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|COMS ADPT ADCT ADLAC ADBE ALTR AMZN APCC AMGN APOL AAPL AMAT AMCC ATHM ATML BBBY BGEN BMET BMCS BVSN CHIR CIEN CTAS CSCO CTXS CMGI CNET CMCSK CPWR CMVT CEFT CNXT COST DELL DLTR EBAY DISH ERTS FISV GMST GENZ GBLX MLHR ITWO IMNX INTC INTU JDSU KLAC LGTO LVLT LLTC ERICY LCOS MXIM WCOM MCLD MEDI MFNX MCHP MSFT MOLX NTAP NETA NSOL NXTL||NASDAQ 100||NASDAQ 100|
|ALD AA AXP T BA CAT C KO DD EK XON GE GM HWP HD INTC IBM IP JPM JNJ MCD MRK MSFT MMM MO PG SBC UTX WMT DIS||DJIA||DJIA|
|itxc idtc ntop coms brw etel||IP Telephony||IP Telephony|
|ETFC AMTD SCH NITE JBOH NDB | AMZN MSO CDNW CMGI AOL YHOO | NSCP HLYW BKS COOL BYND | ATHM BNYN EBAY UBID GCTY NSOL | EWBX FRTI INSP XMCM TGLO CNQR||Internets||Internets|
|S KM KSS WMT||Retailers||Retailers|
|CPQ GTW DELL INTC MSFT CSCO||Computers and PC's||Computers and PC's|
|LLL LOR GMH CSC RTNA RTN BA LMT||Defense||Defense|
|MER AGE MWD GS LEH DLJ DIR PWJ RJF SIEB TROW TWE VALU JEF DLJ CMB C BAC JPM MWD STI KEY BK STT||Banking and Finance||Banking and Finance|
|LU DIS GE IBM F GM||Traditional Blue Chips||Traditional Blue Chips|
|BHMC EAGL HD HBI LOW WIKS WLHN | ASD ACK BDK BOC BOW BGG CHA CBE FJ GP ITW IP JM LPX MMM MTC NWL SHW SNA SWK TTC VCC VSG||Home Needs||Home Needs|
|RAINMCD YUM WEN DRI OSSI EAT PZZA APPB SDH FM CEC BOBE CBRL CAKE SONC RI SBA BOCB IHOP CKR COP RYAN LUB MHI STAR NPCI CHUX RARE PFCB AVDO LDRY RAIN DAB VRES DINE TACO UNO PJAM BUCA MRG SHN LTUS RUBO PDIM PIC SZ PNRA CHT BUNZ FRS||Restaurants||Restaurants|
|ETFC USAB NTBK AMTD SCH NITE NDB | ARBA SALN | MSO AMZN CDNW | S KM KSS WMT | AOL YHOO ATHM BNYN | CSCO LU GE IBM GM F CPQ GTW DELL LMT LLL||Big Picture Picks||Big Picture Picks|
|JHDCX JHNGX SOVIX||Funds||Funds|
|ADBE AMTD AMZN AOL BAMM BGP BKS BRCM CSCO CWP CYSP DRIV EBAY EGGS ET ESRX EXDS FON GBLX IBM INKT INTU LCOS LU MACR MSFT NITE NOVL NT NTBK ORCL PRGS QWST SCH SUNW T USWB VVTV WCOM YHOO||Internet with Funds investings||Internet with Funds investing|
|Merrill's new I Fund
Yahoo, ET, Amazon.com Inc., eBay Inc., Priceline.Com Inc., CMGI Inc., Inktomi Corp., RealNetworks Inc., Exodus Communications Inc., DoubleClick Inc., Ameritrade Holding Corp., Lycos Inc., Cnet Inc., PSINet Inc., Network Associates Inc., EarthLink Network Inc., MindSpring Enterprises Inc. and Go2Net Inc
|American Online Inc. 20 percent. At Home Corp., Yahoo Inc. and E*Trade Group Inc. together about 40 percent.|
|DTSI ECTL SCON URMD ELON EFCX AFFI PARS ARIA XYBR TALL ULTR SMSI OSIS SCLN IFNY MZON||Ideas||Ideas|
Free Real Time Quotes | Technical Analysis | The Advisor.com | Streetadvisor.com
|A number of people have speculated that there are seasonal trends associated
with the stock market. The following is an example of one such speculation.
Although we feel that these seasonal trends are present not only in the stock
market but in business in general, examination of the last 40 years of the
DJIA does not appear to show such trends.
The DJIA average is available at http://averages.dowjones.com/ and the historical charts are at:
We have a different view of the world. There is a phrase out there "figures never lie but liers figure". It really is a shame that so few people are literate in mathematics and able to translate between math and the spoken word. So rather than trying to apply tea leaf reading techniques based on numerology, cycles, or the length of the male skirt or lack there of, we think in terms of balance. There are items that apply to everyday living and if a balance is present between those items then we have a metric to reasonably predict some potential future. If the balance is broken, that is also a predictor.
The following chart plots the DJIA, Corporate Profits, Gross Domestic Product, Personal Income, and Consumer Price Index for the past few decades. The numbers are scaled to the DJIA. In other words, a constant value was added or subtracted from each plot. This moves the curve up or down but does not change its shape.
This chart shows us that GDP and personal income have been tracking each other for a very long time. It also shows that there is some relationship between Inflation (CPI) and the DJIA. When inflation was running rampant in the 70's the market DJIA (light blue) really took a big hit. I know, we all know that! It also shows that as inflation has subsided, the market has really gone up considerably. In fact it has broken through the GDP and personal income curves. During this time corporate profits have also significantly increased. Those corporate profits are also coincident with the massive downsizing of the recent past; cashing in of assets so to speak.
This analysis is available for purchase. Read on.
What does all this mean? It means that we are probably in for some changes. A curve not present on this chart is the cost of new housing. Again, we are looking for balance between the items that are used in every day living. How much did we make, how much did corporations make, how much did the government make, how much does it cost to buy a company, how much does it cost to buy a house, and how fast is our money devaluated. We think the market in general has caught up with the inflation of the 70's and the cost of a new home. This leaves us with picking the winners and losers in the next market. If you did not make your million in the past few years, you have a problem.
Which companies will survive, grow, prosper, or become insanely huge and rich? Wow, what a tall order. Looking at the historical data of the DJIA is not a nice sight. There are years when people lost 80% of their assets in the market. In other words, companies went out of business. If you were lucky enough to pick Xerox, life was good for you in the 60's. However, there were some pre 1930 relics, barely surviving that bit the dust in the 60's and 70's.
We know, This really stinks. This requires work and luck. It would require work and luck even if you did not learn this new reality. Let us explain. Assume the market continued its wild hay ride for the next 30 years. You put your 401K in the market and rode with the hay ride. You say great! However, if everyone else puts their money in the market they will be sitting on the same bundle. If everyone makes a killing in the market in the next 40 years and they sit on lets say $50 million, what do you think the price of a car will be? Price of bread? Price of housing? You see the object of investing is to separate yourself from the pack. The reality is that if you are not in the top 1% you will never be able to retire unless you already make a great deal of money.
Enough of this depressing stuff...
OK - So Where Do I Begin?
Step A is to get a copy of poincast on your PC. It is free and it is the closest thing to TV or radio, but it really provides a great deal of information about companies. Download Pointcast.com and get it working at home and at work.
You are part of an industry. That means you know something that most investors in that industry do not know. Find the companies in that industry, including yours, and start to compare them. Add these companies to your poincast setup that you downloaded and installed on your PC. Start reading the articles associated with those companies and look at the other info poincast provides. In addition, book mark the yahoo.com financial page and the infoseek.com (go.net) stock page. Also bookmark this page you are reading, CassBeth Investing Data.
Enter your stock symbols in yahoo and start clicking on the links. Start with the chart, then check out the news, then the profile. Then enter the message board on yahoo for that stock. Don't ever take any advise from a message board, however read it. Once in a while there is wonderful information about the company or a really great link that expands your horizons. Use infoseek to get quarter by quarter financial information. That information is also on poincast, but sometimes they do not match. That is a warning. Double check all your important information that drives you into a decision.
After about a month open an account with an online broker. We recommend E-Trade. There are other brokers and you can find them above, but we like E-Trade. Put a small amount of money in the account. While the money is transferring and you are waiting, play the etrade game. That will get you familiar with the tools. When you are ready, make your investment.
HELP !!! What do I Buy
We can't help you with your final decision, but here are the things that we consider. First of all you need to decide if you will invest based on fundamental data or technical data. Fundamentals are things about the company, such as: what does it produce, where is it located, what is its plan, how are they growing, what are they investing in, how do they hire people, how big are they, etc. Technicians ignore all the information. Technical analysts only look at the stock price over a period of time. They do not care about company strategy, its management team or anything. They just look at the stock price and use various mathematical formulas to guess where a stock price is headed.
We primarily focus on the fundamentals and occasionally look at the technical data before a buy sell decision is made. The fundamentals that we examine are:
We only invest in new companies that we think will become fortune 500 companies. That means they become #1 or #2 in their market. Our investment must return a minimum of 10 times over 5 years. In other words a:
A home run would be to start at the beginning and finish at the end. Quality is key. We look for anything that does not smack of fortune 500. Poor press releases, small thinking, asset stripping, fly by night appearance, poor advertising, and of course flawed products. Just 1 item will throw a company off the list. That includes a poor web site.
Everyday is the start of a new day. Don't think it is too late or you missed the boat. Do your research and make 1-3 small investments of perhaps $1,000 each. Follow them for 6 months. If you want to sell and move on to another company, then do it. If you did lose money, remember to sell before December 31 so you can get a tax break. In fact wait till December to sell. The markets tend to rise as grand parents buy stocks for their grand kids and the big money manipulates the markets to show good end of year mutual fund returns. What looks like a mess in the summer or worse in October might be a good return by December.
Never ever buy on margin. Remember, investing is not about making 10% per year. Investing is about buying 10 cents on the dollar, or making 10 times on your money over a 5 year period. If you fall into the trap of trying to get 10% per year you will use margin accounts to convert 5% returns to 10% returns. That is a flawed strategy. This is not interest on a CD. If you want to get 10% per year, then buy into a few good mutual funds.
In case you did no get it, we will repeat the message. We are trying to take $1000 and convert it to $10,000 dollars in a small time frame, like 5 years. Almost everyone can spare $1000. Invest a $1000 dollars in each company using your etrade account. The cost is only $20 dollars. Take a few years to spread that money across a few very high quality new companies and one or two of them will execute three 5 year plans that will yield the 10X return. That means $1000 becomes, $10,000, becomes $100,000. You will know if you have a winning horse in your first year - within 6 months. At that time you can increase your investment to perhaps $10,000 or more, but never bet money that you need on the market. If at the end of the year all your horses are duds, you are only out a small amount of money. Re-evaluate your strategy. Claim your losses and try it again, but pick only 2 stocks.
Remember, you are investing, not gambling, even though we talk about horses. You are a business man or woman and this is your business. You should be on top of it, love it, and know why it will grow. When you vote your proxy, take it seriously. It is your company. But know when it is time to move on. Unlike a small business owner, you can sell your business when the world changes and you have made your money.
It is the best of times and it is the worst of times. Putting money in the market is very dangerous as shown by the averages on the links above. You are not buying into the market. You are believing that there is a future for your kids and that new companies will create a wonderful new future. In the process you will prosper. The market could go down or sideways for decades, but new companies will be born and their owners will become rich. For the first time in history, you have access to information that can help you to identify these new leaders. The internet is not a fast talking salesperson trying to make a commission. The internet is not a small collection of magazines with paid advertising. It is truely a very valuable tool that can help you to gain control of your financial future. It may indeed be the last step in the evolution of democracy, where you are in full control of your money.
GOOD Luck and Invest Wisely
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