CNBC got it's first dose of Zuma Dogg today, as he called into CNBC's "Mad Money" to needle Cramer a little about Game Stop stock (that ZD owns).
Keep in mind, the stock was up today, in the worst down market day...BUT IT WAS DOWN THIS WEEK (even though the entire market tanked). BUT ZD ONLY LIKES HIS STOCKS TO GO "UP" -- NEVER DOWN, NOT EVEN ONE PENNY!!!
And I knew Jim would say good things about Game Stock, cause it's a great stock. Meanwhile, as usual, ZD gets off to a combative start. I started my question with, "Except for today...Game Stop had a terrible week...". Which is when Jim cut me off and said, "If you call up .66 cents in the worst down day...". Forcing the Big ZD to cut in to say, "I SAID EXCEPT FOR TODAY". Which caused Jim to show ZD who is boss of the show.
Then, Jim continued to have a little fun at ZD's expense with the next caller.
AUDIO: Zuma on CNBC's "Mad Money" with Jim Cramer
youtube.com/zumadogg
zumatimes.com
strategyupdate.com
zumadogg@gmail.com
Friday, December 14, 2007
Sunday, December 9, 2007
"Prepare For The Bear": Good Economic News Means Kiss The Feds .5% Cut Goodbye...Hello .25% Cut Only and Goodbye December Rally
Look for a slow day, and a down day on Wall Street. With the price of oil dropping on Monday...oh no...now the Fed will probably only cut by .25% -- which will give back all of that recent December rally over the past couple weeks.
Many people feel, anything less than a .5% Fed cut will trigger recession fears and will scare Wall Street and Santa won't be leaving anything but a devalued lump of coal in your portfolio.
And now that things look just good enough for a .25 cut, instead of the .50 that Wall Street will require for a continued bull market...
I hope you sell as much as possible, take a breather, and if the coast is clear on Tuesday (which it probably will not be), then you buy back in. (But I would have sold Apple at $190, in October, before it dropped to $150 -- 72 hours later, then buy it back at $150 -- and would have been happy selling it again at $194 on Friday. (But I'm a real cowboy!)
strategyupdate@gmail.com
strategyupdate.com
Many people feel, anything less than a .5% Fed cut will trigger recession fears and will scare Wall Street and Santa won't be leaving anything but a devalued lump of coal in your portfolio.
And now that things look just good enough for a .25 cut, instead of the .50 that Wall Street will require for a continued bull market...
I hope you sell as much as possible, take a breather, and if the coast is clear on Tuesday (which it probably will not be), then you buy back in. (But I would have sold Apple at $190, in October, before it dropped to $150 -- 72 hours later, then buy it back at $150 -- and would have been happy selling it again at $194 on Friday. (But I'm a real cowboy!)
strategyupdate@gmail.com
strategyupdate.com
Friday, December 7, 2007
New Job Numbers In 45 Minutes: The Market Won't Be Happy, Either Way!
New December Job numbers come out in 45 minutes (8:30am).
If the numbers are bad, it will be the sign of bad economic times ahead -- possibly signaling a trend toward recession. (I do not expect them to be that bad, if they are not actually good. Although I think this is a superficial, shallow number that does not indicate enough -- and I suspect they can be "fudged". )
So if they are bad, although it would be a bad sign for American's, the stock market would actually be HAPPY to see bad job/economic news, because it would lead people to believe Bernakie/Fed will cut rates by .5%, instead of the "given" .25%.
If the job numbers are good, signaling a good economic outlook, then the market probably won't rally, but remain steady -- or slightly down, if anything -- since good economic signs would scare market investors that the Fed may only cut rates by the expected .25%.
So in evaluating the market effects that the job numbers will have today...you have to evaluate not only the TRUE meaning of these numbers from a literal sense...but you must also factor in the "psychology" of market investors.
SUMMARY: Unfortunately, what is good for the market and what is good for the U.S. economy do not necessarily correlate -- and strategyupdate.com feels that these two forces are often times in conflict. (Short term greed versus long term natural process of ying/yang.)
strategyupdate.com
ALERT -- 8:30am JOB REPORT UPDATE: Oh hell yeah!!! The best possible news! The job numbers came in at the perfect "neutral" figure (it came in basically exactly as expected...nothing too much, either way.)
SO THAT PAVES THE WAY TO STILL ALLOW THE FED TO STILL CUT .5%!!! (THE PERFECT JOBS NUMBER FOR THE MARKET, IF NOT FOR THE ECONOMY!!!)
If the numbers are bad, it will be the sign of bad economic times ahead -- possibly signaling a trend toward recession. (I do not expect them to be that bad, if they are not actually good. Although I think this is a superficial, shallow number that does not indicate enough -- and I suspect they can be "fudged". )
So if they are bad, although it would be a bad sign for American's, the stock market would actually be HAPPY to see bad job/economic news, because it would lead people to believe Bernakie/Fed will cut rates by .5%, instead of the "given" .25%.
If the job numbers are good, signaling a good economic outlook, then the market probably won't rally, but remain steady -- or slightly down, if anything -- since good economic signs would scare market investors that the Fed may only cut rates by the expected .25%.
So in evaluating the market effects that the job numbers will have today...you have to evaluate not only the TRUE meaning of these numbers from a literal sense...but you must also factor in the "psychology" of market investors.
SUMMARY: Unfortunately, what is good for the market and what is good for the U.S. economy do not necessarily correlate -- and strategyupdate.com feels that these two forces are often times in conflict. (Short term greed versus long term natural process of ying/yang.)
strategyupdate.com
ALERT -- 8:30am JOB REPORT UPDATE: Oh hell yeah!!! The best possible news! The job numbers came in at the perfect "neutral" figure (it came in basically exactly as expected...nothing too much, either way.)
SO THAT PAVES THE WAY TO STILL ALLOW THE FED TO STILL CUT .5%!!! (THE PERFECT JOBS NUMBER FOR THE MARKET, IF NOT FOR THE ECONOMY!!!)
Saturday, December 1, 2007
Video Update: Google's (Poor Man's) GPS-like System For Your Cell Phone (using Google Maps ) Now In Beta
Watch out Garmin and GPS makers...Google is in beta with their "poor man's" GPS system. Watch this video to find out how Google now allows you to access Google maps on your cell phone like a GPS system.
This should rock the Google stock even more!
strategyupdate.com
This should rock the Google stock even more!
strategyupdate.com
Tuesday, November 27, 2007
The "22 Immutable Laws of Marketing": A Must Read For Stock & Financial Market Investors
StrategyUpdate.com was not created to give "stock tips", per se, but to help give overall, big picture investing strategies and philosophies. (Even though certain stocks will be discussed here).
Meanwhile, regarding "big picture strategy to make you a better investor", HERE is the biggest tip I can give you:
A quick StrategyUpdate.com blog summary of the classic book, "The 22 Immutable Laws of Marketing" by Al Ries & Jack Trout. Why do I suggest this blog summary? If you are investing in companies, or if you operate a company -- you should be running many of these 22 Immutable Laws through your checklist when evaluating a company's product or service.
Anyway, these guys Ries & Trout have my highest, most empahtic recommendation. Just read the damn thing. Otherwise, I hope you lose money!
The 22 Immutable Laws of Marketing Summary
StrategyUpdate.com has all the links to news wires, videos, quotes, charts and streaming TV feeds like Bloomberg and CNBC. It's a simple, easy to use investors resource site. All the links you need throughout the day in one place. The site I created for myself. Check it out.
StrategyUpdate.com: Investors resource site for a global economy
email: contact@strategyupdate.com
Meanwhile, regarding "big picture strategy to make you a better investor", HERE is the biggest tip I can give you:
A quick StrategyUpdate.com blog summary of the classic book, "The 22 Immutable Laws of Marketing" by Al Ries & Jack Trout. Why do I suggest this blog summary? If you are investing in companies, or if you operate a company -- you should be running many of these 22 Immutable Laws through your checklist when evaluating a company's product or service.
Anyway, these guys Ries & Trout have my highest, most empahtic recommendation. Just read the damn thing. Otherwise, I hope you lose money!
The 22 Immutable Laws of Marketing Summary
StrategyUpdate.com has all the links to news wires, videos, quotes, charts and streaming TV feeds like Bloomberg and CNBC. It's a simple, easy to use investors resource site. All the links you need throughout the day in one place. The site I created for myself. Check it out.
StrategyUpdate.com: Investors resource site for a global economy
email: contact@strategyupdate.com
Monday, November 26, 2007
Abu Dhabi Saves The World As They Buy $7.5 Billion of Citibank Equity
Citigroup to Receive $7.5 Billion from Abu Dhabi Government
Wow! Only 1.8 million people and it is the richest city in the world! Must have something to do with the local oil industry!?!?
So looks like Abu Dhabi needs to protect it's investment, and make sure the U.S. sub-prime financial fears do not end up causing a domino effect throughout the world.
Because they have some big customers in China, Asia, India and across the globe. And if the U.S. slows down, the Big A-D knows that it will trickle into those markets, as well.
So if they have to help boost a weaker customer to help keep the stronger customers pumping along, so be it.
So Abu Dhabi has to help bail out Citibank, so that the one rusty cog doesn't break down the whole machine.
And as a result, the U.S. stock market will probably have the triumphant, magic "up" day they have been hoping for this holiday season.
Abu Dhabi, has agreed not to own more than 4.9 percent of Citigroup's common shares, according to the statement.
Thomson Financial reports that Japanese shares rallied into positive territory in early afternoon trade after losing more than 2 percent in the morning session, with trading focus switching to the announcement by Citigroup of the $7.5 billion bail-out by the Abu Dhabi Investment Authority for 7.5 billion US dollars.
I don't know much about Abu Dhabi, but they just saved the world (economy, at least).
Bloomberg.com reports that Citigroup Inc., the largest U.S. bank, said it agreed to sell $7.5 billion of equity units to the Abu Dhabi Investment Authority.
And as of 11:00pm Monday Night (11/26/07), the Asian market is responding favorably to the news that Citibank has it's back covered by Abu Dhabi regarding sub-prime problems.
cnbc.com adds: The ADIA investment should help re-build Citigroup's capital levels, which have been eroded by a credit crunch that began in the summer. Citigroup Chief Executive Officer and Chairman Charles Prince resigned earlier this month after the bank, which had already written off billions of dollars, said it was facing as much as $11 billion more in losses.
And as of 11:00pm Monday Night (11/26/07), the Asian market is responding favorably to the news that Citibank has it's back covered by Abu Dhabi regarding sub-prime problems.
cnbc.com adds: The ADIA investment should help re-build Citigroup's capital levels, which have been eroded by a credit crunch that began in the summer. Citigroup Chief Executive Officer and Chairman Charles Prince resigned earlier this month after the bank, which had already written off billions of dollars, said it was facing as much as $11 billion more in losses.
Earlier on Monday, CNBC learnt that Citigroup is planning a second round of large-scale layoffs. Insiders say the firm has not set a target number of cuts. The finance giant has roughly 320,000 employees. But people with knowledge of the matter have described the pending job reductions as "massive" and "large." The total number could reach as high as 45,000, these people estimate.
Abu Dhabi is the second largest city of the United Arab Emirates. It is also the capital and largest city of the emirate of Abu Dhabi. CNN said it is the richest city in the world. The city lies on a T-shaped island jutting into the Persian Gulf from the central western coast. An estimated 1.8 million people lived there in 2006.Wow! Only 1.8 million people and it is the richest city in the world! Must have something to do with the local oil industry!?!?
So looks like Abu Dhabi needs to protect it's investment, and make sure the U.S. sub-prime financial fears do not end up causing a domino effect throughout the world.
Because they have some big customers in China, Asia, India and across the globe. And if the U.S. slows down, the Big A-D knows that it will trickle into those markets, as well.
So if they have to help boost a weaker customer to help keep the stronger customers pumping along, so be it.
So Abu Dhabi has to help bail out Citibank, so that the one rusty cog doesn't break down the whole machine.
And as a result, the U.S. stock market will probably have the triumphant, magic "up" day they have been hoping for this holiday season.
Abu Dhabi, has agreed not to own more than 4.9 percent of Citigroup's common shares, according to the statement.
Thomson Financial reports that Japanese shares rallied into positive territory in early afternoon trade after losing more than 2 percent in the morning session, with trading focus switching to the announcement by Citigroup of the $7.5 billion bail-out by the Abu Dhabi Investment Authority for 7.5 billion US dollars.
"That news about Citigroup, one of the worst hit by the subprime loan mess, helped soothe the market's wariness to some extent, immediately sending the dollar back to above the 108 yen," NTT Smart Trade director Takashi Kudo said.
The announcement also supported US stock-futures contracts on the 24-hour traded Globex, raising expectations that Wall Street may get off to a firm start when trading resumes Tuesday.
PUBLIC NOTICE: New investor resource site...strategyupdate.com. Links to all the news wires, cnbc, bloomberg tv feed, analysis, video links, everything you need throughout the day, all on one, no-frills, easy and free site. Check it out, right quick! strategyupdate.com.
INVESTOR ALERT: Do NOT Be Looking For Bargains In The Financial Sector Yet
Call the financial sector (banks with sub-prime interests) "Rocket Man", cause I think it's gonna be a long, long time. (Before we see the bottom.) StrategyUpdate.com's Batcomputer says the sub-prime problem is mucho, mucho mas of a problema de hablamos. (Much, much more of a problem than they are saying.)
As a matter of fact (well, no...it's not actually "fact", just my opinion), I think the U.S. economy is in for much more of a set-back than being discussed. People are talking about "recession", but my Batcomputer keeps saying that it is "inflation" that will end up being much higher than being discussed. (My Batcomputer has been shockingly accurate in the past, so "much higher inflation than factored into the formula" is a concern on strategyupdate.com's radar.
Why would you wanna chase this loser sector, thinking it has bottomed-out, and may crawl back up...when there are many, many high-perfoming stock that will better withstand any overall market dips?
Look at the GPS device industry. They are the surprise big sellers this holiday season. Many of the most popular models are sold-out. Garmin is a maker specializing in GPS. They are up 8.5% so far, today, based on the sales news. Nokia is going to be in the GPS business, too.
And they say Apple stores were attracting customers like a human magnet. Not only are iPods selling as you would expect; but laptop sales are said to be waaaaaaay up! So if you didn't buy at $15, as I asked you to, it still looks like a good time to take a bite out of Apple.
Meanwhile, check out strategyupdate.com: The new resource tool for investors with lots of good links to all the good sites you need to monitor for financial info; and some good articles and videos to help you with "big picture" strategy, to help you be a more efficient investor.
As a matter of fact (well, no...it's not actually "fact", just my opinion), I think the U.S. economy is in for much more of a set-back than being discussed. People are talking about "recession", but my Batcomputer keeps saying that it is "inflation" that will end up being much higher than being discussed. (My Batcomputer has been shockingly accurate in the past, so "much higher inflation than factored into the formula" is a concern on strategyupdate.com's radar.
Why would you wanna chase this loser sector, thinking it has bottomed-out, and may crawl back up...when there are many, many high-perfoming stock that will better withstand any overall market dips?
Look at the GPS device industry. They are the surprise big sellers this holiday season. Many of the most popular models are sold-out. Garmin is a maker specializing in GPS. They are up 8.5% so far, today, based on the sales news. Nokia is going to be in the GPS business, too.
And they say Apple stores were attracting customers like a human magnet. Not only are iPods selling as you would expect; but laptop sales are said to be waaaaaaay up! So if you didn't buy at $15, as I asked you to, it still looks like a good time to take a bite out of Apple.
Meanwhile, check out strategyupdate.com: The new resource tool for investors with lots of good links to all the good sites you need to monitor for financial info; and some good articles and videos to help you with "big picture" strategy, to help you be a more efficient investor.
Saturday, November 24, 2007
NEW BLOG: Executive Strategy Blog (Featuring Dr. Deming, Al Ries, Jack Trout, Marketing Warfare and Political Spinning
I know this site is new: It's a spin-off of my "Executive Strategy" blog.
This site (strategyupdate.com) applies the concepts from the "Executive Strategy" blog to the stock market and global economy (financial).
It features some posts about Dr. Deming (Innovation, Quality), Al Ries & Jack Trout (Marketing Warfare strategy) and some stuff about Los Angeles political spinning (trying to apply the above concepts to speech-writing/policy).
Dr. Deming, Al Ries and Jack Trout have all sent me letters praising the articles based on their material that is now posted for strategyupdate.com.
executive strategy blog
email: contact@strategyupdate.com
I would start by scrolling for "Ries & Trout '22 Immutable Laws of Marketing'" post.
This site (strategyupdate.com) applies the concepts from the "Executive Strategy" blog to the stock market and global economy (financial).
It features some posts about Dr. Deming (Innovation, Quality), Al Ries & Jack Trout (Marketing Warfare strategy) and some stuff about Los Angeles political spinning (trying to apply the above concepts to speech-writing/policy).
Dr. Deming, Al Ries and Jack Trout have all sent me letters praising the articles based on their material that is now posted for strategyupdate.com.
executive strategy blog
email: contact@strategyupdate.com
I would start by scrolling for "Ries & Trout '22 Immutable Laws of Marketing'" post.
Wednesday, November 21, 2007
CNBC ("Mad Money") Jim Cramer's Investment Strategy -- Video & Chapter Summaries From New Book
Welcome to my new site/blog (it's evolving, but always about the content). Here's an audio ramble I recorded today. Click here for audio message from Strategy Update's founder, Zuma Dogg. And go to zumatimes.com and make sure you check out some videos. (Buckle in! I'll lose all credibility, then I'll try and win it back)
Meanwhile, coming soon, there will be original analysis on this site, but for now...
Here's something I came across on the cnbc website that I like a lot. Excerpts (including video) of Jim Cramer's special on "Rules of the Game" based on his new book. All of this stuff sounds pretty good to me. I have spent countless hours trying to persuade people I care about to try and think more along these lines. And of course, it kinda has slightly more credibility when Mr. Cramer says it. So to all those I love and care about...please read these excerpts, watch the fun little videos, and try and live by it. (No "picking and choosing" you undisciplined crybaby!)
CNBC's Jim Cramer's ("Mad Money" 6p & 11p) Investment Strategy "Rules of the Game" (Videos and Summaries from new book):
Original Posts By: Tom Brennan and Carlo Dellaverson
Excerpts from and links to Tom's original cnbc.com post -- including Jim Cramer video segment from "Mad Money":
Cramer's New Rules
In all of Cramer’s years on Wall Street, he’s learned a thing or two. When it comes to investing, he says, the most important thing to remember is that you have to play by the rules. So he’s gone and set up a few rules of his own – rules that cannot be bent or broken, he says, because nearly every time he’s broken one of these rules he’s lost money. The rules are there for a reason: they keep you disciplined and keep you away from making mistakes. Read on for Cramer's most important rules. Check out Cramer’s latest book for all 20 of them.
It’s Buy and Homework – Not Buy and Hold
If investors want to beat the market, Cramer says they need to know a handful of extremely important rules before they can be successful. They need to unlearn some of the worst, most harmful myths that all too many people seem to believe about stocks and investing. One of the biggest? Buy-and-hold.
Buy-and-hold isn’t a strategy, it’s an ideology. Its one central tenet is based on the idea that if you buy a stock and hang onto it for long enough, money will be made. It’s the security blanket investors use when a stock drops: “I know the stock is down now, but buy and hold says it’ll eventually bounce back and go higher than where I bought it.” But honestly, it’s just not true that a stock will necessarily recover its losses.
Worst of all, buy-and-hold lets investors be lazy. It means they don’t have to do their research. It’s the perfect excuse to not do homework. And the only way they can really know if their stocks are going up (or down) is by doing that homework. So that’s the rule: buy-and-homework, not buy-and-hold.
Homework should include checking a stock with CNBC.com’s investing tools, reading all the relevant news stories about it, comparing it to its peers and competitors, reading through its quarterly and annual reports, and especially listening to its quarterly conference calls. Very few nonprofessional investors listen to the conference calls, Cramer says, but they’re the single most important part of doing homework. And if investors don’t do this homework, they’re setting themselves up to lose a lot of money.
The professionals are always actively looking for new ways to make money, new stocks that can perform, and they will beat lazy individual investors if they just sit tight holding on to the same stocks indefinitely. Be like the professionals. Don’t have time to do the homework? That’s fine – just put money in a mutual fund. But Cramer doesn't recommend an investor manage their own money if they don't have the time (because that’s just buy-and-hold).
video:
The Surest Sign It's Time to Sell
There are plenty of indicators out there that mean you should sell a stock, but there are few that are as rock solid as this one: whenever you see a stock that’s being heavily shorted and also heavily hyped at the same time, you should be selling that thing nine ways from Sunday, Cramer says.
Hype can mean many things, but in this case Cramer is talking about analyst recommendations, celebrity endorsements and much-touted facts in the media that don’t actually mean anything for a company’s bottom line.
Combine that with a big short interest and you have a dangerous mix. Remember, shorting is basically people buying a stock high and selling it low, instead of the other way around. Shorts are betting a stock is going to go down and they’re typically right about as often as they are wrong. However, when they are up against a group of hyped-up, entirely positive analysts, the shorts tend to be right a whole lot more.
Shorting a stock is risky, and usually the only people who do it are well-educated investors who have done their homework. So when you have all the analysts on one side having a love fest with a particular stock, and an army of shorts sitting on the sideline betting the stock goes down, you should see a red flag – it almost always means there’s something wrong that no one is talking about. It’s not inside information; it’s just information the bulls would be more comfortable ignoring. But if you ignore it, you could get crushed.
Bottom Line: Big hype plus massive short interest equals sell.
video:
Don't Fight the Cycle
There are certain stocks that do well with a strong economy and certain ones that prosper in a weak economy. For instance, when the economy is chugging along, it makes sense to buy big industrial stocks: companies that make machinery, cars and minerals, for instance. But when the economy weakens, you have to dump those cyclical stocks and get into secular growth stocks like healthcare, food and drink and consumer staples – essentially, products people still need even when the economy is weak. Procter and Gamble is probably the best example of this kind of company, Cramer says. Nobody stops buying toothpaste just because the economy is slowing down.
Cramer's not just advising you to play the cycle. What he’s really saying is that you shouldn’t fight it. You shouldn’t own cyclical stocks when the economy stinks and you should stay away from the consumer staples when the economy is stronger. This is an absolute rule, Cramer says. It doesn’t matter how good the stock is, how clean its fundamentals are – if it doesn’t fit into the cycle, it could lose you money. In the end, sadly, it doesn’t matter what you think. What drives a stock is what the money managers think, and the money managers obey the cycle.
Bottom Line: Don’t own stocks when the business cycle puts them out of favor with Wall Street, because those stocks will almost always go down – even if they don’t deserve to.
video:
Woulda, Shoulda, Coulda
We all know that it’s unproductive to think, “If only I’d bought here or sold there.” Or “If only I picked up Network Appliance before it bounced back instead of selling it into its bottom” – if only, if only, if only. These two words have no place anywhere near an investor's portfolio, Cramer said.
People don’t spend enough time talking about the psychology of investing. The pressure of owning stocks and having to make decisions about whether to buy or sell them is intense. It’s scary. Being an investor is emotionally brutal, but very few people ever talk about that side of stocks. Oh, they’ll talk about earnings and expectations and comparisons – all the rational stuff – but none of that matters if they can’t get their head under control.
Investors can’t afford to be thrown off their game, but at some point they’ll come down with a case of the woulda, coulda, shouldas. The worst thing an investor can do is let a mistake undermine his confidence.
Now this doesn’t mean investors shouldn’t evaluate their performance. They have to review what has worked in their portfolio and what hasn’t. But letting screw-ups undermine self-confidence doesn’t make a person better investor.
video:
Are You Diversified?
Everybody wants to be diversified in theory, but it's not as sexy as going all in on a winner stock. Diversification is boring. It’s conservative. It limits your risk. It’s totally unsexy. Diversification is the biggest party-spoiler in the world of finance.
Cramer understands. When housing is rallying, of course people want to throw all of their money into that one really strong sector. But think about those people who were ruined because they owned too much tech when the bubble burst just a few years ago – or the Enron employees who lost everything because they only owned stock in their employer and then that went to zero.
The problem is that people just are not good at processing downside risk – that’s just how people are programmed. They don’t intuitively understand that if they throw all their money in one sector, they could lose it all. It’s hard to feel that some of the stocks they own, especially those they like best, could be headed straight to zero.
In this situation, feelings always lose. Investors absolutely must stay diversified, and this rule can’t be bent, broken or spindled.
video:
Never Buy All at Once
A good investor can't be arrogant, Cramer said. And the single most arrogant thing an investor can do is buy a whole position in a stock at once. Never do this.
Investors send a message when they buy a whole position at once: “This stock will not go down any further from here. In fact, it’s all up from this moment on.” If an investor buys all at once, and then the stock dips, he feels like a moron – and he should, Cramer said. A little more patience and little less arrogance would have landed him some shares at a better price.
Now, a broker might not like getting these little incremental trades, but the investor is the shot-caller in that relationship. The timing of a buy is never perfect, so don't rush. Just acknowledge that there's a possibility the stock could drop, allowing a better chance to buy more.
Bottom Line: Don’t be arrogant. Don’t buy stocks all at once. Be patient and buy incrementally.
video:
The Rules of the Game
Rule No. 1: There’s a market for everything – oil stocks, newly public stocks, small-cap value stocks – so pay attention to how it works. You should even think of the stock market in general as a market, meaning it’s governed by supply and demand as much as anything else.
The importance of supply and demand in trading is especially true for hyped up, trendy stocks. Just look at ethanol in 2005 and 2006. At the end of 2005, when every major media outlet was running stories about how ethanol was the next great energy source (see original post: http://www.cnbc.com/id/21903112).
But by the summer of 2006, when VeraSun VeraSun Energy Corp, Hawkeye and Aventine Aventine Renewable Energy Holdings Inc were on the scene, the oversupply of ethanol stocks had killed the run in that sector. If you’d just been paying attention to the fundamentals, or to the hype about ethanol in the media, you would have been caught totally off guard by downturn in ethanol. A lot of people got caught up in the hype and ignored the simple but important rule of supply and demand.
The oversupply doesn’t just have to be in a sector, either. Cramer once got burned on the Sealy
Sealy Corp initial public offering, and not because there was a sudden glut in the supply in mattress stocks – it was the record rate of IPOs. The quarter the mattress professionals came public saw the most IPOs since the dot-com bubble. Anybody who was after a newly public stock, who wanted to play the IPO game, had already gotten a piece of the action somewhere else. He ignored the market for IPOs, and he paid the price.
Bottom Line: New rule from the new book – Pay attention to specific markets for specific kinds of stocks. The supply and demand of a certain kind of stock is just as important as a company’s earnings.
video:
Know What You Own
Rule (No. 2 tonight) is “Know what you own.” Just because you own a tech stock doesn’t mean the company is representative of the entire sector. There are industries within a sector, and those that ignore this important fact can end up losing money – or missing out on big opportunities.
[see original post for further explaination:]
EX: There will be talk of a healthcare rally or a transports rally or a tech rally, but that doesn’t mean the whole sector’s rallying. (Cramer caveat: Always be suspicious of anyone on TV – except for him – calling a sector rally. You want to know how broad that rally truly is.) It’s the industries within these sectors that really count.
Case in point: Cramer called a tech rally in June of 2005 by writing two ticker symbols on his hands – MSFT and CSCO. He figured these two names best represented tech on the whole, even though the rally was happening in gadget production and not the entire sector. By February of 2006, Microsoft was up 71%. These were the real participants in the so-called tech rally that was really a gadget rally.
Bottom Line: Don’t let yourself be fooled. Never mistake a rally in an industry for a rally in the sector to which it belongs. It’s an easy mistake to make, but if you remember my rule, you should be able to make a lot more money.
video:
Be a Lemming
Only two rules left. We’ve already been over paying attention to markets, knowing your stocks and playing Latin America for the short term only. Now it’s time to cover a rule that might betray your contrarian leanings: Be a lemming.
That’s right. You want to follow the Street’s lead because most of the time it works.
Cramer wants to be clear: This doesn’t mean you stop thinking. If you think the Street is wrong about a stock or group of stocks, then don’t buy in. But if you do your homework and you like the direction in which the big institutional investors are headed, then be a follower.
Wall Street is often right. Stocks on the 52-week high list often stay there for days or weeks by hitting new highs. You don’t have to follow the momentum, but if there is momentum and you’ve done your homework and you like the stock, then Cramer says go for it.
Sometimes stocks will get anointed by money managers. These are the best-of-breed stocks that are meant to stand in for the entirety of a great sector. They’re like the Energizer bunny – they just keep going and going and going.
Bottom Line: It’s OK to follow the Street’s lead. In fact, it often pays to follow the Street’s lead and buy the stocks that are going up, but only if you agree that the stock is worthy.
video:
Don't Be a Snob
There’s one rule that’s near and dear to Cramer’s heart, and it should be pretty simple to follow: Don’t be a snob.
Pretty much everybody involved in the stock market is a rich person who lives in Manhattan or the suburbs of New York City. The analysts, the money managers, the commentators – they’re almost exclusively concentrated in this one area, and they’re almost all much wealthier than regular people.
Now that might sound like a pretty apparent statement, but think about it. With Wall Street being run almost entirely by rapacious capitalist fat cats – not that there’s anything wrong with that – they are bound to miss some of the best trends out there. If you’re too busy shopping at Neiman Marcus to take a look at Target, that oversight could cost you a great opportunity to make money. Wall Street is almost always late on picking up trends in low-end or mid-grade products because everybody on the Street lives in an upper-class bubble.
Most of the big institutional buyers missed this move (see original post for example) because they were snobs, Cramer says. They didn’t want to eat at Oliver Garden and they didn’t want to own a piece of its parent company. Because of that, they missed about a 50% gain in nine months. A 13 point upside swing – now that’s something to be snobbish about.
Bottom Line: No offense to the people that run Wall Street, but they have blinders on. Those blinders mean you can make money looking at stocks that run under the Street’s radar.
video:
Latin America Is Always A Trade (Not a Long-Term Investment)
The title kinda says it all. If this is an issue for you see original post:
Humility Is a Virtue
OK, here’s the final rule of the night: Don’t be afraid to say something is too hard. There are some things out there that are just too hard to game. No matter how much homework you do, no matter how hard you try, you will never be able to know enough to invest or trade in certain situations.
Cramer says one of the hardest is restaurant same-store sales growth. He admits to getting burned almost every time he’s tried. There are just too many factors at work, he says, too many different things going on that could crush you if you get it wrong.
Now, Cramer’s not telling you not to buy a restaurant stock. He’s just letting you know there a better ways to profit than banking on a better-than-expected same-store sales number.
Cramer shared some examples of why restaurant same-store sales are the worst.
Bottom Line: Never be afraid to admit that something is too hard to game. Restaurant same-store sales are the hardest, but they're not the only things that are too hard to game. You're not admitting defeat or stupidity if you admit something is too hard – you're being smart and looking for easier pickings.
video:
Past Performance Not Indicative of Future Success
This next rule sounds intuitive but it’s actually the exact opposite: past performance is not indicative of future success.
If you’ve made a lot of money playing a trend, or just investing in a hot industry, then your natural instinct is to keep finding new ways to play that trend. It’s an easy mistake to make, but it’s also an easy way to get burned. If you’ve been successful playing a sector trend, you can’t let that make you feel invinsible, Cramer says, because it’s a surefire way to lose money.
Bottom Line: Don’t let the fact that one stock has caught fire influence your decision to buy a similar looking stock. It’s an easy trap to get caught in, but it can be a hard one to get out of if you lose big.
video:
Tips Are for Waiters, Not Traders
Investors should never take or listen to stock tips, Cramer said. They shouldn’t try to get stock tips. Tip generously when out to dinner, but that’s the only kind of tip that’s allowed in the People’s Republic of Cramerica.
Here’s the worst part: When someone is passing out stock tips even though he doesn’t truly know anything, that person has an agenda. Rumors don’t get started for no reason. If you get a tip, it’s probably because somebody’s in a bad position. So if there's a rumor that Nokia’s taking over Research in Motion, most likely that person has a load of RIMM stock he’s hoping to sell into strength.
We all would love to get a real tip, but those don’t exist. As far as Cramer’s concerned, a tip is either illegal, incorrect or straight-up manipulative. None of those things is good for an investor.
Bottom Line: Stock tips are tempting, but they’re not worth listening to. Tips are for waiters, not traders.
video:
zumatimes.com
Meanwhile, coming soon, there will be original analysis on this site, but for now...
Here's something I came across on the cnbc website that I like a lot. Excerpts (including video) of Jim Cramer's special on "Rules of the Game" based on his new book. All of this stuff sounds pretty good to me. I have spent countless hours trying to persuade people I care about to try and think more along these lines. And of course, it kinda has slightly more credibility when Mr. Cramer says it. So to all those I love and care about...please read these excerpts, watch the fun little videos, and try and live by it. (No "picking and choosing" you undisciplined crybaby!)
CNBC's Jim Cramer's ("Mad Money" 6p & 11p) Investment Strategy "Rules of the Game" (Videos and Summaries from new book):
Original Posts By: Tom Brennan and Carlo Dellaverson
Excerpts from and links to Tom's original cnbc.com post -- including Jim Cramer video segment from "Mad Money":
Cramer's New Rules
In all of Cramer’s years on Wall Street, he’s learned a thing or two. When it comes to investing, he says, the most important thing to remember is that you have to play by the rules. So he’s gone and set up a few rules of his own – rules that cannot be bent or broken, he says, because nearly every time he’s broken one of these rules he’s lost money. The rules are there for a reason: they keep you disciplined and keep you away from making mistakes. Read on for Cramer's most important rules. Check out Cramer’s latest book for all 20 of them.
It’s Buy and Homework – Not Buy and Hold
If investors want to beat the market, Cramer says they need to know a handful of extremely important rules before they can be successful. They need to unlearn some of the worst, most harmful myths that all too many people seem to believe about stocks and investing. One of the biggest? Buy-and-hold.
Buy-and-hold isn’t a strategy, it’s an ideology. Its one central tenet is based on the idea that if you buy a stock and hang onto it for long enough, money will be made. It’s the security blanket investors use when a stock drops: “I know the stock is down now, but buy and hold says it’ll eventually bounce back and go higher than where I bought it.” But honestly, it’s just not true that a stock will necessarily recover its losses.
Worst of all, buy-and-hold lets investors be lazy. It means they don’t have to do their research. It’s the perfect excuse to not do homework. And the only way they can really know if their stocks are going up (or down) is by doing that homework. So that’s the rule: buy-and-homework, not buy-and-hold.
Homework should include checking a stock with CNBC.com’s investing tools, reading all the relevant news stories about it, comparing it to its peers and competitors, reading through its quarterly and annual reports, and especially listening to its quarterly conference calls. Very few nonprofessional investors listen to the conference calls, Cramer says, but they’re the single most important part of doing homework. And if investors don’t do this homework, they’re setting themselves up to lose a lot of money.
The professionals are always actively looking for new ways to make money, new stocks that can perform, and they will beat lazy individual investors if they just sit tight holding on to the same stocks indefinitely. Be like the professionals. Don’t have time to do the homework? That’s fine – just put money in a mutual fund. But Cramer doesn't recommend an investor manage their own money if they don't have the time (because that’s just buy-and-hold).
video:
The Surest Sign It's Time to Sell
There are plenty of indicators out there that mean you should sell a stock, but there are few that are as rock solid as this one: whenever you see a stock that’s being heavily shorted and also heavily hyped at the same time, you should be selling that thing nine ways from Sunday, Cramer says.
Hype can mean many things, but in this case Cramer is talking about analyst recommendations, celebrity endorsements and much-touted facts in the media that don’t actually mean anything for a company’s bottom line.
Combine that with a big short interest and you have a dangerous mix. Remember, shorting is basically people buying a stock high and selling it low, instead of the other way around. Shorts are betting a stock is going to go down and they’re typically right about as often as they are wrong. However, when they are up against a group of hyped-up, entirely positive analysts, the shorts tend to be right a whole lot more.
Shorting a stock is risky, and usually the only people who do it are well-educated investors who have done their homework. So when you have all the analysts on one side having a love fest with a particular stock, and an army of shorts sitting on the sideline betting the stock goes down, you should see a red flag – it almost always means there’s something wrong that no one is talking about. It’s not inside information; it’s just information the bulls would be more comfortable ignoring. But if you ignore it, you could get crushed.
Bottom Line: Big hype plus massive short interest equals sell.
video:
Don't Fight the Cycle
There are certain stocks that do well with a strong economy and certain ones that prosper in a weak economy. For instance, when the economy is chugging along, it makes sense to buy big industrial stocks: companies that make machinery, cars and minerals, for instance. But when the economy weakens, you have to dump those cyclical stocks and get into secular growth stocks like healthcare, food and drink and consumer staples – essentially, products people still need even when the economy is weak. Procter and Gamble is probably the best example of this kind of company, Cramer says. Nobody stops buying toothpaste just because the economy is slowing down.
Cramer's not just advising you to play the cycle. What he’s really saying is that you shouldn’t fight it. You shouldn’t own cyclical stocks when the economy stinks and you should stay away from the consumer staples when the economy is stronger. This is an absolute rule, Cramer says. It doesn’t matter how good the stock is, how clean its fundamentals are – if it doesn’t fit into the cycle, it could lose you money. In the end, sadly, it doesn’t matter what you think. What drives a stock is what the money managers think, and the money managers obey the cycle.
Bottom Line: Don’t own stocks when the business cycle puts them out of favor with Wall Street, because those stocks will almost always go down – even if they don’t deserve to.
video:
Woulda, Shoulda, Coulda
We all know that it’s unproductive to think, “If only I’d bought here or sold there.” Or “If only I picked up Network Appliance before it bounced back instead of selling it into its bottom” – if only, if only, if only. These two words have no place anywhere near an investor's portfolio, Cramer said.
People don’t spend enough time talking about the psychology of investing. The pressure of owning stocks and having to make decisions about whether to buy or sell them is intense. It’s scary. Being an investor is emotionally brutal, but very few people ever talk about that side of stocks. Oh, they’ll talk about earnings and expectations and comparisons – all the rational stuff – but none of that matters if they can’t get their head under control.
Investors can’t afford to be thrown off their game, but at some point they’ll come down with a case of the woulda, coulda, shouldas. The worst thing an investor can do is let a mistake undermine his confidence.
Now this doesn’t mean investors shouldn’t evaluate their performance. They have to review what has worked in their portfolio and what hasn’t. But letting screw-ups undermine self-confidence doesn’t make a person better investor.
video:
Are You Diversified?
Everybody wants to be diversified in theory, but it's not as sexy as going all in on a winner stock. Diversification is boring. It’s conservative. It limits your risk. It’s totally unsexy. Diversification is the biggest party-spoiler in the world of finance.
Cramer understands. When housing is rallying, of course people want to throw all of their money into that one really strong sector. But think about those people who were ruined because they owned too much tech when the bubble burst just a few years ago – or the Enron employees who lost everything because they only owned stock in their employer and then that went to zero.
The problem is that people just are not good at processing downside risk – that’s just how people are programmed. They don’t intuitively understand that if they throw all their money in one sector, they could lose it all. It’s hard to feel that some of the stocks they own, especially those they like best, could be headed straight to zero.
In this situation, feelings always lose. Investors absolutely must stay diversified, and this rule can’t be bent, broken or spindled.
video:
Never Buy All at Once
A good investor can't be arrogant, Cramer said. And the single most arrogant thing an investor can do is buy a whole position in a stock at once. Never do this.
Investors send a message when they buy a whole position at once: “This stock will not go down any further from here. In fact, it’s all up from this moment on.” If an investor buys all at once, and then the stock dips, he feels like a moron – and he should, Cramer said. A little more patience and little less arrogance would have landed him some shares at a better price.
Now, a broker might not like getting these little incremental trades, but the investor is the shot-caller in that relationship. The timing of a buy is never perfect, so don't rush. Just acknowledge that there's a possibility the stock could drop, allowing a better chance to buy more.
Bottom Line: Don’t be arrogant. Don’t buy stocks all at once. Be patient and buy incrementally.
video:
The Rules of the Game
Rule No. 1: There’s a market for everything – oil stocks, newly public stocks, small-cap value stocks – so pay attention to how it works. You should even think of the stock market in general as a market, meaning it’s governed by supply and demand as much as anything else.
The importance of supply and demand in trading is especially true for hyped up, trendy stocks. Just look at ethanol in 2005 and 2006. At the end of 2005, when every major media outlet was running stories about how ethanol was the next great energy source (see original post: http://www.cnbc.com/id/21903112).
But by the summer of 2006, when VeraSun VeraSun Energy Corp, Hawkeye and Aventine Aventine Renewable Energy Holdings Inc were on the scene, the oversupply of ethanol stocks had killed the run in that sector. If you’d just been paying attention to the fundamentals, or to the hype about ethanol in the media, you would have been caught totally off guard by downturn in ethanol. A lot of people got caught up in the hype and ignored the simple but important rule of supply and demand.
The oversupply doesn’t just have to be in a sector, either. Cramer once got burned on the Sealy
Sealy Corp initial public offering, and not because there was a sudden glut in the supply in mattress stocks – it was the record rate of IPOs. The quarter the mattress professionals came public saw the most IPOs since the dot-com bubble. Anybody who was after a newly public stock, who wanted to play the IPO game, had already gotten a piece of the action somewhere else. He ignored the market for IPOs, and he paid the price.
Bottom Line: New rule from the new book – Pay attention to specific markets for specific kinds of stocks. The supply and demand of a certain kind of stock is just as important as a company’s earnings.
video:
Know What You Own
Rule (No. 2 tonight) is “Know what you own.” Just because you own a tech stock doesn’t mean the company is representative of the entire sector. There are industries within a sector, and those that ignore this important fact can end up losing money – or missing out on big opportunities.
[see original post for further explaination:]
EX: There will be talk of a healthcare rally or a transports rally or a tech rally, but that doesn’t mean the whole sector’s rallying. (Cramer caveat: Always be suspicious of anyone on TV – except for him – calling a sector rally. You want to know how broad that rally truly is.) It’s the industries within these sectors that really count.
Case in point: Cramer called a tech rally in June of 2005 by writing two ticker symbols on his hands – MSFT and CSCO. He figured these two names best represented tech on the whole, even though the rally was happening in gadget production and not the entire sector. By February of 2006, Microsoft was up 71%. These were the real participants in the so-called tech rally that was really a gadget rally.
Bottom Line: Don’t let yourself be fooled. Never mistake a rally in an industry for a rally in the sector to which it belongs. It’s an easy mistake to make, but if you remember my rule, you should be able to make a lot more money.
video:
Be a Lemming
Only two rules left. We’ve already been over paying attention to markets, knowing your stocks and playing Latin America for the short term only. Now it’s time to cover a rule that might betray your contrarian leanings: Be a lemming.
That’s right. You want to follow the Street’s lead because most of the time it works.
Cramer wants to be clear: This doesn’t mean you stop thinking. If you think the Street is wrong about a stock or group of stocks, then don’t buy in. But if you do your homework and you like the direction in which the big institutional investors are headed, then be a follower.
Wall Street is often right. Stocks on the 52-week high list often stay there for days or weeks by hitting new highs. You don’t have to follow the momentum, but if there is momentum and you’ve done your homework and you like the stock, then Cramer says go for it.
Sometimes stocks will get anointed by money managers. These are the best-of-breed stocks that are meant to stand in for the entirety of a great sector. They’re like the Energizer bunny – they just keep going and going and going.
Bottom Line: It’s OK to follow the Street’s lead. In fact, it often pays to follow the Street’s lead and buy the stocks that are going up, but only if you agree that the stock is worthy.
video:
Don't Be a Snob
There’s one rule that’s near and dear to Cramer’s heart, and it should be pretty simple to follow: Don’t be a snob.
Pretty much everybody involved in the stock market is a rich person who lives in Manhattan or the suburbs of New York City. The analysts, the money managers, the commentators – they’re almost exclusively concentrated in this one area, and they’re almost all much wealthier than regular people.
Now that might sound like a pretty apparent statement, but think about it. With Wall Street being run almost entirely by rapacious capitalist fat cats – not that there’s anything wrong with that – they are bound to miss some of the best trends out there. If you’re too busy shopping at Neiman Marcus to take a look at Target, that oversight could cost you a great opportunity to make money. Wall Street is almost always late on picking up trends in low-end or mid-grade products because everybody on the Street lives in an upper-class bubble.
Most of the big institutional buyers missed this move (see original post for example) because they were snobs, Cramer says. They didn’t want to eat at Oliver Garden and they didn’t want to own a piece of its parent company. Because of that, they missed about a 50% gain in nine months. A 13 point upside swing – now that’s something to be snobbish about.
Bottom Line: No offense to the people that run Wall Street, but they have blinders on. Those blinders mean you can make money looking at stocks that run under the Street’s radar.
video:
Latin America Is Always A Trade (Not a Long-Term Investment)
The title kinda says it all. If this is an issue for you see original post:
Humility Is a Virtue
OK, here’s the final rule of the night: Don’t be afraid to say something is too hard. There are some things out there that are just too hard to game. No matter how much homework you do, no matter how hard you try, you will never be able to know enough to invest or trade in certain situations.
Cramer says one of the hardest is restaurant same-store sales growth. He admits to getting burned almost every time he’s tried. There are just too many factors at work, he says, too many different things going on that could crush you if you get it wrong.
Now, Cramer’s not telling you not to buy a restaurant stock. He’s just letting you know there a better ways to profit than banking on a better-than-expected same-store sales number.
Cramer shared some examples of why restaurant same-store sales are the worst.
Bottom Line: Never be afraid to admit that something is too hard to game. Restaurant same-store sales are the hardest, but they're not the only things that are too hard to game. You're not admitting defeat or stupidity if you admit something is too hard – you're being smart and looking for easier pickings.
video:
Past Performance Not Indicative of Future Success
This next rule sounds intuitive but it’s actually the exact opposite: past performance is not indicative of future success.
If you’ve made a lot of money playing a trend, or just investing in a hot industry, then your natural instinct is to keep finding new ways to play that trend. It’s an easy mistake to make, but it’s also an easy way to get burned. If you’ve been successful playing a sector trend, you can’t let that make you feel invinsible, Cramer says, because it’s a surefire way to lose money.
Bottom Line: Don’t let the fact that one stock has caught fire influence your decision to buy a similar looking stock. It’s an easy trap to get caught in, but it can be a hard one to get out of if you lose big.
video:
Tips Are for Waiters, Not Traders
Investors should never take or listen to stock tips, Cramer said. They shouldn’t try to get stock tips. Tip generously when out to dinner, but that’s the only kind of tip that’s allowed in the People’s Republic of Cramerica.
Here’s the worst part: When someone is passing out stock tips even though he doesn’t truly know anything, that person has an agenda. Rumors don’t get started for no reason. If you get a tip, it’s probably because somebody’s in a bad position. So if there's a rumor that Nokia’s taking over Research in Motion, most likely that person has a load of RIMM stock he’s hoping to sell into strength.
We all would love to get a real tip, but those don’t exist. As far as Cramer’s concerned, a tip is either illegal, incorrect or straight-up manipulative. None of those things is good for an investor.
Bottom Line: Stock tips are tempting, but they’re not worth listening to. Tips are for waiters, not traders.
video:
zumatimes.com
Monday, November 19, 2007
Good News For Apple's iTunes as Bronfman's Warner Music Finally Accepts Reality And Jumps On Board
Wednesday, 14 Nov 2007
Warner Music's U-Turn On Apple
Companies:Warner Music Group Corp. | Apple Inc
It was a kind of "stop the presses!" moment when Warner Music [WMG 7.6 
-0.20 (-2.56%) 
] boss Edgar Bronfman took the stage earlier this week at the big GSMA Mobile Asia Congress in Macau, telling the assembled guests that they should embrace the model put forth by Apple Inc [AAPL 163.95 -2.44 (-1.47%) ] . Wired News calls this a "Hell freezes over" moment!
A little background here: Bronfman has been a longtime and vocal critic of Apple, the iTunes pricing scheme and of course the company's revenue sharing plan. Previously, he has called the Apple model "unfair.")
Now Bronfman (the insightful, cutting-edge genius is saying), "We used to fool ourselves," he said. "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won."Wow! The trail-blazing leader adds, "For years now, Warner Music has been offering a choice to consumers at Apple's iTunes Store the option to purchase something more than just single tracks, which constitute the mainstay of that store's sales. By packaging a full album into a bundle of music with ringtones, videos and other combinations and variation we found products that consumers demonstrably valued and were willing to purchase at premium prices. And guess what? We've sold tons of them. And with Apple's co-operation to make discovering, accessing and purchasing these products even more seamless and intuitive, we'll be offering many, many more of these products going forward."
Bronfman added, "The new iPhone is "beautifully designed," featuring "brilliantly written software," also a "spectacular user-interface....that throws all the accepted notions about pricing, billing platforms and brand loyalty right out the window."
So to all mi amigos who refused to sell Apple at 190 a couple weeks ago, against my recommendation, because of the "what it" factor ("what if" it goes up to 200, even though I bought it at 50)...maybe this should help move it back up. And I hope you sell some at 190 next time you have a chance.
zuma's youtube videos
zumadogg@gmail.com
Good Investment Strategy Beliefs by CNBC "Mad Money" Jim Cramer
Jim Cramer had a good show tonight on CNBC's "Mad Money" (6pm & 11pm).
He gave some good investing rules. Here's a re-cap:
Jim Cramer's rules before you can be successful. (These rules go against "conventional investing wisdom". I think he considers them "beliefs", actually.)
#1. Don't get stuck in the "buy and hold" mindset. It isn't a strategy. It's an ideology. (He calls it, "Stalinism" half-joking...well, not really joking, at all.) "Buy and hold" is, "really harmful for investors who want to invest wisely", says Cramer.
Adding, "'Buy and hold' means if you hold on long enough, you will make money." (It gives you a chance to let yourself off the hook if it goes down.) It let's you be lazy. According to Cramer, 'buy and hold' means you don't have to do research or homework because you feel it will always bounce back.
"On 'Mad Money' it's 'buy and do homework", not 'buy and hold'!"
If you are not doing your homework (research, following your stock and it's competitors); and listening to the quarterly conference call (that Cramer feels is, "very important"), then you are relying on "faith and hope", according to Jim.
He even uses the same term ZD has used countless times from the podium..."bamboozle".
Saying, "You have been bamboozled if you were sold on 'buy and hold'."
#2. Don't play, "woulda, coulda, shoulda". "There are no regrets. When you dwell, it becomes counter-productive", says Cramer. He calls it, "if only". (The movie you run over and over in your head, as in, "If only I didn't buy it." Zuma Dogg says also beware of the, "What if", mind-trap. As in, "What if I sell Apple at 190, and it goes to 210. (Don't worry...it dropped to 150 two days later, and two weeks later is only at 165. You can never be a loser, selling at a record high, when you bought at $50. But $190 was STILL not high enough for ANYONE I spoke with that held Apple.
So the "woulda, coulda, shoulda" burnt people some people with Apple and Starbucks this week in my world in the "what if" department, as well as the "if only".
#3. "Tips are for waiters", Cramer would like to remind you. Everyone likes a good stock tip, because everyone wants to make "easy money", so people are eager to believe these tips. "Stock tips are tempting, but not worth listening to", said Cramer.
#4. As soon as you know you have a dog/loser...
THIS IS THE ONE I SEE THE MOST PEOPLE STRUGGLING WITH. It's human nature, I guess. No one likes to admit they may have been wrong. Again, people will chase a stock all the way down -- like a guy who refuses to pull over for direction. People get too wrapped up emotionally in the decision making process. In the radio business, you play a record enough to get enough market research back. If the record doesn't take off after a while, it's never gonna take off. You can tell when you have a hit record, as opposed to a stiff. (That's what statistics are for.)
Cramer says, "We sell! We cut our losses." Zuma says, "Vegas and the stock market exchange are two places people never seem to like to cut losses until there is nothing left to cut."
#5. Don't buy all at once. "Don't be arrogant", he calls it. Watch this video for how to buy on the way down, as relating to Google stock.
cnbc.com
cramer's website
zuma's website
He gave some good investing rules. Here's a re-cap:
Jim Cramer's rules before you can be successful. (These rules go against "conventional investing wisdom". I think he considers them "beliefs", actually.)
#1. Don't get stuck in the "buy and hold" mindset. It isn't a strategy. It's an ideology. (He calls it, "Stalinism" half-joking...well, not really joking, at all.) "Buy and hold" is, "really harmful for investors who want to invest wisely", says Cramer.
Adding, "'Buy and hold' means if you hold on long enough, you will make money." (It gives you a chance to let yourself off the hook if it goes down.) It let's you be lazy. According to Cramer, 'buy and hold' means you don't have to do research or homework because you feel it will always bounce back.
"On 'Mad Money' it's 'buy and do homework", not 'buy and hold'!"
If you are not doing your homework (research, following your stock and it's competitors); and listening to the quarterly conference call (that Cramer feels is, "very important"), then you are relying on "faith and hope", according to Jim.
He even uses the same term ZD has used countless times from the podium..."bamboozle".
Saying, "You have been bamboozled if you were sold on 'buy and hold'."
#2. Don't play, "woulda, coulda, shoulda". "There are no regrets. When you dwell, it becomes counter-productive", says Cramer. He calls it, "if only". (The movie you run over and over in your head, as in, "If only I didn't buy it." Zuma Dogg says also beware of the, "What if", mind-trap. As in, "What if I sell Apple at 190, and it goes to 210. (Don't worry...it dropped to 150 two days later, and two weeks later is only at 165. You can never be a loser, selling at a record high, when you bought at $50. But $190 was STILL not high enough for ANYONE I spoke with that held Apple.
So the "woulda, coulda, shoulda" burnt people some people with Apple and Starbucks this week in my world in the "what if" department, as well as the "if only".
#3. "Tips are for waiters", Cramer would like to remind you. Everyone likes a good stock tip, because everyone wants to make "easy money", so people are eager to believe these tips. "Stock tips are tempting, but not worth listening to", said Cramer.
#4. As soon as you know you have a dog/loser...
THIS IS THE ONE I SEE THE MOST PEOPLE STRUGGLING WITH. It's human nature, I guess. No one likes to admit they may have been wrong. Again, people will chase a stock all the way down -- like a guy who refuses to pull over for direction. People get too wrapped up emotionally in the decision making process. In the radio business, you play a record enough to get enough market research back. If the record doesn't take off after a while, it's never gonna take off. You can tell when you have a hit record, as opposed to a stiff. (That's what statistics are for.)
Cramer says, "We sell! We cut our losses." Zuma says, "Vegas and the stock market exchange are two places people never seem to like to cut losses until there is nothing left to cut."
#5. Don't buy all at once. "Don't be arrogant", he calls it. Watch this video for how to buy on the way down, as relating to Google stock.
cnbc.com
cramer's website
zuma's website
Good Investment Strategy Video (On Market "Emotions & Psychology")
Off to a good start on this blog, cause my first post from last night predicted that the market would be down big-time on Monday (issuing an INVESTOR ALERT), which it was, down 218.
People I care about have a decent amount of money in the stock market, and I worry about them, these days. Because they are of the "buy and hold" mentality. Buy it, and forget about it (for the long-run). These people consider following day-to-day trends in this volatile stock market exchange to be "short-sighted", or even worse -- day trading!
And they come up with all kinds of reasoning why they need to hold on to the stocks, no matter what anyway. (You know, taxes; commissions; not enough interest...)
I'd rather stuff it in a mattress at 0% interest, than lose 30% of my net worth, because I am faithful that just because "that's the way it's always been", means it's gonna be that way tomorrow.
So if you wanna get to know a little about Zuma Dogg and his investment strategy/philosophy, watch this video. I'm posting it for all my friends and relatives who shunned me for this type of thinking. But when I told them to sell Apple at $190 a couple weeks ago and take a profit...they told me to shut-up, because they wanted it to keep going up. (No kidding!) It was $150 within 48 hours, and now they would do anything to see at $190.
How many people were optimistic that Starbuck's was gonna turn around, because they still see a line at THEIR location. Someone told me last week, they weren't going to sell Starbuck's because it was down so much, they WANTED it to go back up a little, first. (Then the report came out, two days later and the stock tanked, and now he would do anything to have sold it at the previous (painful) loss, that is now so painful...it's REALLY not worth selling now. (But that's what he thought, last week.)
So people will risk much, much more to prevent losing out on making a little more money. (They'll lose $40,000 in stock because they were trying to win back the $10,000 they already lost. Or, they'll lose $40,000 because they didn't sell, because they wanted it to go up, even more.)
SO WATCH THIS VIDEO. MORE VIDEOS TO COME. WATCH THIS SITE. GET TO KNOW ME! ZD
zumadogg@gmail.com
zuma's video archives
People I care about have a decent amount of money in the stock market, and I worry about them, these days. Because they are of the "buy and hold" mentality. Buy it, and forget about it (for the long-run). These people consider following day-to-day trends in this volatile stock market exchange to be "short-sighted", or even worse -- day trading!
And they come up with all kinds of reasoning why they need to hold on to the stocks, no matter what anyway. (You know, taxes; commissions; not enough interest...)
I'd rather stuff it in a mattress at 0% interest, than lose 30% of my net worth, because I am faithful that just because "that's the way it's always been", means it's gonna be that way tomorrow.
So if you wanna get to know a little about Zuma Dogg and his investment strategy/philosophy, watch this video. I'm posting it for all my friends and relatives who shunned me for this type of thinking. But when I told them to sell Apple at $190 a couple weeks ago and take a profit...they told me to shut-up, because they wanted it to keep going up. (No kidding!) It was $150 within 48 hours, and now they would do anything to see at $190.
How many people were optimistic that Starbuck's was gonna turn around, because they still see a line at THEIR location. Someone told me last week, they weren't going to sell Starbuck's because it was down so much, they WANTED it to go back up a little, first. (Then the report came out, two days later and the stock tanked, and now he would do anything to have sold it at the previous (painful) loss, that is now so painful...it's REALLY not worth selling now. (But that's what he thought, last week.)
So people will risk much, much more to prevent losing out on making a little more money. (They'll lose $40,000 in stock because they were trying to win back the $10,000 they already lost. Or, they'll lose $40,000 because they didn't sell, because they wanted it to go up, even more.)
SO WATCH THIS VIDEO. MORE VIDEOS TO COME. WATCH THIS SITE. GET TO KNOW ME! ZD
zumadogg@gmail.com
zuma's video archives
Sunday, November 18, 2007
Not Gonna Be A Good Day For The Dollar or The Stock Market
First of all, since many of you reading this have never hear of "Zuma Dogg", you may be wondering, "Who cares what this guy has to say?" That's up to you. But if you follow me for a while, maybe I will build up credibility in your mind. (I win 'em over the hard way.)
First of all, here's a recent blog post that may at least raise some eyebrows if you are a new ZD reader: ZD predicts subprime/housing bubble burst 3 months in advance
NOW, FOR TODAY'S POST...LET'S SEE IF I CAN GAIN SOME "CRED", RIGHT OFF THE BAT:
NOT gonna be a good day for the dollar or the stock market on Monday November 19, 2007. YIKES! INVESTOR ALERT! THE BOTTOM IS REALLY GONNA START TO BOTTOM OUT TODAY! NOT GONNA BE A VERY CHEERY HOLIDAY SEASON AFTER MONDAY'S CLOSING BELL!
zumatimes.com
Zuma Dogg on YouTube
zumadogg@gmail.com
First of all, here's a recent blog post that may at least raise some eyebrows if you are a new ZD reader: ZD predicts subprime/housing bubble burst 3 months in advance
NOW, FOR TODAY'S POST...LET'S SEE IF I CAN GAIN SOME "CRED", RIGHT OFF THE BAT:
NOT gonna be a good day for the dollar or the stock market on Monday November 19, 2007. YIKES! INVESTOR ALERT! THE BOTTOM IS REALLY GONNA START TO BOTTOM OUT TODAY! NOT GONNA BE A VERY CHEERY HOLIDAY SEASON AFTER MONDAY'S CLOSING BELL!
zumatimes.com
Zuma Dogg on YouTube
zumadogg@gmail.com
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