Big picture 2006
The earnings season is here.
Starting this week, companies will report their second quarter numbers. Overall, the numbers will look good compared to previous numbers. However, that does not mean stocks will go up automatically. The important thing is to understand the "big picture" (refer to my note dated 5/10). If you agree with my analysis on the market, you will not be scared off like most other investors (amatuers).
I forgot which day it was but I have painted an overall assumption of 2006 stock market trend for you in this blog (it's in there - you just have to find it). For your benefit, let me give you the short, dirty version. During 2006:
1st quarter: up a few percent
2nd quarter: down a few percent (erasing the previous gains)
3rd quarter: will hit the bottom & start moving up
4th quarter: up - double digit percentage gains (best quarter)
So for the entire year of 2006, we will probably see a small gains overall.
This was and is my own assumption based on many variables like: seasonal & political movements, interest rate movements, the general economy and others.
By the way, this is also the reason why simply holding an index fund does not work in 2006. Let me be clear - generally, I do recommend index funds for those who are not active investors. Mutual funds are too expensive - they charge too much for no reason. I much prefer exchange traded funds (ETF), which is a topic for another day.
Now, let me answer some readers questions.
Q.#1: Any idea what a good price to buy at would be (IGLD)? Looks like it is going to have a few days of weekness ahead.
Answer: You are pretty sharp to notice that IGLD might have few days of weakness ahead. I just bought a few thousand shares at $5.40 today. Anything in the $5 range is a great buy. I just hope that you do not miss a chance by trying to squeez out few cents. Let me remind you that this is a 12-24 months play (or until we hit our target of $12/share). At that time, few cents will not matter much. I just want in. Thanks.
Q.#2: Please refer to July 9th comment section - too long to print.
Answer: If you are too busy to read my blog (usually takes less than 5 minutes to read - it takes hours to write though) then you should not actively engage in investing - period. Please refer to my very important note dated April 25th titled "Portfolio for the 21st century". That report contains all my knowledge sumed up in a simple (too simple it seems) menu. Once again, that non-active portfolio will beat 80%+ of all investors for the next 10-20 years (now you can thank me).
In addition, I know I am being clear when I say that I am buying or selling. I placed a limit order to sell IDWD at $0.97 (per my blog) and it excuted. You can place any amount you wish to excute at. If you wish to sell or buy before me, then place it a penny lower or higher than me. It's that simple. Just know that I do not care for small changes.
Lastly, when I say you should hold as many stocks in your portfolio compared to AceTraders portfolio - of course I mean you need to buy. Very few will beat my performance by trying to pick & choose; remember, I already picked and chose.
I chose to hold onto half of my IDWD shares until further review.
I made it clear on Friday that I am selling half.
Any other questions?
Starting this week, companies will report their second quarter numbers. Overall, the numbers will look good compared to previous numbers. However, that does not mean stocks will go up automatically. The important thing is to understand the "big picture" (refer to my note dated 5/10). If you agree with my analysis on the market, you will not be scared off like most other investors (amatuers).
I forgot which day it was but I have painted an overall assumption of 2006 stock market trend for you in this blog (it's in there - you just have to find it). For your benefit, let me give you the short, dirty version. During 2006:
1st quarter: up a few percent
2nd quarter: down a few percent (erasing the previous gains)
3rd quarter: will hit the bottom & start moving up
4th quarter: up - double digit percentage gains (best quarter)
So for the entire year of 2006, we will probably see a small gains overall.
This was and is my own assumption based on many variables like: seasonal & political movements, interest rate movements, the general economy and others.
By the way, this is also the reason why simply holding an index fund does not work in 2006. Let me be clear - generally, I do recommend index funds for those who are not active investors. Mutual funds are too expensive - they charge too much for no reason. I much prefer exchange traded funds (ETF), which is a topic for another day.
Now, let me answer some readers questions.
Q.#1: Any idea what a good price to buy at would be (IGLD)? Looks like it is going to have a few days of weekness ahead.
Answer: You are pretty sharp to notice that IGLD might have few days of weakness ahead. I just bought a few thousand shares at $5.40 today. Anything in the $5 range is a great buy. I just hope that you do not miss a chance by trying to squeez out few cents. Let me remind you that this is a 12-24 months play (or until we hit our target of $12/share). At that time, few cents will not matter much. I just want in. Thanks.
Q.#2: Please refer to July 9th comment section - too long to print.
Answer: If you are too busy to read my blog (usually takes less than 5 minutes to read - it takes hours to write though) then you should not actively engage in investing - period. Please refer to my very important note dated April 25th titled "Portfolio for the 21st century". That report contains all my knowledge sumed up in a simple (too simple it seems) menu. Once again, that non-active portfolio will beat 80%+ of all investors for the next 10-20 years (now you can thank me).
In addition, I know I am being clear when I say that I am buying or selling. I placed a limit order to sell IDWD at $0.97 (per my blog) and it excuted. You can place any amount you wish to excute at. If you wish to sell or buy before me, then place it a penny lower or higher than me. It's that simple. Just know that I do not care for small changes.
Lastly, when I say you should hold as many stocks in your portfolio compared to AceTraders portfolio - of course I mean you need to buy. Very few will beat my performance by trying to pick & choose; remember, I already picked and chose.
I chose to hold onto half of my IDWD shares until further review.
I made it clear on Friday that I am selling half.
Any other questions?
posted by Jaewoo | 11:48 PM
2 Comments:
Welcome back! Jaewoo. Good to see your frequent updates again! I didn't update my site recently, you know, because of the world cup.
IGLD - I like the stock a lot. Priced at a deep discount to its Chinese cousin stock - SINA/Sohu. The sharp drop this week (I guess due to the unstable situation in Israel) makes it a great bargain. Picked some today, plan to get more.
Thanks for the idea!
Siyu
Fidelio: The answer is "NO". My goal for this blog is not to be a "FREE" financial advisor to everyone. This is a site where people can benefit from learning together with me being the director. Again, if reading my blog is too much for anyone - sorry.
Siyu: I remember making a killing with SINA in 2003. Good to hear from from you.
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