Friday, February 21, 2014

Carl Icahn: The Count Dooku of Wall Street

At my age, many ask me who my favorite investor is or who I aspire to be. It is easy to say Warren Buffet or Milton Freedman. Although Carl Icahn may or may not be someone to aspire to be but there is no doubt that Icahn has made a huge name for himself. Icahn is just that, an icon. No mean for the pun but he is easily up there with the best investors in the game. What makes Icahn so interesting is his style of investing and even more so; his story. The book King Icahn: The Biography of a Renegade Capitalist goes into the life of Carl Icahn and how he amassed his fortune.

Carl Icahn's story is intriguing, he wasn't raised in a family with financial prestige, his dad was a frustrated opera singer that ended up switching between the cantor for his local synagogue and a substitute teacher. His mother was also a school teacher. Carl Icahn focused on his studies and majored in philosophy at Princeton. He then decided that wasn't his thing, so he wen't to med school in New York. He then dropped out after 2 years to join the army. Still hasn't picked up investing. Finally, he started investing and started his own company that is now the empire Icahn Enterprises. He then amassed a huge amount of money to try and control numerous amounts of companies in his favor to turn enormous profits. He over the years has developed a ruthless reputation. He can be considered a corporate raider, by buying certain percentages of companies to control their agenda in the stock holders favor, then ditched the company to pursuit another. He is the Count Dooku of Wall Street. It seems with age, that he actually is resembling the Star Wars antagonist Count Dooku. Count Dooku in Star Wars is the well respected master Jedi. Just like Count Dooku, Carl Icahn is regarded as a legendary investor. Icahn's reputation as a corporate raider is because of his almost hostile take overs of companies just to turn a profit. Some just say Icahn's methods are aggressive and benefit each company he comes in contact with.

His style of trading and more in depth look at his story can be found in the book King Icahn by Mark Stevens. Mr. Icahn has also spent some change on some million dollar horses. He is a diversified investor that can certainly stir up feuds with other investors, like last years feud with billionaire investor Bill Ackman. Carl Icahn can certainly be admired for his story and respected for his success in investing. But is he someone to look up to? After you  read into his business holdings, and his raids on Phillips Petroleum and TWA, you can decide whether or not to admire the Count Dooku of Wall Street.

Thursday, February 13, 2014

Comcast and Time Warner - The Merger Explained

Recently, media reports showed that Comcast proposed a $45.2 billion takeover of Time Warner Cable Inc. This takeover would be quite a hefty deal for the market and the government to grasp. Two of the largest cable providers merging just sounds like a deal that the government will sniff out. The FTC, or Federal Trade Commission along with, surprising, the IRS, and sometimes the SEC, will have some report and analyzation of the merger in due time.

My Rant on Comcast
Non business related, Comcast is the provider for my TV and I do enjoy the on demand options, (although the movies I want to watch always have a fee to them) as well as the freedom to watch without weather interference (sorry directTV) Comcast simply is frustrating. Comcast is a monopoly in the cable industry regardless of its merger with Time Warner, Comcast knows that its customers will reluctantly stay with them regardless of the premium they put on for extra channels. They know customers don't want to go through the hassle of switching cable providers and that most customers certainly won't go to satellite providers. So, Comcast has its customers right where they want them; in a struggle of paying big money for more shows or movies. I just can't get over their ridiculous fee that they charge for some of its on demand products.(other than Netflix movies are coming hard to find)All of their "Xfinity" commercials always show the classic "pay for 6 months" fee thats always lower than what you actually end up paying for it in the long run. I'll have to admit, there customer service has gotten better over the years and the monopoly that they have is only going to get grow.

The Growing Diversity of Comcast
Comcast over the years grew from the cable company, to the phone company, to the internet company, and now to the home security company. Its pretty amazing how many aspects of our lives Comcast could cover. Reading some articles that might say how the cable industry is the next to fall is an intriguing topic, but is hard to pinpoint and should be thrown away at the moment. For now, cable companies are still bringing in profit, and are diversifying themselves to reap more profits. Regardless of the fact, many Netflix or Hulu users tend to stray away from normal cable and rely more and more on Netflix. Comcast realized this and so they recently have added a home security component to its already diverse product line. The home security not only adds a different industry to go into, but also adds a mobile perspective that Comcast has been trying to unlock. And so, the growing diversity of Comcast, can only go up.

Will the Merger Happen?
With all of the diversity in Comcast, I haven't even began talking about the merger with Time Warners Cable. This would involve the two largest cable companies and give Comcast a huge boost in its already dominant industry. That just sounds like a no go from Washington. Well the government as I said before, will have some sort of report on the merger and review its eligibility soon. I wouldn't make any promises of this going through just yet. In time, we'll see. The main argument why this just might squeeze by the government regulators is how comcast and time warner do not have any overlapping markets and so customers won't see any changes to their services since they serve different area codes. Many are arguing its in the publics best interest. Still, Washington will needs to overlook the case and make an announcement soon.

All Hype?
There is an interesting book out about mergers by Thomas  Straub explaining the failures of mergers. Mergers are complicated, government interference is usual, and they are extensive and sometimes confusing. The main point to look at is how much media covers acquisitions and mergers like dogs chasing a ball, they go after mergers for the sake of a news story. Granted, this merger should be covered and is obviously major news, but there are plenty of mergers out their that have failed by either the government or just simply didn't work out. The successful merger that many point out would be the 1998 merger between Exxon and Mobile to create the giant oil company that is today Exon Mobile. Now I'm not saying that this deal will end up being the next Exxon Mobile and I'm not saying this merger will end up being another failed merger, (unless the government intervenes) I'm just saying from a long term perspective, the deal isn't going to be a gold mine of profit for investors, but watch the deal carefully. Invest with care.

Thursday, February 6, 2014

The Pullback We Need?

2013 Markets around the world enjoyed great gains throughout the entire year. 2014 a month in, and American markets have pulled back. Dow Industrial down a cool 7% while the S&P is down 5% and tech heavy NASDAQ down 4%. Many investors believe that a pull back between 10%-15% is what is considered "healthy" for the market to stay true to its pricing. Analysts have been worrying and uneasy about the Fed's transition and tapering of its purchases of bonds. Others believe the sell off is because of how overpriced most stocks are compared to their earnings.
 
The worrying over the pullback is why many have been very speculative of the market and after such a great year being speculative is a natural reaction. Now the question being asked is how much of a pullback is considered healthy? And when does the real worrying kick in?

Look at your portfolio 

Financials did not kick 2014 off with a bang. Usually January is a good month for investors, but this January was the opposite. Financials fell off of their highs like most of the market and could continue to fall with the Fed's tapering.

The most important move I made over the winter was setting aside some cash. A good 10% was how much I put down, and it wouldn't hurt to put a little more down either. Do not expect 2014 to be such as great of a year for equities as 2013 was. Its going to be choppier. I prepared by not only setting the 10% in cash, but also put  a small percentage into hedge positions. TZA or Direxion Daily Small Cap Bear Shares, for example is one of many hedges investors can have on the market.  The fund carries 3X the bear, or down side of the stocks it owns. And so in general, when the market goes down, these funds go up. They aren't bad ideas to own during pullbacks, but a few reminders. Trading hedge positions of any kind are typically a risky trade and experience should be required before setting aside any money into these funds. Only set aside a very small percentage into market hedges, and if you are hesitant or even questioning yourself, then the best hedge is to stay in cash. A lot of research must go into hedge positions before risking your investment.

Small Caps vs. Large Caps

Looking into small cap stocks tends to be riskier. They can be more volatile and depending on the stock, they can be unpredictable. Large caps you can expect more out of the stock. Compared to small caps, large cap stocks are like bread and butter. The big 30 on the Dow don't tend to flex up or down as volatile as low cap stocks do. A great dividend paying stock thats a big name tends to stay with the market obviously depending on the any big company news. In volatile market, small caps are riskier and should be treated with more care than trading a large cap stock.

In Conclusion
Choppy trading sessions should be something to expect more of this year and the market may not have the upswing like 2013 had, and so you won't get too lucky just picking a random stock these days, you have to realize whats going to fit your own goals. Using stock screening programs to fit certain criteria is a great start to picking out a few companies to invest in. I'd stray away from growth stocks this year unless they look absolutely promising. 3D Systems which has been on my watch board, got blitzed yesterday, the lesson to learn is not too panic and make decisions based on a great reasoning. Don't just sell just to sell, or don't buy just to buy. If you are in dire need for a growth stock the main stream profit maker Tesla is an intriguing one to look up. Don't be so scared when you see the market pull back like this. It's not the first time the market has pulled back a little bit, and it won't be the last.

Friday, January 3, 2014

Stock Watch List 2014

After Some research and consideration I have came up with a list of stocks to watch for 2014. At the end of the year I will see how I did.

Apple - Apple addressed its employees with a letter saying that big things are happening at Apple in 2014. Whether or not it was just a pep talk at new years is up in the air. Apple's fall from its $700 level and Carl Icahn trying to give advice to CEO Tim Cook all looks fishy to me. As I wrote about Apple last year, I'll say it again, Apple does not look like the same Apple we saw on the rise in the mid 2000's with Steve Jobs at the helm. That being said lots of mutual funds still carry Apple as its top holder. Apple's customers still have a high percentage of returning to its products, a good thing, plus Apple has tones and I mean tones of cash flow it can either reinvest back into the company (like Icahn says) or raise its already high dividend, or sit on it like its been doing. It finally stuck a deal with China's largest mobile carrier; another good thing, but will its success run to China or not is still in question. Keep in mind while Apple had an OK year, the tech heavy NASDAQ went up 40% while Apple was just staying behind. Obviously if Apple comes out with new products instead of just updating their tiring product line Apple will be a stock to look at but don't expect it to be as revolutionizing as the Ipod. I'd Give Apple a C short term and B- long term. It depends on the market and whether or not Apple really has any big cards up its sleeves.  


Ford Motor - I recently added Ford to my portfolio for the specific reason of its under evaluation. To me I think Ford is undervalued. Its sales for 2013 was strong and its expected to have an even better 2014. It has recently fallen below its moving average and to me that signals a buying opportunity. I had ford on my stocks to watch last year and it was a steady moving stock and still returned some gains, look for 2014 to be a year that Ford gets going. I would give Ford a B- short term and A long term. Short term its overhead has to get passed some negative publicity of the costs it is taking to get its new product line going, but long term it should pay off.

Cliff Natural Resources - Cliff Natural Resources got a bad rap from me last year, and for the right reason, natural resources companies had a real rough 2013. The sector has been drilled and was in the red for most of last year. What intrigues me about Cliff Natural Resources was its second half of 2013. It picked up a 56% gain, in all honesty the stock may be something to stay away from in 2014, but its still an interesting stock to watch for the next couple of years. I would continue my bad rap for Cliff Natural Resources and give it D short term and C- long term. Long term the stock could have a better year than it did.

RPC Inc - RPC Inc was also in my stocks to watch for 2013 because of the Obama's administrations promise on self sufficient energy here in the U.S. Instead of investing in heavily regulated energy stocks, I found the guy that makes the shovel for all the gold miners. RPC makes the equipment that a lot of independent oil and gas companies use. It went up 51% last year and it should have another solid year. I'd give RPC a B+ short term and A- long term. It should be a durable stock to watch for 2014.  

American Water Works - I had American Water Works on my list of stocks to watch last year and it did OK considering what the market did, the reason why its back on the list is because its a great long term investment. American Water Works has a bunch of subsidiaries that are regulated by the U.S. That makes American Water Works a regulated company which means it doesn't fluctuate too much. Its got a .30 beta value and it really won't move too much. Water will always be an interesting investment as the population keeps booming in the future to come. Since its a utility, I'll give American Water Works a B- short term and B+ long term. Remember to treat it as a long term investment. 

Urban Outfitters - Urban Outfitters is a large retail company that seems to be one of the only large retailer that is not near its 52 week high, like most stocks are. It had a bad 2013 and since it is a cheap retail company doesn't mean you should just jump into it. I would give Urban Outfitters a B- short term and a C- long term. Short term holiday season and cloths for teenagers seem to be in an uprising but long term it will be depending on its summer output.

Nordstrom Inc - I'm going to use Nordstrom as a short term investment. This specialty retailer had an OK year in 2013 and honestly in the long term depending on the market, I don't expect this stock to surprise me in a huge upward run. Why I am writing on it is specifically for short term. I would give Nordstrom a B+ short term and C long term. I believe Nordstrom will meet and have a great earnings report with a good holiday season. 

Nike Inc - Nike is one of the largest retailers when it comes to sports wear and almost every athlete that I come in contact with, will be wearing something from Nike. Nike has an enormous amount of market cap and with the Olympics coming up Nike will sure be in full attendance. I will give Nike a B- short term and B long term. I think that it will be a steady moving stock. It was a better P/E ratio compared to other companies at their 52 week highs. Its got room to continue its run.

Emerson Electric Co - Emerson Electric is new to the list this year and in summary Emerson is a diversified industrial company. Its got decent fundamentals and it has had great gains throughout the year. Emerson isn't really volatile but its been etching out good gains throughout the years and its momentum shouldn't fall out on it. Again it might do as the market does so don't be surprised if it pulls back. Emerson Electric reminds me a lot like GE, and they are pretty similar, although GE is even more diversified. I would give Emerson Electric a B- short term and B- long term. It looks like a great stock, but it has to break through hits moving average for it make some good profits.  

The TJX Companies - TJX is really just TJ Maxx. It also has other Homegoods under its name but I'm going to refer to it as TJ Maxx. Since Christmas is over the season's earnings report will be key for TJ Maxx, the company will do as retailer sales do. But TJ Maxx's advantage is its lower prices appeal to a more economical shopper, which seemed to be more popular for the shopping season this year. I would give TJ Maxx an B+ short term and B long term. The small drop off its only because I'm reluctant to think it will continue momentum into the summer.

Chesapeake Energy Corporation - Chesapeake is new to the list but it isn't old to me, I've had my eyes on this energy stock for awhile and if you are looking to buy energy stocks this stock seems to always be mentioned. A lot of energy mutual funds have Chesapeake in its top holdings and its a stock that was up 59% last year. The best thing is, it can still continue its rise. If you are looking at energy stocks, this one is the one to look at. Only downside is the dividend yield is not that inviting and its regulations it goes through by the government. I'd give Chesapeake Energy a B+ short term and A- long term

Gold - Yes just plain gold. Research to find a gold stock but just the commodity itself is what I'm talking about. Make sure your an experienced commodity trader, but Gold has been in a lot of investment conversations because of how much it as fallen in 2013. Gold and the Dollar mostly carry an inverse relationship and the Dollar had a strong year, so in turn, Gold had a miserable year. Many people believe Gold is so low that there is a huge buying opportunity. Remind yourself this, why would the same forces that drove Gold prices down stop? If the Dollar is poised for another good year, than Gold could continue to fall. I say Gold is a C+ short term and D long term. I really think the market can have a decent year, and now that Yellen is assuming Bernanke's role, she is rumored to continue in the same direction that Bernanke was headed 

Facebook Inc - A lot of people have been asking me to write about Facebook. Being in the so called Facebook generation many old school investors that are curious about Facebook usually look to younger people's opinions to whether Facebook is the real deal. Facebook was designed for connecting people, and now since Zuckerberg took Facebook public, he has been trying to develop ways for Facebook to make money. Advertising seems to be Facebook's biggest revenue and it still scares me as whether or not it can be sufficient enough or not. Teens like me still slightly use Facebook but mostly use Twitter, its all business advertising when it comes to Facebook. I give Facebook a C- short term and C+ long term. Honestly I am not shorting nor buying Facebook, watching it is my plan for now. It seems a little overvalued though.

Read my stock of the weeks to look at other stocks to research. These stocks should be good to research and take a look at and consider for 2014. Be sure to check out my other articles on the blog. Check out my Google + account  +Alleyway Investing and check out my Twitter @AlleywayInvest. Alleyway Investing's Twitter has other helpful tips as well. Twitter, Google +, and this blog is written and operated by Jon Morris. Not Responsible for Loses. Opinionated Investment Ideas 

Wednesday, January 1, 2014

Reviewing The Markets and The Watch List From 2013

               Not to many analysts could have predicted the year that the markets had. 2013 treated investors with nice gains in various sectors throughout the Dow Industrial, S&P, and the NASDAQ. Sorry if you were in some basic material stocks or gold because those sectors did not do so hot. In review, the economy, measuring by the GDP, grew at a modest rate under 2% each quarter, well below the growth the economy had in 2012 (according to NY Times). The Fed was struggling to gauge when to taper throughout the year, and the recent plan of action they have didn't seem to effect the markets at all in 2013. Dow Industrial grew 28% in the year. S&P 500 gained 32% in 2013. The NASDAQ also gained a whopping 41% YTD. How can these markets put up these numbers in a slow growing economy. Well economic uncertainty seemed to actually help the markets gain momentum and hold it with the Fed's taper plan moved all the way back to the end of the year. Washington also might of chipped in with spending cuts and tax plans. Although uncertainty of growth in the economy was in question and is sure to be in question in 2014, the issue of continuing more job growth is sure to be a huge issue to tackle for politicians in congress.

           As 2014 has much in store, here's how my Watch List from last year did.

Apple - I gave apple a C- short term and B long term. As I said, without the genius brains of Steve Jobs the continuing of updating their product line seems to be getting a little tiring. Carl Icahn wants to use CEO Cook as a puppet and is promoting his own agenda for what he thinks is best for Apple. Icahn wants to use Apple's gigantic cash flow to use while it is rumored that the Apple board may not want to go with Icahn's buy back ideas. Apple fell 18% in the short term (from January to June) more than my C- expectancy. Apple then gained 25% in the second half of the year rebounding from a bad first half it had. In the end YTD Apple gained 10%, a modest gain compared to the monster performance the NASDAQ had (41%). Until Apple comes out with new products, it will continue to be a questionable stock check out my Watch List 2014 to see what I think about Apple this year.

Cisco - I'll admit it, I might of given Cisco a generous rating last year ( B short term, A long term) and talked it up to much. Its marketing plan seemed to fail as its new product lines like their cloud technology did not seem to budge the stock too much. It gained 25% in the short term and YTD only gained 15%. Its second half of the year is what kicked investors, it was in red territory and fell leaving Cisco floating at its typical moving range for the past couple of months. I'll admit I over talked the stock but its dividend is always intriguing to look at and its fundamentals may attract investors since it may be undervalued.

Disney - Personally, I loved Disney this year and its returns should prove why I love it so much. Its silently up 55% YTD and is setting all time highs in the process. The real question is whether it can continue its great run. And for that you have to read my Watch List 2014. I gave Disney a C short term and B+ long term.

Citigroup - Citi had a good year and is up 34% YTD. I gave it a C- short term and A- long term. It was pretty steady in the short term and long term and so it was not to volatile which is a positive especially with a 34% gain for 2013. It would be nicer if Citigroup had a better dividend but banks should have a good 2014.

3D Systems - This has to be a stock that many investors got to look at. Its turning heads left and right, its the center piece of my portfolio and the center piece of its industry. Its growing from a mid cap stock to a large cap stock and is easily my stock of the year. It is up an unbelievable 173% YTD and its industry is still in its infancy and can continue to grow. If you think its a short opportunity...good luck.

Hormel Food Corp - Hormel Foods blew past my expectations of C+ short term and D+ long term. Hormel Food is up 47% and increased its increased production is the main reason of its success. Hormel food proved me wrong in 2013. The economy seemed to help this stock a lot and it was a great buy as one of the top food stocks to get in 2013.

Ford Motors - I recently added Ford to my portfolio as I believe it is recently undervalued, and one thing I've learned is if you want a safe slow moving stock, you found one. Its up 20% YTD and its new production line for 2014 should give it a positive outlook for this year. I gave it a C short term and B long term.

Express Scripts - I bragged about Express Scripts in the beginning of the year and it did go up 33% but I gave it a generous A long term and did not expect Walgreen to shift companies away from Express Scripts to Aon Hewitt Corporate Health Exchange. With this change and some dangers in private health exchanges Express Scripts only glided with the market instead of beating it.

Cliff Natural Resources - I really did not like the condition Cliff Natural Resources was in at the beginning of the 2013, I only mentioned it as a stock for the future, and the future was clearly not in 2013. I gave it a D- short term and C long term. Cliff Natural Resources is down 26% YTD and the beaten up material industry did not get any mercy in 2013. Although keep I gave it a horrible rating for the short term, its actually up 60% in the second half of 2013 and could be an intriguing stock to look at for a rebound in the next couple of years.

RPC Inc. - I gave RPC a A- long term and it produced. Up 47% YTD and beating most of the market. Once again the Obama administration made a statement by saying they want the US to be more energy dependent and RPC was happy to here that news. That news helped RPC gain in 2013 and expect the same from this company in 2014.

Goldman Sachs - Goldman Sachs is always a giant that is mentioned when talking about financials in the market. Its the upper echelon status gives it a lot of attention, both negative and positive. I gave Goldman Sachs an A- long term and it is up 41% YTD. Goldman Sachs is poised for a great 2014.

Gilead Sciences - With the Affordable Healthcare Act passed it was expected to be a big year for biotech. Biotech delivered, and in the middle of it was Gilead Sciences. Many successful mutual funds carried Gilead Sciences as its main position and no wonder why; it is up 108% YTD. I gave Gilead Sciences a B long term and it was easily even bigger. Now with the year over, check out my 2014 stock list to see what I think Gilead will do next year.

American Water Works - I gave American Water Works a C- long term and it was just that. The stock was okay, although compared to the rest of the market, its 15% YTD is still under the markets average. Water in general is an interesting trade and like real estate, land and water are limited and are a great long term investment, remember longggg term investment.

Macy's - Macy's I thought had a little more juice in it after its great run in 2012. But it continued its run and beat out my C+ long term rating. Macy's ended the year 43% YTD returns. This is in an economy that consumer income has only moderately increased, imagine how well it can do with a strong growing economy..

Madison Square Garden Company - Now the Knicks have been having a horrible year, but that hasn't stopped Madison Square Garden from squeezing some profits. Although it is up 32% YTD the NASDAQ was up 41% and so although it had some gains, it didn't keep up with the market. especially in the later ends of 2013. From July to December, it fell 3% and after a great first half of 2013 it just settled and didn't do too much to end the year. Long term I gave Madison Square Garden a B-.

         At the end of the year, after I chose these stocks to look at and evaluate, the grades I gave them were how I think of them. an A grade means I like them a lot, B is I like them, C is okay, D is I don't like, and F is I really don't like. For me, Short term is anything 6 months and before while long term is usually a year or more. As you can see with the stocks I chose the percentages are intriguing and some of them have beaten the market remember to keep in mind how the market did compared to the stocks gains and check out my 2014 watch list for other stocks you should take a look at.
         To Review My Picks that I had and the grade levels from when I wrote about these stocks last year visit this link to my blog post from last year.
 http://alleywayinvesting.blogspot.com/2013/01/stock-watch-list-2013.html

 Invest with Care. Not Responsible for Loses. Opinionated Investment Advice. NY Times Credit. Google Finance for percentage statistics. YTD = Year To Date. While the markets are closed on New Years Day, YTD numbers are usually to December 31st.




Friday, February 15, 2013

The Million Dollar Answer

      For many people in the investing world, it usually takes hard work and intelligence to get into the investing field. But standing out in it is harder then that. In order to stand out you need something that they don't teach you in business school. It's something you have to figure out on your own. Investing takes hours of concentration and detailed measurements in order to come out on top, and everyone says you have to think ahead of the market. Well the chances are that you might get a lot of measurements wrong if you keep thinking ahead. The future is hard to predict and I'm not saying its impossible, but you'll definitly get some predictions wrong, staying with the worlds markets is already hard enough. Answering the question of how to stand out in the investing world is hard. But there's a word that could be the answer to the million dollar question. The million dollar answer is persistence. Everyone knows  what it takes to be successful, the hard work, time commitment and a will to focus for long periods of time. The toughest part of being successful is constantly following through with doing all of this. The work time commitment and will to focus is what is needed to be successful  but it's the persistence that really gets you successful. Like new years resolutions, people might make the goals to lose weight and the gym might be busy for the first couple of months but that isn't persistence. Persistence is not only following through with your goal but constantly raising it and constantly working for it at a daily basis. That new years resolution to lose weight should be achieved and then make the goal to keep your weight where it is by going to the gym on a daily basis. And revisit that goal the next new years. Very few can truly follow through with that.
        So to be a great investor it obviously takes hard work and time commitment but others have a natural talent at investing, I know that sounds hard to believe but it's true. They might end up being good investors but its really being persistent that gets you success. Making a goal getting to it, then making the next. Invest With Care.

Wednesday, February 6, 2013

How Long Can The Markets Rally?

        I'm back! Yes, after a couple of weeks out focusing on school work and taking time off, I'm still well and alive. Now I've still stayed with the market and kept in touch with the news and obviously the markets seemed to have crushed expectations in January. Can it continue in February? Well the markets can get on these hot runs sometimes and so it seems that predicting when it will end is getting hard. Although the longer it goes on the easier it is to predict a correction. Its surely confusing but I've got some tips on how to predict the market the next couple of months.
      January was hot, real hot month for the stocks, and for the weather here in Chicago. Markets have hit highs and have kept going, some stocks setting all time highs. The markets are getting back to pre-recession highs. As stocks keep climbing when does the correction happen? Although it is hard to predict, with a hot record in January don't expect the market to keep the pace in February, in fact the correction will probably be sometime in late February or early March. Whatever it may be the gains that the markets have had are good ones and getting out now isn't a terrible idea. Many of stocks have pushed pretty far past its highs, and some stocks with good research could take your gains and scram. Main street still thinks the economy is in a midst of a slow recovery and is still hesitant. Although Wall street isn't and in fact seems to be crushing highs. Is it a signal to slow down? Not to rain on the party but every good thing most come to an end at some point. The stocks have not showed signs of slowing down recently but topping out is soon to happen. Don't get me wrong I'm not a pessimist, but i'm not a optimist either. A good quote to go by is "dear optimists and pessimists, while you guys were debating whether or not the glass was half full or half empty, I drank it, sincerely opportunist." That's the way you should look at investing. Stop debating whether or not things are bad or good, look at the facts and take action. Investors need to realize not to get greedy, or you'll get slaughtered. Take your gains soon. But that doesn't mean that you should put your money aside. Still invest it, research options, buy puts. Buy the correction, and although that is extremely risky and timing it is the hardest, you have the sense that it will happen soon, many investors will automatically have some sell offs the next couple of weeks and take the gains from January and following them isn't a terrible idea. Obviously some stocks have some potential to keep going up and that's why researching a strategy of how to get out is a good idea, and investing on the down side isn't too bad of an idea. With Washington still in a midst of debates on debt issues and it deadlines coming at the end of February and other dead lines after that, the markets could get spooked, and so stay in the market if the deals fly through Washington and the economy keeps pace, but the likelihood of that happening is unlikely, and a healthy correction is bound to happen soon. Emerging markets and options would be your best bet on the investing for the next couple of months. Read my article on "How To Invest Emerging Markets" and Invest With Care.