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Monthly Archives: May 2009

General Motors and an Attractive Little Automobile Stock

May 12, 2009
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General Motors and an Attractive Little Automobile Stock

Today we learned (no surprise) that General Motors lost $6 billion in the first quarter.  The company’s revenues dropped 47% in the quarter, to $22.4 billion, while industry revenues dropped “just” 21%. While the lion’s share of the blame for the company’s troubles must go to management (and to the unions), I think a lot of people don’t realize that the U.S. federal government–now playing the role of rescuer with taxpayer money–was hugely complicit in steering GM and other U.S. automakers into trouble with its CAFE (Corporate Average Fuel Economy) regulations, which exempted “light trucks” and thus encouraged the...

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How to Sell Stocks Profitably

May 11, 2009
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How to Sell Stocks Profitably

Last week I received the following note from a reader: “Since I just started investing in early March 2009, and linked up with you folks shortly thereafter, I’ve been mighty lucky (too early to call my successes SKILL), and have seen my two portfolios (IRA and separate investment account) grow from $70,000 to $155,000 and from $150,000 to $200,000 respectively. “My question is about when you normally sell stocks that have done well.  Do you sell when a stock’s price has advanced X% even it that means you might miss out on continuing upward movement?  Instead of percentage increases,...

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Another Bite of the Apple (AAPL)

May 8, 2009
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Another Bite of the Apple (AAPL)

I once bought Apple (AAPL) on a pullback just before it reported earnings.  It was a stupid move, but it paid off because nobody had anticipated just how many iPods Apple was selling. One of our rules for evaluating growth stocks is that the leaders of a previous bull market are seldom the leaders of the next one.  In fact, the odds are about four-to-one against it. But Apple is apparently beating those odds.  The stock, which peaked at 203 during the last days of 2007 and completed a kind of double top at 192 about a year ago...

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What Do Your Stocks Know About You?

May 7, 2009
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What Do Your Stocks Know About You?

Stocks don’t know you own them.  That’s the standard reply to anyone who’s feeling paranoid because a stock they bought immediately fell on its nose.  Similarly, the sports team you’re watching on television doesn’t know when you leave the room, turn your hat around in “rally cap” position, or give the evil eye to the shooter, kicker or passer. At least that’s what they tell me. The truth is, though, that while the stock may not know you’ve bought it, the stock market does.  Or, rather, the market knows when a bunch of people have bought a stock because...

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In the Stock Market, You Must Forget Regret

May 6, 2009
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In the Stock Market, You Must Forget Regret

The stock market is always trying to separate you from your money.  Everybody knows that. What some people may not know is that the market is equally good at separating you from your sanity. My favorite crazy-making tactic on the part of individual stocks is the issue that trades sideways for weeks and then breaks out with a 10% gain in one day.  I tell myself that I can’t buy it now because it’s too extended.  So I figure I’ll buy it when it corrects tomorrow. Tomorrow comes and the stock continues to soar.  Now I really can’t buy...

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