Monday, January 7, 2008

Where to invest during these tough times???

A fellow blogger at mentions that despite the bearish economic sentiment in the overall market, there are several sectors that continue to outperform. Identifying these sectors should be a priority to every serious individual trader/investor.

The problem when it comes to portfolio management, in a lot of cases, is that we have some "fetish stocks" that we stick to and even though it's a good idea to get to know your favorite stocks inside and out and adapt your trading to them, it is also dangerous to fall in love with them... I'm sure you've heard this hundreds of time but you know what? I'm sure you're still doing it!

So, the bottom line is you need to step back and get a "bird's eye" view of the markets. Right now the market is getting more and more bearish thus you need to adapt. If you are an investor and are not interested in trading thus eliminating the "shorting" option I suggest you consider one of the sector Big Ben is referring to which is the Agriculture sector like Monsanto (MON) but mainly the consumer/non-cyclical sector like Pepsi(PEO), Coke (KO) and Anheuser-Busch Companies (BUD). Just look at the action these stocks alone have had while the markets were plummeting...

Once again I recommend you do your own due diligence and don't forget the two rules on trading and investing: ( I can't remember where I heard it first but it's a classic...)

Rule #1 Protect your capital
Rule #2 Don't forget rule #1...

Yours truly

Eric LeRiche

Wednesday, December 26, 2007

Friday, December 21, 2007

Trading and investing /market update

Dear friend,

I am now ready to accept questions you might have about trading and investing...

Until I get specific questions let me discuss the current state of the markets:

Headline news these days is about price inflation worries. The prices of many things keep going up. We see it in the prices of many commodities. We see it in the prices of food and health care and insurance. No one believes the government's official numbers anymore. But even these doctored numbers are showing that inflation is rising.

The market worries that the Fed won't be able to cut rates much anymore. So down she goes. Not that rate cuts would save this market anyway. Look at what happened during the last rate-cutting campaign: The S&P 500 still lost 45% of its value.

I think the market will be rough for a while here. There are more write-downs from banks coming, more credit troubles and more weak earnings reports from financial stocks. Then there is the spillover effect, as housing and mortgage troubles extend to other areas. Lots of bad news, and where the market will go is anybody's guess.

Instead of guessing which way the market might go, I think it's better to focus on things you can control.

When I make a buy recommendation, it's for fundamental reasons, and I plan to hold onto the business for awhile.

If you're interested in fre*e stock picks go to my website at and sign in now because the weekly picks won;t be fr*ee much longer... Consider this my introductory gift to this new blog...

About investing these days, considering we are facing some important divergences ( recession vs inflation) I wouldn't invest all my money in one shot in any investments at this time. Invest in solid companies (fundamentally) but go at it slowly. In other words: average up...

If you like to trade based on technical indicators, be alert and use tighter stops than usual.

Yours truly,


Eric LeRiche