The last time the Dow was around 11,800 was in early March 2008. We have either hit the bottom and will move up, or it is going to continue the down fall. Tomorrow, it should be an up day as we have had more than a few days of big drops. The last two trading days were trying to move up but we would have sells at the same time. If it does fall more, I don’t think we will see much more lowering. The inflation rate cuts usually take 6-12 months to get into effect. The rate cuts happened in late December so we should start seeing the results of them very soon. However, I do believe inflation is going to continue to make its mark and we will see increases in price for all the goods. If you have cash, it would be a great time to find stocks you like and buy them on the cheap.
Month: June 2008 (Page 1 of 2)
I have a collection of stocks that I am interested in, but with this week’s stocks going down below 12,000, there appears to be plenty of bargains to be picked up. SNDK was downgraded by CITI which dropped it’s price 9%. This is an excellent time to start purchasing Sandisk. For the long term, there will be stateless hard drives which will bring them strong into the market again. I also do not see much downside to the price. It would be a 5 year low if it hit $20. I can’t think of anything more conservative than that especially for a company that is running most of the flash memory in the electronic devices we use everyday. I will see what happens on Monday and I will most likely put in a purchase to get some more stocks on the cheap.
Surprisingly, CDE moved up a fat 11.3% before the day closed. There must have been some type of short squeeze. There is major after-market selling bringing the price down to $3.14. I believe this will open on monday above $3, and it will eventually move up. I do not think there was any major news to which would cause this surge in the last 15 minutes of the stock market. I do wish I went in before $3, but time will tell if I get another chance.
Added 6/21/08: Here is an article on the uptick: http://www.tradingmarkets.com/.site/news/Stock%20News/1702954/
$100, $110, $120, $135, … $150!! Oh man, it might happen! Oil just keeps on moving up. We got global growth, higher demand for oil, the summer season, inflation, US dollars declining in value, just some of the things that are contributing to the high oil prices. However, there is another conspiracy about price manipulation.
The issue is that OPEC and the United States could be purposely stocking their reserves to make the prices higher. The reasoning was to contribute to making more efficient automobiles and reduce the amount of carbon emissions. If this is true, it definitely is working as people are feeling the effects of oil and are driving less for that matter. How do they do this? United States is hiding the oil in offshore reserves. Hence, the buying continues but the oil never gets to the states but of course we still get hit with the price.
Enron did the same thing with the California Rolling Blackouts. They said there just was not enough electricity to go around and kept selling their electricity for higher and higher. They had a monopoly on California. This could be similar to what we are experiencing now. We get all our oil from US companies. There’s no way we could stop them from raising those rates, buying that oil, and hiding it to make those prices higher. This might be a great way to start cutting the car emissions, but I hate to know that it required this type of manipulation to get it going.
For one thing, oil will continue to rise in the long-term. I do think it is quite high right now, and it is due to go down. It might be until Fall or later, but it will go down and adjust. It’s odd how oil is having even more of an impact than gold prices. I do believe we will see some oil corrections before the end of this year, but I cannot give a green or red light to the path to take in oil for the short-term.
Warren Buffet likes BNI, Burlington Northern Corporation Santa Fe Railway. He has bought billions of dollars worth of stock in this venture and with good reason. As oil continues to go up, the need for other types of transportation will become popular. Railways that run on electricity and/or coal are a lot more efficient and cheaper especially in times where the oil prices keep on moving up. Bill Gates likes CNI, Canadian National Railway Company. These guys are investing in the long-term and they both already started investing early in the 2000’s. If you look at either of these stocks today, both have skyrocketed and will continue to grow bigger.
Let’s turn to China. Beijing Olympics 2008, World Trade Fair in 2010, growth that is increasing at an exponential rate (at least 10% every year), and a booming economy that is trading tons more exports than imports. The people are becoming regular-day consumers wanting the best computers, televisions, and cars. Eventually, they will want to take vacations and travel more often. GSH, Guangshang Railway, is a Chinese railroad service that has been decreasing from a high of $40. It has a PE of 20, which is a little on the high-end for railroads, but still growth stock. As the Chinese stock market continues to decline, this stock longs more and more like a bargain. I will be keeping an eye on this stock and I think you should too! Long-term, it will definitely be a keeper and if you can get in below $20, you will find yourself to be a happy camper in the long run.
We will continue to see greater volatility in the stock market. I think it’s a combination of the hedge funds shaking things up and trying to grab some profit from each drop and each rise in price. It gets out the individual investors and puts the peoples’ money into the hands of the hedge funds.
I do think that we have seen the worse of the bottoming of the market. There is money on the streets and by third quarter of this year, the market should continue to increase in price. Anything resource related – metals, oil, wood will continue to rise as inflation increases.
For the upcoming week, look for metals such as gold, silver, platinum, and palladium to rise in price. These metals have been down for quite a bit and inflationary pressures will get them moving up. They are also priced quite low, and with any cyclical stock, they are now bound to start moving up.
With this weird up-down market, you can find some undervalued stocks that might make a good buy. I will cover a couple today: CPSL and SSCC.
SSCC, Smurfit-Stone Container Corp., is a box company. They make boxes and ship them everywhere. They do packing, corrugulated boxes, and recycling of them. This company gets a plus because it is a ‘green’ company. It’s stock closed today at $5.75. It’s way off it’s 52-week high of $20+. The company has declined quite a bit because of debt problems, but the management is within the middle of a restructuring the cut costs and improve the profit line. I don’t see much more decline in this stock. This is also an ‘anti’-inflation stock. It’s bottomline price never will really decrease even if the dollar value goes down. People need to ship stuff and they need boxes to do that.
CPSL, China Precision Steel Inc., is a very cyclical steel stock. If you take a look at the chart, you will notice that it’s price has fluctuated from $10 to less than $4 three times in the last year. That means you could have doubled your cash three-times! Long run, this stock is at the perfect time to buy. It’s at $4.59 which is pretty low with a PE 13.59. I do believe it has a change to go down lower, and I might possibly buy if it hits $4.00 or less. Overall, steel prices will continue to rise as global growth continues.
Ok, seriously, I think the market will go back up, but a lot of news that you see will say this is the start of the bear market and get ready for big drops in price. I’m in the market for a lot of long-term investment. If there are more drops in the DOW, get ready for some major good purchases in the market. Remember, investing in stocks should be for people looking to hold on stocks for at least 1-2 years. In my time frame, that’s about correct. Some people might have longer time frames, but I like to get my quick cash and get out.
CDE and PAL continue to go down in price. CDE went down 10% today and PAL actually went up 1%. If they go down enough, I’ll double down and take what is called the ‘falling knife’. I will take the gamble and make a bunch of cash or lose a whole lotta :-/
Today, there was a 10 point gain the Dow, but there was still massive drop-offs in stock prices. SNDK dropped 4 percent closing to near $25. I think flash memory will definitely become bigger and with state-less harddrives the next big thing, they will only continue to grow. I will be looking at this stock in the future and I’m setting a target below $25 before I put any action into it. There is a good potential it might go down furthur, but as a stock to hold for at least 2 years, it will have some big gains for sure.
Another stock that has good potential is the newspaper stock GCI. It has dropped from a high of $90 down to $26 in the past year. This is attributed to loss of revenue from advertising. Garnett Co, Inc. is a newspaper company holding popular ones such as US Times and a bunch of local city companies. It is also growing internationally and building websites for all it’s 100 or so newspapers. I believe it will find a way to pull through and the value of the stock right now pulls in a 5.8% dividend, not too shabby!
The stock market went up 70 points on the DOW today, but my mineral stocks continued to progress lower. I hit the trigger and I bought CDE and PAL. I believe there is a chance that there two stocks might trend even lower, but that’s not a problem for me. They are cyclical and will quickly go back up. I think these two stocks have strong potential and I will set a target for $6 for CDE and $10 for PAL to sell. I might change these targets in the future depending on circumstances and obstacles I see with the news on silver and palladium.
—— SUPER STOCK BLOG PORTFOLIO TRANSACTIONS ——
$9998.42 – Buy CDE for $3.26 for a total shares of 3,067
$5130 – Buy PAL for $5.13 for a total shares of 1,000
———— SUPER STOCK BLOG PORTFOLIO ————-
CDE – 3,067 at $3.26 per share
PAL – 1,000 at $5.13 per share
It’s never great as an investor to see all your stocks drop 400 points in one day. However, we can make great use of this. First, the unemployment report came out to the worse decrease for the past 30 years. We had a 10% increase in job unemployment. Second, oil continued to raise even more going up $10. In California, it’s no surprise to see $4.50 just for regular unleaded fuel. These two things were the main contributors to the friday decline, but we still have the problem with the housing crisis and international pressures that continue to bring down many stocks in the US stock exchanges.
I like to make the best of this situation and I want to look long-term in a couple stocks. To start putting my portfolio for this blog, I’m going to throw down some cash into mining stocks and resource stocks. As China continues to industrialized and Dubai continues to grow and the world grows, we will continue to see huge growth in all mineral stocks. Steel stocks are already really high such as TX. Mining Tool stocks such as JOYG continue to profit and make huge gains.
I have two stocks that intrigue me: CDE and PAL. CDE, Couer d’Alene Mines Corp, is a silver mining company. It’s a great defensive stock. It’s one of the single stocks on Friday to actually move up a percentage point. As the United States continues to get more into inflation, this stock will increase in value as the silver prices increase. Gold will continue to go up also, but I’m looking specifically at CDE because it’s at a very low price right now. Technically it’s at the lowest it’s been since 2003 and I doubt it will go any furthur than that. Silver is also a useful mineral to build engines, jewelry, computer parts, and much more. It will continue to grow in demand as businesses require it. To sum up: Silver and Gold are going to continue to rise and CDE will be in my book for monday if I like the price.
PAL, North American Palladium Ltd., is a palladium miner and a tellerium miner. These are used in the catalytic converters for cars. We see a decline in trucks and SUVs, but as long as cars are being driven, there will be a need for these minerals to build their engines. PAL is at a very cheap price right now $5.36 at the close on Friday. I will look to get in on monday and take advantage of this stock before inflation moves it up. If it goes down furthur, I might wait to get in at a good price. I will time the stock and if I cannot get in at the price I want, it’s ok, there’s always tomorrow. Palladium and tellerium are minerals that will eventually run-out if another mine is not found. These minerals are only in Russia right now and as supply gets low, you will see the price rise up. To sum up: palladium is going to rise for the long-term.