Some are calling the rally we have seen since the start of 2012 a bear trap, an insignificant bounce that will soon lose momentum and drive our markets down further. Extreme skeptics are even predicting that we will see a stock market crash in 2012 similar to that of 1929. Do I believe it? Not really, but I’m prepared for the worst, and you should be too.
The success of great investors generally isn’t due to an ability to predict market ...
Continue Reading →Posted by: Epsilon
Yes, Facebook changed the world. But should you buy the IPO hype? I say no, and here’s why.
Let’s start with the numbers. 
The company, with an expected valuation of $75 billion to $100 billion, is profitable but not as profitable as it should be to put up numbers like that. With a 2011 revenue of $3.8 billion and an operating profit around $1.5 billion, the company has an operating margin of ...
Many undervalued equities have been performing significantly well in this, what appears to be, very optimistic month of January. I have, in this vein, continued to target high-yielding equities with strong returns, low price to book ratios; and those that otherwise appear undervalued…
Read the full article at http://seekingalpha.com/article/322709-15-equities-yielding-10-and-selling-under-book-value-part-i-reits.
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When speaking with a client recently I was reminded that many of the mundane, listless, yet important tasks that are essential to the trading success of me and my clients may not be common knowledge to all. One of these tasks is the detailed record keeping of trades, a now automatic chore that continually allows me the opportunity to analyze and learn from my trading successes and failures…
Read the full article at http://seekingalpha.com/article/321465-how-to-improve-your-trading-keeping-a-detailed-trade-log
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Posted by: Epsilon
FYI – My friends at ForexPros launched a new site design today. Check our their press release below:
Forexpros Launches a New Design
Forexpros launches a newly redesigned website that provides improved navigation, an enhanced layout and upgraded features to further enrich the user experience with the utmost simplicity.
CYPRUS, January 10, 2012 – Forexpros, the leading financial web portal, today launched a major redesign of its website. The new design provides enhanced functionality and simplified navigation to ensure that users spend ...
Continue Reading →Posted by: Epsilon
A company’s price to book ratio (P/B) is a fundamental measure often used by investors to determine the value of the stock in relation to the overall value of the company. A low P/B can indicate that a company’s stock is currently undervalued, offering a strong buying opportunity.
The P/B ratio, which compares the market’s valuation of a company to the actual book value of a company, is calculated as:
Price to Book (P/B) = Price per Share/Book Value of Equity
A P/B ...
Continue Reading →2011 has proven to be a year of education for many, myself included. Aside from protecting from loss of capital, hedging against the risk exposure associated with equities investments has been the most important lesson I have (re)learned from the volatility our markets faced in 2011.
One of my favorite hedging strategies is the tried and true method of investing in dividend-yielding stocks and ETFs. Dividend yielding stocks and ETFs, with their consistent quarterly or sometimes monthly dividend payouts, can add ...
Continue Reading →Real Estate Investment Trusts, or REITs, are corporations or trusts that use pooled capital of many investors to invest in and manage a portfolio of real estate properties and mortgages. They are traded publicly, just like stocks, and offer the benefits of real estate ownership without directly owning real estate.
To qualify as a REIT, a company must distribute at least 90% of its taxable income to its shareholders each year. (Many pay out 100% of their taxable income.) As REITs ...
Continue Reading →If you haven’t read What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time by James P. O’Shaughnessy, you should. Using 45 years of S&P Compustat market data and a systematic, fundamental approach, O’Shaughnessy researched the performance of many different investment strategies and concluded that some produced greater returns than the S&P 500 while others produced less.
This type of analysis may sound anything but groundbreaking in our current, digital trading universe but very few studies, ...
Continue Reading →As the markets have become increasingly unstable this year (2011), educating/re-educating my clients on strategies to trade against the market has become essential.
Some like using options, which offer versatility, liquidity, leverage, and, most importantly in our case, the ability to bet against an equity. But there is some in-depth knowledge required when executing an options trade, knowledge that is above and beyond what is required to simply buy and sell stocks/ETFs. Because of this, though options are a wonderful and ...
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