Market volatility: Huge profits for National City (NCC) investors
Today's Financial News - Posted October 2, 2008
The markets are giving the average investor a wicked case of whiplash. Fortunately, the volatile action is creating incredible investing opportunities. Need proof, check out our profits on National City (NYSE:NCC) and Boeing (NYSE:BA).
By Andrew Snyder
Baltimore – (TFN): I am sick of all these Main Street versus Wall Street comparisons. No matter where we live, no matter where we work, no matter what color our collar, none of us wants to lose any of our hard-earned dollars.
It does not matter if we make our money through investing in stocks or digging for coal in Wyoming. When the tide drops, it lowers all ships and when the economy tumbles, we all suffer.
My phone is overheating with calls from friends and family members searching for advice.
“This is really starting to hurt,” they say. “What is next?”
It is a tough question to answer, but the solution is becoming more and more obvious with each passing day.
Right now, the equities markets are down about 25% from their peak. The decline is just slightly higher than the discounting we see during an average recessionary market. It means we could be close to a bottom. That is first set of good news.
The only piece of bad news is this recession will hurt worse than normal. We will likely lose another five to ten percent decline. A stock selling for a hundred bucks today, could be selling for $90 or $95 in a week or two. That is not too hard to swallow.
The second set of good news, which is really good news for savvy traders, is we will lose that chuck of value in wild day-to-day fluctuations. In essence, it is more of the same whipsaw action for the next few weeks or even months.
We made it this far
Looking back, we did not lose the 25% in one, long decline. We lost it in small increments; one step forward, two steps back. It is that kind of market that offers the most profit potential. Pay attention to the clues your given and you can make some fantastic investment choices.
*********DON’T MISS TODAY’S VIDEO INTERVIEW WITH ANDY SNYDER!**************
With the markets in constant flux, government bailouts supporting Wall Street, and threats of a major economic slowdown, are bonds a better investment than stocks? Stock and bond analyst, Andrew Snyder explains how to attain a steady stream of passive income through corporate bonds.
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For example, if you followed my advice and bought shares of National City Corp (NYSE:NCC) or the January 2.50 Calls (NCCAZ.X) I recommended on Tuesday, you are sitting on some huge profits. Most importantly, you made that money while the market made two steps backwards.
If you followed that play, it is likely you also bought the Boeing February 55 Puts (BANK.X) that I recommended in the same article. Once again, congratulations on the profits. Just as expected, Boeing’s valuation is falling and investors that foresaw the drop are profiting.
Boeing has plenty of room to fall. After all, the entire transportation industry is getting hammered today. So you should continue to hang onto those options.
But with Congress ready to make another move on bailout legislation, the financial industry is up for grabs. With the market making a big jump to the downside today, knowing that the bill is likely to reach success, I am not looking for anything magical in the industry in the near future.
With gains on the National City call options currently sitting at over 85% on those options, sell them now and take some time to count your profits. There will be similar opportunities ahead.
Again, if you have been paying attention, you have seen the profit power unleashed by this market. Over the past three weeks, every single one of my recommendations has been a winner. Most of them were very big winners. (Don’t be surprised if they make me start charging for this kind of advice.)
It is proof that as long as the markets are moving, there is always profit potential out there. Keep reading, keep doing your homework, and keep investing. There is a lot more money to be made.
Watch Andrew Snyder on the TFN’s Smart Investing video, The Key to Recession Investing.
Next Article: Fortis (FORB) up 12%, despite setbacks
Posted by Andrew Snyder · Filed Under News that Matters, US Stocks and Markets
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