Diversity=Safety

You hear lots about the word diversification on wall street. The gray beards say you've gotta diversify. Crammer has a segment on his show from time to time called, Am I Diversified? I guess with all the talk about this word it must be important. I got to thinking though...what if you just started in on investing? What if you don't have alot to invest with? How diversified can you get? I've come to learn that it is all about patience and prudence. I have three portfolios, one with Scottrade and two with E-Trade. Out of the three of them I have one that is a Roth. The Roth I set aside for mostly long term "retirement" stocks. I own a financial in Etrade, a consumer sector in Phillip Morris (with the split I have MO and PM), a speculative in Sirius Satellite and another financial in the XLF financial sector ETF or exchange traded fund. Three out of the five pay a dividend, which I reinvest to purchase more stocks of the same company. Now am I diversified in my Roth, probably not. As I move forward I will fix that. I expect to hold the Sirius until it merges and then sell off as high as I can and then buy back when it comes down some. This will make me some profit, but I will hold this stock in this Roth for the long term as I suspect profitability and growth. Etrade has been beaten up by the sub prime mess and is on it's way to becoming the great stock that it once was which will take time, but in a Roth you have just that...time. PM and MO are both dividend paying stocks and again....reinvesting and how can you argue with this conglomerate who owns Marlboro and Kraft. After splitting up it's American side with it's global side it has become even more attractive in my opinion. Next is my XLF ETF which pays a dividend and has been crushed by the sub prime disaster. These stocks are "on sale" and if bought low and held for the long term should pay off handsomely, especially in a Roth environment.

Now for the other half of my Etrade account....my "trading account". This account holds mostly smaller speculative stocks, but I also hold some heavy hitters. A gold mining company in Yammana (AUY) and another mining stock in RIO. Am I diversified with these two companies being both mining stocks. Well one is a gold mining company and the other is heavy into other metals and minerals...so it is hard to say. I also hold the largest holding of Sirius in this account with the intention of trading it when it pops. I hold a speculative yet profitable small gaming software company and some other small penny stocks. The Scottrade account is where I have another large chunk of my Sirius holdings and this is another problem the gray beards don't like....being too invested in a company. Sirius may never merge...in the short term that sucks,because the whole reason I bought into it was to make some money in the short term. IN the long term it will pay off as the company becomes profitable and they work out their logistical details.

TO sum it all up I have to agree that being diversified is important, you can't always be perfect, but try your best to be a smart investor and an even smarter trader. Diversify.

Scary waters for SIRI

For those of us who bought Sirius Radio with hopes of a merger I want to offer something to think about. First of all. Don't panic yet. It would be foolish to bail out now because chances are you would be losing money. Sit tight...the merger will be blessed and you will at least break even, but my gut feeling is you will make some dough. If you look at http://www.finance.yahoo.com/ and punch in the symbol SIRI, you will see on the left hand side a section called "Analyst Coverage". It is here you can look under the sub-section "Analyst Opinion" to see who is upgrading and downgrading these days and what the consensus on the street is. Siri is looking pretty good. Sleep well and get ready for profitable days ahead.

SIRIously?

So what the holy hell is going on with this rotten stinkin stock? Some facts to figure on is yes...once the merger is blessed by the rotten stinkin FCC, this behemoth will take some time to iron out the wrinkles and get in sync with the world of profitable quarters. So will the myth become a legend by providing speculating stocksters a two bagger? Can we at least make a few grand with this thing? I think that if there are short stocksters, well, shorting this stock, and they quick have to cover once the FCC announces the merger, then I think it will pop and climb for a while possibly climbing to 4 or 5 bucks. Originally we were hoping for 6 or 7. What's a trader to do?

Now if you were as dreary as a London Fog afternoon and said that the lobbyists will win and the FCC will not bless this merger, then I have to say you are nuts. Cheer up and bask in the greatness of a company that will become profitable and make some patient people some money in the years to come, with a quick couple grand for us speculators!

ETF for total exposure.

Maybe you're like me and you wish you had millions of bucks to buy all these cool looking stocks that you just know in your heart of hearts are going to go up through the roof making you a rich man in the process. The operative word in that run on sentence was "wish". So again...maybe you are like me with no money to really invest but you want the exposure to all these emerging markets that this global economy of ours is energizing. What's a guy to do? What's a girl to do for that matter. (We're politically correct here at the attack) Exchange traded funds or ETF's are the key. You can find one for just about anything. Gold (GLD), Water (PIO), Clean Energy (PBW), Oil (That's right OIL), Israel (EIS), India (PIN) and our favorite Financials (XLF).

These are truly a great way to diversify any portfolio and get in with an ETF that invests in a particular country or sectors good stocks. Russia...Brazil...Mexico...China...are all very active and growing economies with the days of poverty behind them and the future looking bright. With all that comes money. Can I get an Amen!

Research and Homework!

So where does one find info and places to do research and homework? These days there is alot of focus and interest in the stock market thanks in large part, in my opinion, to Jim Cramer and his TV show Mad Money. I try to catch the show as often as possible. I also have read all but one of his books, the one that I have not read I am in the process of reading. He makes the stock market and investing interesting and puts things in regular guy terms. Another great show is CNBC's Fast Money. Great group of investors offering great insight and advice. Next would be the Internet. Some websites and blogs I follow every day:

Jim Cramer's http://www.thestreet.com/

http://www.motleyfool.com/

http://www.seekingalpha.com/

http://thetechnicaltrader.net/

http://www.finance.yahoo.com/

http://www.cnbc.com/ (Has a good feature that posts the days each company will report earnings)

http://www.247wallst.com/

You could make it a full time job just reading blogs and websites. I try my best to read at least the day's info from each blog. I've become very good at scanning and soaking in alot of info quickly. I will have to say that five years ago if you asked me a question about wall street or investing, other than being able to sign onto my 401K account, I would not have been able to tell you anything. I made it my mission to learn as much as I could about the market and the economy and have found it to become a hobby which I really enjoy. I am a risk taker and this is dangerous in the stock market, but with big risk comes big reward. I am learning to weed out the bad small cap stocks from the good ones that are actually making some money but flying under the radar.

It's been a journey with some ups and downs, but one thing is for sure, with the proper homework and the proper resources you can learn and improve your chances a great deal.

April Fools? I think Not!

What a whamo of a day on Wall Street with the markets soaring like an eagle! Nothing wrong with a little optimism in this environment and with it being the first day of the new quarter it was a good start to the second quarter. Will it continue...can anyone handicap this market? Not really.

Was doing some weekend homework and came across a few stocks to keep on the radar. I bought a few hundred of each with high hopes. One is a gaming play that develops and licenses software among other things. ALIF.OB It's an OTC stock or a, dare I say, Penny Stock that actually reported a profit last year...Hmm. It has an actual EPS of .03 cents. As always do your own homework on this one.

Another one I am keeping an eye on and have actually bought some of is XFML. A Chinese Media conglomerate. I like the market and I like the stock. Again. Homework.

I am in XFML at 3.20 and ALIF is 1.60.

Over the weekend I picked up some light reading...to complete my Jim Cramer library I picked up his book Mad Money...Watch TV and Get Rich. I also picked up Millionaire Traders, Peter Lynch's Beating the Street and The Warren Buffet Way.

Over and out.

1,2,3 FCC

So we finally made it over probably the biggest hurdle for the finalization of the merger between the two satellite companies that many are waiting for. The FCC will likely follow right behind the DOJ , bringing a much anticipated close to a much anticipated merger. On the announcement I think we'll get a jump and then a settling and then a slow rise to a decent share price. My advice would be to think of a reasonable price you'd be willing to sell at, and then set your limit order sale at that level. That way if you get an announcement and the price spikes up and then comes back to earth while you were in the bathroom you will at least have made a profit. This is the safest way to play in my opinion. If I know I am going to be out of the office or away from my desk for any length of time I always set the limit for at least the day. I set it at between 6 and 7 bucks. At 6 bucks I would more double my investment. Am I chancing a sell at 6 with the possibility of the stock continuing to go to 9? Yes. I have learned though, to take a profit and smile...the greedy bird gets eaten by the dog.