The results of reinvesting dividends

http://www.dividend.com/dividend-stock-library/dividend_reinvestment_plans.php

S&P 500 Dividend Yield versus 10 Year Treasury Yield

The 10 year U.S. Treasury yield has been greater than the S&P 500 Index dividend yield since 1958. However, in November 2008 the roles reversed when the S&P 500 yielded more than 10 year Treasuries. The chart above compares these yields from November 1993 to November 2008. Why do stocks, as represented by the S&P 500 Index, now yield more than bonds, as represented by the U.S. 10 Year Treasury?

Experts differ on the reasons, but one reason is simply market forces. The 10 year U.S. Treasury yield has been driven down as investors have moved out of stocks and into the safety of U.S. Treasuries, driving bond prices up. Bond yields go down when bond prices go up. The S&P 500 dividend yield has increased due to the recent sharp declines in stock prices. Dividend yield represents the trailing annual dividend per share divided by the current share price. Current stock prices have dropped at such a sharp rate that when dividing trailing annual dividends by current price, the dividend yield increased.

http://www.icmarc.org/xp/rc/marketview/chart/2008/20081212SP500DividendYield.html

An Increasing Dividend, but Lower Dividend Yield?

The graph above compares the annual cash dividend per share for all of the S&P 500 companies to their dividend yield since 1960. While it is evident that companies increased their cash dividends per share over time, it is also just as clear that their dividend yield fell. Many investors use dividend yield to find the percentage of a stock’s purchase price that the company will return to shareholders in dividends. Dividend yield can be calculated by dividing a stock’s annual dividend by its share price. For example, if a stock pays an annual dividend of $2 and is trading at $40 a share, it would have a yield of 5%. In 1987, the dividend yield on the S&P 500 Index reached 3.17% and over the following 20 years, the dividend yield declined to 1.77% during 2006. In the late 90's and early-to-mid 00’s, increases in stock price significantly outpaced the increases in dividends, which sent the S&P 500 dividend yield down. According to The Wall Street Journal, one of the reasons dividends grew at a slower pace than stock prices was due in part to companies reinvesting profits back into company operations instead of distributing dividends to shareholders. Although dividend yields for the S&P 500 Index remain lower than the historical average, dividends continue to increase shareholder wealth by providing a source of current income and total return for the investor.


http://www.icmarc.org/xp/rc/marketview/chart/2007/20070914dividendyield.html

Ex-dividend and cum-dividend explained

The four dates to consider are:

1. Declaration date: The date on which the board of directors announces to shareholders and the market as a whole that the company will pay a dividend.
2. Date of record: The date on which the company looks at its records to see who the shareholders of the company are. An investor must be listed as a shareholder to receive the dividend.
3. Date of payment: The date the company mails out the dividends.
4. Ex-dividend date: An investor must own the stock before the ex-dividend date to be eligible for the dividend payout.

The single best strategy for investors – investing in dividend paying stocks.

The single best strategy for investors – investing in dividend paying stocks.

Doing this will:
1. Help you avoid making big mistakes in the stock market;
2. Increase your chances of beating the market; and
3. Be less volatile than the rest of the market.

Just look at the chart below,





http://www.investmentu.com/2007/November/dividend-paying-stocks.html

According to the most recent studies, dividend-paying stocks outperform non-dividend paying stocks by a wide margin.

Over the past 35 years, non-dividend paying stocks have gained an average annual return of 2.5%. That’s less than T-bills. But dividend-paying stocks have averaged an annual return of between 8.9% and 10.9%. That’s a huge difference.

Where can one consistently find value in quality companies that are likely to succeed? The answer is simple: Buy a portfolio of stocks that pay rising dividends, or that start paying dividends. There’s plenty to choose from…

1. High-dividend U.S. stocks, funds and ETFs

2. High-yielding foreign stocks and funds

3. Rising dividend stocks and funds

4. High-yielding Dow stocks

5. Business development companies (BDCs)

6. Real estate investment trusts (REITs)

7. Energy and commodity stocks

Avoid “The Growth Trap”


Brokers usually tantalize their clients with hot tips about new and bold technology breakthrough stories, and investors bite. Big mistake.

The fact is, most technology “growth” stocks fail to deliver. Jeremy Siegel, the Wizard of Wharton, calls it the “growth trap” in his book, The Future for Investors…

“The most innovative companies are rarely the best place for investors,” he boldly declares.
Why? Because investors invariably overpay for tech stocks.

And Peter Lynch, the legendary money manager of the Magellan Fund, confesses, “I note with no particular surprise that my most consistent losers were the technology stocks.” Well, it’s a surprise to me.

Investors interested in earning dividends should steer clear of companies with high fluctuations in profits.

http://stocksguidance.blogspot.com/2009/05/high-dividend-stocks-2009.html

I’ve never seen a company with such total dedication to its dividend.

The Ultimate Dividend Investment




The Monthly Dividend Company is in its 37th year of business. As of May 11, 2007, The Monthly Dividend Company had paid 440 consecutive monthly dividends and 38 consecutive quarterly dividend increases. The annual dividend has grown from $0.90 in 1994 to $1.53.

Here’s what some current shareholders had to say about their company:

“I’ve owned this stock since 1998. I can’t imagine selling it. My original shares pay a 15% dividend and have risen 175%. That’s better than 20% per year.”

http://drnaz.wordpress.com/2007/09/06/the-ultimate-dividend-investment/

Trend analysis of Company's Business Fundamentals

Trend Analysis

Here I am looking at trends for past 10 years of corporation’s revenue and profitability. These parameters should show consistently growth trends. The trend charts and data summary are shown in images below.

Revenue: In general, slowly growing trend, but not consistent (down years in 2001 and 2002). The average revenue growth for last 10 years is 15.3% (with 12% standard deviation).
Cash Flows: Increasing trend for operating cash flow (except a dip in year 2008). The free cash flow very close to the net income. There is little flexibility in allocating cash for dividends.
EPS from continuing operation: In general, this follows revenue trends. Slowly growing trend (with dips in 2001 and 2002)
Dividends per share: Consistently growing dividends.


Quality of Dividends

This section measures the dividend growth rate, duration of growth, consistency over a period of past five years.

Dividend growth rate: The average dividend growth of 25.2% (stdev. 8.34%) is more than average EPS growth rate of 17.8% (stdev. 22%). The two years where EPS were negative, has effect this calculation. If we remove the two negative years, the dividends seem to be well covered. The low payout factors allow for this flexibility and help cover for dividends.
Duration of dividend growth: In recent times, dividends have grown only since last 10 years.
4 year rolling dividend growth rate for past ten years: More than 10%.
Payout factor: In the past 10 years, it has been consistently less than 50%. In 2008 it increased to 53%. This is an indicator to keeping watch for dividends reduction.
Dividend cash flow vs. income from MMA: Here, I analyze how the dividend cash flow stacks up against the income from FDIC insured money market account. The baseline assumption is (a) stock is yielding 2.6%; and (b) MMA yield is 3.4%. Considering the last 10 year average dividend growth rate of 25.2%, the stocks dividend cash flow at the end of 10 years is 4.27 times MMA income. However, with my projected dividend growth of 15.3%, the dividend cash flow is equal to 2.04 times MMA income.

http://seekingalpha.com/instablog/347787-dividend-tree/6165-trow-potential-dividend-growth-investment

The Importance of Dividends

Although many investors consider the current 2% yield offered by the S&P 500 to be trivial, it would be a huge mistake to dismiss dividends. In fact, a look back at statistical data over the past 75 years shows that nearly half of the market's total returns have come in the form of dividends. Between 1926 and 2004, dividends represented approximately 42% of the total return delivered by the S&P 500. Over that same span, it's been calculated that $1,000 invested in the S&P would have grown to $2.3 million if reinvested dividends are included, but only $90,000 without the dividends.

If history is any guide, then dividend-paying stocks should also perform better than their non-paying counterparts over the long haul. Contrary to conventional wisdom, studies have shown that dividend payers handily outperformed non-payers from 1970 to 2000. At the same time, those same dividend-paying stocks experienced far less volatility. They could also be counted on to deliver stronger relative returns in difficult market environments. What's more, according to the latest data from Standard & Poor's, dividend-payers are still outpacing non-payers in today’s volatile marketplace.




An example of looking at dividend (above graph)
Dividend growth has been steady but not spectacular.

http://web.streetauthority.com/cmnts/pt/2006/02-15.asp

BYD's breakthrough growth got Buffett's attention

Li Lu on BYD

Courtesy of Street Capitalist:

Question via Columbia University:

So I did some research on lithium ion batteries, and I saw that BYD has a manufacturing advantage with consumer batteries. But I saw that automobile batteries are much more complex. I did not think that the idea of a good consumer battery manufacturer + an automobile maker made much sense.

So when Buffett looked at the stock maybe it was a better deal but today it is this dream of vehicles that is really priced in.

It does not feel like a good value investor stock. So why would you own it today?



Li Lu:

Well that is interesting. One of the most fascinating things about being an investor is that surprises are part of the game. When you get into situations like BYD, you see lots of good surprises.

Chuanfu and his team have this fabulous culture, everything people thought they knew turned out to be a few years late. He got into battery manufacturing in that particular way because he really had no other option. He had no money, he only had $300,000 in venture capital funding before IPO and that was it. He raised money in an IPO and Buffett gave him $200M, now they have 160,000 employees. $6-7B in revenues, $500M in net profit. It is amazing.

[Reflections comment: BYD had approximately $4B in revenues at the time of Berkshire Hathaway's investment, and was priced at about 12x trailing earnings. Berkshire Hathaway bought a 10% stake for $230 million, implying a cost basis that is roughly 4x recent earnings -- with an interesting set of tire-tracks.]

So he has this ability to adapt in a competitive environment. He has demonstrated that ability again again and again. The way he does automation is far cheaper than anyone else and more reliable. He continues to surprise me with his ingenuity, to figure out ways to do something better than everyone else. What he is currently doing is very different than what everyone else has done. At the end of the day, you might look at what he has done.


So how do you look at it as an investor with imperfect information? Well I suggest you look at what he has accomplished. 8 years ago I had no idea they would go into the automobile or laptop or cellphone battery business. So that demonstrates how he is. This investment is not easy to understand because it is changing so fast, at such a large scale. An almost unheard of speed. Their manufacturing capabilities will double soon. This year they will hire 10,000 college graduates, 8 or 9 thousand engineers. The scale is almost unparalleled.

So this is why the study of history, of all the great corporations will give you a good insight in seeing what will happen with BYD. I suggested that we start with GM and analyze its performance every 5 years for 100 years to understand at least one aspect of BYD’s business.

http://valueinvestingresource.blogspot.com/2010/06/li-lu-on-byd.html

Dividend Growth Investing

The Most Powerful Force in the Universe

How to Invest: Growth vs. Value

When it comes to investing in stocks for capital gains, there are two different approaches that can be taken in order to ensure that your stocks increase their worth: growth investing and value investing.  (There are other rationales for investing, such as investing for dividends, but for now let’s stick with growth and value investing.)  These two methods represent two different ways of viewing stocks and trying to profit from them.  So, what sort of considerations do you have to make when considering which method to use when choosing your investments?

Investing Rationales

Growth Rationale – The growth investor is looking for companies that growing their business (which you probably guessed).  These could be small, upstart companies that have a great deal of potential, or large companies that continue to expand into new areas and increase their business at a much faster rate than their rivals.  If stock investing were horse racing (a reasonably apt metaphor), growth stocks would be those that are the reigning champions or the quickly rising upstarts.  The growth investing model essentially involves trying to find some of the fastest expanding companies, and tethering your fortunes to their growth.

Horse Racing - An Ideal Stock Metaphor

Value Rationale – Value investing, on the other hand, focuses on finding stocks that have been knocked below the true value of their respective companies, then buying and waiting for the broader market to recognize their worth.  As with growth investing, these companies can be either large or small, and the reasons they are currently undervalued can be diverse: bad news that took the stock prize below a reasonable level, a run of bad luck that decreased the company’s perceived value, or even a broader economic storm that dragged everything down at once (like we’ve just experienced).  To go back to our horse racing metaphor, value stocks would be akin to the strong finisher who’s failed to win the past several races and wound up as the long shot.

Why Does This Matter?

The difference between growth and value might seem academic, and in a way, it is.  There are those people who have argued that assigning stocks to the ‘growth’ or ‘value’ columns have nothing to do with the actual value of the companies, but instead such dividers display their own ignorance.  (’Those people’ in this case include Warren Buffet, as you can see at the bottom of this linked page, so perhaps they have a point.)  On the other hand, when looking at the performance of broad segments of the US economy, it appears that the value investing style has beat out the growth style in the past.

The results, if you are a mutual fund investor (particularly a passive indexer like me),  is that your portfolio should attempt to lean more towards value and less towards growth in terms of your funds’ orientation.  This does not mean that every value stock will outperform every growth stock; on the contrary, because the faster increase in value of growth stocks is sometimes deserved, the top performers in the growth category can and will outperform the best of the value classification.  Rather, it means that taken as a whole, stocks that are categorized as value will outperform those in the growth column over time.  Unless you fancy being a stock picker (and make a good job of it, as well), sticking to a portfolio that leans toward value stocks will lead to a much richer future for you and yours.

I hope you enjoyed this rather brief introduction to value and growth stocks, as well as the difference between the two.  Good luck with your investing, whichever option you decide to choose.

http://www.theamateurfinancier.com/blog/how-to-invest-growth-vs-value/

Value Investor versus Speculative Investing

http://www.theintelligentinvestor.net/

While you contemplate a major investment decision, you need to ask yourself if you will be making a value investment or a speculative investment. You can use Benjamin Graham’s extensive writing about the difference between value and speculative investments to categorize potential investments you are considering.

Speculative investors buy a stock with a hunch that the price will go up or down quickly. 

Value investors buy a stock after determining the long-term value of the business.

Although value investors outperform speculative investors in the long-run, value investors do not expect to outperform the market. Value investors accept the reality that no one can predict market behavior; instead, value investors work to control their own investment behavior.

Do you find that you are more of a value investor or a speculative investor?

So before I make a trade I ask myself how easily I will be able to sleep at night, or as Benjamin Graham puts it, I ask myself if the trade promises “safety of principle and a satisfactory return.”

The Determinants of Market Price (Intelligent Investor)

Market Sentiment Curve

5-Year Closing Price. Can this be predicted?

Be rational in facing market uncertainties.

Many good quality growth stocks have a price pattern quite similar to the above chart.  Many have even rebounded to reach their old highs or new highs.

Three possible futures for the economy in this recession and the consequences for investors.

Three futures…
This article sees three possible futures for the economy in this recession, and discusses the consequences for investors….

Three futures

Posted on March 12, 2009 by Richard Beddard
Filed Under Investing, Markets |


Two out of three ‘aint bad

From the desk of James Montier:

In a research note earlier this month, Mr Montier postulates three futures:

1. The optimistic path, in which government stimuli create inflation,
2. A Japanese style protracted work out with low growth and low inflation, and a…
3. Great Depression modelled on the 1930’s.

He concludes:

In the first two outcomes, value should do well. In the third, holding any equity is likely to be a poor decision. Since I don’t know which of these paths is more likely, I continue to believe that a slow steady deployment of capital into deep value opportunities in the face of market weakness is the most sensible option.

How value investing, buying shares in companies on low price to book (net asset value) ratios, would have worked in Japan:

Investors who bought and held would have earned a 3% annual return versus a market return of -4%. Investors who sold the most expensive stocks short, would have earned a return of 12%.

But in the Great Depression, cheap stops and expensive stocks both lost badly and buying shares was, quite simply, a bad idea.

The difference was the severity of the economic crises. In Japan, growth has been flat. In the 1930’s in the US, industrial production declined by 50% peak to trough.

His strategy, to buy value stocks gradually:

…Represents a regret minimisation approach - I end up with some exposure, and I’m dollar cost averaging down if this turns out to be the Great Depression 2. Alternatively, if the stimulus works, or the US follows the Japanese example, then as Jeremy Grantham says, “If stocks look attractive and you don’t buy them and they run away, you don’t just look like an idiot, you are an idiot.”

Category: Investing, Markets

http://blog.iii.co.uk/three-futures/

Characteristics of Value Stocks

Value Investing

Value investing is finding a good quality stock that you are proud to own for an inexpensive or bargain price.

Besides being potentially profitable, value investing is popular because it’s a hands-on way for investors to be actively involved in their stock selections. It’s literally scavenging the internet or digging through annual reports and news articles trying to find that bargain stock. It’s like trying to find a valuable antique at a garage sale. Many people love doing this!

I call value investing the cookbook approach to investing. Adjust for this, adjust for that, and see what you have. Over time, by using value-investing techniques you probably will become good at understanding financial statements and business concepts. Value investing uses fundamental analysis to determine the value of a company, the financial, operational and market risks involved in the business, and the approximate price one should pay for the stock. Contrary to what many people believe, you do not have to be a math wiz, but you will need a basic understanding of practical math, some knowledge of accounting principles, good reading skills, and a skeptical mind.

Basically, a value stock has a low price to book value and a low price to earnings ratio. In determining whether a stock is inexpensive or not, one needs to analyze the company’s book value, also known as shareholders’ equity. You need to determine what the true net worth of a company is by calculating a tangible book value.

Tangible net worth is the equity of a company’s hard assets. This is the portion a company’s equity that hopefully can be converted into cash somewhat easily. Intangibles, however, are “soft” assets that may not have readily available resale values. Intangibles should be subtracted from book value: examples are goodwill, prepaid expenses, deferred acquisition costs, etc. These assets often have no cash value. Goodwill, for example, “evaporates” as earnings decline. Prepaid expenses, normally, are non-refundable deferred costs that are impossible to convert to cash. If an asset has no cash value, new investors should not bail out the old shareholders by paying for them. The main focus is to be conservative with your money.

Over the years I found that if one doesn’t understand a complicated asset type, it usually has no cash value. Don’t pay for anything you don’t understand.

Also, adjust for what I call economic accounting valuation differences. These are more common sense type accounting adjustments that should be made to get a clearer picture of the true market value of the company. 

For example:

• The financial statements of bank stocks in a recessionary period may not fully reflect the severity of a deteriorating loan portfolio. In such situations, try to calculate what you feel is a truer picture of the bank’s loss reserve and subtract the additional amount (net of taxes) from book value.
• If a company has a large unrecorded pension liability, or is using unrealistic future investment return estimates, estimate the projected short fall and reduce book value by that amount.
• Try to give a company credit for undervalued assets. If a company has land that has greatly appreciated in value but is valued on the books at cost, add the unrecorded appreciated value to book value.
• If a company has written off its fixed assets, but market conditions have improved and those same fixed assets have become valuable, then add back the appreciated amount to book value.
• 
  

When finished, recalculate the per-share book value. If the stock is selling at a substantial discount to its tangible book value, that is one of the signs of a value stock.

Remember, you are looking for economic value, not accounting value; focus on the equity of the hard assets. Historically, soft assets tend to lose their value in a downturn. 

True value investors only buy if a stock is trading substantially below its tangible book value. I understand the reasoning, but it’s hard finding these types of situations in all your investments, while maintaining diversification and balance in your portfolio. I just use this as a guide and not as a “must have.” Over the years, I have noticed these types of values in the banking, energy and chemical industries, among others.

Another factor you need to find in a value stock is a low price to earnings (“P/E”) ratio. You are looking for a beaten down stock in an out-of-favor industry. A nice P/E discount is 20% to 50% of the industry average over a few years. You then have the potential to make a nice return on both the natural rotation of the industry to a higher timeliness, as well as the stock regaining market favor. Many investors view cyclical stocks as value stocks. Cyclical stocks are value stocks only if they sell at an earnings discount to their peers and meet the book value criteria as mentioned above. If the company is selling at a discount to its tangible bookvalue, but its earnings have disappeared, it becomes a possible turnaround situation and not a value stock.

In addition to earnings, look for a decent dividend yield, so that you are earning a cash return while you are waiting for the stock to increase in value. This limits your down side because of the yield protection and makes it emotionally easier to hold the stock longer to realize its full return. It’s also a reflection of the company’s intent and ability to return excess profits back to its shareholders.

After your review, if the company still has a low price to tangible book value and low price to earnings ratio, it becomes a serious potential value play.

It’s now essential to analyze the company’s solvency status. Companies need to be able to pay their bills to stay in business.  Try to find a company where current assets exceed current liabilities by 1½ to 2 times. The 1^st time is used to pay off the company’s current creditors; the 2^nd time is the equity needed to replenish the company’s working capital requirements, if supplier financing dries up. It can also be used to pay off the longer term obligations of the firm. It’s hard to find a company with a current ratio of two or more, but under one times means the company has a negative working capital and may need to borrow money to fund the shortfall.

The assets decline in value, but the debts still need to be paid back.  Look for a company whose tangible book value exceeds its debt.

Additionally, you need to be ensured that the company has emergency availability under its credit facilities.  It’s surprising, however, that credit lines tend to dry up and disappear quickly when a company has a downturn in business. When a company really needs money, it’s often hard to come by and expensive. Lastly, regarding liquidity, analyze the company’s debt maturity schedule to ensure that the company can meet any long-term debt payments that may be coming due. Basically, try to get a comfort level that the company can pay its obligations as they come due and that they are not over leveraged.

Other key statistics are the company’s bank covenant ratios. The covenants normally specify shareholder equity levels that a company must maintain, as well as, among other restrictions, cash flow to interest expense and cash flow to debt ratios that must be met. If a company falls short in its financial covenants, or misses a filing requirement, the banks can, and often do, substantially increase interest rates and fees. The bankers can also call the loan and put the company into bankruptcy. Currently, however, covenants are rarely disclosed and many young adults don’t even know that they exist, or don’t realize their importance to the survival of a company. I hope the accountants will make loan covenant disclosures a mandatory requirement.

It’s critical to pick a company with an excellent management team. Investor conference calls are increasingly popular and are very interesting to listen in on. At the end of the day, however, you need to be cautious. Pleasant looking executives with good communication skills, command over the numbers, and a rehearsed script, does not necessarily equate to managers who can grow a company and increase its stock price. Nonetheless, this is a very good starting point in understanding a company and its management.

Message boards are informative, but often participants have hidden motives, or grudges against management, that might make their comments suspect. They should be read skeptically.

CEO's personal lives can also affect investment returns. Studies in Denmark linked "CEO family deaths to companies' profitability over a decade.  In two years after the death of an CEO's child or spouse the profitability of their companies slipped 15% to 20%." - wsj 9/5/07 

It’s also important to see some sort of upward trend in revenues and earnings growth.Value Line Investment Survey is found in most libraries and does a nice job showing long-term company trends. No one likes a company that constantly does worse than the year before, no matter what the value is! Every company needs some sort of “curb appeal” for you to profit from your investment. At some point, you need to sell in order to make money from your investment. Upward trends help on the resale side of your investment.          

Many investors find it hard to distinguish between “cheap” stocks and value stocks. Most times, stocks are low because they deserve to be low. There is nothing wrong with buying a “cheap” stock as long as you know and understand the risks. There are many stocks out there that have large annual losses, high debt levels and no equity. That does not necessarily mean you can’t make money on them, but you should call it gambling rather than investing.

Last, but most important, take a step back from the numbers. Look at the big picture. How does the company fit into the economy; and is there a need for the company’s products or services. Look at the company’s business model (found in the company’s SEC form 10k) and determine if it coincides with your thinking, your goals and your investment objectives.

Value Investing is a time tested investment strategy that works in most market environments.

http://chestnutandcedar.com/library/InvestmentStrategies/LIBISvalueinvest.htm

Nouriel Roubini 2009 - Stock Market Calls

Back Peddling Bears
There is a reason bears such as Nouriel Roubini, David Rosenberg, and now Doug Kass are offering a more tame outlook. The data doesn’t support an all-out economic collapse.

For the record, we are not bulls. We see a lot of major problems in the global economy. However, we see a much more mixed picture than the apocalyptic bears who seem to have blinders on when it comes to anything disproving their case.

A recovery starts slowly. First companies cut costs. Then they spend. Then they hire. Then the economy heals. Seems like the first two phases are taking root.

Do you think the economy is about to fall off the cliff? Do you think we are amidst a textbook recovery? Is it more complicated than that? Let us know in the comments below …

S&P 500 Index: Normalised PE Ratio

Dollar-cost averaging: The bear market solution investment strategy

With the stock market down 52% from its recent peak in October 2007, maintaining dollar-cost-averaging through the bear market proved to be worthwhile. By buying more shares at lower prices throughout the equity market downturn, an investor was able to reap bigger gains when the market recovered."






https://news.fidelity.com/news/article.jhtml?guid=/FidelityNewsPage/pages/mare-dollar-cost-averaging&topic=investing-stocks

How not to lose money

Effects of the Economy on Household's Financial situation

A History of U.S. Home Values

http://seekingalpha.com/article/180690-7-salient-economic-trends-of-the-last-decade

Stock Market as a Whole

Annual 20-year returns for the UK stock market

Yen Carry Trade

Traders have been shorting the Yen and using the funds to purchase stocks,

http://www.marketoracle.co.uk/Article11784.html

Buy Low + Sell High = Big $$$

Volatility Play Investing

Volatility Play Investing

A method of trading stocks that myself and my team have developed. It involves buying and selling the same stocks, again and again, as they undergo repetitive fluctuation in price. 

http://www.pennystocks.org/glossary-of-terms-used.php

Short-Selling

Short-Selling

Short selling is the strategy of selling the shares first, then having the commitment to buy them back at a later date. 

http://www.pennystocks.org/glossary-of-terms-used.php

Sell Urgently when the Fundamentals Deteriorated

Averaging Down

Buying more shares of a stock you already own, and getting the new shares at a lower price because the stock has been dropping. 

Averaging Down is not advisable in this situation.

Remember:
Transmile, Nam Fatt, Kenmark, Carotec

Bull Market

Defenders of the Efficient Market Hypothesis