Will Lightning Strike A Third Time For Dr Boen Tan

Writen by James Finch

In late January, Cameco Corp's director of advanced exploration tantalized the audience at Vancouver's Minerals Exploration Roundup, discussing the geology, and especially the size, of his company's Millennium uranium deposit. Drill indicated resources are estimated at 449,000 tonnes with a grade of 4.63 percent uranium oxide. Additional tonnage is inferred at the lesser grade of 1.81 percent, but still a respectable grade by anyone's calculations (one percent of uranium oxide is reportedly comparable to about 50 grams of gold). Because of soaring spot uranium prices, this deposit's gross value might someday conceivably exceed $2.4 billion.

"The geological setting of the Key Lake Road shear zone is quite similar to the Millennium deposit," Dr. Boen Tan told StockInterview. "The Key Lake Road shear zone is located within the same north-northeastern structural trend as the Millennium deposit." Cameco's (NYSE: CCJ) director of advanced exploration, Charles Roy, called the Millennium uranium deposit, "the most significant new basement discovery in more than 30 years." News reports suggest the Millennium discovery could host a resource of 57 million pounds of uranium oxide. The Millennium deposit is located north of the former world-class Key Lake uranium mine and south of two of the world's highest grade uranium deposits, McArthur River and Cigar Lake.

So why is Dr. Tan evaluating a relatively early stage exploration project against one of the world's most recent and highly lucrative uranium discoveries? Most junior companies exploring in Canada's Athabasca Basin, or for that matter any junior natural resource company, are unduly sanguine about measuring their property's exploration prospects in relation to a major, often recently discovered, world-class deposit. All too frequently such "closeology" ("we're close to the big deposit so we can find an elephant, too) comparisons are deceptive and misleading. In many investment circles, it has become a cliché. However, when the comparison comes from a highly regarded exploration geologist, such as Boen Tan, one should pay attention. Especially when Dr. Tan talks about his geological insights regarding the greater Key Lake area.

Dr. Tan was the Uranerz project geologist for uranium exploration at Key Lake in the early 1970s. His exploration work led to the discovery of the Gaertner deposit (1975) and the Deilmann deposit (1976) in the Key Lake area. According to a recent Northern Miner article, "It was not until the discovery of the Deilmann and Gaertner deposits at Key Lake that the true unconformity type uranium deposit model was first recognized."

Dr. Tan also supervised the definition drillings of these two deposits until 1978. According to the Uranium Information Centre, Key Lake once produced about 15 percent of the world's uranium mined. Over Dr. Tan's long career, he was also fortunate to have evaluated some of the world's largest uranium deposits in the Athabasca Basin, which had been previously co-owned by Uranerz. These include the Key Lake deposits, the Rabbit Lake deposits (including Eagle Point, A-, B- and C-Zone, and the McArthur River deposits).

Comparisons between the Key Lake Road Project and Cameco Corp's Millennium Uranium Deposit

Asked about his opinion of Forum Development's Key Lake Road project, for which Dr. Tan is the chief geologist, "We have the right lithology, the right structure and, on top of that, we have uranium mineralization." Dr. Tan was impressed with the amount of uranium mineralization scattered with the graphitic metapelites. "It is very seldom you find such a lot of uranium mineralization there," he explained. Again, he compared that with exploration around the Key Lake deposit where he remarked, "The graphitic metapelites at the hanging wall of the Key Lake deposit had as much as 4,000 parts per million of uranium." It's an optimistic sign in preparation for a summer drilling program.

Let's look at Dr. Tan's geological comparisons between Cameco's mammoth Millennium uranium deposit and the exploration he is overseeing for Forum Development's Key Lake Road project.

1. Athabasca's eastern basin is comprised of Archean granitoid gneisses and Paleoproterozoic metasedimentary rocks. Dr Tan wrote, "Both the Lower Proterozoic rocks and the Archean granitoid rocks occur within the KLR shear zone in similar geological setting (along the north-south structural trend,) as the Millennium deposit."

2. The Millennium's main uranium zone occurs in a pelitic to semi-pelitic stratigraphic assemblage of gneisses and schists. Asked about the drill targets on the Key Lake Road project, Dr. Tan responded, "The targets are in the pelitic stratigraphic assemblage at depth which includes the same graphitic pelitic gneiss and the calc-silicate which host the uranium mineralization in the Millennium Deposit."

3. Cameco's geophysical surveys indicated the presence of a significant resistivity low centered over the uranium mineralization. Dr. Tan explained, "Forum did airborne VTEM (electromagnetic survey) and multiple parallel EM conductors of over 40 kilometers long were outlined. Last year's radiometric prospecting was carried out and several uranium showings (from 0.1 to over 5 percent uranium) were found in the graphitic metapelites, calc-silicate and pegmatites along this 40 km conductive trend."

4. The Millennium deposit features extensive hydrothermal alteration over the lithology. The uranium mineralization was associated with dark chlorite and illite, and with a distal halo that included sericite. Dr. Tan remarked, "In the Key Lake Road area, we did observe moderate clay alteration in the fractured and brecciated calc-silicates and pelitic gneiss which appear to be chlorite and sericite. In 1980's five reconnaissance holes were drilled in the area and chlorite alteration in the meta-pelites was reported from the drill cores. In a project Forum has scheduled for drilling this winter, Dr. Tan pointed out, "In the Costigan Lake area clay alteration in the pelitic gneiss were intersected in several holes. One drill hole intersected uranium mineralization of 0.43% U3O8 in 0.36 m of clay altered graphitic pelitic gneiss."

5. The Millennium deposit's ore mineralogy is comprised of pitchblende, with lesser amounts of coffinite and uraninite. Dr. Tan discussed the comparative mineralogy, saying, "We found uraninites in the calc-silicates which occur as fine to coarse disseminated grains and as nuggets up to 2 centimeters in diameter (over 5 percent uranium). Fine grained uranium mineralization (up to 0.6 percent U) found in the fractured graphitic meta-pelite appear to be secondary uranium mineral." In the Key Lake Road's "Molly Zone," Dr. Tan indicated, "Uranium mineralization was found within the calc-silicates and pegmatites along the shear zone. The calc-silicates contained up to 5 percent uranium with visible pitchblende" He also pointed out that at Forum's Maurice Point project, which the company may drill in 2007, "the prospector discovered a zone of mineralization of 100 by 10 meters wide with uranium mineralization from 1 percent up to 7 percent uranium in an outcrop."

6. Finally, Dr. Tan explained, "Because all the unconformity uranium deposits in the Athabasca Basin, such as the Millennium, Key Lake and McArthur, always have lots of boron. That is indication of the hydrothermal diagenetic ore-forming process. Do any of Forum's properties show boron? Dr. Tan said, "The Beach Zone in the Maurice Point project has high boron elements. On top of the good uranium grades, yes, that is the extra special thing. Because it is characteristic for a hydrothermal uranium deposit in Athabasca, like Key Lake. It's a good indication like pathfinder elements."

Evaluation of Forum Development's Exploration Prospects

As with any early exploration project, additional drilling helps define the property's potential. Many of Dr. Tan's comparisons, while valid, require drilling the most promising targets. Asked about what questions that drilling the Key Lake Road project might answer, Dr. Tan responded, "If the uranium is deposited under hot water, in a hydrothermal environment around 300 degrees, if you don't see the uranium during drilling, you want to see the rock alteration, the pathfinder geochemistry, the boron, and elevated uranium." He also pointed out the most obvious answer you want to see during a drill program, "The thing you want to see in drilling is to see some uranium."

Some might consider Forum Development Corp's relatively shallow drilling approach with hesitation. The company plans drill holes between 150 and 200 meters deep, not the 700 meters usually drilled in the Athabasca Basin. Forum's Chief Executive Rick Mazur, who is also a geoscientist, saw the positive side to that philosophy, calling his exploration model "unique" (which it is). He added, "The Key Lake project was a concept where we were looking for near or at surface mineralization. We acquired ground just outside the erosional context of the Athabasca sandstone, where we believe that basement hosted deposits could be found at or near surface."

Expensive drilling in the Athabasca Basin can break any junior uranium exploration company's bank. Financing for these drill programs can run into the millions. Exploration can take years. Investors should note that deep drilling into hundreds of meters of overburden can quickly drain a company's exploration budget. Mazur explained, "We are fortunate enough to have rock exposed on surface, and not covered with 400 to 800 meters of Athabasca sandstone." What is Forum's advantage for shallow drilling? "We can go in there and with a very cost-effective program of geological mapping and prospecting, evaluate areas on our property where uranium mineralization has already been discovered in detail," Mazur concluded.

David Scott, an eResearch geological analyst, issued a speculative buy recommendation on Forum Development Corporation (TSX: FDC) in October, 2005, and wrote the company "has an excellent management and advisory team with decades of experience in the Basin. They have staked two well-positioned properties and have moved quickly to explore them." eResearch set a 12-month target price of C$0.60/share on FDC shares, with a potential target price of C$0.90/share "if the company continues to get good results in the Athabasca Basin."

The analyst re-iterated the speculative buy recommendation on February 13th with the target price of C$0.60/share. The analyst based his investment opinion and price target by comparing Forum Development against "peer group" junior uranium exploration companies. Valuation was arrived at his price target by comparing Forum Development in terms of (a) similar-sized uranium exploration companies and (b) uranium exploration companies with properties next to Forum Development. FDC shares traded between C$0.40 and C$0.50/share during February.

Snapshot: Dr. Boen Tan

Dr. Boen Tan is a member of the Association of Professional Engineers and Geoscientists of Saskatchewan, and possesses over twenty-five years of uranium exploration experience. Dr. Tan joined Uranerz, a private German company, in 1969 and after a number of years as a field geologist in Germany and Australia, moved to Canada in 1973 as a senior geologist and Project Manager for Uranerz Exploration & Mining Ltd. (UEM), conducting uranium exploration in the Athabasca Basin.

Dr. Tan was instrumental in the discovery of the Key Lake uranium deposit and the development of the Key Lake Mine which produced 195 million pounds of U3O8 at a grade of 2.5% over a fifteen year mine life from 1983 to 1997. After the development of the Key Lake Mine, Dr. Tan continued to supervise UEM's uranium exploration and drilling programs in the Athabasca Basin, including regional exploration in the greater Key Lake area. Dr. Tan monitored the exploration and diamond drilling of UEM's joint ventures with Cameco Corporation at the McArthur River, Maurice Bay, Millennium and Rabbit Lake deposits until all uranium property and project interests were sold to Cameco in 1998.

James Finch contributes articles on natural resource stocks, most recently about uranium development companies and the entire uranium sector, to StockInterview.com. His articles, complete with all graphics and artwork can be found at http://www.stockinterview.com

Do Not Invest In Sectors

Writen by Hari Wibowo

This is a common occurrence. You heard people say that 'the real estate sector is hot' or 'the internet sector is growing rapidly' or 'let's buy the oil sector now. Energy price will rise again' next year. Sounds familiar? It is. This is because these people encouraged you to invest in specific sectors.

What is wrong with sector investing? There is a common believe that rising tide will lift all boats. Therefore, when internet search is hot, then every companies in the field from Google to Looksmart will rise two to three folds, right? Wait a minute. Have you looked at the graph of Looksmart lately? If you haven't, here is the two year graph of Looksmart Ltd. Let me show you another example. Everybody knows about the rising energy price, most notably oil. Therefore, if you look at the five year chart of energy companies from Chevron and the like, you would expect similar upward trajectory movement, right? Wrong. Take a look at a five year chart of an energy company IvanHoe Energy Inc. here.

So, should we look at sectors when investing? Absolutely. Sector search is very useful during your preliminary research. Auto sector is down. This might be a good place to find stock bargains, right? Yes. Should we blindly invest in any stocks in the auto industry? The answer is no. This goes back to the purpose of an investor. Investor exists to make the greatest return of assets possible while minimizing risk. The sensible way to do that is to compare investment alternative and pick the investment vehicles that may give investors the highest return. In the case of stock, we are looking at the expected profit of a company with respect to its stock price. This is the basis of the return on investment of stock investors.

Therefore, once you identify that the auto sector is a bargain, your homework continues. You should find companies that can give you higher return than the risk free ten year treasury bond. Currently, the ten year is yielding 4.52%. Since 4.52% is risk free, we need to find stocks that can yield more than 4.52% for the foreseeable future. Yield on a common stock can be calculated by dividing earning per share (EPS) with the stock price. If you invert this ratio, you will get the most commonly discussed ratio in the investment community, Price Earning (P/E) ratio.

Sector search is very useful in identifying future investment prospect. However, do not just blindly invest in stocks in specific sector. In the long run, stock price is correlated with the amounts of profit it can produce. Stock price does not correlate to the performance of other peers in the industry.

Free investing idea is currently available for investors at http://www.noviceinvesting.com. For webmasters, free listing for qualified web site at http://www.noviceinvesting.com/Directory.

Wall Street To Main Street News Views And Commentary May 8 2006

Writen by Louis Victor

It's Monday May 8, 2006, and it's the first day of the trading week. The big financial industry news today is the $25 billion deal that would give Wachovia Bank (NYSE: WB) a greater presence in close to 39 states. They may be well on their way to acquiring Golden West Financial Corp (NYSE: GDW), this is the latest acquisition by Wachovia over the last few years, other acquisitions that they have made included SouthTrust Corp and Westcorp.

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We want to hear from our readers/listeners, so drop us a line, maybe you have a question about a certain company or perhaps you want to introduce us to a company that we should know about.. All that you need to do is either shoot us out an email using our contact form on our website at www.namcnewswire.com or give us a call toll free at 888-463-9237 between the hours of 6:30pm and 12am EST weekdays. Your question could be a part of the Wall Street to Main Street radio show that is syndicated daily.

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Power Integrations, Inc

We need to make Wall Street to Main Street subscribers aware that one of the company's that we featured on Wall Street to Main Street two weeks ago as part of our "Furious Five" may be restating their financials going back to 1999 amidst a stock option scandal. The company is Power Integrations Inc (NASDAQ: POWI) and it traded down on heavy volume on Friday but bounced back up into positive territory by the close. We liked it for their product line but the restating of earnings could foster legal issues for the company, so we are taking a step back from our outlook on the company for 2006 due to this recent occurrence and needed to make our readers/listeners aware of the situation. Other companies that are facing similar issues include Comverse Technology (NASDAQ: CMVT) and Vitesse Semiconductor (NASDAQ: VTSS).

For a listing of our "Furious Five" picks go to www.namcnewswire.com. To get them sent to you daily ahead of the Wall Street to Main Street radio show just signup at our website, its fast and its FREE.

Last Weeks "Furious Five"

These are the companies that were featured as part of our "Furious Five" last week, they include G-III Apparel (NASDAQ: GIII), Under Armour (NASDAQ: UARM), American Eagle Outfitters (NASDAQ: AEOS), Crocs, Inc (NASDAQ: CROX) and True Religion Apparel (NASDAQ: TRLG). If you are a subscriber and missed any of the "Furious Five" companies that were featured last week and want it resent to you just shoot us out an email using our contact form on www.namcnewswire.com and we'll get it out to you. This is only for subscribers if you are not a subscriber and wish to receive our feature on any of these companies just sign up to Wall Street to Main Street and then contact us via our contact form on www.namcnewswire.com and we'll have it sent to you.

Movers and Shakers

Some major movers in Fridays trading session included Four Seasons Hotel (NYSE: FS) which traded up $9.40 to close at $63.90, El Paso Corp (NYSE: EP) traded up $1.69 to close at $15.18, Oceaneering International (NYSE: OII) traded up $6.73 to close at $72.15, NYSE Group (NYSE: NYX) traded up $5.73 to close at $68.60, Activision (NASDAQ: ATVI) traded up $14.76 to close at $14.76, PriceSmare (NASDAQ: PSMT) traded up $2.32 to close at $11.91, and Terex Corp (NYSE: TEX) traded up $7.39 to close at $101.81.

Analyst Upgrades/Downgrades

Recent Analyst upgrades include Uap Holdings (NASDAQ: UAPH) which was upgraded to a Buy from a Neutral by Merrill Lynch, Northern Trust (NASDAQ: NTRS) which was upgraded to an Overweight from a Neutral Weight by Prudential Equity Group and Arm Holdings (NASDAQ: ARMHY) was upgraded to a Buy from a Neutral by UBS.

Recent Analyst downgrades include Warner Music Group (NYSE: WMG) which was downgraded to a Sell from a Hold by Citigroup Investment Research, Unilever (NYSE: UN) which was downgraded to a Equal Weight from a Over Weight by Morgan Stanley, the Ryland Group (NYSE: RYL) which was downgraded to a Neutral from an Overweight by JP Morgan and Centex Corp (NYSE: CTX) was downgraded to an Underweight from a Neutral by JP Morgan.

Analyst Coverage Initiations include Qwest Communications (NYSE: Q) was initiated with an Underperform rating and a price target of $6 by Credit Suisse, the stock closed at $6.75, Leap Wireless (NASDAQ: LEAP) was initiated with an Outperform rating and a price target of $55 by Credit Suisse and Sepracor Inc (NASDAQ: SEPR) which was initiated with a Hold rating and a price target of $44 by AG Edwards, the stock closed at $46.23.

Tid Bits

One of the companies that we featured in the silver and gold exploration business is scheduled to report earnings today. The street is looking for Coeur d'Alene Mines (NYSE: CDE) to report 6 cents a share.

Here is something unique, in Minnesota, First Fuel Bank allows consumers to purchase actual gasoline in advance for future use. A consumer can actually buy as much gas as they want at a set rate and if the gas prices rise they can just tap into their own supply at any of their locations and keep their cost down. This is only a 6 station company so don't get too excited about the idea.

Apple Computer (NASDAQ: AAPL) beats the Beatles, as they were awarded a favorable decision against the trademark infringement case brought on by Apple Corp Ltd, the company that guards the interest of the Beatles.

Career Education (NASDAQ: CECO) will pay the U.S. Education Department close to $500,000 to end government findings of financial aid violations in some of its campuses. On another note Institutional Shareholder Services (ISS), a proxy advisory service, has recommended that stockholders vote in favor of a dissident director slate led by Steve Bostic

In the Spotlight

We have featured Impart Media Group (OTCBB: IMMG) over the past several weeks. As we have stated, we do not focus on OTC Bulletin Board issues due to the high risk factor. We only introduce our readers/listeners to unique companies that have the potential to be listed on the Nasdaq. Impart is one of those companies.

For our outlook, and other vital information on the companies that we feature on "In The Spotlight" on Wall Street to Main Street just subscribe for FREE at www.namcnewswire.com

FURIOUS FIVE

This is the First of our "Furious Five" companies that we see excelling in their industry in 2006. The first addition to this week's Furious Five is First Cash Financial (NASDAQ: FCFS) it trades on the Nasdaq under the symbol FCFS.

For our outlook, and other vital information on the companies that we feature as the "FURIOUS FIVE" on Wall Street to Main Street just subscribe for FREE at www.namcnewswire.com

We cannot stress enough that investors need to do their due diligence, call the companies, get the information, consult with your investment advisor and if you do not have one consider getting one. Put the same time into investigating these companies as you do when you go to purchase a new television, it's only for your protection. When it comes to thinly traded securities stagger your orders or put a limit order in to avoid a run up.

NAMC Newswire Note

Go to the NAMC Newswire for updates at www.namcnewswire.com and you can listen to the NAMC Radio for the audio version of "Wall Street to Main Street" at www.namcnewswire.com/namcradio

To register to receive the Wall Street to Main Street Free Daily Newsletter Click Here or go to our site and click on the Newsletter section. www.namcnewswire.com/newsletter CEO's that want to contact us can do so by going to www.namcnewswire.com or call us at 888-463-9237.

Louis Victor
NAMC Newswire
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Disclaimer: None of the information contained on the NAMC Newswire constitutes a recommendation by the NAMC Newswire, its journalist, nor its parent company that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific investors or person. Each individual investor must make their own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy featured on the NAMC Newswire or NAMC Radio Any past results are not necessarily indicative of future performance. The NAMC Newswire, its journalist nor its parent company does not guarantee any specific outcome or profit, and all investors should be aware of the real risk of loss in following any strategy or investments featured on the NAMC Newswire or the NAMC Radio. The strategy or investments discussed may fluctuate in price or value and investors may get back less than you invested. Before acting on any information featured on the NAMC Newswire website or the NAMC Radio segment, investors should consider whether it is suitable for their particular circumstances and strongly consider seeking advice from their own financial or investment adviser. Investors are also urged to do their own due diligence before investing in any security.

All opinions featured on the NAMC Newswire or NAMC Radio are based upon information that is considered to be reliable, but neither the NAMC Newswire, its journalist, its parent company, affiliates nor assigns warrant its completeness or accuracy, and it should not be relied upon as such. The statements and opinions featured on the NAMC Newswire by its journalist are based on their outlook at the time of the statement or opinion, and are subject to change without notice. NAMC may at times hold a position in the companies that it features, in these cases appropriate disclosure is made.

Louis Victor is the host of the syndicated podcast show and financial newsletter "Wall Street to Main Street" which is featured on the NAMC Newswire Radio. He has been involved in the financial industry for over two decades, on the retail and investment banking ends. He is also well versed in the advertising and marketing industries, which has given him insight into market trends and unqiue companies that may be under the radar.

Beta Factors How They Can Be Used In The Current Situation

Writen by Andy George

Ever since the turn of the century, world stock markets have been very volatile. In other words there have been significant movements (up or down) in share prices. This phenomenon has been evidenced by the collapse in recent years of the share prices of the dot com companies (e.g. Yahoo, Amazon etc.) and the sharp falls in the share prices of telecommunication stocks (e.g. British Telecom, Marconi etc.). Yet despite these events there is very little emphasis placed on measuring the volatility of stocks.

The aim of this article is to explain one method of measuring the volatility namely beta factors and how investors can interpret this information. The article aims to state how investors can use beta factor analysis to their advantage when there are political uncertainties affecting markets. Though some stockbroker firms calculate the beta factors of certain stocks quoted in their respective stock exchanges, investors have little access to these figures. In more developed markets many stockbroker firms do have access to beta factors but it is only in recent years that investors have access to this information.

BETA FACTORS:

The beta of an investment is a relative measure of the systematic risk of an investment. In other words it measures the specific risk of the company's shares relative to the market as a whole. In general, the sign of the beta (+/-) indicates whether, on average, the investment's returns move with the market or in the opposite direction to the market. The scale or value of the beta indicates the relative volatility of the particular stock.

A beta of +0.25 for instance, would indicate that on average, the investment's returns move one quarter as much as the markets do in the same direction. If the market rose by 10%, the investment would be expected to rise by 2.5% but on the other hand if the market fell by 10% the investment would be expected to fall by only 2.5%. A beta of -0.1 would indicate that on average, the investment's returns move one tenth as much as the market's do, but in the opposite direction. If the market rose by 10%, the investment would be expected to fall by 1%. Hence we can summarise a number of situations:

If Beta > 1 this means that the investment's returns will move, on average, in the same direction as the market's returns, but to a greater extent.

If Beta = 1 this means that the investment's returns will move, on average, in the same direction as the market's returns, and to the same extent.

If 0 -1, to the same extent if Beta = -1, and to a greater extent if Beta < -1. In practice it is rare to find negative beta stocks since they go against the trend of the market. One possible sector that could consist of negative beta stocks is the gold industry that tends to go against the trend shown by equity markets.

INVESTMENT STRATEGIES:

In world markets, beta factors can have a major influence on the investment strategies of investors. If the analysis is to be believed then in times of a bull market (rising markets) investors should hold stocks with a high positive beta factor since they should outperform the market. A practical example of this was in the late 1990's concerning the dot com stocks. At this time the bull market has reached its peak and those investors who held dot com companies (that had high positive beta factors) made excess returns and did far better than the relative index performances.

However in times of bear markets (falling markets) then investors should target low beta stocks since they should outperform the market. An example of this can be found in the UK where two low beta FTSE stocks (Tesco and Centrica) outperformed the market in a falling market.

USING BETA FACTORS IN THE PRESENT SITUATION:

The current world political situation is probably the worst it is for many years. World markets are falling at a rapid pace. What does beta factor analysis teach us about an investment strategy in this situation? Firstly, however good a company is it likely that in such circumstances most will encounter falls in their share prices.

However during this time a number of alternative investments that have negative beta factors have appreciated in value. The prime example of this is gold. Over the past twenty years when there was a strong equity bull market, the price of gold has fallen significantly. In addition to this shares in the gold sector have performed badly when compared to equities. However in the past few years it is noticeable that in the political uncertainty that has arisen in the world that the price of gold has shown material gains at a time when equity markets have recorded sharp falls.

Another commodity that has done well is oil that has seen a significant increase in its price per barrel over the past few months. In line with gold, the oil price has suffered over most of the past twenty years (at a time when equity prices were on an increase) and it is only in recent years that the oil price has shown a recovery.

CONCLUSION:

Beta factor analysis is a useful technique that has enabled many international investors to achieve satisfactory returns in the past. If one looks at the trends in world markets then one can see that in a bull market those investors that have followed a selective aggressive portfolio (i.e. including shares with beta factors of over 1 times) have generally outperformed the market.

However the wheel has changed. We are now in the stage of a bear market. The current political uncertainty has made things extremely difficult for investors. Should they get out of world markets since a conflict will almost certainly mean falling equity prices. Or should investors move to alternative investments with negative beta factors such as gold and oil? After all in case of a conflict these commodities will almost certainly rise and will probably go against the trend of equity prices. The answer will very much depend on how the current political situation develops. However investors will do well if they include gold in their investment portfolios.

Disclaimer: No responsibility for loss can be accepted to any person acting or refraining from acting as a result of material in this article.

©2004 by Andy George. All rights reserved

About The Author

Andy George is a qualified chartered accountant who was born in Birmingham, England and who has had many years' experience in public practice, industry, and commerce and as a lecturer. Since 1991 he has been based in the island of Cyprus. Andy was a financial correspondent for eight years at the Cyprus Financial Mirror where he wrote articles on business and accounting related issues to a non-technical audience.

He is the author of eBooks: How to write and Publish Your Own With a Shoestring Budget http://www.budgetebook.com

http://www.easy4tune.com/cbmall

akgeorge@cytanet.com.cy

Investing In 2006 A Speculators Perspective

Writen by Mychal Raynes

This coming year looks to offer some exciting investment opportunities. Alternative fuels, the housing market, inflation, gold, silver, and auto manufacturing will be economic headlines for the year 2006.

Screws Continue to Tighten On Energy

2006 will see oil prices rise upwards due to increased oil demand from the world's fastest growing economy, China. This rise in price is also due to increased oil supply falling short of meeting increased oil demand. This will force economies around the globe to seriously consider alternative fuel.

These alternative fuels will mainly be Synfuel because of Synfuel's ability to integrate with the world's existing infrastructure. This will become the cheapest and most efficient method of combating rising energy prices while being able to appease environmentalists. While new alternative fuel plants will not necessarily be brought online this year, steps will be taken to promote Synfuel technology.

While Synfuel solves the problem of continued oil demand, nuclear power will ease the natural gas power plant problem. U.S. Congress will continue to seriously consider the benefits of nuclear power.

Suffering in the Housing Market

2006 will set the trend for the housing market for the next few years. Look for the price of an average house in major cities to drop because of higher energy prices, increased unemployment, outstanding debt of the average American, and more houses for sale than houses being bought. Continued fed rate hikes might be the initial push into housing's decline in value. When the housing market runs into trouble expect more media coverage than the O.J. trial because most people own a home, whereas if the stock market runs into trouble most people don't invest. One can expect congress try ineffective - even counterproductive - methods to ease suffering in the housing market.

Bernanke vs. Gold

With the ascension of Ben Bernanke to the throne of Federal Reserve Chairman, expect Bernanke and The Fed to continue interest rate hikes until a piece of the U.S. economy experiences disaster. Coupled with Bernanke's philosophy of monetary inflation, this will bring utopia for gold investors and other sound money advocates.

Not only is the value of gold moving up against the dollar, gold is moving up against most currencies world-wide. Because gold and sound money policies have been ignored by the world over, and the decline in currency value, investors - private and public alike - are beginning to purchase solid assets. Therefore expect the price of gold to continue in the up direction.

Silver - Icing On the Cake

Silver is gearing up to be this year's sleeper investment. This is due in part because silver could not be purchased at a better value. Also, silver is being used faster than it is being mined creating a supply and demand imbalance that could likely lead to a shortage. World stockpiles of this precious metal have already diminished to a multi-decade low. Investors leveraging their money in the silver mining sector should experience reasonable gains on their investments.

Driving Around In 2006

Another big story for 2006 will be the thousands of layoffs experienced by American auto manufacturers. Look for business restructuring including a strategy of bringing cost effective and fuel-efficient vehicles to market. U.S. auto manufacturers' stock value will continue to decline throughout 2006. Serious automobile investors will look towards Japan, especially companies like Toyota, when evaluating auto investment opportunities.

This coming year will provide profitable speculative investment opportunities. Explosive Speculations Newsletter is designed to capitalize on the economic weakness that 2006 will likely bring. Don't miss out on valuable information that can help bring that "extra something" to your investment portfolio.

No permission is needed to reproduce an unedited copy of this article as long the About The Author tag is left in tact and hot links included.

CO-AUTHORED BY: Zach Fross
Explosive Speculations Investment Newsletter is geared towards informing investors about investment opportunities that have a chance to double and triple over the next few years. To find out more about Explosive Speculations please visit http://www.explosivespeculations.com

or email us at info@explosivespeculations.com

Mcd Daily Chart Covered Call Example 1

Writen by Ron Ianieri

NOTES ON McDONALD'S (MCD)
Covered Call

1. Around June 2, 2003, MCD breaks out through a resistance
level established back in late Nov. early Dec. 2002 after
failing to break that resistance level in mid May 2003.

2. MCD climbs up from $20.00 to the $25.00 range in a slow
gradual uptrend step like pattern. This type of pattern is an
opportunity for buy-writers because this type of gradual rise
normally brings about a decreasing implied volatility period
which is great for premium selling.

3. Notice the size of the daily vertical lines during the period
from mid-August 2003 to December 2003. The size of the lines
represents the daily trading range of the stock. As you can see,
the lines are very short which indicates that the stock does not
move much intra-day. Again, this is an indication of decreasing
volatility which is a positive sign for buy-writers.

Conclusion: The two most prominent and noticeable patterns both
bode well for buy-writers. The covered call strategy does not
need a lack of movement, as much as slow, consistent
non-volatile movement.

So, in the case of McDonalds above, the slow trending movement
of the stock brings about a decreasing volatility. Added to this
is the contraction of intra-day movement, as shown by the
decreasing range of daily trading.

These two factors each contribute to decreasing volatility and
provide an opportune time to write a covered call. This is the
type of pattern that offers both capital appreciation as well as
premium returns.

Amazing Options Trading Strategies For Safer Investing
and Explosive Profits. Discover how to protect your
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How To Choose The Right Investment

Writen by Mika Hamilton

Choosing which investment is right for is a complicated decision. While you can seek advice from financial professional, ask for tips from family and friends, and do research – in the end the decision is solely your own. This can be an extremely scary situation. However, before you may any type of investment make sure your survey your entire financial situation. Take in account your present financial needs as well as any future needs that you might be award of. Most investors should not invest in any high risk securities unless they have a solid regular income, insurance, and cash readily available in case of a financial loss. There are several basics to investing that should be taken into consideration.

The first of which is to understand that any type of investment involves risks. There is no sure thing and no one can predict the future. The next rule is to remember that the more risk involved the higher the potential profit. The opposite is also true. Low risk investment vehicles have do not offer high return rates. Make sure any company you invest in your fully understand. There are no "take backs" in investment world. Mistakes are can not be undone and therefore must be lived with.

It is also important to set investment goals before you begin to invest. Ask yourself "what do you want to accomplish with your investments? Are you saving for a vacation, early retirement, or a college fun? All these are important in determining how to diversify your stock portfolio. Goals go hand and hand with safety. Safety refers how conservative your investments will be and how likely you are to loss your original investment. If you are investing to have an income then you need to pick stocks and mutual funds which offer a consistent profit over a long term period. Growth is also another direction you may want to go. This is when the goal of your investment portfolio is long term investment which carry more risk, less safety, and provide no dividends.

Some investors are simply interested in speculation and day trading. This is a much more aggressive form of investing. Speculation stocks have a much higher risk of loss then your average stocks. For the most part speculative trading happens over short intervals of time with new and innovative companies which have yet to prove they can be successful. The risk here is that if the company takes off you have made a huge profit, however they fail, you suffer a great financial loss.

The goal of any investment portfolio is be balance. Having high risk securities for aggressive profit coupled with low risk slow money makers that are always stable. You do not have to choose a single approach. Instead use a combination of the above goals. Determine the portion of each you with your stock portfolio to be diversified in and then begin your investment endeavors. If you feel overwhelmed or simple would like some help you should seek out a financial advisor who can offer direction, experience, and great stock tips.

Visit the Global Investment Institute and signup for our free Investing For Beginners E-Course at http://www.Global-Investment-Institute.com

Investment webmasters or publishers, please feel free to use this article provided this reference is included and all links remain active.

The Era Of Disaster Recovery And Prevention And What It Means To Investors

Writen by Leon Altman

The recovery from Katrina and Rita ushers in a new era of Disaster Recovery and Prevention. Governments and people are rethinking their response to disasters and the steps they can take to prevent or minimize the worst consequences. The biggest catalyst for this new era is the political fall-out from Katrina.

The slow response to Katrina was a black eye for the Bush administration. For Michael Brown, the ex-head of FEMA, it was a national humiliation. The fates of Louisiana governor Kathleen Blanco and New Orleans mayor Ray Nagin remain to be seen, but reports have pointed out their failures in prevention and response, and that will come into play at election time.

President Bush wants to make up for the bungled response (and restore some political capital)and has earmarked a recovery effort that may total $200 billion dollars. The early response to Katrina has become a cautionary tale for politicians and bureaucrats in federal, state and local governments, and you can be sure they will be pushing for more disaster prevention spending in their own particular fiefdoms. And the media is keeping watch—newspapers in California have been filled with stories warning about the lack of disaster (especially earthquake) preparation in the state.

The Army Corp of Engineers, burned by the lack of follow-through on their recommendation to raise the New Orleans levees, is now looking to repair vulnerable areas around the country. And they're not the only ones.

New homes have multiplied along vulnerable coastal areas. From Florida to the Outer Banks up to The Hamptons and all throughout the east coast, coastal property values have soared. Dune Road, a sliver of land with pricey homes between the ocean and a bay in Westhampton, New York, was virtually wiped out by flooding little more than a decade ago. Now it has been rebuilt with even pricier multi-million dollar homes. You can be sure these homeowners will spend what it takes to protect their properties.

And they may need to because it looks like big storms are brewing. If many meterologists are correct, we may have entered a cycle of increasing frequency and severity of hurricanes.

Combine the measures slated for homeland security, rebuilding the Gulf coast and the ramp-up of disaster prevention around the country and you have a near permanent state of disaster recovery and prevention.

For some companies, let's call them Hurricane stocks, the opportunity to take part in the Gulf recovery means a great deal of more business in the short term. For others, it may mean more business for many years to come.

Hurricane stocks are companies that are needed right now. For instance, the immediate need to help those whose homes have been destroyed or are unhabitable. Think of companies that provide temporary living and survival gear. Think of Coleman camping products, such as tents, sleeping bags, portable stoves, flashlights. Coleman is owned by Jarden (JAH:NYSE).

Manufactured homes have come a long way in the past decade, and will prove to be a good temporary solution for many and a permanent solution for others in the Gulf. Cavalier Homes (AMEX:CAV) has been contracted to build and deliver manufactured homes to the Federal Emergency Management Agency to house Gulf Coast residents displaced by Hurricane Katrina. The contract is expected to generate $58 million to $63 million in revenue for the company.

Some other compnnies in this sector include Champion (NYSE:CHB), which partners with nearly 3,000 independent retailers, builders and developers, Fleetwood Enterprises (NYSE: FLE) and Coachmen Industries Inc. (NYSE:COA).

Oil and gas facilites in the Gulf coast also need emergency repair. The economy of the Gulf Coast and, to an extent, the economy of the U.S. depends on it. A number of drilling rigs were damaged in the storms, which means that a company like ENSCO (NTSE:ESV) which owns drilling rigs in the area, will be in big demand. Oceaneering International (NYSE: OII), which inspects and repairs underwater infrastructure of oil facilities, will be busy, as will Jacobs Engineering (NYSE:JEC), providing engineering and construction services to oil and gas companies.

Rebuilding the Gulf Coast

Rebuilding will include the big dogs in construction, like Halliburton (NYSE:HAL), The Shaw Group(SGR) and Caterpillar (NYSE:CAT). But many smaller companies will also take part, often as subcontractors. The Army Corp of Engineers has increased its task order from $10 million to $20 for Aduddell Roofing, a subsidiary of Zenex International, Inc. (OTCBB:ZENX). National Storm Management (NLST:PK), an expanding national construction company specializing in storm restoration management, will also do a good deal of restoration work in the Gulf Coast.

To build you need building materials. Home retailers such as Home Depot and Lowe's will be seeing their orders increase, but so will companies that provide raw materials like timber. Take a look at Rayonier (NYSE:RYN)and Plum Creek Timber (NYSE:PCL), two REITs that own and manage timber properties.

Some Hurricane and rebuilding stocks have already jumped and retreated. But the point to remember is that while the hurricanes resulted in an immediate need to help those in dire need, they also ushered in a new era, an era when governments and people in the U.S. and around the world know they can do more to recover from disasters and minimize the consequences. So keep an eye on companies that will be at the center of the Disaster and Prevention theme for years to come.

Leon Altman founded http://www.InvestingIN.com and http://www.SmallcapRecap.com , two websites that offer news and commentary on stocks. Sign up for free newsletters on the sites.

Invest

Writen by Marcus Peterson

Broadly speaking, investment depends on the marginal efficiency of investment and the rate of interest. What induces individuals to undertake investments? Obviously, profit expectations seem to exercise a major influence on the investment decisions of individuals, and these profit expectations in turn are influenced by the current and the expected level of economic activity, changes in technique and so forth.

Suppose a man borrows money to invest. He will have to pay interest on the loan. But he expects profit from this investment. He must compare the rate of interest he has to pay to the rate of profit that he expects to obtain. Obviously, the rate of return or profit must at least be equal to the rate of interest; otherwise no investment will be made. So long as the expected rate of profit exceeds the rate of interest, investments will continue to be made. The yield expected from a new unit of capital is called the marginal efficiency of capital. This marginal efficiency of capital must never fall below the current rate of interest, if investment is to be worthwhile.

The rate of interest does not quickly change. Hence, the inducement to invest, by and large, depends on the marginal efficiency of capital. If the business expectations are good or if the marginal efficiency of capital is high, more investments will be made in spite of high rates of interest. On the contrary, a depression, or bleak prospects of profits, will discourage investment, even if the prevailing rate of interest is low. Thus, fluctuations in investment are mainly due to the fluctuations in the marginal efficiency of capital. There are some other factors that affect investment. For instance, if a firm has excess capacity and can easily handle increased future demand, it will not go in for further investment to increase its capital equipment.

Invest provides detailed information on Investments, How To Invest Money, How To Invest In Stocks, How To Invest In Real Estate and more. Invest is affiliated with Bank Trust Investments.

How To Start A Debt Reduction Plan

Writen by Steve Ashton

Whether you simply want to pay off your mortgage or car loan sooner, or you've run up a huge pile of credit card debt, starting a debt reduction plan is always a good idea. Follow these five steps to setting up your own debt reduction plan:

1. Find out where your money is really going. You can't cut your expenses if you don't understand where you're spending your money in the first place. Pull out all of your receipts, credit card bills, and bank statements for the last 3 – 6 months. Make a list of everything you spend money on, by breaking things down into categories (food, entertainment, clothing, travel, bills, interest, taxes, etc.). Then figure out what percentage of your income is going towards each group of expenses. While you can't change certain expenses, you can change most of them. Decide what general areas you can cut expenses in, and which areas you should be spending more money on.

2. Trim unnecessary expenses. Now that you've decided what general areas you want to cut expenses in, start looking at specific bills and receipts. Some expenses will be justifiable, and others won't. Just because something was inexpensive, doesn't mean you can justify spending money on it rather than putting more towards reducing your debt. For example, perhaps you spent $80 on a pair of jeans, and $10 on a clearance top you found. At first glance, you might think the $80 expense could have been cut by finding a less expensive pair of jeans, while the $10 expense is easily justified, but that's not necessarily so. If you truly love that pair of jeans, they're of high quality and will last a long time, and you'll wear them regularly, then the $80 expense is justifiable. But if you purchased the clearance top simply because it was cheap, and you'll likely wear it only on rare occasions, then that expense is the unjustified one that could have been cut. You need to evaluate the benefit of what you spent the money on versus the benefit you would have realized if you had spent that money paying down your debts.

3. Set a timeline and goals for yourself. You've already decided where you can cut your expenses. So what should you do with that extra money in your pocket? Each debt reduction plan will revolve around different goals and timelines. Set your own now. For instance, if you have a 30 year mortgage, your goal might be to pay it off in 20 years instead, to save thousands of dollars in interest payments. If you want to pay off your credit card debt, your goal might be to pay off one card completely (and get rid of it) by the end of the current year. Your goals and timeline will be highly personal, so spend some time deciding what's most important to you.

4. Pay the small, high interest debts first. When you've decided on a timeline and general goals for yourself, it's time to pick the specific debt to deal with first. The general rule is to start with the smallest debt with the highest interest rate. That usually means a credit card. By eliminating a small high-interest debt, you'll cut down on the total interest you'd pay over time, and by choosing a small debt first to eliminate completely, you'll free up those regular payments to go towards a larger debt later. Once that small debt is paid off completely, keep paying those monthly payments, but pay them towards your mortgage, car payments, or other large expenses.

5. Reward yourself with savings. As you reduce your debt, make sure there's something in it for you (although for some, the peace of mind may be enough). One of the best ways to reward yourself is to set up a savings account, money market account, or some other kind of interest-bearing account with the money you used to put towards your debts. For once, let interest rates work in your favor, and when a large expense comes up you'll have funds to draw from (whether it be an emergency or a pleasant vacation). You won't need to rely on creditors when you can rely on your accumulated wealth.

Copyright 2006 Stephen Ashton

Find out more tips and advice about how to clear your credit card debt at http://www.clearcreditcarddebt.com. You can find debt consolidation loans at http://www.finddebtconsolidationloans.com.

Is Molybdenum Another Way To Ride The Energy Bull

Writen by James Finch

Earlier this month, a reporter from Business Edge (Ontario edition) was pondering investment advice he might receive over a fantasy lunch with different financial gurus, such as Warren Buffet, Jim Dines and Eric Sprott. He said of Eric Sprott, "You'd be hard pressed to find a savvier market player than Canadian money manager Eric Sprott - anywhere." Because the reporter was appraising the dollar value of an auctioned "charity lunch" with an investment guru, he embellished upon his witticism, "This lunch could be worth a mint if Sprott were to let you in on the next big thing. In recent years, the CEO of Toronto-based Sprott Asset Management has been consistently ahead of the street."

And what might this secret tip be? Perhaps molybdenum could become the next big thing. We talked with Maria Smirnova, a Sprott Asset Management Research Associate, who spoke positively of the metal, "I think the key to the molybdenum story is its wide-reaching applicability, especially in the energy sector." She added, "This specialty metal is used in oil and natural gas pipelines, hydrocarbon desulphurization, oil drill rigs, pollution control equipment and nuclear energy applications." Energy bulls, perhaps even the Sprott team which has bet heavily on the energy sector and invested in two molybdenum juniors, believe the world will need more "moly" during this commodities boom.

"It's not sexy or glamorous," Raymond James' (Canada) uranium analyst Bart Jaworski told us during a telephone chat a few months ago, "and besides it's dominated by the Chinese." Well yes, that is true, but isn't the uranium price also being driven higher by Chinese stockpiling? Another drawback for the metal, as Maria Smirnova, pointed out during a recent phone conversation, is that many can't even pronounce 'molybdenum.' So, they call it 'moly' for short, as if this specialty metal belonged in the lyrics of Little Richard (Good Golly, Miss Molly).

According to the International Molybdenum Associations (IMOA), nearly 80 percent of the moly demand comes about for the manufacturing of tools, high speed steel, stainless steel and low alloy steel. Since World War I, moly has become a lower cost replacement for tungsten in hard and impact-resistant steels. It was first used as an alloying element in the production of armor plate.

Molybdenum commodity specialist Michael J. Magyar describes molybdenum's properties and uses in the United States Geological Survey Minerals Yearbook, "Molybdenum is a refractory metallic element used principally as an alloying agent in cast iron, steel, and super alloys to enhance hardenability, strength, toughness, and wear- and corrosion-resistance. To achieve desired metallurgical properties, molybdenum … is frequently used in combination with or added to chromium, columbium, manganese, nickel, tungsten or other alloy metals."

Exploration for new sources of oil has led to the development of deep drilling The very deep reservoirs are often contaminated with corrosive sulphides, brines and carbon dioxide. Moly is the most sulphide stress cracking resistance low alloy steel available for use in sour wells. As service conditions deteriorate, oil companies are turning to higher molybdenum stainless steels (with 13 - 16 percent moly content) to manage the unfavorable elements at those depths.

Sixty percent of molybdenum consumption is used for stainless steels, super alloys or lower alloy steel. An example is a popular form of stainless steel called S31600 (Type 316), containing three to four percent Moly). This type of stainless steel was used to clad the exterior of tallest building in the world – the Petronas Towers in Kuala Lumpur in Malaysia, London's Canary Wharf and in many other architectural applications in marine coastal environments.

According to the IMOA, "The most corrosion resistant stainless steels contain 6 to 7.3 percent molybdenum. These grades are used for power plant condensers, offshore piping, and critical components in nuclear power plants such as service water piping. In 1996, 6 percent moly stainless steels were selected for the absorber towers of more than twenty flue gas desulphurization scrubbers being installed in coal-burning power plants in South Korea."

Molybdenum-based catalysts are growing. The oil industry has been using moly to remove sulphur from the compounds usually found in crude oil. As petroleum production turns to higher sulphur crude oil, they will require more molybdenum-based catalysts. Others plan to use moly in liquefying coal. True, this consumption remains early days. But, in early February, China Oil News reported China plans to spend $15 billion to build coal liquefaction plants in that country. China hopes to draw from its enormous coal deposits for conversion into oil products, using molybdenum-based catalysts.

James Finch contributes to StockInterview.com and other publications. Visit http://www.stockinterview.com to download your free copy of "Investing in the Great Uranium Bull Market: A Practical Investor's Guide to Uranium Stocks." You can always write to James Finch at jfinch@stockinterview.com

Making Money From Property Uk

Writen by Moutushi Banerjee

Money from real estate/property investment has been the most powerful type of investment for building wealth. The reason property is such a commanding way to make money is due to leverage associated with it.

For the experienced investor this is obvious, but for the benefit of those who are new to it leverage is the use of borrowed funds at a fixed rate of interest in an effort to boost the rate of return from an investment. Increased leverage causes the risk and return on an investment to also increase.

Keep your money in the bank is considered as the safest option to get some guaranteed increase in the value of your money.

Taking the bank at an assured maximum return of 5% per year, your money of £100,000 will return at the end of 5 years an amount of £127,628.

Take the stock market and admittedly over the last few years the stock market has been popular moneymaking option in the UK. Though it is really hard to say what sort of return you get from the stock market, let us assume a 12% return every year. Now 12% return on £100,000 will return at the end of 5 years an amount of £176,234.

Now in the growing market of UK, let us say the property market grows at a rate of 6% over the next 5 years, so how does that form to be a better money making option.

It is property, which allows you to leverage £100,000 to purchase £500,000 worth of property. (£400,000 borrowed from your bank). Now at the end of 5 years your investment of £100,000 becomes £269,115.

So you have increased your initial investments by 2.6 times over a period of 5 years. So you can make more money from property UK than what the stock market or bank can provide.

So what else do you need to make leverage work for you? Ponder on the options below before investing on the property of your choice. · When buying, be clear whether you are buying solely for investment, or partly for your own use. · Whether you intend to let out your property for long periods (e.g. 6-12 months) or on a short-term basis for holidaymakers

The augmentation of global economy makes property investment UK the best way to make money. Yes you will need much more skills to make money from property UK, but with time using leverage with calculated investments property UK can become the best investment option to make money.

http://www.midasestates.com/making_money_from_property_uk.php

Keys To A Winning Swing Trade Part Vi Final Part

Writen by Rob Jenkins

Now that you have assessed the stocks that affect your stock the most, you have to take into consideration the much larger picture, the overall market. Wall Street is often a large cesspool of herd mentality. When the market sells off, around 75% of stocks follow suit and also sell, the same is true about when the market goes up. Now there are exceptions, but you want to give yourself the best chance for success. So if the market is in a general uptrend you should be leaning more toward plays going that way.

You should now have the entire basis you need to pick a stock, now you need to determine your entry. I have found that the best way to do this is to break up a predetermined amount of money, and buy in pieces. I tend to buy on strength, not weakness. The reason is, if a stock is unusually weak, it normally tends to continue down, not trying catch the "falling knife" is a good way to save you money. If a stock is not strong, there is no reason for you to try to change the trend and hope your right later down the road. Sure you may miss the lowest entry possible, but it is my feeling that you will miss even more big losses.

The final tip and probably most important is to PROTECT YOUR MONEY. Wall Street doesn't care if you go broke; you have to take an active role in your own future. When you have a great gain, take some profits, when a stock is weak, SELL IT. Consider all gains your money. For example, say you buy a stock at ten dollars and now it's at twenty and beginning to pull back. You have to assess the situation like you just bought at twenty, because that is your money! Don't look at it and say "well ill just hold through this dip because I have a large gain", as a swing trader you have to realize that dips can become tops in a hurry. If it really is just a dip you can buy it back again when it is showing strength, if it is the top, who cares, you sold right?

This process requires a bit of time being spent, but considering the amount of money you stand to lose if you do not do it, it is well worth it. Trading isn't easy and it isn't for everyone, but once you equip yourself with the proper tools and knowledge, you have a better shot than most.

Mr. Jenkins is a full time trader and author at : http://www.equitychallenge.com

The Point Behind Point Amp Figure

Writen by Thomas Mullooly

After receiving the e-mail I sent out last week, a client called and asked "what is the point of all of these charts that you refer to?"

I told her that "point and figure charts, and the strategy that I use with those charts, is designed to prevent you from being involved in a disaster."

I asked her to humor me for a moment and let me tell her about a gentleman I recently met.

In 1998, he decided that he'd retire in mid-2000, when he turned 65.

Back then, his 401k plan was worth $1,214,000.

He expected to withdraw $80,000 per year from the plan (or about 6 to 7% of the balance), when he figured this out in 1998.

He went on to tell me that he expected this would be a reasonable amount, because the market had returned an average of 15% per year for the previous 15 years.

Even if the market didn't make 15%, he said, he read somewhere that "over the long haul, the market returned a little over 10% per year, going back to the 1920's."

So, since he planned to only take out 6 or 7% per year, and it's growing at least by 10% or more, he estimated he would never run out of money.

So he made big plans!

He planned to renovate his house, put in a pool. Also do a little traveling, something he never had time to do while he was raising a family and working. His wife also made plans to stop working as well.

His retirement date was Friday, April 14, 2000; his 401K had a value of $1,277,000.00.

One year later, in April, 2001, his 401K plan had a value of $979,000.

By December 2002, his 401k account was worth $764,000.

He had not even made a withdrawal yet, but his solar-powered calculator told him bad news: he'd be scrounging for money by the time he was 76. The $80,000.00 per year he planned to take out would now drain this account entirely in about nine years.

The distribution was scaled back, from $80,000 to $24,000.00 a year.

Going from $80,000 to $24,000 a year was a lifestyle change for him. He felt burned. Dreams of traveling went out the window. Buy a new car? No chance.

His wife has taken a job in the library. He's now back at work, as a consultant, hustling for jobs. And now he's just learned that his former company is changing their healthcare plan for their retirees.

What if this were you in this situation?

Right now, he wants to forget about asset allocation, pie charts and "pie in the sky" stories of long-term returns and growth rates. He told me that pretty soon, he won't be worrying about "pie in the sky," he'll be wondering... how to get pie on the table!

Moral of the story: when the point and figure charts go on defense, we should heed the warning!

Please don't get "sucked in" to the concept that the market returns an "average of ___% per year" and "over the long haul" things will work out OK.

Just know that going on defense doesn't mean the market will go immediately straight down.

What we DO know is that the risk of losing money in our accounts is much higher when the indicators are flashing defense. This has been the case since the bullish percent charts were created over 50 years ago.

If you want me to show you how these charts can guide you, just call me and I will GLADLY show you in less than 10 minutes.

This is where stock selection is key.

There has never been a more crucial time for you to be working with someone who watches the market on a daily basis. If you have any questions whatsoever regarding our game plan, you need to call me immediately at the office. The number is 732-223-9000.

Since the summer of 1998, there have been four times where the S&P 500 has returned 20% or more. And there have been four times where the S&P 500 has LOST 20% or more. In just seven years!

But if you just sat there and "held on," no real progress was made. You can look it up; you're right where you stood in 1998. Pretty soon it will be a decade where the "buy and hold" investor will have made no money.

Thomas P. Mullooly, President of Mullooly Asset Management, LLC (http://www.mullooly.net) has spent over twenty years in the investment industry, as a broker and as an investment advisor.

The Dangers Of Buying And Holding

Writen by Neal Frankle

Maggie and Sam called my office last week, and I could hear the desperation in their voices. They've lost more than $1 million in the stock market since 2000 by "investing conservatively." Their broker assures them that buying high-quality mutual funds and holding onto them through rough markets will grow their money safely. Yet they can plainly see it isn't working. In fact, they've watched a serious decline for a while now, and they're starting to panic.

Their problem is not earning money to fund their retirement dreams. Both Maggie and Sam are smart and successful: She is a heart surgeon and he is a well-heeled attorney. Yet they've lost a fortune, and they can see that no matter how much they earn, it can't possibly offset the damage done by listening to the advice of their broker, so they've turned to me to stop the bleeding.

These two aren't the only intelligent, affluent investors I've met who are frustrated and frightened by their investment results, and 2000 wasn't the only bear market investors had to face. Based on 60 years of evidence, a bear market ravages investors every 3.3 years, and the average loss is 27%. That's enough to scare anyone. According to AARP, 35% of all retirees go back to work after they retire. Could it be because the market cracks and scrambles their nest eggs?

I'm reminded of my Uncle Jim, who wouldn't listen to me and retired in 1999 with $700,000. His plan was to create income from his retirement package and to live happily ever after. Interest rates were too low for Jim, so he decided to invest in growth mutual funds to create the income he wanted. By the end of 2002, his $700,000 had dropped to less than $400,000 thanks to an inhospitable market. His savings had lost 43% of its value. Then, instead of $700,000 working for him, he had $400,000 working for him. That meant less income--a lot less income. Faced with this disturbing reality, Jim sold his beautiful home to buy a small condo and had to go back to work. Jim didn't have 70 years to "think long-term" as his broker and other financial "experts" suggested he should. Jim needed that income today.

What can Jim, Sam, Maggie and everyone else do to protect themselves from catastrophic loss in the future? Since we know that a crash comes every 3.3 years on average and the typical loss is over 27%, it is critical for investors to invest only when the risks of doing so are relatively low.

Of course whenever you invest in the stock market you take on risk. However, we know that certain times are riskier than others. Just as you check the weather forecast before you embark on a road trip, I'm suggesting that you check the market's temperature before you hit the financial road.

There are a number of ways you can do this. The method I like best is watching the major indices, such as the Dow, S&P 500 and the NASDQ. Here are the specific steps:

1. I look for days when the volume explodes. For example, if the DOW trades 2 billion shares on average, and today the DOW trades 2.2 billion shares, that is a significant increase in shares.

2. When that happens, I pay attention to what happens to the price of the index. Continuing our example, if the DOW closes higher today to boot, I know that large institutions are falling over themselves trying to buy shares, which means prices are moving up.

3. We know that one sign of a healthy market is a big increase in shares traded, coupled with the index moving higher. In fact, there has never been a bull market stampede without a big increase in trading along with an increase in the index price. If I see two or more of these strong days, I'm more prone to invest.

I strongly suggest that you watch the major indices for clues on the market's health before you invest. I'll be providing more specific tips on how you can "take the market's temperature" next month, most notably how you know when it's time to stop holding and sell.

Neal Frankle is the author of Why Smart People Lose a Fortune: 5 Steps to Restoring Your Wealth and Sanity. He helps affluent clients establish and implement a safety-net strategy to protect their wealth. He also helps other professionals, such as CPAs, to do the same thing for their clients. To contact him, send e-mail to Neal@WealthResourcesGroup.com.

Neal Frankle
(818) 621-2556 (mobile)
(818) 716-3100 (office)
neal@wealthresourcesgroup.com

The Human Index

Writen by Geoff Gannon

As the Dow approaches a new all-time high (the record close was 11,722.98), now would be a good time to take a break from the financial news found on your televisions, in your newspapers, (and yes) even on your computers.

A new high is an empty headline. I'm not writing to tell you that; you already know that. What you may not fully appreciate is just how arbitrary an index the Dow Jones Industrial Average really is.

Most notably, it's no longer very industrial. Only about one of every three stocks in the Dow is involved in what might be considered an old-line industrial (heavy manufacturing, extraction, etc.) business. A lot of the Dow components are involved in totally different businesses such as consumer products, health care, and technology. For the most part, these businesses are usually a lot less tangible. The businesses are asset-light; the future prospects are largely company specific.

Today, the extent to which the common stocks of the thirty companies move together may have more to do with their shared classification as "Dow" stocks than with the future prospects of the underlying businesses.

On April 8, 2004 some changes were made to the Dow. These weren't the first changes – and they won't be the last. Such changes add to the arbitrary nature of the index, especially in the short-term.

Generally, the changes have been motivated more by who should go than with who should come in. Discarded Dow components can usually blame a dying industry for their exit. Sometimes, a rapidly dwindling market cap helped.

The April 2004 changes involved three spots in the index and six stocks.

Departures: AT&T (T), Eastman Kodak (EK), and International Paper (IP).

Arrivals: Verizon (VZ), American International Group (AIG), and Pfizer (PFE).

Please note that AT&T is now back in the Dow. In November 2005, SBC Communications, which was itself born from the 1984 divestiture agreement between AT&T and the Justice Department, changed its name to AT&T after acquiring that company. It also adopted the ticker symbol associated with that name (T). As a result, a chart of the new AT&T does not reflect the fortunes of the old AT&T.

None of these stocks has fared particularly well. In fact, since the changes, they've all basically underperformed the S&P 500. With the exception of Kodak (and Verizon for a very short time), none of the stocks have managed to trade above the share price they had at the time of the reshuffle

Is this just a coincidence?

As a rule, reshuffling an index through human intervention is likely to produce odd (and unexpected) coincidences.

The Dow is made up of a small number of companies. These companies tend to be very high-profile businesses. They are also high-profile stocks. Usually, they were high-profile stocks before they entered; but, obviously, being added to the Dow only increases investor interest in their fortunes. Any human intervention is likely to reflect the (current) biases of investors (and the financial media).

The result? A very human index.

Geoff Gannon writes a daily value investing blog and produces a weekly (half hour) value investing podcast at: http://www.gannononinvesting.com