Reminder to Enter June Stock Challenge
If you haven’t picked a stock yet, remember to submit your entry by the end of Sunday June 8th, 2008 for the June Stock Challenge.
Stock Challenge June 2008
The May 2008 Stock Challenge ended with only one participant, myself. I pick Nvidia (NVDA) and it netted a gain of 20.19% for the month. But since I was the only participant, I win by default anyway. I took the $20 cash and bought myself a lot of ice cream.
I will give the Stock Challenge one last chance. And for this month, I am offering a brand new VISA Gift Card at $25 value (I paid an extra $3.95 activation fee for the card), plus lots of prizes for the other winners.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of June 2nd to the close price of June 30, 2008. In case of duplicates, the contestant with the earlier post counts, so enter early.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of June 2nd, 2008.
The company stock must have a minimum stock price of $5.00 at the start of June 2nd, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by the end of Sunday June 8th, 2008. The winners will be announced here on Growing Money after June 30th, 2008.
Prizes
1st Prize - $25 VISA Gift Card
2nd Prize - Choice of book from my collection
3rd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me
via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick YGE.
Previous Contests
Stock Challenge April 2008
Stock Challenge May 2008
Stock Challenge Results for April 2008
The results for the Stock Challenge April 2008 are post below. There were four stocks that were picked: AMD, C, SGP, and RIMM. SGP had the highest percentage gains in April however, the contestant did not fulfill the requirements and link back to the blog.
Therefore, the official winner is The Dividend Guy. His pick Citigroup (C) opened at $22.61 on April 1, 2008 and closed at $25.27 on April 30, 2008, netting a percentage gain of 11.76% in a month. The Dividend Guy will receive the first prize. Vaughan will receive the second prize. Since Siddharth was one of the earlier participants, I will also send him a prize.
I have sold my shares of AMD in April. I lost confidence in the stock, at least for the short term, and have been looking at other stocks.
Transactions
3/18 Bought AMD 500 6.42 $3218.00
4/28 Sold AMD 500 6.05 $3016.98
Total Gains of -$201.02
Updated 5/3/2008
1st Prize of $20 cash was sent via PayPal to The Dividend Guy.
2nd Prize was unclaimed. No contact information was given for Vaughan.
Other Prize was unclaimed. No contact information was given for Siddharth.
Stock Challenge May 2008
Last month, I started the first Stock Challenge in April. We had several participants in April, and hopefully we will have more participants this month. I will post the results and the winners for the April Stock Challenge by the end of next week.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of May 1st to the close price of May 30, 2008. In the case of duplicates, the first person to post will be declared the winner, so enter early.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of May 1st, 2008.
The company stock must have a minimum stock price of $5.00 at the start of May1st, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by Sunday May 11, 2008. The winners will be announced here after May 31th, 2008.
Prizes
1st Prize - $20 Cash (Payment made by PayPal)
2nd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick NVDA.
Stock Challenge April 2008
I am starting a stock challenge for the month of April. This will be a pilot program and if the pilot goes well, there will be more contests in the future. There will be prizes for the winners. I will participate in this contest to start it off.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of April 1st to the close price of April 30, 2008. In the case of duplicates, the first person to post will be declared the winner, so it’s best not to pick a stock that was already posted.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of April 1st, 2008.
The company stock must have a minimum stock price of $5.00 at the start of April 1st, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by Sunday April 13, 2008. The winners will be announced here after April 30th, 2008.
Prizes
1st Prize - $25 iTunes Gift Card
2nd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick AMD. AMD opened at $5.93 on April 1st.
Oil Prices Hit Record $100 a Barrel
Oil Prices touched $100 a barrel today on the first trading day of the new year. The market tanked today from the weak manufacturing reports. There are many talks about an upcoming recession. The market certainly does not look good right now, and the dollar is still very weak.
I realized most of my losses in my portfolio before the end of last year to offset my gains. My biggest loss for the year was WM. I will have to assess the damage the credit crises has done to my portfolio. And I will put 2007 behind me so I can prepare for a new year. I will do more research and see which stocks and funds I should invest in for 2008. With high oil prices, the upcoming US presidential election, housing, credit issues, this year should be very interesting.
Good luck everyone. Be careful if you are trading in the markets.
Hong Kong Hang Seng Index
I was in Hong Kong recently and one of the main things I notice was the stock market. The Hang Seng index had surpassed the 30,000 mark while I was in Hong Kong. Stock talks were all over the place, from grocery stores to shopping malls. And almost everyone was trading stocks - young adults, moms, and even grandma’s. Some people even quit their job to trade stocks. Every morning most of Hong Kong is focus on the Hang Seng index and their stock portfolios. And it seems so unreal, everyday the market is going up.
At the time of my departure from Hong Kong, the Alibaba company was about to go public. It was said to be one of the hottest stocks and everyone had their eyes on that stock.
It seems like deja vu to me. I remember seeing this type of market in 1999 in the US stock market. Anyone can buy any stock and make money in a short period of time. There was no reason to look at fundamentals of companies. Why? Because in the amount of time you would spend doing your research on a company, you would have already made a 20% gain. It was about buying the company with the best value, it was about buying something that was hot and would trade on news. People tell me the stock market is the best way to make money. Every time someone talks to me about stocks, I would just listen, nod my head and smile. When asked for my opinion, I would give the most unexpected answer, “Risky market. Tread carefully.”
Understanding Stock Market Risk Tolerance: Big Ships vs. Small Ships
My cousin wanted to invest some money in the stock market. He had previously opened a brokerage account and traded highly volatile penny stocks and lost most of his investments. It wasn’t a lot of money but it put a huge dent in his confidence and forced him to close his account and withdraw from the stock market.
The main reason for his loss in the stock market was because he concentrated only in penny stocks. He was one of those people that eyes the largest percentage gainers and hopes to get in and ride the stock to enormous gains. In reality, he always bought the pennies stocks at the high and sold them after the stocks has gone south.
He reasoned that the only way to make money was through penny stocks, because they can run up very quickly. I quickly added to his statement that penny stocks can run down very quickly as well. There is tremendous risk playing with penny stocks, especially with over the counter stocks.
After a period of avoiding the stock market, he wanted to get back in. So he asked me what to invest in. I replied that I would need to know more about him as an investor. Generally I start with these three questions to get an idea of the person:
1. What is your investment time horizon?
2. What is your risk tolerance?
3. What is the size of your investment?
The investment time horizon is the length of the period of time you are planning to hold your investments. There is obviously a difference between investing for a house you will buy in two years as opposed to investing for retirement thirty years down the lane. The risk tolerance is to determine how much risk you can stomach. Basically, how much money can you lose without losing sleep? The size of your investment will determine how diversify you can be. Generally, the larger the investment, the more diversification you should take.
My cousin said that his goal is to buy a condo in five years. He has saved up about 20K, and since this money will go towards his down payment, he cannot afford to take much risk. So this gives me a very good idea of which investment path he should take.
Five years is a long way to go and if he invests his money wisely, he could use this period of time to help himself towards achieving the goal.
But first, I have to explain to him about risk tolerance. It is very important to understand the level of risk you can take. I came up with an analogy to talk about the stocks and the stock market. I told him to think of the stock market as the ocean and stock companies as ships. Imagine you’re sailing in the middle of the ocean. Would you want to sail on a big ship or a small one? A big ship in the ocean is like a blue chip in the stock market, and a small ship is like a small company. The big ship is more stable; it generally moves slower but is less responsive to big waves. The small ship, on the other hand, can move a lot faster but can be swallowed by a big wave. Which size ship would you be more comfortable riding? How much excitement do you want? That all depends on the individual investor.
Just like the ships at sea, the companies in the market are susceptible to market waves.
Small companies, like small ships, carry a high risk in the stock market and are more volatile. While investing in small company stocks, or small caps, can double your money, a single bad news can tank the stock. Big companies, like big ships, do not move as fast in the stock market but they are generally less responsive to the daily market fluctuations.
I would advise new investors to start with big company stocks, or large caps. I suggested to my cousin to put his money in large caps if he doesn’t have the time to do his own research. Large caps are less volatile and carry lower risk, which are good points, because he would use this money as a down payment. If my cousin has extra money that he can afford to risk, then he can use the extras to buy small caps. With most or all of his money in large caps, he does not have to lose sleep over his investments. Another point is, you have to be comfortable with your investments so that you can sleep at night. If you’re constantly worrying about a stock’s performance, then you should either reduce your holdings or don’t invest in them at all.
The key is to find your own comfort zone. Once you know your comfort zone then you are on your way to investing. If you are not sure about how much risk you can stomach, start with safer investments, like large caps and move slowly towards higher risk stocks. Even if you can stomach huge risk, it is always good to diversify risk. Have at least one foot on the big ship, so even if there is a huge wave coming, you’ll know that at least one foot will be safe.
10 Fast-Growing, Large-Cap Stocks
1. Apple (AAPL)
Composite Rating: 99*. Stock fell 14% in four days on talk that the company will cut production of iPods and iPhones, implying weak demand. But the stock found support at its 10-week moving average. And, on the whole, mutual fund ownership continues to rise. 3-year EPS growth rate: 9%.
2. BG Group (BRG)
Composite Rating: 96. The U.K.-based oil and gas giant bounced back from two straight quarters of shrinking earnings with a 40% surge in the second quarter. And the stock just managed to reclaim its crucial 10-week moving average, after a plunge on heavy volume in late July. 3-year EPS growth rate: 39%.
3. Celgene (CELG)
Composite Rating: 94. The developer of cancer and other therapies boasts five straight quarters of triple-digit profit growth. Sales have surged in a range of 61% to 89% the past four periods. And margins have widened from the low-20s to the low-30s. 3-year EPS growth rate: 93%.
4. China Mobile (CHL)
Composite Rating: 98. The wireless company is based in Hong Kong but offers service across the mainland. A late July decline came on high volume, but the stock’s retreat from record highs hasn’t even touched its 10-week moving average. 3-year EPS growth rate: 28%.
5. Freeport-McMoRan Copper & Gold (FCX)
Composite Rating: 99. The copper, gold and silver producer saw earnings dip 10% in the fourth quarter of 2006 from its year-ago comparison. But results bounced back the following two periods to gains of 95% and 104%. Sales gains slowed to 10% in that weak Q4, and have since soared 112% and 307%. Mutual fund ownership surged to 564 funds in the most recent period from 422 a year earlier 3-year EPS growth rate: 165%.
6. Google (GOOG)
Composite Rating: 94. The Internet search giant’s most recent earnings disappointed Wall Street, and the stock suffered. Earnings growth in the past three quarters slowed from 106% to 61% to 43 3-year EPS growth rate: 95%.
7. Mobile TeleSystems (MBT)
Composite Rating: 98. The Russia-based provider of wireless services also reaches a number of former Soviet republics. Sales gains have picked up to the 30s the past four quarters from a previous stretch in the 20s. Profit swelled 156% in the recent report, its best result in several years. 3-year EPS growth rate: 21%.
8. National Oilwell Varco (NOV)
Composite Rating: 99. The Houston-based equipment maker for the oil and gas industry beat views by 25 cents when it reported $1.79 a share in its recent report. The company’s profit has soared in triple digits for three straight quarters. Views for the current period are for an 87% gain. 3-year EPS growth rate: 82%.
9. Oracle (ORCL)
Composite Rating: 95. Stock fell 10%, intraday best to worst, in six straight sessions before snapping back Wednesday. Still, Oracle hasn’t quite regained its 10-week moving average. 3-year EPS growth rate: 25%.
10. Southern Copper (PCU)
Composite Rating: 99. The operator of copper mines and refineries in Peru and Mexico missed views by 3% in report issued last month. Still, the recent quarter’s 66% profit gain was best result in seven quarters. 3-year EPS growth rate: 55%.
Source: http://biz.yahoo.com/special/ibd080607.html
An Alternative Energy ETF
From Mad Money:
Jim, is there an ETF that tracks alternative energy stocks? — Gus from Long Island, N.Y.
James J. Cramer: One popular ETF that tracks alternative energy plays is the Powershares Wilderhill Clean Energy Portfolio (PBW:Amex) . It holds 36 stocks in the alternative energy business, including Capstone Turbine (CPST:Nasdaq) , Plug Power (PLUG:Nasdaq) and UltraLife Batteries (ULBI:Nasdaq) , and the diversity may help protect investors from some of the wild swings you see in these types of stocks.