GO
Help
All content in the ZeccoShare community is generated by its members and does not contain advice or recommendations on behalf of Zecco Holdings or Zecco Trading. More>>
Content Name: CommunityDisclaimerShortLeftNav
Preview Revision #:
Active Revision #:
Edit Content
Zecco.com » General Investing » Screening & Picking » The Improving Economy
Last post 05-09-2008, 1:14 AM by jackg1606. 18 replies.
Page 2 of 2 (19 items)   < Previous 1 2
Previous   Next
Content Name: ForumThreadInternal
Preview Revision #:
Active Revision #:
Edit Content

  •  05-08-2008, 4:37 PM 28748 in reply to 28690

    Re: The Improving Economy

    Reply Quote

    jackg1606:
    TROW, STT and SCHW are all in the same boat as MER.    If you own any of these stocks you are going to be hurting in the next leg down in this market.  SKF is the one you want to own at the moment. 

    All of these charts are showing the same overbought condition which is beginning to selloff.

     


     

    Aqua, you picks don't seem to be doing any better than MER.  Have I made you a SKF believer yet?   I'm making a killing in this thing.  Oh I see....you are a long termer.  Sorry to hear that you are value investing.   

  •  05-08-2008, 9:10 PM 28763 in reply to 28690

    Re: The Improving Economy

    Reply Quote
    T
    jackg1606:
    TROW, STT and SCHW are all in the same boat as MER.    If you own any of these stocks you are going to be hurting in the next leg down in this market.  SKF is the one you want to own at the moment. 

    All of these charts are showing the same overbought condition which is beginning to selloff.


    The market has been highly efficient; the better companies have risen more since April 22nd than the companies that are preceived as of being of low-quality. I agree with you on the investment banks that they are risky (data on working capital ratios later).

    STT up 11% since April 22nd
    TROW is up 13% since April 22nd

    GS, SCHW, and MER are all up less than 5%, while MS and BSC (not too suprisingly) have lost money since April 22nd.

    Total Assets/Total Debt

    Problems with Cash-Flow (except for MS and BSC) and problems with Balance Sheet (except for JPM)
    GS - 1.037 - atrocious cash flow
    MER - 1.0323 - atrocious cash flow
    BSC - 1.0307 (wasn't this the company that was near a chapter 11 filing) - actually pretty good cash flow; the main problem was that a certain long-term debt came due, was callable, or it was an investment gone bad. In my opinion, all five of these banks were vulnerable. This is evident since over $6 8 billion in loans were paid vs. those initiated according to the cash-flow from financing activities. That's usually a good sign, but it's not a good sign if you are forced to come up with money you don't have.
    MS - 1.0315 - not as bad as last year cash-flow statement
    JPM - 1.0856 - pretty good (ugly cash flow statement)

    Excellent Balance Sheet and Cash-Flow Statement
    STT - 1.0866 - pretty good; good to very good cash-flow statement
    SCHW - 1.0968 - good cash-flow statement
    TROW - 7.9477 - that's right, 8 times more assets than total debt; cash ratio of 1.644 - very nice cash-flow statement

    This demonstrates why I really love tech companies; their cash ratio is far above 1; the cash ratio only involves cash + short-term investments over current liabilities. Their cash to long-term liabiltiies is pretty astounding and poised to handle a downturn with incredible ease (i.e. GOOG).

    That's why I am not a chartist; it is very limited in the information that it provides. It can be great when you see a head and shoulders pattern or options action (when you put in buy or sell stops), but it's very illogical to rely on the chart alone (or to constantly perseverate about the chart). I think using charting along with the annual report is the way to invest in stocks.

    I am solely a fundamental analysis guy. I seldomly refer to charts before making an investment decision as I don't believe in their effectiveness. Look at PNRA in 2002 and you will see why. I believe the market tends to be efficient and thus it's really hard to gain an advantage. However, from time to time, if you do your homework, it is possible to get a real deal like GOOG at its 52 week low, for example.
    Aqua

  •  05-08-2008, 9:37 PM 28766 in reply to 28748

    Re: The Improving Economy

    Reply Quote
    I'm in MER based on a weekly chart.  My stop is huge for this and still within the system I use.  Even if you look at the portfolio weigh its not much.  I still fully expect for this to get to my target over time.  If I had gone in on a intraday chart I would have missed this drop entirely.  Figured I would try something different never done a weekly chart until recently.  Funny cause 2 of the three weekly ones are getting killed(MER, PSS & TWX<--only one doing descent).  I am in ABX which is what the most weigh in my portfolio is and the first target has been reached already.  The crowd should be coming to it shortly gold is showing bull run since Friday.

  •  05-09-2008, 1:14 AM 28783 in reply to 28763

    Re: The Improving Economy

    Reply Quote

    Aqua, as an accountant I have a great appreciation for the value of financial information but I haven't found it to be the best way to trade.  The efficient market theory's biggest weakness is the fact it doesn't recognize the effect of human emotions on the market.  People analyze stocks using fundamental information but many of them execute their trades based on their emotions.  When they see a stock price "take off" they chase after it and buy it at too high of a price and then when they see their losses pile up they sell it many times close to the bottom right before a reversal.  Remember, most people loose money in the market not because their fundamental analysis is wrong but because they execute their trades badly.  Fundamental analysis only looks at what is logical but stock price movement is based on the actions of people who are not logical in their actions.  As I just stated, they tend to buy high and sell low. People's behavior develop into patterns as they repeat the same mistakes over and over again.  These are what cause patterns to show up on stock charts.  A big part of chart analysis is just understanding the psychology behind price movement and trading based on the anticipation of what people are going to do in the market.  Chartists trade based on how people react in the market rather than based on financial data.  Price is what pays and price is determined by how people react in the market.

    For example, the stocks you suggested be traded rather than MER are all in a downward trend.  However, in your analysis you determined their true value to be higher.  If the market is as efficient as you say, then why are these stocks loosing value?  Another example, in the late 90s there was a dot com boom which resulted in soaring stock prices which were not logical in terms of their fundamental data.  If the market is efficient then how did this happen?  Of course, you can point to the fact many of the people who traded these stocks in the end lost money but there were many people who also made a fortune from them.

    When you say charts don't give you much information it is because you are looking for a different type of information which charts do not supply.  You will be just as disappointed if you search trees expecting to find a fish.  I think this is why fundamentalists think chartists are full of shit.  They think chartists are looking for fish in trees.  If you look at a chart from the perspective of trying to understand and anticipate how people are reacting in the market, charts will give you a wealth of information you will never find in a company's financials.

    Your GOOG trade turned out to be great as GOOG benefitted from the low value of the dollar.  I also remember you stating your intention to hold GOOG for 2 years before selling.  If during that time, GOOG falls below your entry point for whatever reason and continues to fall are you going to stick by your parameters of holding it for 2 years or will you use charts to indentify a point in time where GOOG is unlikely to go much higher and take your profit disregarding your intention to hold it for 2 years?
Page 2 of 2 (19 items)   < Previous 1 2
Content Name: StandardBottom
Preview Revision #:
Active Revision #:
Edit Content
 


ZeccoShare is currently in Beta mode. In case you wish to provide feedback, please post it in the ZeccoShare Forum.

ZeccoShare provides a confined and secured environment. The information you share (e.g. profile, holdings, trades, performance) is only displayed to other Zecco members. Guest (i.e. not signed in) are not able to see any individual member information. Guests will only be able to see anonymous, aggregated community data.

Zecco members marked with a ‘Zecco Associate’ medal are employees of Zecco.com. They are not registered representatives of any broker/dealer, and are not registered with any national securities exchange. All information displayed and all posts made by these users are their personal information and opinion, and not the opinion or information of Zecco.com. Zecco.com is not a broker/dealer, has no access to material non-public information about publicly traded companies, and does not make any recommendations regarding the purchase or sale of any security.

All content in the ZeccoShare community is provided for educational and informational purposes only, does not constitute a recommendation to enter in any securities transactions or to engage in any of the investment strategies presented in such content, and does not represent the opinions of Zecco Holdings or its employees. Your use of the ZeccoShare Community is conditioned to your acceptance of all Disclosures and Terms of Service.
Close [X]
Content Name: CommunityDisclaimerLong
Preview Revision #:
Active Revision #:
Edit Content

Terms of Service - Privacy Policy


Zecco.com is a financial portal of Zecco Holdings, Inc., which also provides access to Zecco Trading, Inc.’s trading service. Zecco Holdings, inc. is not a securities broker/dealer. All securities and investments are offered to self-directed investors by Zecco Trading, Inc. Member FINRA /SIPC. More information is located on the disclosures page.

At Zecco Trading, you can make up to 10 free stock trades in any one month that you maintain a $2500 minimum account net equity. After that, you pay only $4.50 per stock trade. Options trades are $4.50 plus $.50 per contract. Only the first account of any account type is eligible for the Zecco Trading, Free Trading program. Any multiple accounts of the same type with the same registration are not eligible for the free trading program. Free Trading Program is only available through Zecco.com. $0 minimum to open cash and IRA accounts.

* Margin accounts require a $2,000 minimum balance for opening and trading on margin. Margin trading involves risks and is not suitable for all accounts.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.

Multiple leg options strategies involve additional risks and multiple commissions, and may result in complex tax treatments. Please read Spread Trading Disclosure.

Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. A mutual fund/ETF's prospectus contains this and other information, and should be read carefully before investing.

System response and access times may vary due to market conditions, system performance, and other factors.

The content of Zecco Holdings, Inc.’s and Zecco Trading, Inc.’s websites, including research, tools and securities symbols, is for educational and informational purposes and should not be intended as a recommendation or solicitation to engage in any particular securities transaction or investment strategy. You alone are responsible for evaluating the benefits and risks associated with the use of our services or products and to decide which securities and strategies better suit your financial situation and goals, risk profile, etc. The projections regarding the probability of investment outcomes are hypothetical and not guaranteed for accuracy or completeness. They do not reflect actual investment outcomes and are not guarantees of future results. Tools’ calculations do not take into consideration commissions, margin interest and other costs that may impact investment outcomes. All investments involve risk. Losses may exceed the principal invested. Past performance of a security, market, or financial product does not guarantee future results. Neither Zecco Holdings, Inc. nor Zecco Trading, Inc. offers any tax, legal or financial advice.

No consideration was paid for any testimonials displayed on this website. Your experience may vary, and the testimonials are no guarantee of future performance or success. Zecco Holdings, Inc., Zecco Trading, Inc.’s and their independent providers are not liable for any errors, incompleteness, or delays, or for any actions taken in reliance upon information contained herein. By accessing our websites, you agree not to redistribute the information found therein.

Market Data Copyright © QuoteMedia. Data delayed 15 to 20 minutes unless otherwise indicated. RT = Realtime, EOD = End Of Day, PD = Previous Day. Powered by QuoteMedia. Terms of Use.

© 2006-2008 Zecco Holdings, Inc. and Zecco Trading, Inc., Member FINRA /SIPC All rights reserved.