Posted on 01 July 2009 by BobL
If you have ever owned shares in a foreign company, or penny stocks for that matter, you probably have a difficult time locating information on the company. I’ll run you through a few of the steps I take when I see action in a stock I am playing, but I am unable to locate news.
- Yahoo Finance (news and message boards)
- Google Finance (news and discussion)
- AOL Daily Finance App on my iPhone
- Wall Street Journal App on my iPhone (overall market and sector news)
- Google news search (often turns up articles in the foreign press)
- Twitter (twitter search has become a great ‘real time’ news reference for stocks)
With those sources, you are likely to be able to drum up a lot of headlines on an active company (too many, in fact) but with a foreign share, a stock that is thinly traded, or a penny stock, these sources might just turn up a nugget of information that hasn’t yet reached the main stream.
When on the message boards, take the posts for what they are worth. I am not suggesting that you pay much attention to the ‘opinions’ expressed, what I suggest is that you use these as sources for legit news that hasn’t reached mainstream. If a poster references an article, but doesn’t provide a link, ask them to provide. Don’t trust the source until you confirm it in print.
I will try to take the time to go into greater detail with regard to how I use the above sources. I can provide screen shots and examples if you are interest. Please comment below and I’ll get to it sooner than later.
Posted on 27 March 2009 by BobL
You have got to hand it to some of the stock analysts who are out there. I stumbled across a research recommendation on a bank stock while doing my own due dilligence. The stock is Allied Irish Banks (AIB). Take a look at the chart of this security and you will have a pretty accurate picture of many financial stocks. What I want to focus on here is the stock performance before the analyst changed their recommdation and after the change.
Analysts recommendations. What did that cost you?
Click on the image above to get a good look at the performance during the analysts “Buy” period and then the performance following their “Sell” recommendation. It is no wonder this market is in a shambles! AIB is down 96% during the period that the analyst had a “buy” recommendation. How much are they down during the “sell”? UP 19%!
In fairness to the analyst, the sell recommendation might prove to a be a good call. This bank, along with the economy in Ireland, has been incredibly hard hit. The bank just might go away. However, if it doesn’t, it could be a huge gainer with a long term horizon. In fact, do a little research on this stock. They hold a stake in M&T Bank (MTB) that is about 20% of MTB. AIB trades well below the value of their MTB holdings alone.
Posted on 25 March 2009 by BobL
This is a basic example of how a short sale of a stock works.
You sell a stock short and get the cash. Sell Short 1000 shares @ $1 / share= $1000 in your account.
You need to go get those shares back to “cover” your trade. You borrowed them from your broker and need to give them back. Your bet is that you will be able to buy them back lower. The stock drops to $.90 / share and you buy the 1000 shares back to ‘cover’ your position. Your cost is $900. You get to keep the $100 (of the $1000) that you took in.
Make sense?
Posted on 25 March 2009 by BobL
When trading in a volatile market, you should protect your downside, while putting yourself in a position to get out of the shares once your price target has been reached.
Bracket orders are designed to limit your loss and lock in a profit by “bracketing” an order with two opposite-side orders. A BUY order is bracketed by a high-side sell limit order and a low-side sell stop (or stop-limit) order. A SELL order is bracketed by a high-side buy stop (or stop-limit) order and a low side buy limit order.
There are 2 investor types. Those who don’t want to take the loss and those who don’t want to miss the gain. A bracket order will work for both.
