knowing the bottom market

We just hear the market bad day to day. We cannot see the market news rise. We sure that recently the stock price will not rise up. . We cannot sell our stock today unless we do not have anything. I think today is the time we buy the stock because the stock is cheap. Perhaps next ten year, the economic will be good, so you can sell the stock with over many times prices.

We must be selective to buy cheap stock today. Do not buy stock with bad fundamental because it will make your life worst.

We must be sure that we buy the valuable cheap stoc. That is why we should know the bottom of stock price. The bottom means the cheapest price of the stock. Recognizing the bottom market is a difficult thing. Therefore, you should learn the market trend.

You can also visit ths page: http://stocks.about.com/od/advancedtrading/a/042608stayin.htm?nl=1

US suspend gold coin sales

The US government suspended the gold coin sales. They afraid the citizen does not trust US Government. Gold is the best investment. The value of gold is resistant with any economic condition.

Along time a go US citizen did not believe to the cartel money. They prefer to keep gold than using money. They think the paper is useless. Finally, The US Government releases the act that forbid people keep their gold.

I think this is not fair because the government limit the citizen’s right. The citizens have to save their money at gold. They have right to defend their assets.

In last September 2008, the government has suspended American Buffalo gold coin. They have to do it because the over demand. This is not good for the US economics. The dollar could go down anytime.

Demand this year is 54 percent higher than last year at the same period. The US Mint has sold 164,000 American gold buffalo.

We should know that US government does not have money as much the money supply. If the citizen buys gold, the dollar will depreciate. The US government economics will be worst. The government supposedly does not print large amount of paper money because it will harm to US economics.

http://www.huffingtonpost.com/2008/09/28/us-mint-suspends-sale-of_n_129960.html

http://aaronandmoses.blogspot.com/2008/09/gold-coin-sales-halted-again.html

Cash flow statement determine the company health

In my job later, my boss told that the cash flow is important things at the newspaper industry. Many companies bankrupt because the company could not get cash to produce the newspaper. they have no cash to pay to the supplier so they cannot print the newspaper. On the other hand, the collector also could not collect their receivables. The customer did not pay the newspaper.

I think the most company need cash flow to operate their company too. I think the company with large cash is the good company. But wait, if the cash from debt, you should be careful. You should check the debt to equity ratio. If the company has high DER than thirty percent, the company must have bad rating credit.

The dummies tell that investor should notice at leat three items i.e.:

1. Sales
The company that could get return from the sales side must be a good company.

2. Earnings
You should check the develop of earning. Is this yea income higher than foregone income?

3. The debt
The bad company usually use higher debt

The above item does not guarantee the company has good return stock. You should analyses comprehensively to get the best prediction for your stock. Good Luck.

Accounting basic for analyzing stock

Surely, we must analyses the fundamental of company before investing in stocks. You should read the financial statement carefully. The good income statement may reflect the good company.

I quoted from dummy stock investing. Here are item that you must analyze :

1. sales
Good company must have good sales. The sales record also shows the increasing. Surely, the higher sales mean higher profit.

2. Expenses
The higher expenses mean the company has low profit. You can analyze the expenses year to year.

3. Research and development
You can check at my foregone articles

4. Earnings
The company that has higher earning will pay you higher dividend. You can check the EPS ratio of the stock. The higher EPS mean the stock has higher profit

Portfolio that help you from crisis

We know that mutual fund in dangerous because the Lehman bankrupt. The domino effect of Lehman could break the mutual fund redeem. The stock market is also less profitable. The US market index and world market index has decreasing. It is seem unprofitable to invest at any investment.

Some expert says that we must use portfolio to reduce our risk. In my opinion, the portfolio is bad idea today. The market dooes not show the recovery. We can loss our money.

Alternatively, we can shift our money to another investment. Real investment might be a good idea. You can buy gold, house, farmland, etc. Gold is the best investment. IT can help you at any bad economic condition. The price is also stable.

Using capital analyst ratio

Capital turnover ratio is ratio between sales and capital. This ratio tells the ability of the company changing capital to sales. The company needs capital to raise their production and sales. The factory needs machine, fuel, building, car, truck for production. Perhaps it is easy to product the things as long there is capital. Unfortunately, some company could not sell their product. Of course, the company will bankrupt soon if there is no one who buy it product.

I think Bloomberg.com provides the company ratio data but only for member. The investor could count the ratio by herself/himself. He/she just need the company financial statement. Capital turnover ratio needs the sales and the capital data. You can find easily the sales data. On the other hand, you must count the capital of the company. There are two capital that usually use by company i.e. equity and stock. To get the ratio, total sales (exclude other income) divide by capital.

Perhaps common people appraise the larger ratio is the better because the company could get higher return than the others could. The common must realize that each company is different.

You should compare apple with apple. The different industry has different characteristic so it has the different capital turnover ratio. I have studied the oil company and the mining company turnover ratio. The oil industry and mining industry need large capital. The company must spend money at least eight years meanwhile it does not get the oil and mining for eight years. The company must build large asset to get the oil and the mining. The company explores the land, the off shore, or the deep sea that need millions dollar. The mining business is full uncertain, the company could bankrupt for a moment. The oil and the mining company have great risk too. It could get nothing at the land whereas they have surveyed before. Only the company with large capital could run oil and mining business.

On the other hand, the retail company does not need large capital as the oil and mining company does. The sales of the retail also is large than the oil and mining so the capital turnover ratio of retail company is higher than oil and mining company. We can see the people buy product like cloth, book, stationery, food, and drink at the retail shop everyday.

The best company is the company, which has higher capital turnover ratio at it industry. It could convert the capital into the profit. The company must pay a part the dividend to the investor.

Guide to middle caps stock

Middle capitalization stock issues by company, which has middle caps or $ 1 billion dollars or 5 billion dollars. This investment may give the investor return too. Perhaps you invest at the growing middle caps stock. The middle caps stock is safer than penny stock and micro caps stock. Certainly, the middle stock has lower return than blue chips or ultra caps stock.

Of course, you must find the best of middle caps stock. The best will give you higher return than the worst. One day, the best mids caps could rise to blue chip. There is no one company become blue chip directly. Shell Oil Company was the small capitalization company along time ago.

Some guides that may help you to get higher return:

You must know the fundamental of the stock. The listed company has obligation to report the financial statement. The figure will reflect the health of company. The company, which has larger debt to asset ratio, should be avoided.

The stock also has large sales and market that could make higher income. Certainly, the company must pay your dividend.

Safe Bond: Freddie Mac

Safe Bond: Freddie Mac
Safe bond is the fixed incomes securities that guaranteed by government agent i.e. Ginnie Mae. The bond is same with Government bond from securities side. The investor should not worry investing in this bond.

The issuer or safe bond is Freddie Mac or FHLMC (Federal Home Loan Mortgages Company) – a stated company that provide mortgages loan. The process of issuing safe bond is complicated.

The GNMA issue the loan to the bank. The bank will make mortgages that has guaranteed by GNMA. The bank construct to loan to the other meanwhile the GNMA will guarantee the loan. Besides GNMA, the other safe bond guarantors are FNMA and FHLB. GNMA receive cash from the bank. The poll money from bank divides to different maturity bond or trenches.

Since this bond is guarantee, we can say this bond is safe. It rate is AAA and A. This rate is higher and has small possibility to default.This bond is called collateralized Mortgage Obligation or CMO. This bond collateralized by government through GNMA (General National Mortgage Association). CMO found in order to cover traditional mortgages backed by securities. CMO could eliminate prepayment and longevity of securities.

CMO is sold at the three terms i.e. long term, mid term, and short term. Therefore, you could choose one of them. At least you should provide $ 1000 to buy CMO.CMO has many variety or class i.e. class A, class B, and class C. The class A is the shortest class CMO. They ranging just 2 year to five years. Depository institution likes this CMO. The Class B is the middle class that ranging 5 year to 7 year. Pension fund and Insurance Company like this bond. The C class is the longer with ranging to ten years. The financial institution use C class for hedge fund. This bond attracts financial institution and pension fund.

The investor could get interest payment periodically. Beside that class, CMO has Z series or accrual bond too. This bond is the cheapest than the other safe bond because the face value is lower. Investor could get coupon from Z series because investor could get interest at the end of month.

CMO also provide R class that the rate is lower. You can lose your money by using this kind of bond. This CMO risk is same as junk bond risk. Although higher risk, the investor believe it could result higher return. A fallen angel may perch in your lucky. If you dare to put your money, you will get higher return.

Guide investment stock market for beginner

We know investing at stock market could raise your income. My classmate’s friend has success to gain profit at stock market. He buy house from the stock capital gain. The stock gain has tempted my classmate to invest at stock market. He asks me to teach him about investment.

For the beginners, you should know that investment not only give you return but also risk. You can lose your money over many times at stock market. Moreover, you can kill your self if you are not patient. Therefore, you should prepare your self to be losing. Do not think you will get return soon. Moreover, today condition is bad because the sub prime makes the decreasing stock market index.

Before you enter the market, you should find the broker. The broker will guide you to ride the stock market. They will give you the knowledge and experience to teach you. The broker position could determine your profit too.

I suggest you should learn deeply about investment. You can choice the investment that has prospect. You can buy stock with lower P/E (Price earning Ratio). You can get P/E value at www.finance.yahoo.com or other sites. Lower P/E mean that stock is cheap stock and reversely. Mr. Warren Buffet –the guru of investment- usually use this ratio before choose the stock.

After know about investment, you should make portfolio. Portfolio is the bunch of investment that has negative relation each other. The member of bunch could reduce the market risk. You should combine any kind of stock e.g., you can buy Industry stock, dotcom stock, financial company stock, etc.

You can make simulation your portfolio. You must notice the progress around six months or one year. When your portfolio loses, you can find another portfolio. You should actively to build portfolios because simulation free and painless.

Perhaps your portfolio could get higher return than you should contact your broker to buy that portfolio. Perhaps the broker will give you addition advice too.

If you have small amount money, you can try mutual fund. This investment has result higher return than certified deposit. You do not have to build portfolio because the investment manager have do it for you.

Guide investment stock market for intermediate

As an intermediate, you must know investing at stock market. You must already feel how to get return or lose at the stock market. You have experience to build a portfolio and know how to reduce the risk.

You are in the developing area. Perhaps you want to wide your investment return. Therefore, you must develop your self and add your capital too. You may leave mutual fund because this investment is less profitable than stock.

First step is evaluating your portfolio. Is your portfolio beat the market? You can compare your portfolio return to market performance. If your portfolio lower or same with index performance, you should change your portfolio soon. Moreover, sub prime has decrease the index performance so your return might decrease too.

You should control your emotion too. An intermediate could make mistake by greed or fear. The greed could make the stock is overvalued. On the other hand, the fear could make the stock is undervalued. You must use your logic. You should analysis before investing.

Warren buffet always buys a company not buying a stock. You should follow that richest man step too if you want to be a rich man. Mr. Buffet divides the guidelines to four categories i.e., business tenets, management tenets, financial tenets, and value tenets.

First, you must recognize the business of company. You should recognize the business operation and the business cycle of industry. The prospectus stock comes from prospective business company too.

Second, you must know the management too. The company good must use well management team too. The best management could produce more profit than fool management.

Third, you should know financial tenets too. Certainly, the prospective stock comes from company, which has well financial statement. Buffets also notice the earning per share of the stock. The higher EPS refers to the stock is undervalue and reversely. You can buy undervalue stock with cheap price and then you can sell with higher price.

Fourth, you should know the value tenets too. The prospective stock has good value. You should notice at least three fundamental ratios like Price to Earning Ratio (PER), dividend yield, and book to market ratio.

You should buy well stock like Buffets do. You cannot hope from rubbish stock or junk stock. It could rise but for temporary and make suffer financial lose. Writer never suggests you to speculate the stock.