Home

Stock Options University   Trades  Services  Tools  Feedback     

Market View  Today's News Past Results FAQ Links

Special Reports

Stock Option Investing.com

            Market View

Here you will find our latest views on the Market

How many times have we heard the same story. Next quarter sales will be better. We showed a profit this quarter. Yes you did. After you lowered expectations by 50% from last year. Don't believe the lies. All economic indicators this week were much lower than forecast, but the economy is fine.

More economic indicators coming up this week. They will be less than forecast, bringing the market down again. The consumer and average trader will soon realize that the economic recovery is a joke. Mutual funds are being cashed in at a record pace. Foreign investors are starting to pull their money from our markets. It's a house of cards. One big event of bad news could send it crashing to the ground.

Bear or Bull. Who cares. These are the latest findings done by us. Be an independent thinker. Don't believe what you're told to do by Economists or the Federal Government or by Stock Brokers or Analysts. They all have ulterior motives, and none of their motives are meant to do anything but to take your money. If you swear by them, eventually you'll be swearing at them. Play the lottery, your odds are better.

We will give you facts, some public knowledge and some not so public. Then you can see the truth for yourself and make your own decisions. We use Fundamental  and Technical analysis.

The S&P 500 and most of its stocks have valuations and P/E ratios 30 to 40 percent higher than normal. We feel that the S&P could drop  to 800 or lower.

The Dow Jones and its stocks are in the same boat. We feel that the Dow could drop to 8000 or lower.

The following are just a few of the reasons we believe that it is much too dangerous to hold on to stocks or mutual funds at the present time.

1. Eight Trillion dollars in Federal debt.

2. The Global economy is in a shambles. Japan has been in recession for ten years. Argentina went bankrupt with other countries soon to follow.

3. U.S. Consumers owe more money than any time in history. Recently the figure was put at about 8 trillion dollars.

4. Corporate and Consumer bankruptcies are at record high levels.

5. U.S. investors lost over 8 trillion dollars in the last two years.

6. Thirty percent of all U.S. companies have only 6-8 months left of cash to pay their bills. Most of these have lied about assets and actually are showing no profit if not negative cash flow.

7. U.S. banks only have 10 cents for every dollar they owe.

8. Derivatives, these being highly volatile "bets" on anything from interest rates to gold prices total 40 to 50 trillion dollars.

9. Terrorism. Another event like 9/11/01 could bring the global markets to a bigger crash than 1929.

10. World conflicts could do the same thing. Israel/Palestine, India/Pakistan, China/Taiwan, North Korea, Syria, Yemen.

 Fire Your Broker

1. They work on commission. They will do whatever it takes to sell you something good or bad.

2. Penny stock scams. You get a phone call or fax telling you to buy this incredible new company. It costs only twenty cents a share. Buy it now, before it goes up to $5 or $10. You buy 50,000 shares for ten thousand dollars. Your broker makes a nice commission. 100 other "lucky investors" buy the same stock, sending its price to fifty cents a share in a matter of days. How can you miss. You've made 150% profit.

This is where the brokers and scam artists make their move. They count on your greed to kick in. You'll hold the stock, waiting for it to hit $1, $2, $5. Your broker and all his friends also bought big blocks of the same stock. They know the company is a piece of shit. When the stock hits fifty cents a share, they sell all of their shares. The stock price plummets to ten cents a share in one day. You are now out 50% of your money. They made 150% profit. Meanwhile you'll be lucky if that stock ever sees your original purchase price again.

3.  IPO Scams. XYZ stock is announcing it's going public. It will sell 50 million shares. A week before the IPO (Initial Public Offering), brokerage firms that issue these stocks let their preferred customers in at the offering price.

The stock goes public for a higher price than the insiders paid. Brokers hype the stock , investors rush in and drive the price up in a couple of days. Meanwhile, the insiders are getting ready to unload all their shares at a sweet profit. When that happens the stock crashes and the little investor is screwed again. You are now stuck with a stock worth half what you paid.

4.  The Boiler Room. You get a call about a cheap stock that's about to be discovered by wall street. Get in before the price goes up. Only problem is either the stock doesn't exist or it's a penny stock. After the broker makes enough money he disappears with your money and everyone else's.

5.  Parking & Crossing.  You call your broker to buy XYZ at $50 a share. He waits a minute and the stock is 49.75. He buys it at that price and sells it to you at $50. He makes 25 cents a share. That doesn't sound like a lot, but if he sold you a hundred shares, it's $25 dollars profit. Add that profit up over many trades on a daily basis and he made a lot of money.

You give an order to buy XYZ at $50 a share. He gets an order to sell XYZ at $49 a share. He buys it at $49 and sells it to you for $50 making a dollar a share plus commission.

6.  Insider Trading.  This was "fixed" by the SEC in the eighties. No more would people get inside information and buy or sell stocks based on that information. Yeah, right. I've got some swampland in Miami with oil fields for sale for you. Or perhaps you'd like to buy the Brooklyn Bridge.

7.  Stock Ratings.  Even with all the declines in the market recently, half of all stocks are still rated buy or strong buy. Only ten percent are rated a sell. Come on. Who is lining the pockets of brokerage firms and analysts. The same company that rates a strong buy.

Send  mailto:customerservice@stockoptioninvesting.com with questions or comments about this web site.
Copyright © 2007  Stock Option Investing
Last modified: May 12, 2007