The Market Outfit

Property Index can help with overseas property investment, view the properties available for investment.

In spite of the fact that the Property Index online service is still a newcomer firm, founded in March 2007, they were very quick to prove their mettle. Actually, they are a rather easy-going firm specializing in counseling any individual contemplating to sell, buy, rent, etc. real estate assets across the world. They affirm to offer you assistance to pinpoint squarely what you crave for very swiftly as well as without pain. Property is available for the asking almost anywhere in the world at present, maybe the most exclusive area being real estate available in Spain. It should really be an easy job to specify the glorious estate you can purchase in Spain, one rationale for opting for real estate here being a combination of the houses and apartments on the market and the option of living amongst this keen populace.

It is one of the most popular regions of the world at present, and considering the beauty and wonderful sunshine surrounding you, how could you go wrong.? Property in Spain is steeped in history, this part of the world is home to quite a number of civilizations. Around thirty years back there was just a dribble of English keen on estate in Spain. Ask any one person who has removed to Spain and they are certain to back it up. Lots of people would term it a trend and others term it a as something approaching a fixation… People that are keen on removing to this place will typically range from young families in search of a life perspective to the elderly who want to put their feet up.

Note, however, that you may have to wrestle with a few catches when looking to acquire estate abroad; there are obviously hundreds of actions to manage be it when planning, sightseeing or completing. Even if one minor procedure is missed that is liable to escalate wide-reaching catches as well as, critically, monetary loss. As everyone would presume with this trendy area, estate could be fairly expensive in this destination and this, of course, is absolutely a result of the high demand. Regardless of this the patron is spoilt for choice in a destination blessed by happy scenery. It’s able to offer all, stock and barrel, you might feasibly need, and more.

It’s Friday night and you want to spend the night on the town, but pay day is two weeks away and you spent all your funds on rent and fuel. One simple solution is to get a pay day loan. A pay day loan is fast cash loan that you could get for $100-$2000, usually.

There are local pay day loans in your neighborhood. You will want to be careful and watch the rates that they tack on with each loan. Most require that you have a checking account along with pay stubs, verifying that you have a valid job. If you do not want to get a pay day loan at a local bank, you could go online where there are a variety of options available to you.

The great benefit of online payday loans is that they can directly deposit the cash in your bank account, you will not have to wait in lines. This is the simplest way to get funds into your account with the least hassle. All you have to do is simply complete the forms they require online and the information is secure. If you’re looking for a quick solution for some extra cash consider pay day loans.

Microsoft is a difficult situation for me to evaluate. I think the company still has a lot of growth ahead in some areas. But, that depends on where management wants to take it.

There are three core businesses that are already well developed: Windows, Office, and Servers.

The moat in the first two are wide. The Windows moat is huge.

The business model in operating systems is great. You keep upgrading every few years; the hardware needn’t progress for you to find things to tweak and get people to buy the next step up. It’s insanely profitable.

I think the new launch (Vista) will be bigger than people expect (eventually) in how it allows for cross selling other Microsoft products (but we’ll see about that). I expect the press to be very negative at least until well after the launch, because there will always be some bugs and delays.

Games

Eventually, video games will be a big business for Microsoft. I hate the economics of the console business, but love the economics of the publishing (and development) side of things.

I’m sorry to see that Microsoft didn’t use its cash pile to buy up an established business here (publishers were cheap in the market a few years ago; an all cash deal would have worked well. Now, everyone thinks video games will be the next big thing).

The console wars are going well for Microsoft. The two keys to establishing a dominant console are launching first and getting good games on your platform. We’ll see how Sony (SNE) does this round, but I expect them to be the big loser.

Nintendo may surprise here. I think the Xbox 360 and Nintendo’s new console (Wii) will do very well. It’ll be interesting to see the breakdown of the consoles in both the domestic and foreign markets. I think Sony may still be strong overseas, but could be in a much poorer position at the end of this round than they were with the PS2.

Search

Long-term I am optimistic about search. I think Google’s position is much weaker than most people think. I don’t think Microsoft will be the only one to benefit here.

Search is a very natural cross sell with Windows. That’s the direction everything seems to be headed in (combining online and desktop search). For future growth in terms of market share I think Microsoft is in a better position than either Yahoo (YHOO) or Google (GOOG).

I also think we might see a couple other (largely unknown) search engines gain some share.

I think Google’s strength is its brand. Its dominance helps with advertisers more than users. I don’t think it has a lock on users. Also, I think Google has been poorly positioned for doing much of anything outside of keyword search.

I expect to see a lot more in the way of intelligent, social search inspired stuff. Years from now, much of search will have to be helping you find what you didn’t know you wanted to find.

Google is dominant in a different business: helping you find what you know you want to find (but don’t know the name / location). The two types of search are very different. Both will be important, but the growth in other forms of search will be coming off a smaller base and will likely integrate with keyword search. Google has the most to lose here.

Other Devices

Microsoft wants to perform well on mobile devices and on your TV. Compared to competitors it is very strong in these respects.

The strategy seems to be the one I would favor - to control the point of initial contact wherever software is used and then to only venture into the actual application or content side of the business where it is highly profitable to do so. In video games it will be highly profitable. In other areas it is less likely to be very profitable.

I expect to see more generic, web-based applications. These will be less profitable for everyone. Office should hold up well, but not as well as Windows. Basically, Microsoft needs to take what it has in PCs and import that to TVs, Handheld Devices, Consoles, and the Web.

That should be the strategy. I think that is the strategy. These aren’t unrelated businesses that need to be broken up to unlock creativity (as some have suggested). Rather, the profit potential for each is greatly enhanced by being part of Microsoft. If you take these pieces apart they are worth very little. There would only be the three businesses I started off talking about and the console / games business.

Internationally, there is going to be natural growth for Microsoft’s dominant businesses. It won’t be a tremendous growth rate, but it will be strong and will require virtually no additional investment to secure.

Obsolescence Issues

Overall, I like the future for software a lot more than hardware, because the marginal gains in the quality of hardware will slow greatly in the years ahead.

The question isn’t what can be done mathematically in terms of increasing specs; it’s what that translates to for the user. We are reaching a point where the individual user will not directly see the benefits of increased hardware performance as clearly as he did in the past.

Much of the research that goes in to this area will only serve to bring down prices and benefit memory intensive businesses - it will not provide as much of a “wow” factor for the user anymore.

This is especially true in games. The situation in desktop applications is already such that improving the software design is where most gains will come from.

Computing power is simply not a scarce resource for most individuals sitting at home or in a cubicle. Advances will benefit some users a lot and will trickle down to the end user (often via the web) through fast responses and cheap services. But, that’s a barely noticeable change.

You’ll see something here akin to the kind of thing you see in the brokerage business. It won’t be obvious, because price competition will never be as great in software.

Generally, you’ll just see the prices for doing anything electronically come down. That’s very different from what we’ve seen over the last few decades, where you also had advancements that attracted new users, because they allowed developers to do something differently, not just more cheaply.

This is a very long-term trend I’m worried about. It could weigh heavily on a business like Dell (DELL), because PCs are actually quite durable; once the rate of obsolescence slows, sales will have to slow as the cycle lengthens.

Management

I think Microsoft’s management is absolutely the best in the business. In fact, I think it’s one of the best in any business.

It would be hard for me to find more than a handful of people I’d rather have managing a business I was part owner of. I also think the current arrangement is a good one.

There is enough of a line between current operations and future investments in the Chairman / CEO split that investors will probably get the greatest benefit from the brilliance of the Chairman this way.

Everyone underestimates Bill Gates. It’s easy, because his great triumph came some time ago now. But, he’s interested in building something lasting. I trust him more than anyone in tech without a question. He always impresses me whether he’s talking about his own industry or some other topic. He has exactly the right kind of mind for someone running a business where the long-run is such a concern.

Qualitatively, I think Microsoft scores close to perfectly. I could cite the profitability stats, but I won’t, because you know they’re better than almost any other business on the planet - and that’s with a huge siphoning off of resources to investments in the future that aren’t required to maintain the cash cow, wide-moat Windows franchise.

Valuation

Valuation is a bit more troubling. Microsoft is not at the point on an EV/EBIT basis where I’d be buying the stock if there was a risk of no extraordinarily profitable growth in the future. In other words, at the current price, it clearly makes for a bad bond.

The key is earnings growth. I think you have to believe MSFT will have a real future in search, games, and non-PC devices that will fuel future, highly profitable growth.

I think that future is there. As far as a truly large cap stock (say $10 billion or more) it’s about as attractive as anything on the planet right now - and certainly it’s the most attractive stock of any very large U.S. business. Even though Intel (INTC) and Dell are cheap looking, I don’t like them nearly as much. Dell is an interesting situation, but I don’t understand the business well enough.

I have a better idea of where MSFT is headed - and I like it.

Conclusion

I don’t own shares of MSFT. I won’t be buying any either. I don’t normally own such large stocks. I prefer much smaller businesses, because the mispricings tend to get more out of whack. You aren’t going to see MSFT trade at an EV/EBIT of 7.5 or something like that, but you do sometimes get those chances in small (high quality) businesses.

There are a lot of chances to find wild mispricings without much of the future being a concern. Those are the situations I prefer to invest in, because businesses like MSFT have an awfully large anchor with the amount of capital they’ve got - plus, they tend to be less likely to be wildly mispriced.

However, if I had to own one business with a market cap of more than $10 billion and hold it for a lifetime I would buy Microsoft here without hesitation.

Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value investing podcast at:

http://www.gannononinvesting.com

We don’t consider playing defensively a way of buying “safe” stocks because safe stocks won’t make you any money. We need movement, but there are ways to help you survive huge mood swings that the momentum stocks can display. Today we are going to look at the idea of “averaging down” and if it is a good idea or not. It is not an easy answer.

The concept behind averaging down is that if you buy XYZ at 100 and it falls
to 90 and you buy more, your “average” cost is just 95 now. So if XYZ bounces
up, you only need to get to 95 to break even on the trade. The idea sounds reasonable, right? Well, “maybe/sometimes”.

For the most part the problem with averaging down is that people
use it to justify a poor trade. If you buy into XYZ with the idea it is going
up and it starts to fall, you have to ask why? If the market is healthy, and
XYZ hasn’t released any bad news, XYZ should be at least holding its own right? Well someone doesn’t like it and you don’t know the reason why, yet. Now, suppose you buy more XYZ to “average down” and then the next day “boom” they release some type of bad news. You have effectively bought more shares of a poor trade. So in this instance averaging down has hurt you. So naturally the question becomes, “should you ever average down?” and that answer is “yes” at times.

Let’s use an example: Suppose you are into XYZ because they just announced good earnings a day ago and they are trading higher. But then ABC who is in the same sector announces earnings and they miss by a mile. More times than not the stocks in the whole sector will get hit a bit. Generally this is a sympathy fall and since XYZ didn’t do anything wrong, buying more on that type of dip is often a good idea. They aren’t usually long lived and you get the chance to buy some more XYZ at a bargain price.

**Part 2

What about buying more (averaging down) simply because the market is having
a bad hair day? This gets tricky, but try and follow the reasoning. It all depends on what XYZ has done lately.

For the most part, if XYZ has had an “orderly rise” and they take a step backwards because the market burped, we have no objections to averaging down and buying up some more, in hopes that the market will rebound the next day and XYZ will be on the move again. BUT and this is very important, if XYZ has already run for several points, the answer gets very hard to say. We are conservative about a lot of things and when a stock has moved several points in two weeks and then it gets smacked in a nasty market sell, we do NOT recommend buying more and averaging down. Why? two reasons. First, if you are already up 5 dollars and XYZ gets hit for 2 in a one day drop, you are still up 3 bucks. But if you buy even more and the market falls yet another day, now you have really eaten into your profits. Since we never really know how far a market will “shake out” you could be buying into a pretty big hole. So, what we like to do in an instance like this is simply take your profits from the first fall if it violated your stop loss point. If it wants to fall more, you are out with a good profit and when it bottoms out and starts back up you can buy in again. If it doesn’t hit your stop loss point on its first fall, instead of buying more, sit tight and see what the next day brings. If the next day looks like it wants to rebound, THEN, buy some more.

We stress this point for one reason. Some weeks many stocks fall several points in just days. Sure, you might be expecting a shakeout and get it, but what happens if it doesn’t pop back up? This happened to the Internet stocks back in April of 1999 and a lot of people were trapped all summer “hoping” to get their money out. So, the point is, averaging down does have
its place if used wisely. But we don’t use it to justify a poor trade and we
generally don’t use it to add to a recent high flier that is falling apart. We would rather sell out that high flier, pocket our winnings, and buy back into it once it has bottomed and started climbing.

For more FREE trading tips, enter your email address at:

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When most analysts, financial planners, fund specialists and investors try to decide whether to buy a particular stock they immediately go to the financial statements to determine the growth potential of the company. Numbers and more numbers. Then management analysis and industry speculation. Unless you are an experienced financial analyst (and there are not very many good ones) the numbers in the reported statements can be very misleading - just as the company Controller wants them to be.

Let’s not consider fraud as there has been plenty of that both here and abroad. They are all honest (I hope). Most corporate executives want to remain within the law so they report statements that are true to the FASB - Financial Accounting Standards Board.

As the old saying goes, “Numbers don’t lie, but liars can figure”. If you are good with accounting techniques you can make a bankrupt company look good - on paper. On CNBC-TV many folks watch the CEOs telling a great story about their company. You sure don’t expect them to tell you the whole truth and nothing but the truth, do you? That is why I always hit the mute button. And many times when you look to see what the insiders are doing in this wonderful (?) company this executive and his buddies are selling out.

Then there is Morningstar that gives us those twinkling heavenly bodies. Nothing like a 5-star mutual fund - that has lost money for the past 4 years. So much of their information is old and if they know it you can be sure that has already been factored into the current price. How about those peer groups? Suppose this particular peer group is ranked 99th out of 100 or even 15th or lower. One question: why do you still own it?

Why are you putting your money in the stock market at all? The idea was to make more money. Right? Yet the majority of little investors will hold a stock or mutual fund while it goes down and down. Wouldn’t it make more sense to sell out once it loses a certain percentage from its highest price after you buy it? If you bought it at $20 and it is now $40 is it now time to sell? I don’t know so why not let the price action tell you. If you only wanted to risk 10% when you bought your stop-loss would have been $27. It now should still be 10%, so you will be out at $36 if it starts down. Suppose you tracked that stop all the way up to $80? This is why I have always preached that stops make you money.

The best (?) analysts know very little more than you. They just have a bigger vocabulary about the market. You and your dart board can do as well. All any truly smart investor needs is common sense and the ability NOT to fall in love with any position. Know when to hold ‘em and know when to fold ‘em.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy
It!” has helped thousands of people make money
and keep their profits with his simple 2-step
method. Read the first chapter at
http://www.mutualfundmagic.com
and discover why he’s the man that Wall Street
does not want you to know.

Copyright 2005

All of your life you have been waiting for an opportunity where you can make a fortune. Just think of it, no more debt. No more bill collectors calling and no more working for that idiot of a boss. Your ship has finally come in.

There is something happening that is so big that if you knew how to properly position yourself to take advantage of it you could make a fortune. The huge opportunity I’m talking about is investing in the Gold market. For people who have been following this market it is known that Gold is going up in value.

This one market alone can make you some serious cash. The reason Gold is going up is because China and other countries are demanding more of it. Another reason is because as interest rates go up people tend to flock to Gold as an investment.

Some experts are predicting Gold to be up near the $1000 per ounce level by the end of the decade. Consider that each $1 in the price of Gold equates to $100 in profits. Now consider that at the time of this writing Gold is near $553 per ounce.

Want to know how to make at least a 200% profit by the end of the year? You guessed it, invest in Gold. The fundamentals look good for Gold finishing the year at least above $600 per ounce. Some analysts are projecting Gold to finish the year over $700 an ounce. The more you invest in the Gold market this year the more money you should earn, provided you have used your safety net (stop loss) for protection against temporarily down turns.

Remember - Buy on down days and sell on up days. This is how real fortunes are made!

Copyright David D. Wells. This Article and all contents are proprietary products. All rights reserved. You are welcome to forward the entire Newsletter to anyone interested as long as it is not edited in anyway and includes the Resource Box.

Often referred to as The Money Motivator, David D. Wells is passionate about helping people Crack the Wealth Code to become Money Magnets. Let him teach you the techniques used to help Hillary Clinton turn $1,000 into $100,000 in the course of a year.

How much financial bloodshed is necessary before we realize that there is no safe and easy shortcut to investment success? When do we learn that most of our mistakes involve greed, fear, or unrealistic expectations about what we own? Eventually, successful investors begin to allocate assets in a goal directed manner by adopting a realistic Investment Strategy… an ongoing security selection and monitoring process that is guided by realistic expectations, selection rules, and management guidelines. If you are thinking of trying a strategy for a year to see if it works, you’re due for another smack up alongside the head! Viable Investment Strategies transcend cycles, not years, and viable Equity Investment Strategies consider three disciplined activities, the first of which is Selection. Most familiar strategies ignore one of the others.

How should an investor determine what stocks to buy, and when to buy them? Will Rogers summed it up: “Only buy stocks that go up. If they aren’t going to go up, don’t buy them.” Many have misread this tongue-in-cheek observation and joined the “Buy (anything) High” club. I’ve found that the “Buy Value Stocks Low (er)” approach works better. A Google search produces a variety of criteria that help to identify Value Stocks, the standards being low Price to Book Value, low P/E ratios, and other “fundamentals”. But you would be surprised how the definitions can vary, and how few include the word “Quality”. In the late 90’s, it was rumored that a well-known Value Fund Manager was asked why he wasn’t buying dot-coms, IPOs, etc. When he said that they didn’t qualify as Value Stocks, he was told to change his definition… or else.

How do we create a confidence building Stock Selection Universe? Simply operating on blind faith with one of the common definitions may be too simplistic, particularly since many of the numbers originate from the subject companies. Also, some of the figures may be difficult to obtain quickly, and it is essential not to get bogged down in endless research. Here are five filters you can use to come up with a selection universe of higher quality companies, and you can obtain all of the data inexpensively from the same source:

1. An S & P Rating of B+ or Better. Standard & Poor’s is a major financial data provider to the investment community, and its “Earnings and Dividend Rankings for Common Stocks” combine many fundamental and qualitative factors into a letter ranking that speaks only to the financial viability of the rated companies. Potential market performance (a guessing game anyway) is not a consideration. B+ and above ratings are considered Investment Grade. Anything rated lower adds an element of unnecessary speculation to your portfolio. A staff of thousands does your research for you.

2. A History of Profitability. Although it should seem obvious, buying stock in a company that has a history of profitable operations is less risky than acquiring shares in an unproven, or start-up entity. Profitable operations adapt more readily to changes in markets, economies, and business growth opportunities. They are more likely to produce profit opportunities for you quickly.

3. A History of Regular Dividend Payments. The payment of regular dividends, and periodic increases in rate paid, are sure signs of economic viability. Companies will go to great lengths, and endure great hardships, before electing either to cut or to omit a dividend. There is no need to focus on the size of the dividend itself; Equities should not be purchased as income producers. A further benefit of using dividend payment as one of your selection criteria is the clear indication of financial stress that a cut communicates.

4. A Reasonable Price Range. You will find that most Investment Grade stocks are priced above $10 per share and that only a few trade at levels above $100. If you have a seven-figure portfolio, price may not matter from a diversification standpoint, but in smaller portfolios, a round lot of a $50 stock may be too much to risk in one position. An unusually high price may be caused by an unusually high degree of sector or company specific speculation while an inordinately low price may be a good warning signal. With no real structural size limitations, I feel comfortable with a range between $10 and $90 per share… but I would avoid most issues even at that level.

5. A NYSE Listed Security. I’m not sure that the listing requirements for the NYSE are still more restrictive than elsewhere, but it is helpful to be able to focus on just one set of statistics. Most of the information you need regularly is reported by Exchange (Market Stats, Issue Breadth, and New Highs vs. New Lows).

Your Selection Universe will become the backbone of your Equity Investment Program, so there is no room for creative adjustments to the rules and guidelines you’ve established… no matter how strongly you feel about recent news or rumor. Now you can focus on operating procedures that will help you diversify properly by position size, industry, etc., and on guidelines that will help you identify which stocks should be watched closely for purchase when the price is right. Keeping in mind that you want to sell the Equity Position at a target profit ASAP, you’ll want to establish appropriate buying (and selling) rules. For example, I never consider buying a stock until it has fallen at least 20% from its highest level of the past 52 weeks, so I include those that are close or at this price level on a “Daily Watch List”. Then, I select those that I would be willing to add to equity portfolios if they fall a bit more during the trading day. My actual “Buy List” changes every day in both symbol and limit price.

You will need to apply consistent and disciplined judgment to your final selection process, but you can be confidant that you are choosing from a select group of higher quality, well-established companies, with a proven track record of profitability and owner awareness. Additionally, as these companies gyrate above and below your purchase price (as they absolutely will), you can be more confident that it is merely the nature of the stock market and not an imminent financial disaster… and that should help you sleep nights.

By the way, never say no to a profit when the upward movement equals 10%, and you’ll be able to do it again, and again, and again.

Steve Selengut
http://www.sancoservices.com
http://www.valuestockbuylistprogram.com
Professional Portfolio Management since 1979.
Author of: “The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read”, and “A Millionaire’s Secret Investment Strategy”.