What a drubbing!

November 27th, 2006:
Congratulations to everyone that was short on almost anything today! For all of those who were short Google (GOOG), my hat is off to you, but cover it quick. The Dow was down about $160, the Nasdaq down about $50, and the S&P500 was down $15. If you were short on any of these you should be patting yourself on the back... or, I should say, you should pat the Republicans on the back. That's right, the market tanked because the dollar plummetted, which means that in all likelihood the Fed will have to raise rates to protect the dollar against inflation... This probably won't happen until January, but you're going to need to start to get a little bearish... or, this could just have been one bad day.

For the best advice you can get: IDCC or LVLT (both great wireless tech plays). I like IDCC more, and it's at a ridiculous discount right now. See previous articles, but just make the P/E lower. If you're a real gambler, go with JDO... I think they'll recover in 6 months.

I'm dog tired, so this is all you're getting today.

A lot to give Thanks for!

Welcome to LowCapital.blogspot.com - today is Tuesday November 21st. The Dow was up 5, the Nasdaq up 2 and the S&P 500 up 2. The market was trading on pretty low volumes today and really just crept up. I'm not sure if that's because of the upcoming long weekend and everyone taking the day off or if it was because prices were creeping back up. Either way, given the amount of blockbuster mergers and takeovers being announced yesterday I expect good growth for a few more weeks.

I think there are a couple of plays that can work out for us over the short term. One of them is Level Three (LVLT). They recently acquired BroadWing, which I think will make them a fantastic company. I took down several hundred of their shares today during the intraday low... and I don't do things like that unless I'm sure of growth. I would look for this stock to go from $5.15 to $8 within 3-4 months.

I'm also still high on IDCC... this company just looks too good to be true. Earnings are going gangbusters and the P/E is miniscule. Get in now before this one doubles. See previous days posts.

I'm taking off for the rest of the weekend to explore investments in major beer brewers if you know what I mean... Either way, the way the market is going, we have alot to be Giving Thanks for!

IDCC and CPHD

Welcome to lowcapital.blogspot.com, home of Smart Money for the Small Investor. Sorry for teh delay in posting, but my cpu died on Friday afternoon, which not only kept me from blogging, but knocked me out of trading for the second half of Friday! Here are the two stocks I recommend, Interdigital Communications Corp (IDCC) and Cepheid Pharmaceuticals (CPHD). Both were slightly down today, and I think that makes them an even better buying opportunity.

IDCC is a wireless technology company that does everything from cell phones to routers, and this is an industry that is exploding with growth. This stock is one I think is ready to take off too. It has a trailing P/E of 9.6 and a forward P/E of 5.4, which means even if it just maintains it's low 9.6 we should see a 13 point gain by next year... I'm personally looking for this company to DOUBLE in price. That's right, I'm looking for it to go from $33 to $66. Now that's what I call a good investment.

CPHD is a company that focuses on genetic testing equipment. Their technologies allow researchers to perform analyses in about 30 minutes that used to take a week of tedious manual labor. It's a company that is still losing money (like many biotechs), but is starting to look better and better on the balance sheets.

The market as a whole should continue to be bullish, with the CPI coming in very low. That means the Fed will likely hold its hand, and if the CPI stays low, you'll perhaps see the Fed loosen up. Can anyone say "deflationary Bull market?"

Two stocks with big potential

Today is November the 16th and the market is rocking again. Mooo! Can you hear the cows? I mean bulls. But it's so easy to make money in this market we're getting lazy... That's why I'm here. The Dow was up 54, the Nasdaq up 6.3, and the S&P500 up 3.2. Today I'm recommending wireless company Interdigital Communications Corporation (IDCC) and Jed Oil JDO.

Running of the Bulls!

Today is November 15th, and the market was running positive today: Dow up 33.70, Nasdaq up 12, S&P500 up 3.35... It's easy to make money in a market like this; however, if you're not beating the market, you're not winning. That's why we have to have a few speculative stocks that can give up blow out numbers. Today I'm suggesting Komag (KOMG) and Savient Pharmaceuticals (SVNT).

A big day for the market!

Welcome to the November 14th edition of Smart Money for the Small Investor here on LowCapital.blogspot.com, with budding market guru Dr. Cam Snow (I'm very full of myself after the run I posted in the last couple of weeks). No video today, but I'll hand out a couple of tips anyway.

Market Recap: Dow up 86pts., Nasdaq up 23pts, and S&P500 up 8.5pts. So, all in all, this was an excellent day on the market, and an excellent day for several of the picks I've recently doled out. I've been restructuring my own portfolio to a 70-30, which is 70% large caps with dividends and 30% as speculative stocks that are movers. There are two companies that I've latched onto that I think should be moving on fundamentals and because they are good companies.

Big Pharma: It's going to rebound big time and I'm a big fan. I personally favor Pfizer, PFE. It has a PE near 12, and a 3.5% dividend... really quite unbelievable considering it beats estimates every time. This company should be at $35/share, not $26... that's why I've been loading up on PFE.

The second one I've been studying up on lately is Conoco Philips (COP). This is my 3rd favorite oil company... My favorite is Apache (APA) because that's who I work for, and they are making me rich. Marathon (MRO) I really like because I see them as a lucrative takeover target (in addition to Devon). MRO posted big numbers, blew out estimates, and is still way undervalued! I smell takeover for them within a couple of years. COP is a little too big to get taken over by anyone but Exxon (XOM) though. COP trades at a PE of less than 6, which is far below that of other companies, and they are solid. They just hired 46 new geoscientists in Houston, which tells me they are growing at a phenomenal rate... NO ONE hires 46 geoscientists! That is barely possible considering we only graduate 700 per year (B.S. + M.S. + PhD combined). I think this stock could jump up to... drumroll please: $80/share. That would be 15 points up, and I think at worst they could be 4 down. That, and they have a 1.5% dividend... truly a good buy!

Two growth stocks!

November 13th: The Dow was up 23.5, the Nasdaq up 16.67 and the S&P up 3.5 on moderate volume. The market was up today because the price of crude was down. The price of crude has became so important because with the Consumer Price Index numbers being a driver for Fed rates they directly affect the interest rate these days... truly amazing! Today I want to focus on two stocks that are good plays on growth: Schering Plough (SGP) and Hittite Microwave Corp (HITT). The fundamentals may look skewed, but both have big time potential!



Holdings disclosure: PFE

Calling all suggestions!

Hello Smart Money Readers!

I've been generating ideas for about 3 weeks now, and my track record is going pretty well (all winners except for a few large-cap suggestions --notably Pfizer, which I happen to have a large position in).

I am planning on continuing to pick winners (which is in my best interest as well); however, I can't uncover every good pick that's out there. So I would like to challenge you the reader!

Send me two stocks, and I will do the research and give my take on them. Hear of a stock from one of the "chart reader" blogs and want to know how it looks on a fundamentals basis? Send it on to me!

Email me at lifegoals@gmail.com

Thanks much,

Dr. Cam

Battling Commissions

Welcome to the November 10th/11th edition of Smart Money for the Small Investor. When we look at the stock market, we often think in terms of percent gains and losses and how many points a stock will jump. This works for large investors who can buy and sell several thousand shares at once. However, as small investors who are taking down small positions, commissions can kill you on trades.

Example: You want to buy ABC corp., a $10 stock. If you get the lowest commission available ($7 from scottrade) you may have to make big gains just to break even. If you buy 10 shares, you have to make a 14% gain to break even [$10*10shares+$7(buy)+$7(sell)=$114]. If you buy 25 shares you have to make 5.6% to break even; 50 shares? 2.8%; and 100 shares -- 1.4%. So, you can see where the problem is. Unless you have the ability to put $500-1000 down, you'll need to make big gains just to break even.

This really starts to become a problem when you want to have several speculative positions. For example, if you want to buy positions in several of the stocks I've been suggesting, you may need multiple thousands of dollars for each position; for most small investors this is beyond our means! So, here is my take on what you should do for trades (as opposed to investments) -- choose only a few and put as much as you can afford behind each one. Here is an example:
If you have $10,000 I would have $7000 in investments, and $3000 in trade positions. That means that at most I would have 3 trading positions of $1000 each. I would prefer to only have 2 positions with $1500 each.

Investments are a little different though and are probably more appropriate for very small investors (e.g., those with less than $5000). Investments are positions you anticipate holding for quite a long time... usually at least 6 months if not longer; these are stocks that offer minimum risk and usually have dividends. Example, lets say you want Pfizer (PFE) as an investment. Let's say you buy 20 shares @ $25/share and each share has a $1 dividend. This means that you put in $507 [$25*20+7$(commission)]. If you hold the position for 1 year and get the full dividend, you have made $20 in dividends. This has covered your buy commission and your sell commission (another $7) should you chose to go into another stock. Furthermore, this makes any gains in the stock pure profit. So, with an investment, especially if it has dividends, you can afford to take down smaller positions.

Happy Trading!

Dr. Cam

Dividend Plays

November 8th 2006 edition of Smart Money for the Small Investor. Today turned positive after a negative morning following a Democrat victory in the House and possibly in the Senate. I think the market will stay positive for the week, but am worried it might be turbulent. Today I recommend Trustco Bank (TRST), SteelCases (SCS), and believe it or not, good old fashioned high yield CDs.

GO VOTE!!!

It's election Tuesday... control of the House and Senate are up for grabs and your vote matters. It also matters for the markets!

Doubling up!

Welcome to the November 6th edition of Smart Money for the Small Investor. Today was a great day on the street with the DJIA up 120, the Nasdaq up 35, and the S&P 500 up 15.5! Today I discuss two companies: Aspreva Pharmaceuticals (ASPV) and Interdigital Communications (IDCC). I think both these stocks are severely undervalued companies on metrics, which have outstanding underlying companies. Don't hold off on these, because the will go up big time over the next six months!

Getting ready for the elections

Welcome to the Nov. 3rd/End of Week edition of Smart Money for the Small Investor.

Recap: DJIA was down 32.50, while the S&P 500 and Nasdaq were both down 3. This extended losses on the week, with all three major indexes being down between .75% and 1%. However, the indexes still had solid gains on the month (1-1.5%) and are still at phenomenal levels compared to a year ago.

The midterm elections are Tuesday November 7th. This is going to create short term havoc and buying oppoutunities in the market. If the Dems win, Big oil and Big Pharma will take a hit, and the biotechs will jump. However, this hit will just be temporary, and you'll be able to make money when they rebound in a couple of weeks. If the Dems fail to win either the house or the senate, look for Big oil to extend it's gains, Big Pharma to jump and biotech to be flat to negative.

Protecting the core

Welcome to the November 2nd issue of Smart Money for the Small Investor. It's important not to get yourself spread to thin. For example, if you only have $25000 to invest, and you have 25 positions, you run the risk of getting slaughtered in commissions and having to hope for large percentage jumps to break even. Furthermore, it becomes difficult to keep up with the news from each of those companies. If you even just spend 5 minutes on each per day that puts you at 10 hours of research per week... and that's probably at a minimum. That's why you need a core of 4-5 holdings that you concentrate 60-80% of your resources into. This way you can keep up on all the news and take advantage of smaller gains. I use my personal portfolio as an example.




Holdings Disclosure: GE, PFE, APA, RTN, TRST, ARNA, CPHD, CERS, SAI

Speculative industrials.

Welcome to the Nov. 1 edition of smart money for the small investor. The market was negative today with a lot of profit taking going on. All three major indexes, the DJIA, Nasdaq 100, and S&P 500, were all in the red. Today's tips are for EnGlobal (ENG) and BTU international (BTUI), two up and coming industrials.



Holdings Disclosure: ARNA, CPHD, CERS, TRST.