This was pretty funny - it's now getting passed around; someone posted it at Elite Trader
Market Reality

GM chapter 11 = PRICED IN
125K+ jobs lost from GM chapter 11 = PRICED IN
unemployment @ 9% = BETTER THAN EXPECTED
unemployment @ 10% = DOW SOARS
unemployment @ 11% = GREEN SHOOT RALLY
unemployment @ 12% = ALREADY FACTORED IN
unemployment = 35% = DOW DROPS 100 POINTS
housing price =1% = RECESSION ENDING
housing collapses = GREEN SHOOT
Housing falls 20% = STABILIZATION
Government spends 1 trillion of OUR dollars = STIMULUS
North Korea fires nuke = RALLY
Israel bombs Iran = 30 MINUTE END OF DAY RALLY
world explodes = ASIA RALLIES
PMI crashes = HUGE RALLY
No jobs are created = RECESSION ALMOST OVER
U.S. debt overwhelming = TOO BUSY RALLYING TO CARE
Consumer stops spending = RETAIL RALLY
Banks are insolvent = SIGNS OF STABILIZATION
American auto industry BK = GOOD THING
Banks pass scam stress tests = HUUUUUUUUGE RALLY
Banks "only need 75 billion = OUT OF THE WOODS
Banks pass a real stress test = NEVER WOULD HAPPEN
Banks pay back tarp = LATE DAY SURGE
Banksw can't pay back TARP = EARLY MORNING SURGE
12% mortgage delinquency = GOOD FOR STOCKS
Hundreds of thousands of mortgages underwater = HOUSING BOTTOMED
Dollar rises = RALLY
Dollar crashes = RALLY
Inflation = BULL MARKET
Deflation = BULL MARKET CONTINUES
REFLATION = MASSIVE SHORT COVERING RALLY
Gold rises = STOCKS RALLY
Gold falls STOCKS RALLY BIG
Banks' fake earnings = SIGNS OF STABILIZATION
CRE stablizing= 1000 POINT RALLY
CRE CRASHING = STOCKS SHAKE IT OFF TO RALLY
CONSUMER INSOVENT = CONSUMER IS SPENDING
OIL @ 50 = BULL RALLY
OIL @ 60 = GREEN SHOOT
OIL @ 100 = IMPORTANT RECOVERY SIGN
OIL @ 20 = TAX BREAK

And the one we should all interpret corrcectly:
NO ONE IS BUYING STOCKS = BILLIONS ON THE SIDELINES

Above $10, 500k shrs daily, 300m cap
JRCC 53%, ZION 47%, CRZO 38%, TRLG 37%, LAMR 31%
FAS 28%, EWBC 28%, PLCE 27%, SIVB 27%, UNG 24%
CTCM 25%, APWR 22%, ECLP 21%

$5-10, 200m cap
VNDA 676%, CENX 74%, MNKD 50%, GFIG 44%
HBAN 39%, UNTD 39%, THQI 38%, DRYS 35%, CSIQ 35%
FITB 30%, LINTA 27%, AINV 24%, CVBF 23%
UCO 22%, BBEP 21%, TBSI 21%, APAC 20%

Now that the stress tests are out, the uncertainty is gone. We now know which banks need to raise how much capital. Citigroup (C) only needs half what was anticipated, Suntrust (STI) needs a little more.

State St (STT) however, needs NO capital, and states they're ready to pay back the government re TARP. So is this the one to own? IF there's a calamity they need no capital, if not, they should soar now.. without a calamity, they have like 20b extra..

STT is up 8% after hrs but 20% down from recent high of 49.. 52 wk hi = 76. The PE is now 8.. Only a tiny dividend currently, this will likely be raised in the future if you're into mini-income.

Buffett bullshit: he liked STI and WFC before this, and they both need mucho more capital -- hope nobody bought when he was "talking his book" - face it, his methods are from 1930 - "buy value, hold for 40 yrs" - he even admits it.. WON'T WORK in the current market -

in 40 yrs: China will rule the world...
the US will owe 100 trillion, will be a 2nd rate economic power
the leaders will be: China, India, Europa (this is coming.. and about 500 yrs too late), and Brazil (which is only 20 yrs OUT of a military dictatorship, if anyone remembers! - how quick we forget)

CHINA is only 60 yrs into their new nation - where were WE after 60 yrs?? preparing for Civil War, and a 2nd rate econonic power while using FREE slave labor, FREE chinese railroad labor (many were paid in counterfeit yuan then sent home with it) -- we'll NEVER have this advantage again, hence the 3 depressions since the Civil War (1876, 1929, 2008)

The only constant is CHANGE - Alan Watts

Due to overwhelming debt and an extremely low market cap, they're about to replace GM in the Dow Jones Industrial Average. They do this periodically whenever a stock in the index slides, and often move something in that makes it look better over time. This is how they disguise the downward bias of the stock market in general, they used a tiny index of 30 or 500 stocks vs the 9500 that trade as indicators of the market's "success". It's not a fair comparison over time, as few stocks in the Dow in 1928 are even around today.

"The company will probably be removed from the Dow Jones Industrial Average", said John Prestbo, the editor and executive director of Dow Jones Indexes.

Standard and Poor's adjusts its index of 500 stocks annually, removing those smallest in market cap - which means they went down in price - with some that are now bigger -which means those that went up in price, or were new IPO's that succeeded, like Google, Mastercard, and Burger King. So even from year to year the components are not the same, as the failing stocks are removed for healthier ones. At least with 500 in the index, the effect is minimized of this "gerrymandering"; its has less effect than it does on an index as small as the Dow 30.

I found this very good article on Reuters about using the economic and human impact of the SARS pandemic in 2003, which caused 8000 cases and 800 deaths. Eventually it cost the world 18 billion, estimated, but sent two economies into recession, and caused some nation's currencies to drop.

Using SARS to Measure Swine Flu Impact

Wednesday 4.22.09: Dow -83 (1%)@7887, S&P -6.5 (.8%)@844, Nasdaq +2 @1646

Just like that terrible commercial, "you buy and sell the same stocks, again and again." Yep, that's what they're doing. Buy em today, sell em tomorrow, ad infinitum.

Is this market getting to be like a stuck record? Sometimes it reverses direction daily for 4-8 days in a row. It makes asolutely no sense. One day financials are 'headed for doom', market plunges; next day, the feds speak, change some rule, and suddenly financials are covered by shorts, 'scrambling like scalded monkeys' (Jeff Macke). Lately, it's almost clockwork.

Someone is obviously playing with us to get churning, trading, commissions, whatever. They just sit there making up news and rumors, then laugh when the market reverses and some sectors, usually financials, move 20%. It's getting very old, and they are losing investors for good whom they should need. Apparently not, this has become a poker game for insiders only: floor traders, hedge fund managers, big brokerages. The little investor is unwanted and can't pay the huge buy-in required, apparently millions per entry, or you don't rate being in the game.

I think the market professionals didn't really like having the average person in the market, so they figured out a way to get rid of us - all the millions of small IRA and 401 accounts aren't worth the time and effort to do the bookkeeping. If you don't have millions, and allow the brokerages to leverage that for their own use to manipulate stocks in collusion with their colleagues and hedge fund minions, then you're of little use or value, or "the capitalists don't want you."

This has become a game of and for big money only, who are trying their best to eradicate the lower and middle classes from spheres of influence. What they want and may have created is an autocracy of big money - a government by, of, and for the wealthy only. After all, "they create all the jobs", if you listen to the neo-fascist leader of white America, Larry Kudlow of CNBC - the same bozo that was an economic advisor for Ronald "spend like there's no tomorrow" Reagan, who later admitted after the 1987 crash that "the U.S. economy is a house of cards."

Kudlow thinks if you keep giving capitalists a free reign, their immense wealth will "trickle down" to the little guy. Well, that obviously doesn't work: they take what they can steal and smuggle it out to foreign countries with secretive banking, where the U.S. can't get to it, and they can retire both wealthy and out of reach. The joke on us is that millions still believe this, thinking that capitalism is a "lottery they can win", like the housewives paraded for us on shows like Donny Deutsch's "Big Idea", pretending that "you too can get rich with a good idea". Fat chance, I'd be much better off playing the Don't Pass line at any craps table in Nevada, betting against the shooters and with the casino.

Too bad we can't really bet with the casino here. If you buy the stock of a successful company, there's no guarantee they still won't steal all the money and go bankrupt, it seems to be the true American way. In fact, in 1987 some brokerages also went bankrupt and angry investors had to wait for the feds to get around to paying their money back at a pace even slower than the Katrina victims rescue. Let's just hope it doesn't take half a century like it took the Swiss banks to return money stolen from the Jews by Nazis in WW2; they gave it to Israel because this was money without any living heirs, but they held the billions for over 40 years, and no one knows really how much was there, or how much went to other nations' banks. Some even came here, the Bushes grandad was a co-partner with seven Nazis and one American in a bank that accepted part of the loot.

Money knows no boundaries or politics, and has no ethics to worry about.

Stocks are up a lot over the last four weeks, 11% is the median stock gain.
The criteria for this screen: Price >$5, 250m mkt cap, 500k shrs daily, less than 3% debt, up 25% in four weeks - this returned 28 matches.

LULU 95%, CHIC 78%, SOLR 74%, RIMM 59%, GYMB 59%
ANN 58%, MPS 46%, AB 43%, CHS 41%
BEBE 39%, TIE 39%, OMG 39%, FRPT 38%,
TROW 37%, GRA 37%, JOSB 36%, ELX 35%
TBL 32%, BBBY 31%, GERN 31%, IPI 30%, HOTT 29%
VCLK 28%, GNTX 28%, ARST 27%, THO 27%, CMG 27%, FFIV 27%

Many stocks have gone up recently, so I had to limit the number returned by upping the daily shares traded, and also only selecting stocks with little or no debt.

Above $8
Screening Criteria: >$8 per shr, >250m market cap, 500k shrs daily volume, no debt

LULU 22%, ALGN 18%, CHIC 15%, TRLG 12%, CMG 11%, PTEN 11%
CECO 9%, APOL 8%, CRR 7%, MDR 7%, SYK 7%, YHOO 7%, GYMB 7%
JOSB 6%, HTLD 6%, EXPD 6%

Stocks from $2-8
Criteria: $2-8 per shr, 250m cap, 300k shrs daily, <20% debt

GIGM 22%, ARUN 21%, BPZ 21%, DAR 20%
TC 13%, TIE 13%, GERN 12%, VSH 11%, FRPT 10%
CRME 9%, BEBE 9%, TRAD 9%, ZINC 9%
ERES 7%, IDTI 6%, ELX 6%

Did anyone see the Larry Kudlow show yesterday on CNBC? I leave it on after Fast and Mad Money (just to get my ire up at the right-wing pro-capitalist propaganda), otherwise I hate this former Reagan economic advisor, who thinks if you make rich people richer the money 'trickles down' to everyone! - we've just found out how that doesn't work - the wealthy simply move their wealth offshore so the IRA and US can't get to it. Whatever's left over after fur coats and yachts, that is.

I wanted to pass on the info that there were several stock analysts on who admitted that when they are on TV they simply "talk their book", in other words, not what they really think, but what they want you to do to help their own individual stock positions, long or short. (Cramer made over 100 million shorting stocks then bad-mouthing them on tv - now they have disclosure rules to prevent that). They admitted that everyone who comes on tv sees that an an opportunity for a "free commercial" for themselves and their position. They said "Warren Buffet never tells you what he's doing, only what he's already done, you find out too late to invest alongside."

So, the gyst of all this is: IGNORE the tv and other analysts, they're not giving you the straight story. I had already found in the 80's that if you took all analysts into consideration, you'd find something like this: 6 buys, 4 holds, 5 sells. Meaning, "worthless advice", as you may as well toss a coin to get the real implied direction. They never pay for "bad calls", so they are basically immune; I assume they only give out information that their parent company tells them to disemminate.

Somehow these charlatans still get air time, so one can assume that "financial networks" like CNBC are nothing more than giant informercials that run 16 or more hours a day, trying to "sell capitalism to everyone" that's gullible enough to get sucked in. All we end up doing for the most part is supporting the millions of "financial professionals" who are the parasites of capitalism, sucking away a portion of every investment dollar that hard-working citizens have been able to save.

Only those >$10, 500m cap, 500k shrs daily (31)
Chg % rounded to nearest integer

CETV 176%
ASH 130%
BRY 122%
CEDC 122%
LAMR 107%
MET 104%
DB 103%
CNH 101%
PRU 100%
PAG 99%
ROC 99%
TXI 99%
WCG 93%
HOG 92%
WFC 89%
CTV 86%
CE 83%
HBI 80%
KBH 79%
MHK 78%
SIVB 77%
UTR 77%
CAKE 76%
MFC 75%
PGF 75%
MW 74%
USB 73%
SFD 73%
MDP 71%

Disclosure: Long FAS (3x long financials), and TNA (3x long R2000) as of 4.03.09

Only those >$8, 250m cap, 300k shrs daily,
Chg % is rounded to nearest integer

ASH 37%
LULU 31%
MAC 28%
CTV 26%
ALV 26%
SNX 21%
MXB 20%
SKX 20%
SYNA 19%
LPHI 18%
PLD 18%
PLT 18%
WYNN 18%
IDCC 17%
CNC 16.5%
ARB 16%
JCI 16%
PANL 16%
THO 16%
MV 15%

Disclosure: Long FAS (3x long financials), and TNA (3x long R2000) as of 4.03.09

- These classic posts have been around a decade but I thought they warranted repeating in these troubled market times -

From: Dinner_and_a_fine_whine

****
[Message 1]

WGAT down again. It is just so unfair!

The market goes up and WGAT goes down. The market goes down and WGAT goes down. Why does this always happen to me? Why doesn't this go straight up? It is not air.

Why all the buy ratings but no buying? Why no news? Wink has news. Liberate has news. Why don't we ever get any news?

Somebody bought 25000 shares at 40 and change after the bell? what do they know that i I don't know? Why don't I know anything? What about all these shorts. What do they know that I don't know? Why do there have to be so many shorts anyway? When will this MM manipulating stop anyway?

Why doesn't my research pay off. It is so unfair. WGAT shareholders having a party but I haven't been invited. Nobody invites me anywhere.

Why didn't I listen to uncle Joe and buy more Cisco? Why did I buy so much WGAT anyway? My wife is going to kill me. She hates me anyway. Says I complain too much.

Good product but why can't we get PR ? Nobody ever promotes my stocks! Why did I have to pick a day when longs are so hostile to post my first informative post on this board?.

The market is just so unfair. WGAT and my life bite.

****
[Message 2]

What kind of scam is this?

Oh this is just great!
They just posted interest in my margin account and triggered a margin call. Margin interest what is that all about? I don't remember my broker mentioning margin interest. Margin interest? Oh that is so unfair!

"Buy more WGAT" my broker says.
"I ain't got no money" I tell him.
He says what about margin?
I say "I hear its risky."
"Only for losers" he tells me,"not for astute positive thinkers like yourself. Remember" he says "I'm your friend I only have your best interests at heart.If you do well I do well. Easy money he says."

I ask "shouldn't I diversify?"
He says he'll let me in on a little secret." SG Cowan is about to initiate coverage on WGAT with a strong buy. After that nothing but splits coming."

Oh wasn't that just a peachy keen tip now. SG Cowan upgrades Wgat and it drops $5 dollars a share. SG Cowan upgrades WGAT and downgrades my financial condition to life support with one swoop! SG Cowans sucks!

Well I tracked my broker down by phone yesterday. He's down in the Caribbean . I guess he's down there with my easy money looking out for my best interests. Full service brokers what are they all about? Weren't there enough used car lots to go around? My broker sucks ! He costs me money twice once when he gives me advice and once when I take it. Oh yeah.

I almost forgot he is my friend.I asked him once "If you are my friend why don't you give me some free advice?". So he did! He told me to marry the woman who is now my wife.
What a #######! I hate my broker!

Margin interest, SG Cowans, WGAT, free money and my broker suck!

Well my broker says I'm overeacting "Splits are coming!"
Splits--what a scam!
"Here I"ll take your 10 and give you two fives. Keep the change!" What the #### is that all about? This is going to make me rich? No matter! WGAT will never split as long as I own it. My stocks never split. Splits coming? What a bunch of crap!

I have news for my broker. The splits are here. WGAT and my broker have split the value of my account in half and my wife is going to split my lip when she gets wind of this margin call. I hate splits! Splits suck!

Well I have three days to cover my margin call. I hope my stocks go up tomorrow. Oh they won't go up.My stocks never go up. That is not until the day after I sell them.

I wish I had cash. I never have cash. Why did I put all my cash into my Y2K generator business? Y2K what a scam that was! Y2k, margin calls and my life suck! Why does this always happen to me?

Five day gainers - Friday 3.27.09
[Minimum 300m market cap, 500k shrs daily volume]

-------------
..TXI..48.4%
..MHK..35.6%
..BRY..33.3%
..ATU..29.6%
..WGOV.28.8%
..CEN..28.3%
..ASH..27.9%
..CLF..27.8%
..PFG..27.5%
..MHP..27.5%
..PVH..27.4%
..BDC..27.3%
..LAMR.26.8%
..JLL..26.7%
..SNDK.26.0%
..MLHR.24.7%
-------------

.. Monday 3/23/09: Dow +497 (6.8%)@7776, S&P +54 (7.1%)@823, Nasdaq +98 (6.8%)@1556 ..

Well, we got confirmation that the market buys into the new government plan to deal with toxic assets. Importantly, the S&P broke through major resistance at 805 and held steadily above that level, which should now provide support.

Did you see some of the gains in the leveraged funds today?
The 3x long funds from Direxion: FAS +41%, TNA +26%, ERX +23%, BGU +22%

Some of the 2x long ETFs from ProShares: URE +30% (SRS -30%), UYG +25% (SKF -30%), UVT +18%, UWM +17%, UYM +12%

You're now getting maximum benefit of these funds without having to worry about individual stock picking.

Disclosure: currently long FAS (financials) and ERX (energy stocks)

Criteria Used:
1. Market Cap > 250m
2. Price > $5
3. Debt < 15%
4. Daily volume > 300k
5. Price Gain > 15% (Market Median: -12%)

25 Matches Found
---------------------
BWLD 45%
STEC 35%
BIG 31%
CBRL 30%
APKT 30%
ARST 29%
SWKS 29%
FL 27%
KMX 26%
BX 25%
CRM 25%
MW 24%
RGC 22%
CF 22%
SA 22%
CAVM 21%
STAR 21%
BEAT 20%
BBND 20%
TDC 19%
SIGM 19%
LINC 18%
CERN 17%
ZRAN 15%
MPWR 15%
---------------------

Here are the biggest five day stock performers

-------------------------------------------------------------------
Price>$10, 500m cap minimum, 500k shrs traded daily
No Debt criteria [32 found]
-------------------------------------------------------------------
WFC 72%
PRU 59%
USB 53%
DB 52%
COF 48%
CMA 48%
SLG 46%
MW 46%
ROH 45%
MET 43%
PNC 43%
JPM 40%
SGP 37%
BBT 38%
RJF 37%
KBE 36%
MTH 36%
MS 35%
CVTX 35%
VNO 35%
CPT 35%
DIOD 35%
TMK 34%
FIC 34%
STI 33%
KBH 33%
HOG 32%
FLR 31%
CE 31%
REG 31%
SGR 31%
BGU 30%

--------------------------------------------------------
LOW DEBT - with debt<15%
[11 found]
--------------------------------------------------------
MW 46%
FLR 31%
MDR 29%
RGC 29%
JEC 28%
ITG 28%
AB 27%
OMG 27%
ARST 26%
MPWR 26%
PWR 25%

----------------------------------------
LESS THAN $10, cap > 150m, debt<15%
[9 found]
----------------------------------------
SVNT 45%
CNH 45%
ARNA 41%
FCEL 35%
IMGN 28%
CHS 27%
GIL 26%
STEM 26%
TC 25%
----------------------------------------

A stock screen is simply a filtering method to allow an investor to have software scan all the available public stocks and find those with certain criteria. Probably the best examples are: find high dividend stocks, find stocks that are cheap relative to PE or book value, find stocks that are up the most over a year, find stocks with no debt. You can also search for stocks to short or avoid.

There are over 9000 publicly traded stocks. When you start screening them, a good screener will show you the number of companies that meet each filter that you invoke. Let’s say you ask for stocks above $5.00 per share; my screener tells me that I now have roughly 5000 that meet this. Then I add market capitalizations above 200 million; I find that 4000 meet this filter, and when added to the first one, I now have just 3000 candidates. In more risky markets, you don’t want to own the smallest companies, as the risk of bankruptcy for these is too great.

A good screener will also allow you to only return stocks from an index, such as the S&P500. Some also add relative performance criteria such as top 10% in its industry or top 20% of the entire market.

When you run screens, you need to get the number of eventual matches down to a reasonable number, say less than 100. Your final screen will be a list of stocks you want to examine more closely, so if you don’t have a lot of time to spend, 30 or less is about all you can handle on a weekend.

I like to run screens for several important criteria at once. I don’t want any low-priced, low-cap, or thinly traded stocks, meaning low daily volume. I also like to avoid companies with very much debt at all, so above 10% of equity is too much for me. Once I add these four criteria in my screen, I’m suddenly left with only about 600-750 companies out of the original database of 9500 or so, and these are usually the only stocks I would consider holding long.

From this subset of all stocks, I want to pick those best for current investment, which will involve looking at more criteria, such as recent performance, revenue growth, earnings growth, and more fundamental factors. When I get my final list of say, 25 stocks, I then look at stock charts, or technical analysis, to find those best suited for immediate investment or trading.

Whatever your investment strategy or bias, a screener will let you apply this. The big sites all provide screeners: Yahoo has a basic one, Reuters has a better one. Usually your own broker will have a good one as well, especially for active traders. Simply find one you like and learn how to use it well, and you may be saved from investing in the wrong companies.

I've been trading the market a lot since the advent of elecronic trading in the 80's. I even beta tested and recommended trading platform interface changes to two of the biggest brokerages, both still in business today. I've made more than my share of mistakes and have witnessed these below from amateur investors more often than good techniques. In today's market, you have to be flexible and move fast.

The most common 10 mistakes amateur investors make:

1. Buy and Hold - this simply does not work any more, even if you're going to hold a decade or longer. Some stocks have returned to 1930 levels recently, like Ford, GM, and GE. Most pros take both losses and profits quickly, so they don't hold any one position too long, which is called 'marrying a stock'.

2. Holding Losers Too Long - the best attitude is that the 'first loss is the smallest' and to go ahead and take a loss when you're getting uncomfortable with it, say 5-10%. This can be done automatically with a stop loss order placed as soon as you buy a stock that will cause it to be sold if it falls a certain amount. Through experience I like a 5% stop, but 10% for some of the new ETFs.

3. Buying Too Many Stocks - most people hear that they need to diversify, then proceed to buy 10-25 stocks 'to be safe'; however, now you have 20-50 commissions to pay a broker, one for buying and one for selling each stock you want to own. The best way to diversify is to buy and exchange traded fund (ETF) that represents a basket of stocks and you have instant diversification with only one commission trade. I've found the best amount of stocks to own is 3-10, only a few in bear or difficult markets, and only 10 in raging bull markets. As long as some of these are ETFs, you're diversified.

4. Buying with Market Orders - learn how to use and buy with limit orders, or a top limit that you will pay for a stock. Otherwise, you may be the chump that bought at the high of the day just after the market opens when a market-maker takes advantage of your order. I've seen prices jump from 15 to 18 for one order, then come back down to 15 again!

5. Buying Stocks at the Open - the first half-hour to hour of market trading is the worst time in the day to buy stocks. Orders pile up overnight from people who trader after work, from Asians, then Europeans. So when the market is in a rally, these are usually buy orders and the market often opens higher, then dips after these initial orders are processed. It's best to buy after the first hour or during the lunch hour.

6. Buying Hot Tips - rarely will you hear the proverbial 'hot tip' this really is one. What you'll hear more often is unsubstantiated rumors, bogus stories, sometimes downright fraudulent attempts to move a stock. Whatever you do: do not rely solely on advice from friends, relatives, or employees of a company. Always fully research these stocks before buying them, and get opinions from numerous sources online.

7. Buying Companies You Like - most people like Apple stock because they like iPods or iPhones, Disney because they like the movies, or Wal-Mart stock because they like cheap goods; all would have lost money for recent investors, some for a whole decade. Often by the time the public buys a stock, the easy money has been made by the pros and insiders, and the public is left 'holding the bag'. It's better to buy less-known companies that market pros like.

8. Buying Stocks That Analysts Like - this is also often bogus information you're hearing. Analysts quite often are simply 'talking their book', they want the public to buy a stock so they can sell out at higher prices. They may also want to drive a price down to buy in at lower prices - you can never really ascertain their motivation, so be skeptical.

9. Averaging Down if a Stock Falls - this is buying more of a stock as it falls, and averaging down your cost per share. It’s awfully tempting if it’s a good company; the price will come back, won't it? So you double up and now have twice as much money at risk in a falling stock. After the stock falls 50-90% you have multiplied your original loss, and pros call this 'throwing good money after bad'. It's the equivalent of doubling up your bets in Vegas until you finally win! Average up, but never down, as a stock that falls 50% from 100 to 50 now has to go up 100% to get back to even.

10. Buying Cheap Stocks - many think they can buy a penny stock that goes to a dollar and they make several thousand percent on this trade, which will pay for many losers. This is their game, the lure of 'lottery' money, but it's a losers game. Over a decade, 80% of all public stocks will go bankrupt, and guess where the majority are in price? Yep, under a dollar, which is where they have to fall before going to zero.

There are probably hundreds of other valid tips available for both investors or traders. The important factor for all is preservation of capital, or you won't have anything to invest, so keep your losses minimal and you're on the way to stock market profits.

ETF stands for Exchange Traded Fund. Rather than a traditional mutual fund, these are mutual funds that are on a stock exhange that look, work, and trade like stocks. There are several advantages over mutual funds:

• They trade instantly, no waiting for the day’s closing price at 4 p.m.
  
• You can buy or sell them with limit orders and have stop loss orders there to protect your investment from a large drop
  
• Many are offered that give you double or triple the underlying index value’s daily change, so you have additional leverage with your money
  
• Many allow you to short either a market index or a stock sector
  
• You can buy them in an IRA or 401k and thus can short stocks that way, benefitting from falling prices with a rising price in the short ETF. You cannot short stocks in a retirement account, because if they move against you (up), you would owe additional funds.
  
• You can use a sector specific ETF to hedge stock positions and have corresponding sell orders in place in all positions
  

Traditional mutual funds don’t allow any of these, you can’t have a preset sell price (stop loss), you can’t buy at a specific price, you don’t get the immediate value when you buy or sell. On top of the mechanics of trading them, traditional funds will usually cost more in fees when you get out than an ETF will, which will trade at the cost of a stock’s trade commission. On Black Monday in 1987, when the market plunged at the open, those who sold mutual funds had to wait until the 4 p.m. prices, which was at the day’s lows, down over 20% on average for that day alone. People, like me, who sold stock at the open had their cash immediately and avoided the day’s plunge.

You can use ETFs for various investment purposes:

• You can use them for investing rather than trying to pick individual stocks
  
• You can buy into or short an entire sector, such as financials, with one trade
  
• You can use them to hedge stock positions, such as using a financial short ETF to protect a long position in financial stocks, or a short index ETF to protect all your long positions at once
  
• You can buy the ‘market’ with an SP500 fund, or short the ‘market’ the same way
  
• You can lessen your risk because there’s no chance of bankruptcy or a bad earnings forecast such as may occur with individual stocks
  
• They allow beginners to safely learn how to trade while remaining diversified without having to analyze individual stocks
  

ETFs have succeeded because of all these advantages. Most now trade millions of shares per day, and I would avoid those that still trade below 100,000 shares daily, which is called ‘liquidity’. For beginning investors, these offer the safest way to learn how to trade the stock market with the least risk. Simply buy a long or short S&P500 or Dow 30 fund, put in a stop loss order to protect yourself from a big loss, and you have easily started down the road to safer investing.

Updown is a stock trading simulation site, you begin with a virtual portfolio of one million (dollars, not pesos) and you can trade real-time in any exchange listed stock. In addition to having your own portfolio, you can also start trading groups, create friends lists, find stock analyses, start or participate in contests, and exchange messages on the site. It's a great way to improve your trading skills without any risk, and a great way to meet other traders, to exchange ideas, impart your own wisdom, or just argue. The site also allows and sponsors short-term trading contests, and pays real money per month for those traders that handily beat the SP500 for that month.

I've been there well over a year now. It's a lot of fun, it's FREE, give it a try - you'll be GLAD you did!

.. Enjoy! -- the Jman ..