Pathetic Promotion this week on LDPP

The pathetic forum post's I am seeing on LDPP is people patting themselves on the back. Feeding off each other because they knowingly took advantage of the Newbies, sounding like Tarzan and beating their chests.  This makes me sick.  Even if they didn't have anything to do with the play, they jump on the band wagon and say they did because they are thinking about their next play and how much they can make off who they think are Stupid people the next time. Claiming gains to prove they are the next big play is a huge joke.

The last post I read was Friday:

A bang?  A bullet does the most damage when they hit the target they are aiming for.  The faster something loses momentum, the more force it produces.  Get where I am going with this?  The damage was done when the primer was added to the bullet at the onset, hence front loading the stock.

I read a post that said this:

Obviously someone leaked the play for their own personal gain...

When so many promoters, which I found 12 so far, jump on a play, it does not work out so well.  Each and every one of them are in it for personal gains.

Take a look at the data where LDPP went from not trading and the front loading started:

These are things you need to discipline yourself into looking at before you invest.  This information was found reading forum boards and going to http://www.otcmarkets.com.  You spent hours earning you hard earned money.  Take the time to invest it well. 

The chart below is with a 50 moving day average.  Remember I said a couple weeks back that if the stock falls below the 50 M/A she's gone?  You can see by reading the times and sales that some gained but a lot are bag holders.  They didn't take the time to do their own due diligence and got caught up in the hype of the next best thing.  Keep EMOTIONS out of stock trading, period!

This is the 2 day chart of the play.  "Gapped and Trapped" at the get go and went flat.  A picture states a thousand words.

flat and closed -54%

Saw a big post this morning on the next best biggest most awesome trader tool ever.... Big surprise that it was from one of the worst predator pump and dump promoters and all that the site is designed for is to harvest your email so that they can sell you on a list to either another pump and dump promotion or to one of their sister sites that they like to hide in hoping you do not realize that the leopard has tried to change his spots again to trick you into trusting him. I have been on the site they are pushing and it is merely a collaboration of all the tools you already have available to you if you dig a little. Remember hard work yields fruit and you always get what you put into something. The promoters first sentence in his post touting his new site says, After all the HYPE here it is..... See??? They feed on hype. If you are not getting the big picture on promoters... stay tune, I will be watching, learning and posting.  Play it smart and until Monday do your due diligence, Happy New Year and see ya next year.

Who chased and got trapped in this P&D?

Here is a chart for a typical "pump & dump" "gap and trap" that was posted all over forums 12/29/11. 

It closed the day before at 0.0026, gapped to .04 (+1438%) and dropped in the first hour.  Yes she may have closed up 361% but who chased and who got trapped?  There was no news and has not had any since April, 2011. 

Her website is lacking in information big time and this is listed in her quarterly report

"No Active Market. Although the Company’s shares are listed on the Pink Sheets listing service, the Company believes that the public trading price may be an inaccurate representation of the value of the Company because there is little or no trading volume in the Company’s shares and no analysts or NASD market makers actively follow the Company."

http://www.londonpacificgroup.com/

Does that put up a red flag?  Yes she has assets and revs but why has this not been actively trading?

Here is another red flag for me:  company profile reads; London Pacific & Partners, Inc. is an international private equity and corporate finance investor and advisor focused on the transformation of undervalued and growth companies in the healthcare, hospitality, and financial services sectors.

I stay away from companies that have words like "focused" and companies that target undervalued companies.  Makes me think they are looking for shell's to hide things in.  

I also Google'd the CEO:  His experience is all over the place and does not even state LDPP as his primary business.

Kenneth I. Denos
Director and Secretary

EQS
Equus Total Return, Inc.
Houston , TX
Sector: FINANCIAL / Diversified Investments
Officer since January 2005

43 Years Old
Kenneth I. Denos, Deputy Executive Chairman of London Pacific & Partners, Inc. since August 2009. President of the Fund from December 2007 to June 2009; CEO of the Fund from August 2007 to June 2009; Executive Vice President and Secretary of the Fund from June 2005 until August 2007; Executive Vice President of Equus Capital Administration Company, Inc. from June 2005 to May 2008; CEO and President of Equus Capital Administration Company, Inc. from May 2008 to June 2009; Executive Vice President of Moore Clayton Capital Advisors, Inc from June 2005 to May 2008; CEO and President of Moore Clayton Capital Advisors, Inc from May 2008 to June 2009; Mr. Denos has served as CEO of MCC Global NV since May 2006 and as a director and Executive Vice President of Moore, Clayton & Co., Inc. since January 2001. From November 2005 until May 2006, Mr. Denos served as the Non-Executive Chairman of Ridgecrest Healthcare Group, Inc. From February 2005 to February 2006, he served as a director and General Counsel of MCC Energy plc (now Tersus Energy plc). From April 1999 until August 2007, he has also served as Chairman and CEO of SportsNuts, Inc. (sports marketing company). Since March 2007, Mr. Denos has served as a non-executive director of Secure Netwerks, Inc., an information technology hardware and software reseller. Since January 2000, he has served as President of Kenneth I. Denos, P.C. Since March 2009 he has served as CEO and Chairman of Acadia Group, Inc.
http://people.forbes.com/profile/kenneth-i-denos/70767

Chief Operating Officer, General Counsel, and Director
MCC Global NV
Executive Vice President, General Counsel, Secretary, and Director
Moore, Clayton & Co., Investment Arm
Former General Counsel
Tersus Energy PLC
Deputy Executive Chairman
London Pacific & Partners, Inc.
Director
HealthSPAC, LLC
1999-2007
Former Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, General Counsel, Secretary and Director
FuelStream, Inc.
2001-N/A
Former Secretary and Director
Synerteck Inc.
2004-2005
General Counsel
Healthcare Enterprise Group
2004-Present
Director
Secure Netwerks, Inc.
2008-Present
Secretary, Director, Director of MCCA and Director of Moore Clayton & Co Inc
Equus Total Return, Inc.
2011-Present
Director
Scorpex, Inc.

http://investing.businessweek.com

I personally want a CEO concentrating on the company I am investing in.

Too many red flags from the get go, too many red flags for me to put my hard earned money here.  I will be watching her today and see where she goes.  My money goes on the big flush! Ill let you know tomorrow if this turd floated or if it just went down the drain with the other turds

If a stock quacks like a duck, sounds like a turd, then maybe it is one.

Ever wonder why some try to be so convincing it's the BEST STOCK EVER and it's going to the moon kind of thing?  Stop and think about why they are trying so hard to get you to invest in the next best thing since a flushing toilet...

Just a hunch or intuition, but more times than not, they are holding shares and want to dump them.  DUMP them on YOU.  Use your common sense, use your gut feeling and I can't say it enough, do your OWN due diligence.

If a stock quacks like a duck, sounds like a turd, then maybe it is one.

Here's  food for thought:

In its three fiscal years ending in 2010, the SEC brought some 360 enforcement actions to revoke the registration of common stock of numerous companies. This was nearly 18 percent of the total 1,206 enforcement actions brought by the SEC in that period.

The SEC is coming down hard on these stocks and there is a reason for it.  They have your best interest at heart and want to shut these scam's down. Rules and Regulations are set up for a reason.  Remember  a little thing called The Wall Street Crash of 1929?  Our economy is already in disarray and all of the signals are there for an ugly depression.  I could get into a debate over this, but I will save that conversation for another time.  Do what ever it takes to protect your hard earned money and until tomorrow, make it green!

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years."
Warren Buffett

Stock Promoter or Predator Promoter?

I started this blog because i wanted to share with people my thoughts ideas and experiences in business and the investment world. As I am still very active in business and investing, my views and ideas are constantly changing. Here lately you may have noticed I have really focused on the inside of investing and stock promotions as I see that this is where too many victims are taken everyday. Greed is an awful thing and immoral profit making at the expense of the little guys really gets my goat. What I am sharing with you is my own first hand inside knowledge of how the insiders manipulate you. I want to be clear that there are alot of good stock promoters out there that do indeed have all investors interests in mind. The experiences I share with you here are posted so as to give you the ability to tell the difference between a good promoter and predator promoter who is thinking of nothing but his or her own bottom line. Be smarter than they expect you to be. Now to todays information:

Pump & Dump for stock manipulators

In order to make these market manipulations work, the professional promoter's assume:

(1) The Public is STUPID and
(2) The Public will mainly buy at the HIGH and
(3) The Public will sell at the LOW

So as long as the market manipulator's can run crowd control of Newbies, they can be successful in their agenda of stock manipulation by controlling the market's greed & fear.

Don't trade on EMOTIONS!

Remember, it's all a bunch of smoke and mirrors. The stock awareness campaign is designed to spread a rumor/story & to play on the emotional greed of a piece of the pie in the sky find. It begins to spread across the investor world. The Joe Smoe public rushes in not to miss the next big 10 bagger and often the trend will replay the next leg.  BE CAREFUL not to get caught up in the hype, do your own due diligence and never chase the stars.

Smoke & Mirrors of a stock Manipulator

So you wonder how Professional Stock investor's find and manipulate a specific stock???
They are paid dearly to pursue and they take pride in the art. They take no survivors!!!  I have seen where they keep documents for months and it's sad how they will stop at nothing to make a buck off of a Newbie.

Here is what it looks like in the early stages of a Pump & Dump.

Stage 1: A group or groups of shorter's monitor spikes in volumes on stocks with no rumors to be found anywhere.  They do their own due diligence long before a play starts.

Stage 2: Shorts will Flag stocks that run up; then sit back and wait patiently for their time.

Stage 3: The shorter's DD the company and develop their distortion of the rumors to be used later.  And believe me, they do it well, so Master it yourself!

Stage 4: The shorts step in selling on every possible up tick. This is the Reverse of front loading. Preparations are made to attack the guy who had earlier written positively about the company and take out, discredit, any new long-term messengers.

Stage 5: The shorts step in and increase selling on every possible up tick. Just as with the pump, newsletters, e-mail, PR firms against Pump & dumps, etc. are simulated. Expertise in the field is recruited for credibility. Any possible twist using POS (Purposely Omitted Syntax) & PAS (Purposely Added Syntax) is o so conveniently used on every possible angle. If the POS/PAS is discovered then they attack the messenger.

First and foremost they control the message boards, chat rooms, newsletters, etc.

The group clutters the message boards so no positive information can be readily found. Justification is the Value of the Company in the market. Projections of $0.00 worth and loss projections of 100%.  They will even go as far as pushing the bad stuff down so it is buried.  Read deep...

ALWAYS REMEMBER: The market manipulator will do everything in his/her power to keep buyers OUT OF THE STOCK. Cut your losses is touted to stimulate fear. You bought higher but now they need you to sell lower.

Stage 6: The shorts have taken it too far. The volume is increasing and the price is not effectively dropping. A stalemate occurs. The chart is painted sometimes too. Personal attacks increase. Threats of legal action, SEC involvement, and yes even death threats increase. It's sad to watch...Increased secret IDs are employed to increase the cluttering, personal attacks & the distortion. So begins a streak of lies that run for as long as one's stomach can take it. Desperately playing on the "you have been had" scenario. Any new news will be hit it hard by shorters to kill any interest.

Watch the volume not the share price. A market manipulator will have various brokers buying & selling the stock to give the appearance of SMOKE & MIRRORS of increasing volume but the price goes down. Thus stimulating the story the company is selling or an off shore reg S or other convenient scenario. Watch for large blocks that show up but have a MARKET MAKER special code, cross overs, etc. Some use codes like 777 when you are watching the Level 2.

Stage 7: Without warning the buying pressure is too much and the short begins to cover. Short covering combined with new investors buying into the stock causes the stock to go up.   Often the whole thing starts again & again & again. Just a vicious cycle sometimes.

Don't get me wrong, Newbies have made money but more times than not, bag holders are made.  Pathetic really and It is my mission to keep exposing the pump & dumps for what they really are... SCAMS!!!

What to do when the Stock Market is closed... Due Diligence!

Here we are after a long weekend and you find yourself with another day without knowing what to do when the stock market is closed... Work on Mastering DUE DILIGENCE.  This is a huge subject, so today I will concentrate on some basics. Keep in mind what expectations you have and what percentage you want to profit on a stock.  Always have a plan and stick to it, so Get a pen and piece of paper out and keep notes.

Look at the stock chart first to see if there is potential gains.  Does she have a volume trend, does it look like its been front loaded?  What are here daily averages compared to what she did last Friday. Look to see what the stocks support and resistance is.  If you are in doubt and just learning you can find helpful hints on http://www.ddmachine.com/ until you find your niche.  Everyone has there own opinion on stock chart reading and eventually you will have you own.  At this point if you find she is worthy to continue you can.  This can be your jump off point and decide whether or not to waste anymore time on the company.

Go to http://www.otcmarkets.com/home and check out the information listed there.  Remember it is not always updated so Google for more info.  Check out her website for product market potential, the stocks financials, news, quotes, charts, and even insider trader on this site.  Read EVERYTHING!  It is your money, so make it work in your favor.  Familiarize yourself with the stocks latest 10Q or 10K.  Start at the top and look through everything.  Here is a list to help you get started.

Is she Compliant with sec filings? Is she up to date?

Read her financials (this is basic, eventually you will learn to understand more)

- Is there an unambiguous and complete explanation of the revenue streams?

- How good are the cash flows?

does she have cost of goods?

does she have revenues?

- How accurate is the valuation of their assets?

- Are there any hidden liabilities?

- Are there any irregularities in the financial statements?

- What is the company’s history with financial compliance?

- What have the auditors said about the company figures over the last few years?

- Have authorities conducted any tax related investigations into the company’s finances?

- How reliable are the financial projections?

- Have terms and duration of the overdraft and other credit facilities been disclosed and is there any risk to those facilities continuing?

- Have all articles of incorporation, tax registration certificates, board meeting minutes, shareholding records etc been provided?

- Are there any pending legal cases or threats of action (and has potential damage been quantified)?

merger’s?

This will take some time to master, so be patient.

This is my favorite part of due diligence, Google the CEO!  Finding the dirt on some can be very interesting and you will find they have many webs to weave.

That should keep you busy until next time.  I will continue to write on this subject, so stay tuned!  Have a great reading day and be prepared for the markets to open tomorrow.


In the business world, the rearview mirror is always clearer than the windshield.
Warren Buffett

Finding your niche in small business

I wanted to write more about the small business marketplace as the demand for self employment increases among middle and lower class people. I have a friend who has been in the bedding industry for about 20 years. He started out with a family owned company that a few years ago decided to sell a portion of their interest in their company while still staying in the company. A little while after the transaction the investor company forced them out as it determined that it could run the company better on its own. Now, none of the new company people had a clue as to how to run a smaller bedding company and thought that they could compete with the 3 big bedding companies in the world and continue making high end beds. Well, as we know middle and lower middle class america has pulled back most of their finances as times got tough and people lost jobs. Fewer people were willing to go out and buy a $2000.00 bed from a small company thus creating a loss in business. My friend who was the operations manager and a regional vp of production suggested they back off of the high end beds and find a niche in middle level and lower end beds and corner the market thus finding their niche in inexpensive beds. The new company balked at that idea and as of Monday had a liquidation sale of the entire company which at one point was worth upwards of 26 million dollars. The expected net of the sale was gonna be around 5 million dollars and they are no longer in business. What I am getting at is it is important to target middle class america with affordable products as they are the ones that will carry you through difficult times. As for my friend, he is now going into business with the former family owners in the mid level bed industry imagine that, maybe they found their niche. See ya tomorrow......

Pump and dump promoters

As much as I hate to harp on one topic, pump and dump promoters really anger me.They take advantage of unsuspecting investors and leave them holding the bag. The main indicators are in the 10Q, if the company actually has one, and in the average volume as I spoke about in yesterdays blog post. Most stock promotions are paid for by third parties that hold a large position in a stock. Really all these third parties are looking for is volume to dump their stock and the promoters will go to any length to dress up what I like to call a turd stock. Promoters will flood the investor boards with promises of good news hoping you will buy into the hype,and then when the news comes out it is merely a bunch of fluff or rehashed news about plans the company has IF it gets financing. Due diligence is extremely important in uncovering these frauds. Dont get caught holding their bag. If you must buy into the hype then wait till after the initial push and watch the stock come back down then see if you can ride it up. Dont make other people rich!!! Most pump and dump stocks hit their high 15 minutes after the open and never recover from the pullback. Watch a few and see for yourself. Until tomorrow......

1 way to tell if someone is front loading a particular stock

One way to tell if someone is front loading a particular stock is:

If someone is loading up on stock shares before news, a pump, a filing, etc...you'll see that volume on the chart. Now here is one of the ways of finding it.....

Volume trends. What does this mean? It means volume moves in up trends and down trends. If you look at the volume before the pump, there is hardly any at all.  In front loading it sort of looks like a stair case, where the volume increases/decreases slowly every day.

Here's an example; I googled AAPT compensation and found an alert the end of January. See where the volume started increasing before???

 

Now in this case, if you had gotten in before the breakout then that's great. But you need to know when to get out also.  Remember I watch the 50 day moving average.  By this chart you can see once the share price dropped below the 50 M/A the downtrend started.  

If you look at April someone tried to run it again for a second leg and gave a little of a gain, but again look at where the 50 M/A is.  Cuts right through and didn’t want to run anymore.  Hopefully you are out back on the first leg before the downtrend started and not a bag holder.  Learn to watch the moving averages and volume

Volume is probably the most important indicator with penny stocks. That's what all pumps are about, it's all about the volume. And most penny stocks are pumped at some point in time and very volitile.  So watching the volume is very, very important.

Stay tuned, do your due diligence and have a green day.

Why you get Pumped & Dumped in a Stock

First of all I will start with the definition from Wikipedia:

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump-and-dump schemes are sometimes called "chop stocks".

While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors.

Read more... http://en.wikipedia.org/wiki/Pump_and_dump

This is how the morning may go... You wake up in the morning and start going through emails, checking forum boards and watching stock chat rooms.  You see the hype that a stock campaign has put out there all over the internet.  You think, hmmm, that sounds good.  People forget, the reason a stock is being promoted is because ALWAYS somebody has shares to sell.  Lesson 1 - NEVER forget someone wants to make money off you.  Lesson 2 - Don't forget to do your due diligence. 

I have seen it time and time again.  People forget Lesson 1 and 2.  Then they forget to find their exit... ALWAYS look for the door out before you enter a stock.  If you want 20%, look to see if their is potential.  Then I see people chase a stock PPS at the open.  HUGE mistake!!!  This could trap you in a stock price too high that can spiral down when they start diluting.  This is what the stock world calls holding the bag or Bag holders.  I know, because in the beginning, I did it too.  A very expensive lesson to learn. Don't hold, set your stop loss and move on.

Most times the stock price was artificially inflated by front loading the stock to paint a pretty chart.

Interesting enough is that the person who was selling the stock in the first place came back around and may have bought the stock at the lower price.

So buyer beware.  I will continue this subject at another time.  Hope you are all having a great week.

Scanning stocks on the fly....

Sorry for the absence yesterday had an extreme bout with neck and shoulder pain and my left arm was pretty much useless. So.... scanning stocks on the fly. Now, I only do this usually for entertainment so its not something I suggest on a regular basis nor with lots of investment money. Lets say I get a tweet or an alert on a hot stock. The first thing I do is go to http://www.otcmarkets.com and plug in the symbol. I like that site because its kinda like my one stop shop resource center with the most info I need to make a pretty good informed decision on if and when I get in. I plug in the symbol and immediately go to a chart of the last 7 days and look at the volume. If there has been a spike in volume the last few days I get a detailed quote on the buys and sells. If the buys far outweigh the sells and there has been no promotion in the few days prior to the alert or tip, then I know this stock has been front loaded and I am a potential bag holder and Ill stay out of it. If its been normal trading then at this point it is a go so far.... Next I quickly pull up the financials and see if there are actual revenues and see if the company is current on its SEC filings. I also check for the outstanding shares and see if the company has recently put a bunch more shares on the market diluting the stock. If it has, I stay out. Next I look at the news releases to see if it has had recent news developments that can affect the stock. At this point if im still interested I go back to the chart and look for my entry point. I do not suggest this trading stocks on the fly to new traders. It takes a bunch of mistakes and some losses to get pretty good at this. If you insist on trying your hand at it,I recommend trading only with paper. I also do not recommend staying in this stock for very long. Worst case scenario you get in on a dip in the afternoon and sell at the next days open, but the preferred exit is the same day I buy. Well thats it for now. Hope you have a great weekend. Im going to go back to some small business ideas this weekend so stay tuned.......

Stock Charts: One tool of many

Reading stock charts is an art in of itself . Im attaching a bad chart and a good chart so you can see the difference. I generally go out 9 months on a chart so I can get a proper reading on volume consistency and spikes usually caused by news or promotion. I also look at whether the stock has been over bought or oversold at those times. I pick 3 similar lows to get my bottom and pick 3  similar highs to get my approximate top. I also look at the top and bottom bollinger bands to see if an up trend or down trend is possible. A trend up on the top band generally indicates an upturn while a push downward on both tends to indicate a downward trend. Flat top and bottom bands indicate a squeeze and generally the stock will trade flat without any type of push or news. Ive seen so many charts that now I really can look at a chart with little analysis without really putting alot of thought into it. This has come from alot of practice and exposure to many charts. Hardcore technical analysts tend to agree and disagree with one another as opinions are like butts everybody has one. You have to find your niche and stick to it. Reading stock charts is only 1 tool of many that I use in analyzing a stock and nothing is written in stone. One constant I believe in is the 50 day moving average. I have found that If i can get in on a low and play the stock to around that average I make more money than if I dont use that average. Unless of course you are playing bio-pharmaceutical stocks. Those things tend to have a mind of their own and are driven so much on speculation of  results of testing and in my opinion you have to be nuts and pretty darned lucky to catch one of those. The more due diligence you do on those stocks the better reading you can get and then make your decisions based on that. Tomorrow Ill wrap up the work week with a quick check I do on a stock on the fly in the heat of a trading day.

Bad chart

Good chart

Pump and Dump or Stock Promotion?

One thing I want to say about pump and dumps and promotions is be VERY careful. It is very easy to get wrapped up in the hype of a promotion and then YOU are left holding the bag. I like to use http://newsletter.hotstocked.com/stocks to find out when a stock has been promoted and who has promoted it and what was the performance of the promotion. A promotion becomes a pump and dump when the promoter pumps it while others with a position sell off their stake. This is where my due diligence becomes my best tool. Questions I ask myself are, "How long was this stock promoted?, "what was the performance of the stock during the promotion?" " did the stock hold any gains or did it have its 15 minutes of fame before bottoming out again?" Using a promotion can be a tool if I am trying to get out of a position but be very careful and dont hold too long. I advise against using a promotion to get into a position, as the stocks being promoted tend to be very unstable and uncertain and it is easy to get wrapped up in the emotions of making a quick buck. Knowing your due diligence of a company can help you to decipher whether a newsletter or alert you get on a stock is good news or just polishing a turd to get you to buy in. Dont get caught holding the bag!! Do your homework!! Third party promotions are often designed to get them out and you in. Tomorrow we will look at some stock charts so we can actually see past performances on stocks and how they can help us get in on a bottom and out with our profits.

Whos Who

Who is running a company is as important to me as what the price per share (PPS) is. For instance lets say Mal the CEO of a company I am looking at has run 5 other companies that have never had any revenues or products,Ill safely assume that he hasnt turned a new leaf and his current company is also a piece of garbage shell that is probably a dilution trap for me . I say buyer beware. I want the companies I trade and invest in to have executives that have run real companies and had results. The tool I use to find out where he or she has been is Google. Once I know who the executive is I simply google his or her name and see what comes up. Usually I am looking for a profile on Forbes or Businessweek as they have been my most reliable resources. In my opinion, CEO's tend to stick with the same types of companies. Remember, ANYONE can be a CEO on paper its as simple as starting a corporation and putting your name as CEO. So dig on those CEO's and dont forget the company directors and CFO's and COO's etc etc. You will be amazed at what you can uncover on them. Birds of feather and all that. Tomorrow I will focus on stock promotions and promoters and how to tell whether a promotion is legitimate or just a pump and dump.

Financial Reports

One of the very first things I do when I pick a stock symbol is look for the company's financial reports. Are they current in their filings? I like to use http://www.otcmarkets.com/stock/fofu/quote to get most of that information. While reading financial reports can be tedious, it is very necessary in order to find out the transparency of a company. Most publicly traded companies use SEC form 10Q to report their financial earnings or losses. What a company's financial condition plays a big part in whether I invest in it or not. I have seen traders just look to see if the company is current and never look in the report to see whats actually in there. Big mistake. Alot of times shell companies are current on their filings but have no revenues or actual products and the only place to find that out is in their "current" SEC 10 Q form. So, I urge you to be careful and take the time to read everything in those reports. Debt and liability that is not readily advertised to investors is often buried inside those financial reports. Even a polished piece of garbage stock (a company with a nice gleaming newsletter or press release), can be revealed to not be a good investment when you dig a little deeper. Tomorrow Ill talk about finding out who runs these companies and why it is important when you are trading their stock. Enjoy your Sunday. GO TEBOW

News

Depending on the kind of news,news moves stocks. I get into a stock on speculation and sell on news. I use the increase in volume from good or bad news to get out of my position, so its important for me to be in a stock before the news hits. News on positive financials, acquisitions, buyouts,expansions, etc etc can move a stock in a positive direction. News on negative financials, bad product results, lawsuits, etc etc can move a stock in a negative direction. I subscribe to the different news feeds so as to get the teasers that companies often release in advance of a news release. It is important for me to read the news and determine if it actually is news. What I mean by this is sometimes in attempt to move a stock when they actually have no new news, companies will rehash old news reports in what we call "Fluff" news. Fluff news often has no or negative results and generally doesnt help me at all in making money on a position. Doing my due diligence on a company and becoming familiar with what it has going on and what it does helps me better understand the news reports when they come out. In this day and age of volatile markets, outside news sources can also have a negative and positive affect on stocks depending on the sector they are in. For instance, the recent financial crisis in Europe albeit so far away from home affected all of the markets and stocks in our country. Negative news releases sent our markets in a frenzy, at those times it is important to understand what the news is and if it does actually pertain to the the stock I am in and whether I should exit. Alot of times I may just need to wait for the market to stabilize and then see where my position is. Tomorrow we will look at reading financial reports. Have a great weekend.

Paper trading and Getting out on a Friday.......

I mentioned paper trading and how it can help hone your trading skills in earlier entries, but today I wanted to  elaborate a little more on paper trading..  The number one thing paper trading does for me is gives me experience in trading without the pressure of using actual money. This gives me the ultimate environment to trade in, emotionally free. Often when we are trading with our money we get caught up in our want and desire to make money. This can cause us to make emotional and rash decisions and forget our game plan of limiting our losses or getting to a certain preset profit percentage on a stock. Fridays tend to be very erratic and unpredictable as other traders sell off to take either profits or losses for the week. Remember I usually dont hold a position through a weekend unless I know for sure a position I am holding is long term. I tend to like to try to sell by the end of day Thursday so as to avoid the mess that Fridays can become. If for some reason I am unable to sell on Thursday I will use the first hour of trading Friday and the increase in volume to move my stock. Make sense?  The more a stock moves the easier it is to buy or in this case sell it and start looking for my next ride. Setting stop losses allow me to limit the amount I lose and setting a specific profit percentage in my mind allows me to grow my money consistently rather than erratically. Give me 30% profit on my money on every trade and I will run all the way to the bank smiling my best smile. In conclusion I want to again say keep the emotions OUT of your trading and you will become a much better and more consistent trader and hopefully richer than if you trade on emotion. This weekend Ill be writing about the ways I read news on companies leading into next weeks topic...... In depth Due Diligence.

Active Trading

Becoming a savvy trader is a constant learning process. So many things affect the markets in very drastic ways. Humans are fearful animals and it doesnt take much to spook us especially when it comes to money. Learning to set aside your emotions so that you can think clearly when trading stocks is very essential to success as an active trader. The consistently most volatile time of the trading day is the first hour of trading, Stocks tend to what we call gap up prior to the open and with the flurry of everybody trying to get in, it is the most emotional time. I like to wait till a stock has settled down AFTER the first hour. Lets say for instance the prior day a stock closed at $1.00. During the overnight the company may have released news or earnings reports that spur traders to place orders prior to the open. Early premarket traders also place orders which can be higher than the stock closed at the end of the prior day. when the market opens lets say the stock opens at $1.25 per share. Thats a huge 25% gap up that once the market opens will cause a strong demand for the stock causing it to go up even higher until,those guys who bought in early or placed early orders at say $1.00 decide to take profits or sell entirely causing the price to come down sometimes even lower than the stock closed the day before. This is what we call filling the gap. Alot of times all of this activity happens quickly in say 10 or 15 minutes and lasts about that first hour. Alot of money is lost getting in too early. I wait until i see the gap down and catch the price on the way back up. Sometimes it is very difficult to wait but ill tell you its much more satisfying when on occasion the stock doesnt come back up and I still have all of my money. I also like to be out of a stock before the last hour of the day, unless Im holding my position long term. The same flurry that happens at the open alot of times also happens at the close as traders look to get out or those who missed the boat earlier try to get in so as to have a position for the next day. I rarely hold a stock longer than 2 to 3 days as i like to stay aggressive as a trader. This is why it is so so important to papertrade first and find out what kind of trader you are and to also continue to hone your trading skills. tommorrow I will talk more about paper trading and honing those skills. Until then.......... 

Due Diligence

The most important part of investing is doing the due diligence. I do this in several different parts. Now I think I will break each of these down next week so as to give you a better understanding of how each works and why we do it. Today ill highlight each part so I can give you the basic layout of what we look for when we do the due diligence on a company. The first thing I like to do is check and see if the company is current on all of its SEC filings. Next I look at the financial statements themselves. I look for revenues, liabilities, outstanding shares of record, the business description,outstanding loans,and any other important information the 10Q form reveals. I then find the names of the officers and start investigating their backgrounds. It is important to me to find out just how many companies the CEO is or has been involved in as the integrity of the company relies on the integrity of the CEO. There are many symbols that are traded as companies but are actually what we call shells. They have no products, no revenues, or employees. The only thing they have is stock. I would suggest stay away from these kind of companies. I look for companies with real products and real revenues. Next i look to see what the 50 day moving average is on the stock and find the 90 day and 52 week low on it. I also look for spikes in volume as they can be a telling sign of advertising or promotional campaigns. I also look at the recent news releases to see what if anything has been happening with the company. Checking the company's sector competitors and how they are faring is also helpful in determining how the company stands in the marketplace. Once I have digested all of the info I check the current price the stock is trading at so I can determine what my entry price will be. Tomorrow I will talk about active trading and the times I trade and the times I do not trade.

Getting started

The first thing we need to determine is how do we get started? Well, I like paper trading as a good start. Paper trading is just like trading with Monopoly money. There is absolutely no risk and we get to hone our trading skills. Most all personal trading platforms require you open a regular account with a minimum of $500 to $1000.
The big 3 commercial trading platforms,(Tdameritrade,Etrade,and Scott trade) all offer paper trading as well as regular trading. Some people ask,"Dont i need to go through a broker?" Id say if you are investing large sums of money, yes you may want to but some of your money in a brokerage. The everyday person though can invest their own with the right skill set. So, whichever trading platform you choose make sure they offer paper trading as you will need to paper trade for 30 to 60 days to get your skillset down. Personally I like Trade Monster. Ok so, once you are set up in a trade platform, its time to find stocks to practice on. I like finding companies that compliment my interests because I can get ahead of the game by having knowledge about the company and products from personal use. Knowing what a company does and what its products and marketplace are like give me a more personal approach to trading and help instill confidence in picking a stock to trade. Anyone can trade with the correct skill set. Paper trading until you feel confident enough to risk your own money is a critical part in setting your skill set. Once you have picked stocks to trade what do you do next? Tomorrow I will talk about my Due Diligence process I go through in determining if the stock I have picked is really worthy of me trading it. Until then.....

So you want to invest.......

Im gonna focus this week on the basics of investing money. This opens up the mother of all cans of worms. In the old days,you picked a stock, saw the recommendations of either buy,sell or hold and then followed that in your purchase decisions. Then came Sept 2008 and all hell broke loose. The broken system was revealed for what it really was....GARBAGE. I believe in Warren Buffets belief of find a company you like,preferably AMERICAN,do your due diligence and buy with only money you can afford to lose. What I mean by that is dont invest the rent or grocery money hoping to make it grow. 7 out of 10 stock plays lose. What I try to do is limit my losses to an acceptable loss percentage (20% in my book), and set a realistic gain percentage (30%) and stick to them. In the day of pump and dump hype plays it is very easy to get wrapped up in the hype and start dreaming of huge gains. Ill take 30% on my money every day and dance a jig all the way to the bank. As I write this week I will highlight my processes of finding stocks to invest in and how I determine my entry and exit prices as well as what times I buy and sell. Remember.... If it sounds too good to be true it for sure is.....

Self Improvement

Continued self improvement for me is a must. Im not saying im never happy with myself or I dont do well enough, Im saying im human and imperfect and life and crap happens. I need to adjust myself to whats going on all the time. Comfortability in my own skin and self confidence comes from my ability to work on myself and keep myself in check. Success comes from doing those things necessary to take care of me. I myself personally use meditation to get in tune with myself and whats going on. Im not talking about some big ritual or anything I am talking about quieting my mind so that I get hear whats going on with me really..... I tend to do mine while riding my Harley.... something about seeing the world in all its glory really gets me in touch with my own personal higher power. I focus on my breathing because that is where I believe I open up my mind and soul to whatever I need to look at and through that I can reach my inner peace. Doing that allows me to take that tool into the world and use it to calm myself when say Im riding down the road and some Joe talking on his cell phone cuts me off or almost runs me over without looking, so I dont feel the need to track him down and make him see the error of his ways. Like he is really gonna change how he drives because of me...... So in conclusion, find something that allows you to calm and quiet your mind so you can see what is really going on with you and take that into your world. You will find little things dont bother you as much and big things really arent that big at all.

Goals = Discipline

Remember those basic goals I talked about in my first post? Those goals are what help establish my drive in succeeding in business. Sustained drive is what has created my discipline. I am the one in business that shows up early and leaves late. In my own personal discipline I am usually 30 minutes early to a business or personal appointment. I believe in seizing the day. It is very difficult for me to sleep past 6am and I usually stay up late. Im not saying lack of sleep or rest is an essential ingredient in business success that is an individual thing. What I am saying is the stronger my drive though, the more involved I want to be. That overflows into all areas of my life. How passionate I am about success is what helps get me through tough times. Remember, I am from the school of thought that says, "Its not how you survive the good times, its how you deal with the bad times that define you." If i dont have a direction, I will go nowhere. I "cant" doesnt exist in my business language, Its more like what CAN I do..... I always ask myself what if anything can I do to correct this situation. Lets get to the solution first then go back and analyze the problem and how we can prevent future issues. Stay focused and remember the goals you set forth which by the way should be written down somewhere you can see all the time so you dont forget why you are doing what you are doing, Tomorrow we discuss Self Improvement.... Stay tuned.....

Continued Foundation and more........

My grandma always told me "If it sounds too good to be true its prolly some salesman trying to make a buck off of you." I do not believe in get rich quick scenarios. Look at how many lottery winners are broke shortly after winning the lottery. What those people fail to see is cash management is essential to success. Make my money make as much money as possible with out risking the farm. Twenty bucks in my pocket today is much better as 40 dollars tomorrow rather than the alternative of spending it in instant gratification. Im not saying become tighter than a frogs butt, however there are many frugal millionaires and fewer free spending ones with a pot to piss in long term. Its simple, to build wealth you must keep your expenses less than your income. Wealth isnt all about money too.... there is alot of wealth in knowing you are running a successful business that provides for you and your interests with your own 2 hands. Theres nothing like stepping out and looking at my business from the outside in and seeing how well it is doing. Being able to look at it like that allows me to see potential problems. Now...... FUN. I think it is so important to have down time, doing something FUN. The mind needs to rest so that I stay strong. Personally, nothing beats a ride on my Harley Road King, it is a great way to unwind and really fyi, I have come up with my best ideas for business while I was doing something FUN that I like doing.

Keep it simple

Three very key words in a successful small business. Its pretty basic. The more work I can do myself the more money goes to my bottom line. I believe the more involved a small business owner is in the day to day affairs of the business,  the better the chance of more long term sustained growth. Keeping costs in check as the business grows is key to creating a good foundation. It is very easy to get wrapped up in early success and increase the costs too dramatically. Ive seen my share of small businesses succeed early and then go boat shopping, house shopping, lavish vacations etc etc., then when the economy goes south or business slows there is no reserve. Ive been taught to accept the best and prepare for the worst. I like the simple idea of stashing away 6 months personal and business expenses to cover tough times. By tough times I mean a sustained slow down in business. I look at it like this put the money aside and FORGET about it. I dont touch that money until all reasonable (and some unreasonable to the untrained mind) resources are exhausted. Im not saying dont treat myself here and there to some of the things I want, I just think "Am i secure enough today that if business slowed and my income diminished tomorrow can i continue to operate?" Well thats it for now, tomorrow I will delve more into business foundation as well as having FUN and allowing my mind to rest so as to not create business burnout.