Wednesday, March 4, 2015

A Brewing Problem

A Brewing Problem

This is a great article filled with good and bad points about Keurig Green Mountain coffee.  The inventor of the K-cup sold the company for a measly $50,000.  He later made 46 times his money by investing in Green Mountain at $3.20 and selling his stock at $140.  The article does not say he put the whole $50,000 into GMCR, but if the inventor did, he made over $2.3 million dollars from his investment.  This is a stock investor's dream which usually does not happen to most people.

One problem with long term investing is that you cannot know for sure which company will be the next GMCR or Apple.  The second problem is that people will often sell out before the company has reached its full potential.  I have owned both GMCR and Apple, but I sold out too soon in both cases.  Currently, my best long term stocks are Apple suppliers:  AVGO, NXPI, and SWKS.  I hope I will do a better job in holding on to these current picks.  I also intend to make money by trading stocks like UGAZ, UGA, and FAZ.  Then, a third way I plan to make money is by holding dividend stocks like PFF, DHY, and PFN.  So, I expect to make money while being fairly safe and well diversified.


Saturday, February 28, 2015

The Big Bang (as in Bust) Theory of Markets

The Big Bang (as in Bust) Theory of Markets

Here is an outstanding article at Global Economic Intersection about how stocks and bonds have moved upward together as well as downward during the past several years.  The article has an excellent bond price chart which shows how bonds have followed stocks.  The beginning of the chart shows the decline of bonds just like stocks at the start of 2009.  August of 2011 on the chart shows that bonds went down along with stocks during the great Congress lock-down over raising the country's debt ceiling.  Then, after that, stocks and bonds have marched upward with no significant declines during the past three and a half years.  In the next bear market, however, cash may be king instead of bonds since they are bound to go down like stocks at some point in the future.

XIV is a buy

XIV, the inverse volatility index ETF, is a buy now, and it has been a good stock since the second week in February when the stock price crossed over the 20 day EMA line.  Buying volume has also been good in the last three weeks.  Even while the stock market is not making huge gains, it has also been relatively calm.  This is why XIV remains a good trade.  There is not any really bad news to send stocks down.  Take a look at the Yahoo chart below, and click on it to expand it.  As long as XIV stays above the 20 day EMA, it should be held.  Sell the stock whenever it drops below the EMA line.

UGA is a buy

The United States Gas Fund, UGA, is a buy right now and this has been the case for the past month.  I already hold UGA and I plan to buy more.  The surprise cheap gasoline days are over, and gasoline will probably continue to rise until mid summer.  Take a look at the Yahoo chart of UGA and choose a 20-day EMA line if one is not already there.

You should buy UGA when the stock price just crosses the 20 day EMA line and while the money flow (MFI) is low.  Continue to hold the stock while UGA stays above the 20 day EMA line.  Sell the stock when UGA falls below the EMA line or when summer arrives.

TMF Trading Ideas

TMF is the 3x long government bond ETF, and the stock has made super gains over the past 14 months.  We have had global fears along with Federal Reserve uncertainty that have led people to buy bonds.  These conditions will probably continue in 2015, but TMF will be more volatile.  If you look at the chart below from Yahoo, you will be able to see fairly safe trading patterns for TMF.  You should sell when the price of TMF falls below the 20 day EMA.  You should buy when TMF has fallen below the 50 day SMA and the money flow is near zero.  Since the stock market can always have bad news and some people always run to bonds, this scenario makes TMF a reliable trade for several times each year.
Click on the chart to expand it.

Friday, February 27, 2015

Oil Prices & Energy News: Crude Oil Price Charts, Investment Advice

Oil Prices & Energy News: Crude Oil Price Charts, Investment Advice is a very interesting and informative website to visit on a regular basis.  Fascinating oil stories and companies are located there.  A handy table of the current prices of oil, natural gas, heating oil, and gasoline is located on the right side at the top of the page.  This is a great website for staying informed about what is happening in the oil and gas markets.

Saturday, February 21, 2015

Unconventional Fracking: Changing The Future Of Drilling - Praxair, Inc. (NYSE:PX) | Seeking Alpha

Unconventional Fracking: Changing The Future Of Drilling - Praxair, Inc. (NYSE:PX) | Seeking Alpha

Thomas Pangia has written an excellent article about Praxair and the possible future of CO2 in oil well fracking.  Some of the comments about Praxair were also very interesting such as the company using hydrogen for industrial benefits.  I actually owned PX in the distant past, but I got sidetracked by other stock picks in recent years.  However, Praxair is on my watch list now for buying in the near future.  The stock has increased in price more than three times in the past 10 years, and PX survived the last bear market by a wide margin over the S&P 500.