Bull Markets in Calendar Days

http://money.cnn.com/2014/03/06/investing/bull-market-five-years/index.html?iid=Lead

Why the Market Is Irrational and What You Can Do About It

http://finance.yahoo.com/blogs/breakout/harvard-teach-investing-111707627.html

3 Stages of a Bull Market and 3 Stages of a Bear Market

2011 Value Investing Congress Notes
http://www.scribd.com/doc/54958483/2011-Value-Investing-Congress-Notes

The swing of the pendulum 
o Constantly going between greed and fear, risk tolerance and risk aversion, and optimism and pessimism
o In theory, the pendulum should be at the happy medium

 On average it is in the middle 
 But it spends little time there
 Excesses constitute the errors of herd behavior

 3 stages of a bull market 
 Few people feel things are getting better
 Most people realize improvement is taking place
 Everyone thinks things will get better forever
 "What the wise man does in the beginning, the fool does in the end."
o The last buyer pays the price 

 3 stages of a bear market 
 Few people realize that things are overpriced and dangerous
 Most people see the decline is underway
 Everyone believes that things will get worse forever
o Great opportunity to buy if we can behave counter-cyclically - Importance of being a contrarian.



Ben Claremon: The Inoculated Investor http://inoculatedinvestor.blogspot.com/  

In a bull market, be prepared for the bear.

"It is not difficult to outperform the benchmark in a rising market.  For the investor, it is more important to be with a portfolio that is defensive enough not to drop too much in a down market."

Follow these tips to find some good stocks to invest in any market scenario

A general trend that one observes in the equity market is when share prices start falling, many investors, especially in the retail segment, follow a wait-and-watch policy to enter the market. They try to look beyond at the reversal of the ongoing trend.

However, by the time they react, equity markets usually move up substantially. By then they find the market overheated and either stay out and wait for the next correction to participate or are left with no option but to invest money at those levels.

As it is sometimes difficult for investors to calculate the reversal in trends at its early stage, most enter when the markets have run up significantly. Stocks provide low risk high returns in long run which makes the point of entry insignificant, however, generally not many investors invest with a long term perspective. (Study the chart below to understand this statement.)

Read more here:  http://www.personalmoney.in/5-tips-to-select-stocks-for-investment/1543

Are you planning invest in the equity markets now?

24 OCT, 2010, 07.09AM IST, VIKAS AGARWAL,ET BUREAU
Are you planning invest in the equity markets now?


The domestic stock markets have had a dream run this year. Good returns have increased the enthusiasm and risk appetite of investors. Strong inflows from foreign institutional investors (FIIs) remain the key factor behind the bullish sentiments in the market. Investments from domestic institutions and individual investors have also increased. 

The recent over-subscription of the Coal India IPO is a classic example of positive investor sentiments in the markets. The market undertone is quite bullish at the moment and this is reflected in the strong bounce-back after every minor correction. Analysts believe the markets are consolidating at the current levels before taking to newer highs in the short to medium terms. 

The important factors to track are the movements of FII funds and sentiments in the global markets. The markets may have a deeper correction triggered by negative sentiments in the global markets. In general, individual investors should stick to the strategy of 'buy on dips'. Investors should identify favourably-placed sectors in the current economic conditions and invest in selected fundamentallygood stocks. 

These are some of the important points investors should keep in mind while investing in the markets: 

Strategies for primary market investments 

The primary market is attractive with many IPOs listing with attractive gains. However, individual investors should invest only their risk capital in IPOs. It is not recommended to borrow money and invest in IPOs for the sake of listing gains. 

The introduction of ASBA (application supported by block amount) makes investments in IPOs more attractive as the money does not get debited from the investors' account at the time of application. It just gets blocked. The money is debited from the investor's account only at the time of allotment and meanwhile the investor keeps earning interest on this blocked amount. Also, it avoids the hassles of tracking refunds. However, the ASBA scheme is applicable only if the investor applies to an IPO through the bank's e-filing route. 

Strategies for secondary market investments 

The stock markets are close to their all-time high and consolidating over the last couple of weeks. There is strong buying support at the lower price levels and some profit booking at the higher levels. A deeper correction cannot be ruled out as the markets have moved in a single direction over the last couple of months. 

Some analysts believe the markets may go through many small corrections rather than a significant deep correction. Therefore, it is advisable to stay invested in the markets and play safe by booking profits at regular intervals. A periodic review of the portfolio based on the current macroeconomic and business conditions, and quarterly results is needed. Investors should take necessary steps and make the required adjustments in their portfolios based on the macroeconomic conditions and company results. 

Investors looking at investing fresh money in equity should first identify the stocks and invest in small lots to average out the entry price. Since it is not possible to time the markets, it is advisable to stagger investments by buying in smaller lots at regular intervals. Small investors should invest in large-cap stocks and selected mid-cap stocks that have good liquidity. It is advisable for investors to invest only their risk capital in equity, and track the market movements and developments related to stocks of their interest regularly. Equity mutual funds are a good alternative for investors who do not have enough knowledge about the markets.




http://economictimes.indiatimes.com/features/financial-times/Are-you-planning-invest-in-the-equity-markets-now/articleshow/6798783.cms

Pick the right stock at right time for returns

16 OCT, 2010, 03.54PM IST,

KAVITA SRIRAM,ET BUREAU 

Investment tips: Pick the right stock at right time for returns

Picking the right stock at the right time, and booking profits, is a challenge for many small investors. With hardly any time for research and a desire to reap quick profits, many investors often rely on friends and expert advice. The risks are considerable even if you chase a rising stock, without comprehending the driving forces.   How do you differentiate an overheated stock from one that has truly appreciated in its intrinsic value? 


Identifying an under-valued stock 


An under-valued stock is a great investment pick as it has high intrinsic value. Currently under-valued , it has immense potential to rise higher and make the investor richer. 


A low price-to-earnings (P/E) ratio can be an indicator of an under-valued stock. The P/E is calculated by dividing the share price by the company's earnings per share (EPS). EPS is calculated by dividing a company's net revenues by the outstanding shares. A higher P/E ratio means that investors are paying more for each unit of net income. So, the stock is more expensive and risky compared to one with a lower P/E ratio. 


Trading volume is an indicator 


Trading volumes can help pick stocks quoted at prices below their true value. In case the trading volume for a stock is low, it can be inferred that it has not caught the attention of many investors. It has a long way to ascend before it touches its true value. A higher trading volume indicates the market is already aware and interested in the stock and hence it is priced close to its true value. 


Debt-to-equity ratio 


A company with high debt-to-equity ratio can indicate forthcoming financial hardships. If the ratio is greater than one, it indicates that assets are mainly financed with debt. If the ratio is less than one, it is a scenario where equity provides majority of the financing. Watch out for stocks that have low debt-to-equity ratio. 


Some other pointers 


Historical data of stocks that have performed consistently and yielded good returns are reliable. A higher profit margin indicates a more profitable company that has better control over its costs compared to its contenders in the same sector. 


Weeding out over-heated stocks 


Avoiding over-priced stocks that could plunge anytime is as critical as picking the right stocks. Buying over-heated stocks and losing money in a bubble burst is not an uncommon phenomenon in the markets. Stocks that have moved up the ladder very quickly are potentially risky. The sudden spurt could be based on a rumour or event not backed by strong fundamentals. 


Good market conditions or bull runs do not last forever. Investors, who believe that good times are here to stay often burn their fingers. On a similar note, an over-valued stock has little scope or space for upward movement and could lose its momentum anytime. 


A little bit of research and analysis will help investors make prudent investment choices even in bear market conditions.

http://economictimes.indiatimes.com/features/financial-times/Investment-tips-Pick-the-right-stock-at-right-time-for-returns/articleshow/6759442.cms

What to Do in a Up (Bull) Market?

The stock market often falls under the conditions of the so called bull and bear markets. Intelligent investors are well familiar with the conditions of both and know exactly what to do.

A bull market may make your stock's price increase, from which you can benefit in one way or another.

However, the possibility of your stock becoming too costly always exists since after the up, a down in the price may follow, which may be of an extreme speed.

So, under bull market conditions you can do one of the following in order to counteract the potentially negative effects.

• First of all, you can sell a part of the shares and use the money to repurchase the stock when its price falls again.
• Secondly, you can leave the market work its way through the imbalance with no action from your side.
• Thirdly, you can take advantage of the high prices and sell the stocks for a profit.

Never forget that a market correction will follow that may push the price of your stock below its initial level.

A useful strategy to counteract the negative effects of a bull market is to sell a portion of your stocks at the current bull market price, which will be greatly higher than the one at which you have purchased the stock.

• After the market correction is at place you can use the money you have acquired from the bull market sale to purchase shares at the current lower price. As a result you will have more stocks than you used to have before the bull market.
• You have not only avoided losses but also have reduced your average cost per share.

****Bull and Bear Market Strategies - Damn Bloody Good Gems!

What to Do in a Down (Bear) Market?

The stock market often falls under the conditions of the so called bull and bear markets. Intelligent investors are well familiar with the conditions of both and know exactly what to do. 

Under a down market you have several options.

• One of them is to sell immediately in order to minimize your losses.
• Another option is to let the market work its way through the problem with no action from your side.
• A third option is to benefit from the stock decline and add some more to your portfolio. But, this should be done only if you don't perceive that there is something wrong with the company that has led to the stock decline.

****Bull and Bear Market Strategies - Damn Bloody Good Gems!

Should You Keep Investing in a Sinking Market?

Should You Keep Investing in a Sinking Market?

By BestStockTradesBlog

Sure, it’s been a rocky year in the markets—to say the least.  It is so hard to for anyone to hide from the perpetual bad news, so in times like this, it’s easy to let our emotions cloud our good judgment.  Despite the erratic movements of the global markets lately, many of us continue, with great discipline, to plow money into our current savings programs, whether through brokerage accounts or our 401k plans.  But, is this the right thing to do?  Or, are we simply throwing good money after bad?

Everybody loves investing when the market is up because we often see immediate returns on our investments.  When the markets are down, however, our fears tend to paralyze our inclination to keep investing new dollars.  Psychologically and emotionally, nothing is more depressing than seeing your money evaporate.  But if you invest regularly and have some time before retirement, bear markets can be quite a blessing.  

Upward Bias

If history is any indication, we can safely assume that the stock market is expected to yield positive long term returns over time.  Does this happen every year?  Of course not; performance will vary by time period and asset class, and there will always be bad years mixed in with good years.  That’s just the way markets work. The best time to buy, or keep buying, is when the market is in the toilet. For the past few decades, every time the market took a significant fall, investors who bought on the dips were soon were rewarded with a profitable bounce.  Let’s look at the numbers a little closer, using several indexes as benchmarks.  The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market, the Morgan Stanley EAFE index (Europe, Australia, and Far East) is a proxy of for large caps in the foreign developed markets, and the The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe.

                                      Returns 1980 –  2007                          
                 
                    Russell 3000         MSCI EAFE          Russell 2000
1980                  32.59                       24.43                    38.57
1981                  (4.44)                       (1.03)                      2.00
1982                  20.66                       (0.86)                    24.88
1983                  22.68                       24.61                    29.09
1984                    3.43                         7.86                     (7.28)
1985                 32.13                        56.72                    31.07
1986                 16.71                        69.94                    5.70
1987                   1.94                        24.93                    (8.78)
1988                 17.82                        28.59                    24.91
1989                 29.31                       10.80                     16.24
1990                 (5.06)                      (23.20)                  (19.52)
1991                 33.32                       12.50                    46.04
1992                   9.69                      (11.85)                   18.42
1993                 10.88                       32.94                    18.89
1994                 (0.25)                        8.06                     (1.82)
1995                 36.83                       11.55                    28.45
1996                 21.84                         6.36                    16.54
1997                 31.79                         2.06                    22.38
1998                 24.13                       20.33                    (2.56)
1999                 20.89                       27.30                    21.26
2000                  (7.46)                    (13.96)                   (3.03)
2001                (11.46)                    (21.21)                    2.49
2002                (21.55)                    (15.66)                 (20.48)
2003                 31.04                       39.17                   47.25
2004                 11.95                       20.70                   18.32
2005                   6.12                       14.02                      4.55
2006                 15.72                       26.86                    18.37
2007                   5.14                       11.63                     (1.56)

The data depicted tells a story, the years that follow a market downturn can be quite lucrative, often wiping away any losses experienced in the preceding period.

One of the worst sustained bear markets of the past half century occurred during between the late 1960’s and early1980’s.  Yet, had you continued to invest on a regular basis during that dark period, you would have set up your portfolio for a long and prosperous run shortly thereafter. Once the market turned around in the early 1980s, investors who stayed the course enjoyed exceptional returns over the following 15 year period.  Using the Dow Jones Industrial Average as a proxy,
from 1975 to 2006, there were 23 positive years and 9 negative years. If you were to take a simple average of the yearly returns over this time period, you would come up with an average return of 10.83%.  

Still not convinced?  Let’s look at the crash of 1987.  An investor who bought into the market right after the crash of 1987 would have fared very well over the next 24 months. From its low in the fall of 1987, the Dow moved up 56% by the end of 1989.  See, if daily market returns are random (and they are), market timing is a flip of the coin. Investors who attempt to predict market drops are just as likely to avoid them as to miss out on strong return periods.  That is why it would be a mistake to sell out of the market or cut back on your investments during slow times. Because once a market bottoms out, the returns on the bounce can be exceptional, and the market can turn around quite rapidly, which we can never predict in advance.

Dollar Cost Averaging

One of the most effective ways to invest, in particular when the markets are down is dollar cost averaging.  Dollar-cost averaging is an effective wealth-building strategy that involves investing a fixed amount of money at regular intervals over a long period. This type of systematic investment program is used by anyone participating in their company’s 401k or 403b retirement plan.  

In “bullish” markets you buy fewer shares per dollar invested because of the higher cost per share. But, when the markets are down (or bearish), it’s quite the opposite.  You purchase a greater of number of shares per dollar invested because you are buying positions at (presumably) cheaper prices. The blended average of these purchases (high and low) becomes your average cost basis.

So what should you do in a bear market? You do nothing different!  If you’re a long-term investor you do the same thing in a bear market that you would in a bull market, keep investing.

None of us have the clairvoyance to predict market returns.  And those that claim they can are full of hot air.  So the best thing that we can do now, and always, is follow a reasonable investing strategy structured upon our past experience, our common sense, and our reasonable expectations for the future.

http://beststocktradesblog.com/should-you-keep-investing-in-a-sinking-market/

Investing In A Bear Market

Investing In A Bear Market

We are in the 6th inning of the residential RE crisis and the 1st inning of the commercial RE crisis. Most of you are trapped in normalized bull market valuation methods (Income Statements and Cash Flow statements) which states "earnings growth and cashflow" are what you should follow. In a bear market you should be focused on the (Balance Sheets and Cash Flow Statements). Notice the switch from income statement to balance sheet. Read some of my first few blogs and you will see before the residential RE crisis started in mass I was focused only on balance sheet items (cash and debt). I was right and the worst balance sheet stocks got killed not the ones with the biggest losses.

If you actually look at how I ranked builder stocks using cash and debt and applied it to other industries you would see the same result. Why? When a bear economy is upon us credit markets tighten, loans do not get renewed, cash flow turns negative, borrowing costs go up, interest burden becomes magnified, asset prices drop, etc.....

Wall Street can't value stocks as easily when the future is uncertain and earnings go negative or are falling. Bear markets are about surviving and the companies that thrive DURING AND AFTER a bear market are the ones with the best balance sheets buying assets on the cheap. They are also the companies that have the cash to continue to invest in future product while their competitors are trying to stay alive vs. thinking and investing in future operational profit.

Be like the best companies. Stop listening to doom and gloomers, raise cash, invest in yourself, work twice as hard, stay focused and push forward doing whatever you have to in order to make money. Invest it wisely. You may not make as much today, but deflation pushed all your consumer good prices down too. Everything is on sale even at the Chicken Ranch.

http://kolkalamar.blogspot.com/2010/01/investing-in-bear-market.html

****Bull and Bear Market Strategies - Damn Bloody Good Gems!

Bull and Bear Market Strategies
The stock market often falls under the conditions of the so called bull and bear markets. Intelligent investors are well familiar with the conditions of both and know exactly what to do.

The names of the two market conditions are used in order to imply the effect that these markets may have on the value of your stocks.

The stock market hides its risks in terms of devaluating your stocks when the prices are down. However, an educated investor should be familiar with the difference between a decline in the market and a general problem with the stocks.

There are many examples which show that even under the conditions of a bear market some types of stocks perform well. The same is true under the conditions of a bull market. On the other hand, some stocks do really suffer from such extraordinary market conditions.

Why is that? The major reason for this is that stocks don't respond equally to the rises and falls of the market.

If you have done an educated investment that was based on thorough preliminary analysis you will be in an advantageous position relative to an investor that has invested in stocks just like that.

The difference between a trader and an investor is that the latter invests in a particular company stock because he likes the company and its activities. S/he is well informed and attached to the company. That is why in bad market conditions the investor will be able to tell whether the decreasing price is in accordance to the decreasing market trend or there is a problem within the company that drives the price down.

What to Do?
Under a down market you have several options.

• One of them is to sell immediately in order to minimize your losses.
• Another option is to let the market work its way through the problem with no action from your side.
• A third option is to benefit from the stock decline and add some more to your portfolio. But, this should be done only if you don't perceive that there is something wrong with the company that has led to the stock decline.

A bull market may make your stock's price increase, from which you can benefit in one way or another. However, the possibility of your stock becoming too costly always exists since after the up a down in the price may follow, which may be of an extreme speed.

So, under bull market conditions you can do one of the following in order to counteract the potentially negative effects.

• First of all, you can sell a part of the shares and use the money to repurchase the stock when its price falls again.
• Secondly, you can leave the market work its way through the imbalance with no action from your side.
• Thirdly, you can take advantage of the high prices and sell the stocks for a profit.

Never forget that a market correction will follow that may push the price of your stock below its initial level.

A useful strategy to counteract the negative effects of a bull market is to sell a portion of your stocks at the current bull market price, which will be greatly higher than the one at which you have purchased the stock. After the market correction is at place you can use the money you have acquired from the bull market sale to purchase shares at the current lower price. As a result you will have more stocks than you used to have before the bull market. You have not only avoided losses but also have reduced your average cost per share.

Final Piece of Advice
Never forget that it is important to base your decisions on knowledge not on feelings. This means that being educated about the company and the industry from which your stocks come from, the market conditions under which you operate will be of small importance to you.

http://www.stock-market-investors.com/stock-strategies-and-systems/bull-and-bear-market-strategies.html