Updates from the games
January 21, 2008
We are definitely in a bearish (declining) period of the market, and this week
the NASDAQ strongly dropped about 5%.
Yalicoo’s competitions, on the other hand,
were colored in light green as all the winners continue to have positive
returns.
Getmoney (7.7%) and Fred (6.2%) were not affected by the market's bearish
behavior and beat all other players in the
weekly competition, gaining superior
returns. In a declining market, more than in any other time, it is important to
carefully choose the right stocks and know when to buy and when to sell them;
our above-mentioned two traders obviously know how to do it.
Among their gainers
are a company that provides various credit and financial related services (CCRT),
an operator of casino gaming and entertainment resort facilities (MPEL) and a
manufacturer of signal semiconductors (SWKS). Note that CompuCredit Corporation
(CCRT) provides services to underserved and un-banked consumers, including to
sub-prime consumers. However, even though the the stock prices of financial
sub-prime related companies are strongly declining, it is still possible to gain
profits by riding on their upside volatility.
Amazingly (or not), Fred also leads the monthly and
quarterly competitions.
Fred’s portfolios show a return of 5% in the
monthly competition and 2.5% in the
quarterly competition. The returns of the other players are still low, mainly
due to the tough and unpredictable behavior of the market. Meanwhile, all the
competitions are still wide open and I expect many exciting changes on the
scoreboard as time proceeds.
Run away right now! (Or not..?)
Everyone agrees that the market is going down these days and some of the
analysts even consider a recession period in the U.S. Does this mean that you
have to close all your stock positions and divert your investments into a low
yield government bonds shelter?
Over the past decade, the market has seen both bullish runs and bearish ones;
dot-com irrational exuberance; corporate corruption and the resulting
legislation; 9/11 and the following consequences; and now a global sub-prime
credit crisis. Despite all of these, the market has been more up than down.
Since it is impossible to predict in advance when a bearish or bullish period
starts or ends, the conclusion is that in the long run you have to stay in the
stock market in order to benefit from its overall increment over the years. This
is not meant to suggest that you should never sell stocks; it is just that you
should continuously learn stock investing strategies, improve your investing
skills, and invest with your brain, not your emotions.
You can choose to hold an Index Fund or an Exchange Traded Fund that will match
the market return; but, in case you want to supersede the market return and gain
larger profits, there are generally two ways to consider. The first is to buy
stocks and hold them for a longer period of time; this is the Warren Buffet way.
This way includes analyzing the fundamentals of the company, such as its
financial condition, its management and other fundamental issues, in order to
estimate the company’s intrinsic value and understand if its stock is currently
undervalued which means the price is right for buying.
The second way is to try and gain from the short term volatility of a given
stock price by using Technical Analysis indicators. Technical Analysis is based
on the assumption that all the information about a stock is reflected in its
price; thus, by analyzing the movements of the price or the changes in the
trading volume of the stock, one can predict the future short term behavior of
the stock price. As in the previous mode of trading, this too requires
self-education and practice-
all offered by Yalicoo.
No matter which path you choose, you'll need to find the right stocks for your
portfolio and know when to buy and when to sell them. Yalicoo has thousands of
registered traders holding many winnings stocks. Yalicoo’s leaders have proved
in the past that they can definitely beat the market during any time frame by
picking the right stocks and holding them for the right period of time.
In any competition that you join, you will immediately see the five top leaders
in the competition, including all their transactions - live. Besides the cash
prizes you can win in these competitions, copying Yalicoo leaders’ stocks into
your real money portfolio can also increase your actual profits by hundreds and
even thousands of dollars. Just remember that monitoring the moves of the
leaders should be regular and persistent.
|
|