Continue reading Volatile Markets: Checking our stock picks - Week 2

Volatile Markets: Checking our stock picks - Week 2 originally appeared on BloggingStocks on Fri, 31 Aug 2007 16:00:00 EST. Please see our terms for use of feeds.

They're calling it a volatile market. That's like referring to World War II as "that skirmish over in Europe." Come on people, I don't even do the investing game professionally, but I can sure read the writing on the wall. I've been telling you since around Christmas time of 2006 that we are setting up for a massive worldwide economic realignment. I can't predict exactly when the bottom will fall out, but it's coming. Oh yes, it's coming.

You probably don't want my advice but I'll give it to you anyway. Reduce your debt load immediately and cut your risk ventures to the bone. Precious metals might provide some protection, but I myself would remain cautious at this time. Although, generally speaking, precious metals provide relative safe haven in times when the stock markets show weakness, a strengthening dollar tends to dilute that, and the current international economic churning should actually brace up the dollar, aided by an upward swing in manufacturing output and a slight decline in the gap between import and export totals. Gold production and recovery efforts are running in high gear right now, and that increased output is crimping gold's usual hedge function from the supply side.

Continue reading Volatile Markets: Precious metals are the safest place to be

Volatile Markets: Precious metals are the safest place to be originally appeared on BloggingStocks on Thu, 16 Aug 2007 19:24:00 EST. Please see our terms for use of feeds.

When a sector gets hit by negative news and lingering doubts, the good companies come down in value as well as the not-so-good companies. It's a "shoot first, ask questions later" scenario. Well, the time has come to step up to the plate and load the boat on Bank of America (NYSE: BAC). The story and the opportunity are just too tempting to pass up and this story needs to be told!

It is very important that investors clearly understand the differences between "pure" mortgage plays, leveraged mortgage plays and a giant, diversified bank. Several pure mortgage players have been hurt worse than expected. They are one-trick ponies with little diversification in their earnings and revenue structure, and have either severely reduced their earnings outlook or have even closed their respective doors.

Not only are questionable past mortgage practices at the forefront, but these smaller institutions DO NOT HAVE THE BALANCE SHEETS to carry these loans on their books -- they must package and re-sell them. With pricing on mortgage paper out of whack, these smaller, pure mortgage players are suffering from a double whammy.

Continue reading Volatile Markets: Bank of America (BAC) offers low risk, high reward

Volatile Markets: Bank of America (BAC) offers low risk, high reward originally appeared on BloggingStocks on Thu, 16 Aug 2007 11:36:00 EST. Please see our terms for use of feeds.

These are the times that try investors' souls, or so Thomas Paine might have put it had he been a money manager. There is scary news all around -- the credit markets are seizing up, mortgage-backed securities are plummeting in value, even Wal-Mart Stores (NYSE: WMT) and Home Depot (NYSE: HD) have expressed worry lately that the stalwart American consumer is losing her resolve to spend.

Yet no sooner do investors panic and sell their stocks, than the market gets some relief. Central bankers around the world step in with billions in short-term loans, giving the debt markets some wiggle room. Or a hot growth company provides some upbeat news -- VMware's hot initial public offering on Aug. 14 was a nice respite from all the bearishness, for example. Or investors just start to realize there are lots of great companies getting much cheaper while the economy really is still humming along just fine.

Suddenly the Dow Jones industrial average will leap 50 points in an hour and we are left kicking ourselves for not picking up some shares of a favorite stock while it was down -- until the next market swoon when we wonder why we didn't get out when the gettin' was good.

Continue reading Volatile Markets: 11 stock plays for turbulent times

Volatile Markets: 11 stock plays for turbulent times originally appeared on BloggingStocks on Thu, 16 Aug 2007 05:45:00 EST. Please see our terms for use of feeds.