Blockbuster (BBI) is a perfect example of what can go wrong when you misread the industry trends and then realizing it, try desperately to catch up. In the period from late 2001 to 2002, Blockbuster was the leader in the video rental business. Its shares were trading at nearly $30 a share and its market-cap was at around $5.75 billion.

But there was a trend developing towards movie rentals via the Internet. Blockbuster failed to recognize the growing significance of Internet video rentals, a very poor miscalculation on its part. The shares have steadily declined to the current $3.80 to $4.20 channel. Once a large-cap, Blockbuster is now a small-cap and struggling to regain any sense of direction. The company has entered into the Internet DVD rental business but it has a lot of catching up to do.

Fundamentally, Blockbuster has lost money in the last three straight quarters and struggling to grow its revenues, which are forecasted to increase a mere 1.1% in fiscal 2006. Its estimated five-year earnings growth rate is a mere 2.5% per year, which is pitiful.

Blockbuster also has to deal with its massive debt load of $1.27 billion or a debt-to-equity of 2.73:1, which suggests a weak balance sheet. Couple this with poor working capital and you understand the high financial risk. Faced with stagnant revenue growth and losses, Blockbuster faces a difficult upside battle to regain its lost glory. The odds are stacked against it.

In the face of Blockbuster is online DVD rental company Netflix (NFLX), which debuted in May 200, trading at close to $40 in 2004 before sinking to the $10 level in 2005 before the rally.

Netflix saw the future for DVD rentals and it was online and not via the “brick and mortal” route that Blockbuster decided to maintain. In direct opposite to Blockbuster, Netflix is profitable and has been for the last three straight quarters. It has 4.2 million subscribers and growing. Its revenues are growing and expected to surge 32.5% in fiscal 2007 whereas Blockbuster is seeing non-existent revenue growth.

Blockbuster has entered into the online DVD rental arena but it is well behind Netflix. Moreover, Netflix also operates the online DVD rental business for Wal-Mart Stores (WMT), after the retail giant decided to shut down its own online DVD rental unit and instead let Netflix run it.

Trading at 36.73x its estimated FY06 EPS, Netflix is not cheap. But if it can continue its strong growth and earn the estimated $1.11 per share for the FY07, the valuation becomes more reasonable. The pressure is clearly on Netflix to deliver but it is on the correct path.

Note: you are welcome to post this article on your site if it is financial related. You must cut and paste the bio and make sure the web site link is live. Also please e-mail me to let me know.

George Leong is the founder of Investornomics.com (http://www.investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.

In the world we live in today there is no shortage of access to investment information. This in itself however, can be an enormous problem. Asking questions about how to invest, where to invest, and what to look for, can bring you many answers from lots of different sources. The trouble is diving through all the clutter to find relevant information to suit your needs.

So when looking to invest in the stock market, where should you start?

First things first, invest in what you know. If you are trying to evaluate a company, make sure you know how it works. The great Warren Buffett has often been criticized for not investing in technology during the dot-com boom. His answer was simple. If you don’t know the business model, what the company does on a day to day basis, or how it generates revenue now, and in the future, then stay away from it. It is because of this that he has earned billions of dollars year after year for himself and his investors.

Once you know the types of companies to look for, you’ll need ideas. Message boards, newsletters, financial news shows, and stock screeners are all good places to find ideas. Stock screeners are especially useful, because in addition to finding ideas, you can narrow the search down as you go to fit your qualifications. I’ve personally had good luck using the screener at http://finance.yahoo.com.

So you’ve found some companies worth looking into, what next?

1. Insider trading — This is anyone who is considered to have an inside knowledge of the company, and also has money invested in company stock. This could be someone who owns 10% or more of the company, a director, CEO, CFO, etc. Watching when the insiders buy and sell stock, and at the prices they do it, can be very useful in predicting a stocks future. You don’t want to buy a large stake in Company X when all the people running it are getting out. Therefore it’s always a good idea to watch what the "smart money" is doing.

2. P/E ratio — The price to earnings ratio can also be a useful tool in evaluating a company. The P/E ratio will tell you if the company is relatively undervalued, or overvalued. A company that is undervalued should have a P/E ratio that is lower than other stocks in their sector. This is a great value to plug into a stock screener to find profitable companies.

Note: P/E can be manipulated (think Enron). Also P/E ratios vary wildly depending on the sector you are looking in. Technology stocks could have an average P/E ratio of 60, while oil companies could have an average P/E ratio of 10. Whenever I evaluate a stock, I don’t look at the P/E against all other companies, but I look at it against their competitors in the same sector.

3. Technical analysis and charts — This is another tool that can help you see where a company has been, where the company stands now, and where it’s headed in the future. It shows the company in a graphical form where you can see the stocks activity and volume over a period of time. You can find many tutorials on the internet about this, and you can even get a free DVD that shows you the basics from http://www.technitrader.com.

4. Management team — Some people just look at earnings, charts, and other technical ways of evaluating a company. This isn’t always a bad thing but to really know about a company, you should know the management. You should know what other companies they have been involved with in the past, and how they did when they were there. You should also know where they plan to take the company you’re evaluating, and in what length of time they have allocated to get there. It’s a bit like evaluating a sports team. You wouldn’t pick a championship team without looking at the coaching staff.

These are a few of the ways to help find companies to invest in. Like with anything though, due your homework, write out your goals, and when in doubt, ask for advice from someone who has already accomplished what you are trying to do. Knowledge is the key to being successful at just about anything.

About the author:

Braydon McCarville is the webmaster for the financial community at http://www.themoneypost.com Go there to find helpful tools, ask questions, read articles, and increase your financial knowledge.

I find the stories about the California Gold Rush era fascinating because at few other times across the course of human history, could a person of modest means potentially achieve great wealth. Though the quest for gold was not always easy for the 49ers, and not all of them achieved wealth, once they literally “staked their claims,” each person had the same opportunity to achieve instant riches as the next. The Gold Rush was the great equalizer.

Finding great stock trading opportunities is, in a way, like the 49ers’ quest for gold, in that anybody— whether young or old, rich or of modest means, male or female— has a chance to create wealth for him or herself. But finding a shinny nugget at the bottom of your pan is one thing, while finding those select stocks that have the most explosive upside potential is quite another.

Today, I know why trading a stock just as it breaks out can lead to explosive gains, and I know the thrill of watching a quality stock quickly swell my portfolio, but this was not always the case. In fact, I tried out just about every other stock trading strategy first, because I found studying stock charts tedious and confusing. Which stocks should I concentrate on? What should a stock’s chart look like? What moving averages should I use? Which oscillators are the best?

You would think that as an executive at a financial television channel, I’d have the inside track on slick ways to trade the market, wouldn’t you? After all, I regularly rubbed elbows with some of the most influential stock market gurus on the financial seminar circuit. There was only one thing. Each individual was busy selling his or her own unique stock trading strategy. As I bounced from trying one trading strategy to the next, I began to realize that many of these techniques did not work as predictably as I had expected.

At one point, I even turned to penny stocks thinking they were the way to make big money in the market. After all, 5,000 shares of a stock made you feel like a pretty big investor. But in the end, even a $1.50 stock could become a .75 stock overnight, on some little ripple in the company’s game plan, and poof! Half your grubstake…gone! And, since penny stocks are usually so thinly traded, it took a “month of Sundays” just to execute a sell order. Meanwhile you watched as your sell order single-handedly brought the stock’s value down far below what you were hoping to get for it.

The shortcomings of many of the stock trading strategies I tried only made me more determined to find a more predictable way to make money in the stock market. My epiphany came while turning the first few pages of a book on stock charts that had been sent to our television station by the publisher. The book had been sitting on a bookshelf in a corner of my office for some time collecting dust. The book? Analyzing Bar Charts For Profit by John Magee.

Magee was talking about how the field of technical analysis developed, beginning with the early moving averages developed by Charles Dow dating all the way back in 1884. As I read, three things occurred to me:

1. First, some very smart people had been hot on the trail of finding a system of using charts to anticipate stocks’ movements for a very long time.

2. Second, charts represented the only visual, factual record of a stock’s movement that was not filtered through some financial news analyst or stock market guru.

3. Third, and most important, it actually seemed plausible to make reasonable assumptions, based upon certain charts, as to when a stock was nearing its greatest potential. Could I have finally found the “holy grail” to stock profits I had been searching for?

Of course, nothing is ever as simple as it seems at the outset, and quite frankly, the study of charts took me far deeper into technical analysis than I ever had intended to go. Yet somehow the quest for a more definitive way of knowing when to buy high-potential stocks had grabbed hold of me, and wouldn’t let go until I had some hard and fast answers.

I read every book on charting techniques I could lay my hands on. At night, armed with my charting software, I’d download a list of stocks and stare at their charts trying to discern what they were telling me. William O’Neil’s “How To Make Money In Stocks” helped me to better understand the relationship between a stock’s daily price action and its volume. Slowly, after what seemed an eternity, I began to spot the chart patterns.

Of course gaining knowledge about technical analysis is one thing, and putting this knowledge into practice is quite another. Here again, there was no shortcut. No abbreviated course. No quick cure. I had to rigorously trade stocks based upon my assumptions about a stock’s chart. I’d hear seasoned traders say this is a process that takes about four years of frustration, elation and often, disillusionment. They weren’t kidding. Once I emerged from this “birth of fire,” I had a newfound respect for the market forces. Gone was any pretense of cockiness or self-pride. I felt almost as if I had achieved a kind of “warrior status.”

In the end, I learned that trading stocks just as they broke out was simply the most dependable way to make money I had ever been exposed to. There wasn’t any guarantee, there were still surprises, and not everything worked out exactly as planned, but when a stock’s time had come to break out, there just was no quicker way to make money.

These days, I usually begin my search for stock market gold by scrutinizing a company’s fundamentals and choosing the best of the best. Why? Because a leading company has an established track record for executing a successful game plan, and is less likely to surprise you with negative news. Believe me, with all the varying factors that you have to contend with in trading stocks, you at least want to have your best players on the field. Why would you want anything less than your top quarterback in the Superbowl? The same thing applies to stocks. Does the company have successive quarters of earnings increases? How does the company stack up to others in terms of its “relative strength,” or price stability? Is the company in a strong industry group? Is the stock under accumulation by mutual fund companies?

Then I look at the stock’s chart. Here’s where things start to get exciting, because breakout stocks form certain time-tested patterns just before breaking out. “Time-tested” does not mean foolproof, but from a cup-with-handle, double-bottom, flat base, or other types of chart patterns, you can begin to discern the telltale signs of pent up demand. The stock may drift sideways, or slightly downward as if it is disinterested in going any higher. Meanwhile, it’s daily volume drops to a whisper. It’s almost as if the stock is sleepwalking. A lot of traders take this to mean there is no interest in the stock. Nothing could be further from the truth.

One day, the stock seems to turn on the afterburners, and you see this explosive burst of volume that exceeds anything the stock recently seemed capable of. You silently watch in awe as this stock breaks through its resistance/buy point and then heads skyward. Then, as you watch your profits mount, you sit back in your chair and allow yourself a brief moment to reflect on the thrill that the 49ers must have felt, because in your own way, you’ve just hit paydirt. To learn more, visit http://www.stockconfidential.com

Paul Johnson’s Bio:

Paul Johnson’s knowledge of technical analysis has been honed through thousands of hours of studying stock chart patterns, rigorous daily trading, and by poring over the books of the experts in the field of technical analysis, including John Magee, John Murphy, William O’Neil, Steve Nison and others. On any given day, Paul analyzes the stock charts of well over 200 of the world’s top-rated companies.

In addition to being the publisher of Stock Confidential, Paul has written a number of stock trading e-books.

Between 1993 and 2000, Paul was an account executive at the popular TV station KWHY-TV/The Business Channel in Los Angeles, where he worked with the top personalities in the world of stock investing and finance.

Paul is a graduate of Syracuse University, with a Bachelor of Science in Public Communications/Broadcast Journalism and a Bachelor of Arts in English.

Paul currently is a resident of Los Angeles, California.

Stocks - CC – PP (Stocks - Covered Call – Protective Put) Strategy We all know that trading stocks involves stress and risk. At the same time it can also be highly profitable. Trading can give the most return on investments as compared to other investment strategies including real estate. For example, savings, money market accounts or CDs may give a return of 2 to 5% at best. You may expect a 10% rate through mutual funds. However, under the current economic conditions, such a yield may be hard to come by even with a long term investment. Also, you do not have control over your investments and you can not be sure if your financial consultant either. What then is a low risk and more profitable alternative?

The purpose of this article is to illustrate one such low risk, high profit trading strategy, which combines stocks and options.

Covered calls and protective puts are enabled in most of the trading accounts by major brokers. (Ameritrade, Scottrade, E-trade, etc)

Covered call is – you buy stocks and sell 1 call (contract) for every 100 stocks you buy/own.

Protective put is – buy 1 put for every 100 stocks you own. In this strategy we buy a put which expires at least 6 months later.

When the stock price goes up, call price goes up and put price goes down. Elapsed time will have negative impact on put price.

Here’s the Stocks - Covered Call – Protective Put Strategy Look for an up-trending, optionable stock. For this example, let’s call it XYZ. Let’s assume XYZ stock is currently trading at $69 per share. Assume that currently we are in the first, second or third week of February. You buy 100 stocks of XYZ.

Next, you write a covered call on XYZ, at a strike price of 75, for March. This gives you an additional income, but you have an obligation of selling the stock, at $75. Say you get $150 from writing the covered call.

However, just because the stock is an up-trending one, and you have already made $150, you can not be 100% sure which direction the stock price might move. So, in this strategy, buy a put on XYZ for a strike price at 70 and expiration of 6 months+. In our case, buy the put for the month of August or later. Say this costs you $800. This gives you a right to sell the XYZ stock at a price of $70, even if it drops below 70 by August expiration. (For a real time example, as of this article date - Feb 2006, see JOYG with current price at ~55, and its option chain with strike price of 60. Its Oct 2006 put was available at ~6.5)

Scenarios: Let’s consider some scenarios to illustrate how this can be a low risk, high profit strategy.

Scenario 1: By the March expiration date, if the XYZ stock price goes above $75, the stock will be called out. That means it will be sold from your account. Normally, stocks ‘in the money’ by $0.25 will be automatically exercised.

Since the stock price has gone up, your put price will decrease. Since the put is in the future, its delta is low. You might be able to sell it for around $600. Higher the stock price goes, put price will decrease. You can wait for a good time to sell before its expiration. The net profit for 100 XYZ stocks can be calculated as follows:

Stock price sold – stock price bought + premium received from covered call – put price bought + put price sold.

i.e. 7500 – 6900 + 150 – 800 + 600 = 550. That is a return of 7.3% PER MONTH. Which translates to 87.6% per year.

Scenario 2: Stock price goes above 69, but remains below 75 by the March expiration. Here the call will expire worthless, and you get to pocket the premium received from writing the covered call. You can write another call for April for the same underlying stock XYZ, for which you may get $150 - $200. You can continue writing the covered calls until the protective put expires or you get called out. Your overall return could be 30% to 70% per year.

Scenario 3: In most trades, if the stock price drops, you lose money, but not here! Let’s say, XYZ falls in value to $65 by March expiration date. If you had just traded only the stock, your portfolio would have decreased in value by $400. But, in our case, since you have the protective put, you can still sell the stock at $70, no matter how low the price drops.

If it is in later months, say April or May, you will have generated some income by writing covered calls. If the stock price goes down, there are two alternatives we can choose. Wait till the covered call expires for the month, or buy back the covered call. Before the protective put expires, you can either exercise the put, or sell the stock at current price. The protective put price goes up when the stock price drops. So you can sell the stock at the current price of 65 and sell the protective put at around 950.

Depending on the months elapsed, since you can write covered call each month, you will have made $200 - $600.

So, net for this scenario would be:

Stock price sold – stock price bought + premium received from covered call from all months so far – put price bought + put price sold.

i.e. 6500 – 6900 – 800 + 950 + 300 = 50. This will be just a breakeven, despite the stock price has gone down. If the stock price goes further down, there may be little bit more loss, but the maximum risk is the premium paid for the protective put minus money received from covered calls [minus/plus difference between the stock price and put strike price].

So, even if the stock price goes down, you will find yourself with a small profit or no loss or a very insignificant loss. You have, overall, a very good opportunity of cutting down your risks.

This strategy, in most cases, gives a good profit, and in rest of the cases, a very low risk. Thus, this is a high profit, low risk strategy. Practice the details and paper trade the strategy.

For a current list of stocks which fit this strategy, visit BeingLive.com/Stocks

Disclaimer: This article is published solely for information purposes and is not to be construed as advice or a recommendation to buy or sell a security. Trading results may vary. No representations are being made that utilizing techniques mentioned in this article will result in or guarantee profits in trading. Past performance is no indication of future results.

Copyright/Author: This article was written by Vin Bhat, sponsored by http://BeingLIVE.com. BeingLIVE.com provides top-notch, creative and personal-touch Coaching Program for success in personal, financial, business, career and many other areas. Reproductions of this article, without modifications, are permitted, but must include the credits and live link to http://BeingLIVE.com/.

With so many stock market scandals and the daily fluctuations of various securities, it might seem as though there is no simple method of investment that allows you to avoid the major risks of the market. Luckily, things are not always as they seem… some stocks, dubbed “safety stocks” by some investors, are stable enough that they tend to hold their value even when the rest of the market is in shambles. While these stocks aren’t immune to the changes and fluctuations in the stock market, they usually weather the changes well and are much less prone to sudden drops in value.

If you’ve never heard of safety stocks or would like to know more, the information below is designed to give you some information on these relatively stable investments.

Safety in a turbulent market

Though no stocks are completely immune to the daily changes in the stock market, some manage to do better than others. Some of these companies have been around for a long time and that produce everyday items that are known around the world (such as the first aid and baby care manufacturer Johnson & Johnson), and aren’t likely to encounter major scandals to bring down their prices. While these stocks aren’t known for major increases in value, they don’t perform poorly… instead, they offer a slow-but-steady increase that’s much more stable than many other investment opportunities.

Safety stocks and diversification

Because of their general consistency, safety stocks are considered a must-have by many serious investors. They are great tools for diversification, allowing investors to use their stability to offset some of their more volatile investments. This effect can be increased even further by making investments in precious metals or the diamond market, both of which tend to offer a similar stability that works well with that of the safety stocks. A diverse investment portfolio with a strong base of safety stocks and precious metal and diamond investments is likely to weather even the most turbulent market with minimal long-term losses.

Safety stocks and high-risk investments

Even without using safety stocks for true diversification, it’s possible to use these stocks to offset higher-risk investments. When investing in high-risk stocks, a smart investor might buffer their investment with a secondary investment in one or more safety stocks which will help to minimize any losses that might occur. If the higher-risk stock performs well and is sold at a good price, then the safety stocks may either be sold or kept since they’re not likely to drop significantly in value. Should the higher-risk stock not perform well and ends up being sold low, then the value of the safety stocks as they slowly but surely show an increase will help to offset any losses.

Safety stocks and long-term investment

Obviously, safety stocks are great for long-term investments. Purchasing safety stocks over the course of several years is much more likely to show a definite improvement than other stocks that aren’t nearly as stable. When combined with precious metals or the diamond market as mentioned above, the effects can be even more noticeable due to the similar nature of the two types of investments.

Safety stocks can also be combined with bonds or other types of investments that do well in the long term, either using the stocks in smaller amounts to accentuate the earnings of the other investments or as simply another long-term investment among many. This can make safety stocks ideal for retirement plans or any other long-term financial planning.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

It seems almost once a week I hear some buffoon stating that “the average return for stocks over the last (fill in the blank) years has been 10%.”

Listen, I don’t care about “average returns.” And neither should you. I’ll explain why through a simple math problem. Add up these positive and negative numbers: -25, +30, +10.

I get +15 as my total answer. The average of the three numbers is +5. Suppose you’re looking at your investments and you learn that these three numbers are what the stock market returned the past three years (it didn’t).

You calculate that the total return should have been 15% for the last three years and +5% is the average annual return the past three years.

Or was it?

Now, let’s apply these numbers to your account. Say you started with $100,000 three years ago.

Let’s do the math:
Year One you lose 25%, you’re down to $75,000.
Year Two you make back 30%, now you’re at $97,500. Still underwater!
Year Three you make another 10%, now you stand at $107,250. You made $7250 in three years.

This actually works out to be an “average” of $2416 per year, or 2.4%…not the 5% advertised.

Maybe the order you earned these returns will matter, you say? OK, try this:
Year One, you make 30%, and $100,000 has grown to $130,000. Great!
Year Two you lose 25% and now $130,000 drops to $97500. Uh-oh.
Year three you make back 10% and you are back at $107250.

Wait, let’s mix the numbers again for one more time!
Year one you make 30% and your $100,000 grows to $130,000.
Year Two you make another 10% and now the account is up to $143,000. Cool.
Year three you give back 25%. The account is now worth $107,250. Bad.

Beware the man touting average returns!

Repeat after me: you can’t eat “average returns.” Average returns do NOT translate into actual dollars in your pocket! Don’t believe average numbers!

This is important: you’re going to NEED this money someday to pay for college expenses, pay for retirement, pay for medical costs, pay for living expenses and on and on. “Average” returns will be of no use to you when you really NEED the money.

We need to do everything in our power to avoid losses. As you can see from the examples above, negative numbers (losses) will destroy more portfolios than most other mistakes investors can make (and they can make some whoppers!). That one year loss of 25% above is a killer, no matter what year it appears in! You can beat the market simply by avoiding the big down years, or minimizing losses in bad years.

That’s EXACTLY why we use a tactical approach of measuring supply and demand when examining your investments. It’s not just important, it is CRITICAL that we’re aware (in real time) what sectors of the market are in demand (where their prices rise) and which areas of the market are experiencing greater supply (where prices fall). Simply staying far away from weak sectors can drastically improve the outlook of your portfolio.

Buy a Photo Album!

We’re also not helping ourselves at all when we make mistakes like hanging onto losing investments (only because someday it MAY come back). Keeping certain stocks for sentimental reasons is another bad idea. Photo albums are for sentimental keepsakes!

Suppose, instead, that the -25% return (loss) for one year was actually a flat year? Where there was no gain or loss at all. How do the numbers shape up now? Pretty well! But let’s be realistic, suppose the year that the market lost 25% …you only lost 10%. The account would look much better than most others in the market at that time!

Minimizing losses will improve the overall picture each month on your statements. Simply waiting for an investment to recover is a bad strategy. Eliminating losing investments from your account will make your statements look better. And you’ll free up cash for other areas of the market that are working. Or when times get rough and we need to be defensive, eliminating a loser is a great way to raise cash.

Thomas Mullooly, President of Mullooly Asset Management, works one on one with individuals so they can regain control of their investments. Tom’s popular email alerts help folks to reduce the risks in their portfolios. To learn how to stop making simple investing mistakes and to sign up for Tom’s email alerts, visit http://www.mullooly.net, today!

I was watching Suze Orman with my wife today. A woman called in who is trying to reestablish credit after a prior bankruptcy. She told Suze that she had gone to a “restore your credit” seminar where the speaker taught the audience to get two secured credit cards. Secured credit cards are where you go to a bank and give them something like $500.00 and they give you a credit card with a $500.00 limit (or whatever you plop down to secure the whole deal).

The woman wanted Suze’s advice because after she ran the limit up on both cards she was downsized and the only work she could find paid a lower salary. She told Suze she could not pay the cards because she was now paid a lower salary and was late on one of the cards already. Suze told her that there was absolutely no advice she could offer the woman and hung up.

Why do you think she would say this? I mean the woman could go get another job. She could get a loan from a family member or a friend. So why would Suze say this?

Well, Suze said that as long as the woman blamed her financial problems on external problems that she would be stuck. This is completely in line with what I told you in my last e-mail about forgiveness. Suze was really vague (as usual) but let me give you concrete concepts that you can apply in your daily life so you never end up like the woman in the financial train wreck who called in to Suze.

We only have two emotions; fear or love. Fear really sucks because it causes ALL of the problems in our life like sickness, death, poverty, bad luck, and soured relationships with other minds. In our financial lives fear causes debt.

On the other hand love is really great because it causes all of the good in our lives like, health, wealth, and abundance of every kind. In our financial lives love allows us to achieve financial freedom in great part through elimination of debt because if you come from a love based thought system you will sagely recognizes that you don’t need a lot of crap our modern day “you gotta have this” society waves in your face.

The truth is that many (if not most) super rich people are also super miserable because of all of the fear in their minds that someone is “going to take it all away!” The trick is to become rich AND happily content. The super rich that have achieved this have come to recognize that the most valuable thing in their life is something that nobody can take from them without their consent; peace of mind!

We wouldn’t be in this nut case world if each of us did not have some fear in our minds. This would make you a super stock investor in the stock market. So if the trick to achieving everlasting peace of mind is erasing all fear from our minds then is there a “where the rubber hits the road” practical method that acts like a fear eraser? The answer is a resounding yes!

The practical method that will lead you to peace of mind is true forgiveness that I alluded to in the last e-mail. The Course In Miracles, as long as the darn thing is, really just teaches you how to forgive and nothing else. Once you erase the crap in your mind (which is really just fear) your life will transform your life in ways that will seem unbelievable because your interpretation of your life experience will change. Most importantly your financial luck will change as well. Remember always that we are minds not bodies. We are the dreamer not the dreamed and as such we can reset the rules through he application of forgiveness in our daily lives and become whole instead of fragmented by fear!

Dr. Scott Brown, Ph.D. a.k.a. “The Wallet Doctor” can teach you how saving the daily price of a cup of coffee at Starbucks can make you a millionaire in the stock market through long term stock investing. Dr. Brown’s website is: http://www.walletdoctor.com/

Suppose that the market dropped 20% in one year (as it did in 2001 and again in 2002). You might have to spend the bulk of the next big move up in the market just getting back to even, instead of making money. But suppose we were able to walk away with a flat return…or just a small loss instead. Would you agree that we’d be in much better shape heading into the next move up in the market, if we could avoid “the big hit?”

Now, there used to be a time (throughout the 1980’s and 1990’s), that absorbing just a small loss in a year where the market drops 20% would be called “significant performance” compared to (or relative to) the rest of the market. This is because folks in the market were more interested in “relative returns” back then, not “absolute returns.”

The reason so many were interested in “relative” returns back then was because throughout the ‘80’s and ‘90’s, we were barreling down the highway in a secular bull market. Every pull back along the way was simply a terrific buying opportunity. You were dubbed a hero if the market dropped 25% in one year and you were able to lose only 10%.

Not so today!

We’re not interested in “relative” returns and neither should you. What we are interested in is absolute returns.

The methods we use (a blend of fundamental analysis and point and figure technical analysis) are not perfect every time. But they do an excellent job of telling us when supply overtakes demand. This is true whether or not we are looking at a particular mutual fund, an individual stock, a sector or the market as a whole. Whenever supply overtakes demand, lower prices are certain to follow. And we should take the steps needed to protect our retirement dollars at that time.

Look, losing money impacts your returns for many years, not just one year. That’s because if we have a year where we lose 20%, we’ll need to make 25% just to get back to where we began. It’s really important that we do our very best to avoid big losses in our account…whether that account is our regular brokerage account, or our 401k account, or some other retirement plan.

So what do you do to avoid big losses when the market is crashing?

In 401k and other retirement accounts, we have a “safety valve” option which, if used properly, allows us to sidestep much of the damage. It is often called the “stable value” fund or the “stable income” fund.

The stable fund is often a guaranteed insurance contract (or “GIC”) that will give you a safe place to park your money, out of the stock market. There are millions of people (yes, millions) who have all of their money in their retirement plans invested in the stable fund.

In 2005, many of the plans that we advised had stable funds that generated yields in the neighborhood of 3% to 4% for the year. Listen: if you stayed in the “stable fund” for all of 2005, you beat the entire Dow Jones Industrial Average and the Standard & Poor’s 500 index.

But this is really not the goal of the stable fund.

The “stable fund” is an investment that really should be looked at as a “parking place” or a temporary spot, to hold your funds while the market is going down, or on defense.

In secular bull markets, we’d have little use for the “stable fund,” since we’d want all of our funds invested all the time. But that is not the current environment we have in 2006.

When the market begins to drop, we’ll often recommend that a certain percent of your money go to the stable fund, instead of some other investment. This is because it’s better to just stay out of the game than to take a risk, when everything’s going to the dogs.

Sometimes we may recommend you have most of your money in the stable fund. It really depends on your age, your tolerance to handle the fluctuations of the market and where things are heading at that current time. If a new client comes to us when the market is falling, it may take as long as four to six months to get most of the money back into the market. It all depends on where the market is at when we begin.

The stable fund is an instrument we can use to generate decent returns in an otherwise bad market. Nobody’s perfect when it comes to investing, but making use of the stable fund is a useful tool to have inside of a retirement plan. It gives you more flexibility.

By the way, were you aware that close to 80% of all participants in 401k plans (and other retirement plans as well) make their investment choices on the day they join the plan…and then never change them again?

Since Social Security is a mess and pension plans are disappearing by the minute, managing the returns in your 401K has never been more important.

Thomas Mullooly, President of Mullooly Asset Management, works one on one with individuals so they can regain control of their investments. To learn how to stop making simple investing mistakes and to sign up for Tom’s email alerts, visit http://www.mullooly.net, today! Or call Tom at 877.223.7300 to request to see for yourself, in writing, how to manage the risk in your 401k plan.

I don’t read enough trading literature anymore to know if this is an accepted term. It seems I picked it up somewhere, but I can’t be sure. At best I invented it on my own, at worst I am misusing a term popular in the trading vernacular, thereby confusing everyone. However, even if the term is wrong the idea is right.

For those of you reading my blog you are seeing the word hitch, and the term hitching quite a lot recently. This is being written 03/05/06, and I want to explain more thoroughly. Hitching is nothing more than a prices inability to follow through on a price move. If a price is rallying then it’s logical conclusion is the upper bollinger band or the upper stochastic zone. They can, of course, go further, but that is not the focus here. In narrow trading range markets, price action often does not complete its rally, at least on the first try. And you see many, many patterns orbiting around the 20 day moving average, like it has a hitch in its get along. Therefore the name. The price action has a hitch. One can look at the patterns and it is easy to imagine that the moving average has a gravitational zone, and the prices are just orbiting.

This can also work for prices you expect to decline, They move down nicely until a little below the moving average and just hover there. Do they go up from here or down? Much of it depends on the pull of the market in general, or at least the sector of the stock in question. And be very aware that some sector pulls are stronger than others.

So what to do when you notice hitching behavior? Well, if you are clairvoyant you should stay out, go on vacation, read a book, wait for some sort of move that shows promising trades. If you are already in the market, you can straddle the hitch. If you are predominantly long, that get some shorts going. If you are long and notice a day or two of no follow through behavior find some stocks that have rallied past the hitch or at least are topping past their twenty day moving average somewhere below the upper bollinger band and short them. Make sure they are not in a long up trend pattern though. Just an oscillator will be fine. Then you have straddled the market and protected your positions, and as the whole thing works its way out, you can take profits on both ends. You will have to have patience as the resolution is likely to be one way first and the other way later. Usually these things work out on the down side, unless there is some specific bullish news. The reason is hitches are nothing more than market uncertainty, and we all know how the market feels about that. The worst thing to do, display along and get out of positions for losses. If you have that little confidence in your trades, and/or you are so over exposed you have no money to be contrary, that you should seriously review your trading. For if you cannot survive a hitch how you are going to survive when you are plain wrong?

CT Larsen has been trading stocks since 1990. Now trading large cap stocks exclusively. He has recorded three straight years of greater than 50% annual returns. You can read his blog at http://livingonlargecaps.blogspot.com

One of the most appealing ways to attain wealth is to play the stock market. With the advent of the Internet and on line brokers traders have seemingly unrestricted access to various trading products that just 10 years ago were reserved for big financial institutions. A trading product that has been overlooked by many traders is forex.

Forex is derived from the words FOReign EXchange and involves the trading of currencies. Until relatively recently trading forex has been the preserve of banks and other large financial institutions. In the last 5 years forex trading has literally exploded among ordinary traders. When the advantages of forex trading become apparent this is not surprising. The forex market is the largest financial market in the world with an estimated daily turnover of $1.5 trillion dollars. This is 30 times larger than all the US stock markets combined. Further more the forex market is open 24 hours a day 5 days a week.

The size of the forex market is one of its first benefits. The forex market is very liquid and has high volume. Liquidity is a great asset many traders look for because it means a deal can always be done. Forex is a continuous 24-hour market. This is very desirable if you wish to trade part-time as you can choose what time you trade unlike stock markets that are open only 8 hours a day. This 24-hour market almost removes the problem of gapping. Because most stock markets are only open 8 hours a day often-overnight events can cause stocks to gap up or down. Large gaps can especially cause large losses for people who trade derivative products like futures or options. In the forex market the problem of gapping is very much reduced.

Currencies are always traded in pairs. Usually currencies are traded in pairs against the US dollar. The main pairs are US dollar Vs EURO ( EUR), British Pound (GDP), Swiss Franc (CHF), Japanese yen (JPY), Australian Dollar (AUS), New Zealand Dollar (NZD) and the Canadian dollar(CAD). There are other currencies pairs but most traders prefer to trade the pairs above. These currency pairs are known as the majors. Currency traders have plenty of trading opportunities from these 7 major currency pairs. Compare this against the stock market where more than 8,000 stocks trade on the three primary US stock exchanges and currency traders can focus just on these 7 pairs and still make plenty of money.

Unlike the stock market there is never bullish or bearish market conditions. Currencies go up or down against each other according to how the world financial markets perceive the value of the currencies. You can sell a currency (go short) just as easy as you can buy a currency( go long). Currencies go up and down and you can trade either direction just as easily ensuring there is always plenty of trading opportunities.

Forex brokers don’t charge commission or brokerage. This can be quite a large overhead in other financial markets. Forex brokers make their money on the difference between the bid/ask spread of a currency pair. As the forex market is very liquid the spread between the bid/ask is very small. As many stock traders know brokerage can be a significant transaction cost.

You can start trading forex for as little as $300 dollars. There are two types of accounts a mini forex account and regular forex account. Most forex brokers offer 100: 1 leverage which means a in a mini account you can control $10,000 currency position with $100. In a regular account $1000 controls a $100,000 currency position. This provides great leverage and an extremely efficient use of trading capitol.

Trading a mini account is a great way on how to learn to how to trade forex. When you paper trade you are having a comfortable armchair ride. You are trading without the emotions of putting real money on the table. When you trade a 1 mini currency lot you can set your stop loss so the most you lose is $100. This is a great way to learn how to trade effectively without risking much money. In most other trading products even when trading with the smallest trading lot possible you would have to risk much more. Forex provides trading opportunities for people without much trading capitol.

Many traders have overlooked forex trading. It has many benefits that all traders can use to their advantage. It offers the benefit of trading 24 hours a day in any country in the world. The forex market is a very lucrative market no trader can overlook it.

To get more information about the opportunities of forex trading visit

http://www.ultimateforextrading.com