trade. I think I can make a quick 10%-20% on this one. Look at it if you can.
Happy trading...
It is very easy to get lost in the forest when you keep looking at the trees next to you. Too many investors are lost in the forest of various news, emotions and personal issues. That's why they worry about the very stock they bought. Simply put, people quickly forget why they bought it in the first place. So please try to remember why you place your hard earned money at risk by buying stocks. It is not too much to ask that you keep a small notes for your self. Now let me help you get the story stright.
The U.S. Economy: Think of the U.S. government as if it is your household. You have income and expenses just like the government. You also have debt and some debt are good debts like a mortgage on your house or money borrowed to increase your business. Of course some debts are bad debts, like you buy drugs on your credit cards - you get the picture. Basically, the United States is performing very well. We are the richest in the world. Our business is booming, more people are working, we are more productive than ever, inflation is low, money is easy to borrow and we have a stable government. There are only two potential problem I see : the interest rate is climbing (would you risk your money and invest in companies if you can safely get 7% from the bank with no risk?) and U.S. dollar is falling (if the value of our money compared to other nations is falling, do you think others will keep lending us the money?). As you know, if you have low credit rating, banks stop lending you cash or they will charge you a heavy interest to compensate for the risk. But overall, we are in a great shape.
The stock market: All parts of the stock market is in an excellent shape. The large/medium/small stocks are all performing. In fact, the Dow30 will hit all time high soon (11,700 level). Even countries like China, India, Russia, Brazil are all doing well. Did you know that even Iraq's economy is booming? Korea, Turkey, Austria too are doing a superb job of growing the economy. So what do I see? We will hit new highs in our stock market soon. Which means your money better be in the stocks rather than other low interest bearing instruments. Of course this party won't last forever, but until then we need to ride it. I will tell you when the party is over. We will change our strategy then.
Gold and Oil: Long term, both gold and oil will go up. It is a simple math. We only have so much gold and oil (by the way, with our advanced technology, we still can not make gold or oil, intersting huh?) and there are more people who want it and now more people can afford it. Having said that, it went up too quickly too soon I think. So in the short term I think both gold and oil will have to take a rest. There are money to be made in this situation.
Regular readers know that I have a short (betting that price will fall) position in KRY (gold producer). I first shorted it on 4/11 at $5.3 (gold was $590) then I shorted more on 4/25 at $5.92 (gold went up to $621). I covered 1/3 position in KRY on 5/3 at $4.5 (gold was at $664) making myself a respectable 24% profit. I still have 2/3 position with me currently.
But, do you see what I see? If you look at the above trade carefully, you will notice that the gold price went from $590/oz on 4/11 to $664/oz on 5/3. However I was able to generate a profit selling short! As of today the gold is at over $700/oz. KRY is going for $4.89/sh. I think KRY is going to low $4's. That means over 33% gain for my trade in about a month. So, as you can see, some investors are not betting that gold will keep going up stright up without a rest. I have an automatic order to cover 1/3 of KRY at $4.29 and other 1/3 at $4.11/share. We shall see.
If you still do not own IDWD (read my past notes on IDWD) you just might want to before May 18th. That's the record date for which IDWD shareholders are going to receive a special dividend. On top of that the company will probably have an IPO of 995ad.com business that they own. Please try to visit 995ad.com and see for your self. It is supposely valued at over $100 million dollars. If everything goes right, this will be a homerun. However, remember that this stock is the most risky one I own. It is a small company with limited proven history and it is very volatile. If you can afford to risk some I think this fits the bill. High risk - high return.
Lastly, Silicon Lab (SLAB) looks interesting. I will trade this tomorrow. This is a short term quick trade. I think I can make a quick 10%-20% on this one. Look at it if you can.
Happy trading...
posted by Jaewoo | 11:36 PM
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Greets to the webmaster of this wonderful site. Keep working. Thank you.
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