From $24 to $690,000 In Four Years

In 2009 a Norwegian man bought $24 worth of bitcoins and forgot all about them.  Four years later Mr. Kristoffer Koch checked his account after reading an article and low and behold his 5,000 bitcoins were worth $690,000.  He promptly cashed in around $186,000 and bought an apartment in a sought after neighborhood in Oslo.  Read his story here.

Norwegian Man Buys Flat With Forgotten $24 Bitcoin Investment


It may be worth a look to watch the bitcoin market and get some on the dips.

By digitalart, published on 26 July 2011
Stock Image - image ID: 10051347

Diversifying Your Portfolio and Dividend Yields

To start building your portfolio you should keep in mind that you must diversify. Tempting as it may be to put all your money into that one stock that is paying big dividends, you have to be smart and spread your money around to protect your investment

It's a good idea to put your money into different industries i.e. manufacturing, retail, technology, financial, minerals and entertainment.  This will keep you from being hurt too much when various sectors of the market are experiencing trouble.

I created a list of stocks that I am watching I chose to invest in several of these stocks because of how they look in my technical analysis. Many of them are oversold and are in a good position to rebound.

• Retail – TGT, WMT, DG
• Housing/REITs– ARR, CYS
• Technology – MSFT, ORCL, CSCO
• Manufacturing/Automotive – TSLA, F
• Financial – JPM, WFC, BAC, PNC, UBS, RLI
• Entertainment – SNE, TWX, LGF, DIS
• Communications – VZ, T
• Minerals – GLD

I especially like buying retail stocks right before the holidays they may take a downturn after their earnings report in the new year but at least you have an option to sell before then.

I mostly buy stocks with a high dividend yield however I will buy stocks that don't pay a dividend only if it’s a break out company, Tesla fits that criteria.

I recently read a couple of articles about diving deeper into analyzing stocks for dividend yields.  They talked about inadequate assessment in many of the current stock analyzers.  In order to get the true dividend yield you have to look at when a company distributes their dividend. Go back and look over the whole year to see if extra dividend payments were distributed.  If a company only declares a quarterly dividend then only the distributions over the quarter will be factored into the dividend yield calculation.  This however excludes additional one-time distributions which will sometimes dramatically increase the dividend yield calculation.

In short it pays to do your research.

3 Things to Remember when Trading the Government Shutdown

As we all wait for Congress to get back to work, there are some things to keep in mind about playing the market swings. 

• Never put your money in when there is crisis (unless you found out about it before any one else)
• If you think you found out about the crisis before anyone else, chances are you haven't
• It may be a good idea to buy the dips on solid stocks that have good balance sheets and good management

I wrote a post a while back about shorting the market when it is high.  These situations are perfect examples of why shorting the market is always the most profitable trade.  There will always be an unforeseen crisis that will bring the market down and when the market goes down it goes down fast.  There is nothing that happens consistently that brings the market up fast.  The market will always go up slow and down fast.

The key is to find stocks that are overvalued and their balance sheet and management may be going through some difficulties.  At the slightest sign of market weakness these stocks will drop fast.  Conversely stocks that are strong internally will weather these dips and it is a good long term play to buy the dips on these stronger stocks.  Do your homework before jumping in and I always prefer dividend paying stocks for long term plays because it takes the edge off any potential losses and may even prevent any losses. 

Stocks that may have problems because of the shutdown are those that depend on government contracts like defense, food service, research, transportation, medical, education.  Stocks that may be insulated from the shutdown are those that don't have contracts like clothing retailers, luxury brands, entertainment, etc.

Do your homework and set your stops.  Happy trading!

Tesla Is Always A Good Buy

I really missed the boat on this one.  I saw the news article on Tesla and the battery catching fire and knew the stock would go down, but I didn't pull the trigger.  Tesla's back up something fierce today.  truth be told I should have bought stock last year when I was day-trading heavy.  It was my wife who told me to buy some and I should have listened.  In May of last year Tesla stock was around $55 then it shot up to around $100 and is now trading at $174 today. 

Elon Musk is not one to bet against.  With the savvy and courage to run multiple businesses and still keep them afloat he is the type of person who will always come out on top.  I'll wait for another dip and then get in on this one.

Bitcoins, Drugs, and The Underworld

A website called Silk Road was taken down and charges were posted yesterday to Ross Ulbricht who ran the site that allowed underworld transactions, sort of an ebay/craigslist for criminals.  The site used bitcoins as the means of exchange and allegedly made about $1.2 billion in revenues and $80 million in commissions. The site allowed the sale of guns, drugs and even assassinations. 

This definitely impacted the price of bitcoins as the price fell after the news broke but today the price has climbed back up to around $130.

Here's a news article detailing the websites activities:

http://news.yahoo.com/silk-road-website-dealt-drugs-guns-assassins-bitcoins-190640637--abc-news-topstories.html

Here's a site to check the rates on bitcoins:
http://bitcoincharts.com/