Is Wall Street On Sale?

If your a long term investor, it is times like these that you need to be taking advantage of. The markets have just been terrible to start the year, losing everyday but today if your stocks are in the Nasdaq. As an investor you need to ask yourself, "does my stock have anything to do with Housing or a US bank", because if not the story behind when you invested in the first place hasn't changed. It might have simply been taken down artificially along with the rest of the market. Going on sale if you will...

The markets go up and the markets go down, the past week or two almost every thing has been going down though, no matter what sector. Try to focus on the future, the housing problem and the banking mess is only going to last so long. Global growth will trump any minor slowdown that we have here in the states in the long-term. Plus, the fed cutting interest rates is only going to bring the bulls back, especially if we get a quarter cut this next meeting.

Companies like Google, Boeing, Yum, Royal Bank Of Canada, and Vasco are all looking good at this level. Boeing (ba) is at a 52-week low even after it "blew past an order record it set two years ago, selling 1,413 commercial jets in 2007 while delivering 441 planes, its best showing in six years." Google (goog) unveiled several more partnerships at the CES (Consumers Electronics Show), but the market doesn't want to hear any good news at this point. Yum Brands (yum) is China the safe way, Royal Bank Of Canada (ry) has a fat and safe dividend yield. Vasco Data Securities (vdsi)is almost back to where it was after the last earnings fall. The bears have taken over all of these, and many more quality stocks. This historically means we are thankfully near the bottom.

It seems at this point though that we do need The Fed to act. If they don't we will get hammered again, whether we deserve it or not. I this that is half the reason the markets have been so jittery, no one really knows for sure what The Fed is going to do and that means fear...

Take advantage of this volatility, and pick up some of your favorites stocks on sale! Remember, you are buying over time, build a position in a stock, not buying it all at once. Another tip for market dips is to buy your dividend paying stocks. As a stock goes down it's dividend yield goes up, which means that you can get more cash or stock dividends for your dollar than you could have at a higher stock price. As a long term investor you should be owning these type of stocks for their steady dividend income.

Don't let panic cloud the future fundamentals...

Is There Any Reason To Own AMD?

One of the first things you need to realize is that there really are only two computer processor companies out there, the much bigger Intel, and Advanced Micro Devices (AMD). These two companies have been engaged in a price war for quite some time now, well... some would say it seems more like Intel was trying to run AMD out of business. Intel even went as far as sacrificing its own bottom line and in turn it's own stock price.

During this period AMD purchased graphics card maker ATI. It took them quite some time to develop, but they are beginning to bundle the processors and graphics cards together. This should help give Advanced Micro Devices a much needed edge on Intel in the future. It is even already helping them to land contracts like this one just announced with Samsung.

Another reason to conceder owning the hated AMD, is the fact that they just got some fresh, green capital from Abu Dhabi to the tune of 622 million. A very nice chunk of change, to say the least. These foreign investors obviously see long term value in this company, which is certainly a good sign. Piling on have been recent downgrades that have punished this stock even further to it's 52 week low!

The question you need to ask yourself is, "Are people going to stop buying processors"? AMD cannot continue to go down forever, and with the addition of ATI's products, I think AMD can begin to turn things around back into the green. Sure, this stock pick is a lot like catching a falling knife, but in the long term AMD shareholders could be pleasantly surprised if they begin to build a position at this point.
Having a look at the chart though you will realize that this is obviously not for individuals with a pacemaker, especially in these market conditions, but things should eventually turn around. While I did a decent job in calling the bottoms in Vasco Data Securities VDSI, and Ceradyne CRDN, I feel this pick could be even more dangerous due to all the negative momentum. Don't even dream about putting it all in at once!

The markets have been nuts, but I believe they can only take so much before people around the world begin to take notice and begin bargain hunting... Hang tight though, this is the type of market that makes you feel like you are on the cruise ship that just started passing out the barf bags.

The Best Lottery Ticket You Will Ever Buy!

As I got home today I remembered that I had bought a lottery ticket for the mega millions last week, of course immediately all those thoughts of the things I could do with all that money came flooding in. Hmm a new car, new house, retire... I went to the computer and looked up the numbers... guess what? I didn't have a single number on a five dollar ticket. No real surprise, as the lottery is nearly impossible to win, but the real question was why did I just throw away that five dollars?

Let's say though you take that same five dollars and all the other money that you have waisted into the stock market. Think of it as a lottery ticket that never expires, can go up an infinite amount, sometimes pays you money (dividends), and can never go under the amount that you put in. Sounds too good to be true, but that is exactly what the stock market is all about.... one big lottery.

Just think of all that money that you just throw away every day whether it be from lottery tickets or some other vice. I don't know about you, but I am ready to retire already aren't you? Think of the stock market as educated gambling. There are numerous tools that you can use to help you beat the odds. First of all, try to find yourself a hot industry that you feel will continue to grow in the future. Then find the company that has the biggest potential... this is not always the obvious choice.

Make sure the company has good fundamentals, which simply means that they have cash on hand (it's nice when it is increasing), their assets should be growing at a faster pace then their liabilities. All of this you can find at the companies website under "The Balance Sheet" (they all are designed the same so don't worry once you have seen one you have seen them all).

Next, look at a companies Income Statement which shows you how much money the company is really making. Of course this should be increasing (the quicker the better), you can also find out if the companies pays you a dividend (a cash or stock payment made normally every three months).

Sure, there are a lot of other factors that go into buying a stock, like it's float, p/e ratio, the health of it's industry, and general market conditions, but the fact remains that stocks can be your ticket to early retirement, not that lottery ticket you just waisted five bucks on...