What, Me Worry?

My purpose in creating this blog is to share with you my take on investing in the stock market.  Unlike most people, I actually make money in the stock market.  I have no one to thank but my own tenacity in finding a better way to invest after spending years of losing money by listening to stock brokers, buying mutual funds, investing in investment newsletters, buying options and subscribing to market timing programs.

Invariably, I found that no one cares more about my money than me.  You can be sure the same applies to you.

I have a certain philosophy on how the market works and what motivates people to give you the advice that you get regarding investing in the stock market.  Maybe I am cynical.  Forget maybe, I am cynical.  (I used to be naive).  Unless you are fortunate enough to have a personal finance manager most of you will do poorly over the long term.

Just to get it out of the way, I have no formal training in finance or investing or any related field for that matter.  As a matter of fact, I am a doctor who just decided after many years of trying various methods that there is only one way to invest your hard earned money and that it is to not do it with your “head buried in the sand”.  You must actively manage your assets.

I do have a web site at:www.low-risk-high-yield-investing.com

In this site I discuss my philosophy in stock market investing.  With my philosophy I pulled out of the stock market in the first few days of September and we all know what happened to the market almost immediately after that.  Does subprime mortgage scam sound familiar?  For the year so far my investments are up 13.71%; how does that compare to you?  You might want to check it out.

With this blog I hope to post articles that are related to my philosophy which hopefully not only teach, but point out some of the realities of investing your hard earned money in the stock market.  I do not plan on giving daily market commentary for two reasons: 1. who cares what I think, and 2. no one really knows what the market is going to do tomorrow.  The latter is really the whole point of this blog.

Enjoy!

End of Year Tally (not rally)

Happy New Year!  The only thing to be happy about is that we are finally done with 2008 and the worst stock market performance in decades.  For those of you who follow this blog you know that I track the Nasdaq and for the year the QQQQ (the proxy for the Nasdaq) is down -41.73%.  This number by itself pretty much sums up the year on Wall street.

Using the indicator that I use to determine when to be in the market and when to be in cash allowed me to have a return of +13.71%.  For most of the year I was sitting in cash.  In fact I last exited the market on 09-04-2008.  Since that time we have come very close to re-entering the market which happens when the white line passes above the purple line.  I suppose if you were to use a magnifying glass one might argue that in the last couple of weeks the white line has passed over the purple line and therefore we should be back in the market.

The reason I did not re-enter the market was because historically when the white line crosses the purple line, it literally “shoots” right through and you cannot wait to get involved in the anticipated upswing.  Contrary to that is the recent movement of the white line relative to the purple line.  They have been moving parallel to each other and if you look at the price range of the Nasdaq over the last 4-6 weeks you will see it has been trading in a range (up one day, down the next).  So, in my way of thinking there is no sense of urgency to get back into the market.  Of course my thinking is also tempered by the overall miserable economy we are living in, but bear market rallies to occur and when I see a “spike” in the white line relative to the purple line I will get back into the market.  I do think however, that the amount of money I invest will be on the more conservative side.

As I have stated on the main page of this blog I do not offer market commentary because who cares what I think and I am no financial expert.  Of course compare my results for the year to the so called financial experts (those who manage stock mutual funds) and you will see that by and large I fared much better.  But, does this sideway movement in the Nasdaq that we have experienced for the last month or so represent a bottoming of the market?  Who knows? Maybe?

I am reasonably sure that fourth quarter earnings will be miserable, but that misery may already be built into the price of stocks.  So, if first quarter earnings in 2009 are better than the previous quarter (even tho they are still poor relative to previous results) we may actually see some upward movement in the market later on this year.

For a complete explanation on how I determine when to be in the market go to www.low-risk-high-yield-investing.com

CNBC: Charlie Gasparino on Madoff $50B Ponzi scheme Video

original description CNBC’s Charlie Gasparino talks about the $50 billion Ponzi scheme which was the hedge fund run by former NASDAQ chair Bernard L. Madoff.

more about "CNBC: Charlie Gasparino on Madoff $50…", posted with vodpod

Santa rally? Not so Much!

Well, Santa Claus is on his way but I am not so sure there is going to be a “real” rally in the stock market.  Of interest is the fact that since Nov. 21st the qqqq is up around 11 percent.  I arrived at that figure by going back to the lowest point in the last few weeks and comparing it with the close on friday, December 12th.  Not much science there.  There would have been no apparent reason to enter the market on the 21st, unless of course you have some indicator that would have signaled a buy.  I do not have such an indicator.  If you look at my indicator you will notice that we are getting very close to entering the market.  This indicator is as of the close this past friday, the 12th.  As I write this post, the market closed down for the day, so for at least another day we will remain in cash.

One of my “carved in stone” philosophies is that  never rely on someone else to invest your hard earned money.  (See my web site at www.low-risk-high-yield-investing.com for my complete investing strategy) Their motives are not always in the best interest of their clients.  This past week that philosophy was borne out with the arrest of the former head of the NASDAQ.  Please view the above video.  If the allegations against him are proven true then the investment world has reached a new low.  If you cannot trust a man of his stature, who can you trust?  Have I made my point?