TFN eNews 08/03/2009: Back to basics: A new strategy for Wall Street
Published via e-mail broadcast on August 3, 2009
In today’s TFN eNews:
* Politicians don’t like their own medicine
* The best credit card company not to own
* How we manage to make so much money
Dear TFN Reader,
This is what happens when the government meddles with the free markets. Liars lie. Cheaters cheat. Thieves steal. And politicians, well, choose one or all of the above.
Even though the nation’s lawmakers get rewarded handsomely for doing little more than pandering to keep their lavish lifestyles, Washington’s super majority has found it rewarding to attack the folks that toil and think for their money.
Their latest victim is Bank of America (NYSE:BOA). In a quick, in-and-lawsuit, the SEC managed to coerce $33 million from the company, claiming it made false and misleading statements concerning Merrill Lynch bonus payouts.
Apparently it is okay to lie on the campaign trail, but not okay to lie to the folks doing the campaigning.
While this talk of excess bonuses and salary ceilings is an absolute farce, I am not above making money from it.
Let me re-phrase that: I am not above telling you how to make money off of it.
Here is what I wrote in one of my several daily missives to TFN readers:
“When I initially recommended buying shares of Discover Financial Services (NYSE:DFS), I did it knowing the knocked down credit sector would eventually rebound. When the market was full of fear last September, traders hammered shares of just about anything that had to do with the banking or credit sectors.
“As a company fairly removed from the opaque derivatives market, Discover was about as clear from the credit crunch as any credit card company could be. After discounting share price, it was only a matter of time before the markets fixed their mistake.
“That time has come. Over the last month or so, shares of Discover have climbed from $9 to over $12 today. With gains of over 20% on the table, it is time to sell and move on.
“Why not hold and wait for more gains? I know you are asking the question.
“The answer is simple. There is better money to be made, with lower risk, elsewhere, even in the credit industry.”
Find out where right here.
*** While you are checking out the latest updates on the Today’s Financial News site, take a few minutes to read the latest investing advice from the group’s founding father, the regularly scheduled muse of the daily e-news.
Here is a sneak preview of what Mr. Amberger thinks of the current market situation:
“No matter how you look at it, the year 2009 has been a stressful one for investors.
“Starting with the ominous dips last fall, through the Inauguration Crash in January, and on along the summer rally, I can’t remember a year that has taxed my nerves as hard as 2009: Bluechips turned into pennystocks, “tiger” economies morphed into mangy alley cats, Capitalists became socialists, and Communists became Capitalists.
“Sure, at 9,200 the Dow Jones Industrial Average now’s up over 40% from its February lows.
“But that’s till just a 2% gain over where we started the year… -23% below where we were a year ago… and a whopping 34% below the 2007 high. Tens of trillions of dollars in shareholder valuations have disappeared. Investors have thrown in the towel by the millions… taking their losses and turning their backs on the market for good.
“Because it’s hard to see how you can possibly make up your losses without risking what little is left!
“At the end of last year, I found myself with a choice to make. My business is providing good, profitable information to subscribers looking to my team and I to provide them with solid investment recommendations.
“I could either close down shop. Or find a way to make this market work for our subscribers.
“Which was quite a challenge.
“You see, the market crashes and crashettes of the past year pretty much knocked the pegs from under technical analysis. The drastic reversal of fortune left analysts without the floor off history to build their formulas on.
“I knew we’d have to completely re-engineer or approach.
“It was back to basics!
“What we noticed early on is that the broad declines in the markets punished saints and sinners alike. It didn’t matter if a company ran a tight ship or a party boat, their share prices all plunged.
“But while the party boats continue to flounder, the workhorses are putting meat on the table and money into our pockets.
“It’s what we knew all along. To make money in the markets, you need to pick not just good companies… by Damn Good Companies.”
To finish his thoughts, click here.
Since the boss is out of town for the week, on a canoe trip of a lifetime, I will ensure you keep your withdraw symptoms to a minimum by discussing, and expanding, his investing philosophy throughout the week.
Who knows, you may even be a few bucks richer by the time he comes back.
Quote of the Day:
“We have got to slow this thing down. We’re helping auto dealers while there are thousands of other small businesses that aren’t getting help.” – Senator Jim DeMint on Cash for Clunkers
Recommended Reading:
“Something for nothing and your tips for free”
“Three facts prove I was right”
“The TFN Complete Guide to Biotech Penny Stocks”
Today’s Top 3 Financial News Headlines:
The Independent – Warning: Oil supplies are running out fast “The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.”
CNNMoney.com – Cash for Clunkers lifts Ford sales “Ford said that it was helped by the popular Cash for Clunkers program that gives car buyers up to $4,500 for trading in older, gas-guzzling vehicles if they’re buying more fuel efficient cars.”
Reuters - Google CEO Schmidt to quit Apple board “Jobs said on Monday that with Google’s recent introduction of a computer operating system, “now is the right time” for Schmidt to step down from Apple’s board.”
Good trading,
Andrew Snyder
Analyst, Today’s Financial News
P.S. Hot Stock Confidential Member S.Z. wrote us last week to say, “…you guys rock. I’ve made $115K in stocks so far this year on your picks…”
So I ask you, what on earth are you waiting for? Learn more about our premium investment service and our latest hot stock opportunities right here.
Next Article: Mining stocks: The surprising Cash-for-Clunker winners
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