Rule Breakers

"All intelligent investing is value investing."

 - Charlie Munger

"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

 - Warren Buffet

Six Signs of a potential Rule Breaker

Sign No. 1

Top dog and first mover in an important emerging industry.

- Top dogs are active, fast-moving market leaders

Sign No. 2

Sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors.

Sign No. 3

Strong past price appreciation

- Sometimes, the best investments appear overvalued.

Sign No. 4

Good management and smart backing

- This is the most important attribut of all

- Might be the most difficult to get right

- Investors should also be prepared to learn about the venture-backers of a young company

- If the very best venture capital firms are behind a company, maybe you should be, too.

Sign No. 5

Strong consumer appeal

- Rule breaker companies provide products or services that improve the quality of peoples' lives.

Sign No. 6

You must find dumented proof that it is overvalued according to the financial media.

- As the recovery matures, the best performers will be high-quality companies with lots of cash, sustainable earnings, and the clout to take market share.

Also another great "formula" is the formula by Warren Buffet to distinguish the difference between a weak and strong company.

I hope these tips and tricks will help!

Happy Trading!

Stock Analysis

How to conduct a stock analysis

Analyzing is a process:

1. One particular industry or a sector at a time
2. Focus on select companies within the sector
3. Deeply probe the affairs in the financial statement
4. Take a closer look at the earnings forecasts.

What to analyze:

1. Industry Analysis

- Annual Report
  -- Good Overview   
  -- Future growth outlook

2. Business Model Analysis

- Annual Report
  -- Companies strngths and weakness
  -- Industry Report

3. Financial Strength

- Balance Sheet
- Income Statement
- Cash Flow Statement

4. Management Quality

- Key Executives

5. Growth Analysis

- Profit Margins
  -- Profitablility Trends in a particular industry

6. Valuations

- Value Investors look at intrinsic worth
  -- Growth investors look at is the earning potential
- A company selling at a higher PE ratio must grow at a higher price

7. Target Price

-Future earnings first
- Calculate high and low target price by multiplying estimated EPS with estimated high and low PE ratio.
- High and low target prices are the price band within which the future stock price is likely to move in response to the expected future earnings.

Helpful Hints:

Lock in yields of 7% to 14% on fixed income securities and reap huge capital gains.


Research and locate closed-end funds with attractive yields and trading healthy discounts


Closed-end funds priced lower than their historic discount and avoid funds trading at a premium.


Happy Trading!

How to find undervalued stocks

How to find undervalued stocks

As we all know, active investing is the way for short term profits. I think of active investing as value investing, as I claim I'm a active (value) investing. With that in mind, most people don't look at a company's market cap as value. So make sure the company in question has a good size market cap, which will also provide room to grow.

Search Criteria:

Any Dividend Yield

- Smaller companies reinvest their dividends

Low PE Ratio

- PE a company's stock price over 12 mos. earnings.

Low Trading Volume

- High, wall street has done found them and talking about it.

High New Profit Margin

- Indicator of strong management

Low 12 month relative strength

- Stocks that have underperformed in the last year are some of the best buying opportunities.

Low debt to equity ration

- Invest in companies that create cash, not debt

High Rev growth year over year

- Better than Qtr. to Qtr.

- Show hints of long term trends

If you search turns up 20 results, pick the 4 to 5 best stocks. You don't have all day. You may miss your chance.

13F Disclosure Form

Some of you may have heard of the new 13F Disclosure Form. Some of the top investors where throwing a huge fit about it. The public did not pick you on the 13F Disclosure Form as the top investors had first thought.

11 Technical indicators - over looked indicators

1. MACD - moving average convergence divergence

2. DMI -  Directional Movement Index

3. RSI - relative strength indicator

4. Bollinger Bands

5. 50 Day moving average

6. 200 Day moving average

7. 1 Year weekly chart view

8. Multi-Year monthly chart view

9. Candlestick charting patterns

10. Money flow indicator

11. Slow stochastic

As biotechnology is today's emerging industry, play around with this information and see what you come across.

Happy Trading!

Make Money in 2010

How to make money in 2010

- Surviving the upcoming year ahead of time

Signs to watch:

If the dollar weakens substantially, the cost of imports will rise -- and so will inflation. "That could spur the Fed to raise rates sooner, in bigger leaps", says Greg McBride

The action plan for savers:

In 2010, the more liquid you keep your money, the better.

Your best bet:

FDIC-insured bank savings and money-market deposit accounts, as well as CDs that mature in six months or less. Money-market mutual funds offer as much liquidity (more, in fact, compared with CDs), but pay far less - a bad deal.






*Source - From the editors of: Money Magazine

STOCK UPDATE

DRLY - Doral Energy Corp.

$0.375  +0.025   7.14%


EPS: $-0.05        PE: -18.75
EV: 36.94           Vol: 1.78M
CR: 0.21             ROI: $-35.35
BVPS: $0.12      Rev: 0.30
RVPS: 0.02        52WH: $2.19
50 Day: 0.39      52WL: $0.28
200 Day: 0.52

- Company has PROVEN reserves of 6.1M barrels of oil

- Company has approximately 7,800 acres

Like always, I wish you a Happy Trading!

Monday Morning Portfolio Watch

 This mornings portfolio update and watch:

INAR      $0.0012
Opened: $0.0016
Vol: 105.67M
- Stock is moving fast!

NTII   $0.233    +0.004   1.57%
Opened: $0.24
Vol: 238,754
- I have been seeing really great gains with this pick.

WWPW    $1.10    +0.04   3.77%
Opened: $1.05
Vol: 294,825

GTWO    $0.43   +0.03  7.50%
Opened: $0.45
Vol: 116,680

SKTO    $0.26   -.04   -13.33%
Opened: $0.29
Vol: 51,755
Last week: $0.35
- If you missed the gains from last week, here is your chance to recover. This stock is slowly but surely gaining week by week. Hurry and get in on the dip while you still can.

WLSI   $0.0002    +0.0001   100%
Opened: $0.0001
Vol: 144.01M
- This is another one that is moving fast!

ESYM    $0.0006   -0.0001   -14.29%
Opened: $0.0008
Vol:  20.47M
- Take a gander at that volume.

FXRE:  $0.16   +0.010   6.67%
Vol:  1,500

SIRI   $0.637  +0.006   .87%
Vol: 5.44M
- This stock will not stay cheap for ever.
- This is a high undervalued stock.

MTCH   $0.0851  +0.0021  2.53%
Opened:  $0.119
Vol:  8.19M
- This stock is moving quickly.
- My stock trading company account is "having difficulty" so don't be like me and might miss out on this stock. I wish I could create or have my own trading terminal for this reason. Everyone else on the "servers" move to slowly.  

MTLQQ   $0.661  +0.021  3.28%
Opened: $0.0655
Vol: 667,498

HYHY  $0.03
Opened:  $0.005
Vol: 76K
- This is a new stock. I found this stock while gawking at another.
- I am watching this one to see what it does. It just might be worth investing in with the Vol number rising.

That concludes this mornings portfolio update. Check back for more updates or new leads.

Till then, Happy Trading.