Market Direction and Spotting the Next Great Bear Market

 Bear Market, Market Direction
Apr 212013
 
Market Direction and Spotting the Next Great Bear Market

This is a FullyInformed Members article. With the stock markets sitting at all new highs and now entering a corrective phase, investors worry about the next bear market. Indeed from the stack of emails I have been receiving, many investors are worried that the next great bear market may be just around the corner. To that end let’s look at a few signals every investor can watch for that will alert them when they should prepare for the arrival of the great bear. One of the best things to do is to study / Read More

Hedging For Profits and Protection

 Bear Market, Put Selling
Feb 092013
 
Hedging For Profits and Protection

A lot of investors believe that to hedge a portfolio requires complex calculations. They also believe that options and a variety of positions must be put in place and held mid-term to even possibly long-term to “properly hedge” a portfolio. Nothing could be further from the truth. Many investors also believe that hedging is like insurance – it costs money to protect a portfolio. A lot of financial planners will advise clients that just like insurance hedging is a cost that is necessary to protect a portfolio and just like insurance, it may / Read More

Why Remembering The Lehman Brothers Collapse Is Important To Stocks

 Bear Market
Nov 202012
 
Why Remembering The Lehman Brothers Collapse Is Important To Stocks

The stock markets in general have had a good recovery from the market crash in 2008 to 2009. As I indicated in many articles over the past four years, it has been an earnings driven recovery. Earnings for most companies fell right off the cliff in 2008 and not a fiscal cliff either. Companies slashed employment, tightened budgets, reined in spending and then the Government stepped in and pumped in hundreds of billions of dollars. With the Federal Reserve now into QE3, market direction is showing all the signs of topping out just / Read More

Market Direction – How I Handle A Correction

 Bear Market, Market Direction, Profit And Income Strategies
Oct 212012
 
Market Direction - How I Handle A Correction

About 2 week ago I was writing an article which I called “Market Direction – Should We Be Getting Worried”, which looked at a longer range view of the stock market direction heading into the fall and the Christmas Period. I had wondered what would happen if earnings on big caps stocks started coming in short of expectations. But shortly after starting into the article the market seems to find its footing and head higher, so I put my article on hold thinking that perhaps I was premature. Just to be clear that / Read More

Market Crash of 1987 – Recalling Black Monday

 Bear Market, Editor's Picks, Just My Opinion
Oct 192012
 
Market Crash of 1987 - Recalling Black Monday

25 years ago today stock markets around the world crashed. Investors were shocked and billions of dollars wiped out.The crash actually started in Hong Kong and spread to Europe and then the United States and Canada. The Dow Jones dropped 508 points to 1738.74 losing 22.6%. It was called Black Monday and many investors, analysts and economists feared it was a repeat fo the crash of 1929. Indeed 33 eminent economists from around the world met in Washington DC in December 1987 and they predicted that the years to follow Black monday would / Read More

Market Direction Tops And How To Spot The Next Bear Market

 Bear Market, Market Direction
Oct 022012
 
Market Direction Tops And How To Spot The Next Bear Market

Stock market direction since the market made a new 4 year high on September 14 has analysts and investors worried. The high set on September 14 has not been confirmed and the market for the past 10 days remains unable to breach the September 14 high. The longer it takes for the markets to set a new high in market direction, the more the recent high is suspect. As investors we are always worried. Even in March 2009 as the market set new 10 years lows investors worried. Then when market direction began / Read More

Market Direction Bet – Lessons Learned From Bear ETFs Losses

 Bear Market, Market Direction, Reader Questions
Sep 162012
 
Market Direction Bet - Lessons Learned From Bear ETFs Losses

I have said many times that Market Direction remains the most important aspect of investing. If you can follow the market direction trend then in most cases you are going to profit or at least not lose capital. But if you want to bet against market direction then I hope you do well. Recently I have received a large number of emails from investors who are losing capital based on their method of market direction investing. It is impossible for me to answer all the emails and some I have dashed off an / Read More

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Ultra Bear ETFS While Market Direction Remains Caught In Euro Crisis

 Bear Market, Market Direction
May 232012
 
Ultra Bear ETFS While Market Direction Remains Caught In Euro Crisis

Market Direction as investors saw yesterday is totally fixated on the Euro Crisis and many investors must be starting to wonder about these Ultra Bear ETFS they hear so much about. With Greece set to vote once again in a June election this basket-case nation has investors concerned worldwide. No matter what the outcome of the June Greek Election the perception of investors is that the Greek crisis will mean an Italian, Spanish, Irish and Portuguese Crisis and therefore a Euro Crisis. What investors fail to understand is that the European Central Bank / Read More

Collar Option or Married Put Done The Right Way – Collar Strategies Index

 Bear Market, Collar Option or Married Put
May 052012
 
Collar Option or Married Put Done The Right Way - Collar Strategies Index

Collar Option or Married Put is a great strategy. I get asked all the time when does a collar strategy not work.  It’s the wrong question to ask because a collar option or married put works all the time if your goal is to insure your stock against loss whether you build a long term position or are a short term investor who has a climbing stock and want to protect it against a pull back, which invariably it will have. Therefore a collar option or married put is designed for a bull / Read More

Stock And Option Strategy – Teach The Bear New Tricks

 Bear Market, Editor's Picks, Profit And Income Strategies, Put Selling
Dec 132011
 
Stock And Option Strategy - Teach The Bear New Tricks

This, the third article in my Teach The Bear New Tricks looks at a Stock And Option Strategy for rising stocks in bear markets. Bear markets are not all doom and gloom. They provide increased volatility which push option premiums high making put selling and covered call selling very profitable. Fund managers cannot simply pull all their capital out of stocks and wait out a bear market. This never happens. They therefore look for value in diversified large cap dividend payers. Stocks like Johnson and Johnson, PepsiCo, McDonalds, Yum Brands and the like. / Read More

Deep In The Money Calls – Teach The Bear New Tricks

 Bear Market, Covered Calls, Exxon Stock (XOM), Profit And Income Strategies
Nov 262011
 
Deep In The Money Calls - Teach The Bear New Tricks

Deep in the money calls can be an exceptional strategy to consider in a bear market. Whipsaw days and high volatility can make it tough for any investor. Wouldn’t it be great to put aside all the wild swings, volatility and fear of the bear market and get back to what is really important, investing. That’s what deep in the money calls can provide. There is a difference between trading and investing. Traders are often in the market for short periods, sometimes even minutes as they try to make quick profits. Investors on / Read More

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Collar Strategy – Teach The Bear New Tricks Using A Collar Option

 Bear Market, Editor's Picks, Profit And Income Strategies
Oct 162011
 
Collar Strategy - Teach The Bear New Tricks Using A Collar Option

Collar Strategy is a great way to buy into a stock during a bear market without worrying about the stop collapsing and taking your capital with it. But many investors hate using a Collar Strategy as they perceive it as being too expensive. Indeed to put a collar option in place on a stock will cost capital, but if the goal is to seek a capital gain and protect from capital losses then the Collar Strategy makes sense. As well when a collar option is purchased an investor can use selling out of / Read More

Royal Bank Stock – Learn From The Bear Part 1

 Bear Market, Profit And Income Strategies
Oct 152011
 
Royal Bank Stock - Learn From The Bear Part 1

Royal Bank Stock is one of the most widely held stocks in Canada. It is also a stock held by pension funds and institutional investors across much of the world, in particular North America, Europe and Asia. Royal Bank Stock is the largest of Canada’s big 6 banks. Royal Bank stock has a market cap of around $68 billion C$ and earnings of $18 billion C$.  But like the other stocks in my series on Learn From The Bear, Royal Bank Stock has also seen its share of bear markets. This is the / Read More

Royal Bank Stock – Learn From The Bear Part 2

 Bear Market, Profit And Income Strategies
Oct 152011
 
Royal Bank Stock - Learn From The Bear Part 2

In the second part of the Royal Bank Stock article, I pick up in 2008 as the severe bear market is getting underway. To understand this article you should consider reading Part 1 of Royal Bank Stock – Learn From The Bear. ROYAL BANK STOCK – LEARN FROM THE BEAR – continued… Royal Bank Stock – 2008 (first loss): Loss 16.9% 2008 would mark the worst year on record for Royal Bank Stock. The first warning sign shows in the story of Royal Bank Stock when it failed to recover to the recent / Read More

CAT Stock – Learn From The Bear

 Bear Market, Caterpillar Stock (CAT), Profit And Income Strategies
Oct 122011
 
CAT Stock - Learn From The Bear

Cat Stock is another favorite stock of many investors around the world. It stands to reason because CAT Stock represents a huge international corporation with locations in every major world market. Caterpillar has a market cap of 48 billion and revenue of around 50 billion. This is a mammoth company with ties to the infrastructure growth of nations everywhere. This is also part of the reason I like to read the story that its historic charts tell me, because CAT Stock is directly tied to the health of the world’s economies. Before I / Read More

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