10.02
Hey Readers,
It’s been about a month since I’ve started to pick up on the more recent market activity. For the most part, I stayed out of the game this year, but with the market getting so volatile, I chose to get back in, work my way to retirement, and start this blog that you are reading now. What does a volatile market mean in times like this? In short, it means change.
Our market has been on a downward spiral for about a year. The downturn was evident based on a technical analysis of the good ol’ Dow Jones back in July of 07. We saw a good market start to rise a little too fast after the start of 07 until it stalled in July with a starting bout of heavy volatility.
Now, we’re back. When a market rises, you don’t see the kind of speed and volatility you see when a market falls, because that kind of behavior is only present when there is a surplus of greed. Instead, a rising market moves more slowly in a pool of fear. What you see, in terms of volatility, is mostly found in the day-to-day happenings with the media.
The media is your guide for a rising market. They lead the hope, fear, let-down, and pump-ups that drive the state of the market when it’s at its most vulnerable. The media drives the thoughts of the people by embodying and proclaiming the thoughts of the people. This is the state we are in right now.
I found my way back into the market, because I know now is the time to buy in order to realise heavy future gains. Long term, I have picked the companies that make the most sense. These are the companies that you are going to see in the news, who’s products you are going to start seeing on your shelves, and who’s websites you and your children will visit. These are companies like eDoorways, Hat Trick Beverage, and others.
I will also continue to diversify my long-term portfolio with high-value companies that have been stripped of their dignity by the ravages of fear in the market. These are companies such as EBay, Potash, General Motors, Ford, and others that we will see start to rise again over the next two years.
Focusing on the short-term, I fill my portfolio with the keys of volatility. Financial, real-estate, and other mortgage-backed securities line my pockets week over week as the media lines up thousands of investors for rides on the emotional rollercoaster of torment. It’s easy enough to see where the hope is and where the hope will be shattered. Everyone can see it. The challenge is getting out before others start to get greedy and getting in while people are still fearful and before people get hopeful.
As we watch the market rise, there will be plenty of opportunity to read the media for short-term gains. When I look for a short-term gain, I look for a company that’s worth more than it’s trading at through the magic of technical analysis. I then match that to direct and related media volume. I also look for future media broadcast possibilities (press releases, calendars of events, blogs of disgruntled employees being layed off, etc).
Based on this volume, I’m able to determine the most likely future of a company’s stock price. I then value the stock price at what I think it’s worth in the current market and where the company is headed. This gives me a sell point that I monitor as news develops. My short-term gains are usually gauged between two weeks and three months.
As for my long term gains, I look for companies that have a solid business plan, plenty of market demand, fresh ideas, plenty of start up capital, enthusiastic management, and a low buy price. I pickup millions of shares, and I hold through thick and thin as though I’m married to the company. My long-term gains are gauged between one and five years. I never move longer than five years due to market situations like the one we’re in. If I put all of my eggs in one basket for too long, they’re bound to be crushed eventually.
-Aaron