Harry Potter or Hairy Spotter?

I couldn’t resist—it’s a corny play on words--but right on the money!

Is my Moneyman a stock market wizard or a mathematical genius with the uncanny ability to spot hairy situations in the market?

Here is my MoneyMan-ism of the week: The key is in Buying Fear and Selling Happiness

The trouble is not many of us can judge clearly when there is enough fear and when there is enough happiness in the air. I like formulas. I’m not a nerd—well maybe I possess geek-like qualities . . . but in all fairness, I think I’m pretty average. I kinda like formulas . . . velocity is equal to distance over time . . what goes up must come down, for every action there is an equal and opposite reaction. Picking good and making timely choices—it’s not just a gift he possesses. . . . by golly, there is a method behind his madness!

Last Tuesday, Dan invested 35 million into some puny tech stocks – only to turn around 2 days later and sell for a 7-8% profit. . . .roughly making 2.8 million and some change.

Two questions? How did you know to do this? And how come I didn’t get the memo???
;)

Dan says to keep in mind that “an oversold market can continue to go down and an overbought market can continue to go up-the real power is generated when it swings in a rhythm.” The “rhythm” that Dan speaks of is a distinct vibration--sensitive to a multitude of external factors.

Dan relates this rhythm of the market to that of a small child on a swing. Paying attention to the movement of his swing as it reaches its apex. In this particular case, he paid attention to the 10-day moving average—it is a simple matter of advancers vs decliners . . . . subtract decliners from the advancers, then take the 10-day moving average. . .positive numbers makes the numbers move up, a neutral market will make numbers come back down . . . the market moves at a rhythm with a tendency towards changing directions at any moment. What you need to learn is how to recognize the clues that tell you exactly at what point in that curve does the number start changing directions.

So who is more powerful? A Harry Potter, with a few magic tricks and spells, a slight of hand to create illusions to please your eyes—pulling quarters from behind your ear? Or the one who learns to see the world as it is, understanding the rhythm, spotting the hairy situations of fear and happiness—creating realities and putting quarters in your pocket?

Listen for yourself: the moneyman report

I'm gonna be at the BizRadio Money Fair on Jan 9th!!!!!! Come listen to some of the greatest financial thinkers of our generation!!!!

Christmas is coming, the goose is getting fat . . .

please put a penny in the old man's hat!

these days, a penny will not do--how bout a twenty ;) the holidays are upon us--two blinks and there's hardly twelve days left to sing about. So forgeddabout the dancing ladies and the lords-a-leapin . . . BRING ON GUITAR HERO III, MAN!!!

what a great time of the year for our economy!

everyone's spending, more and more people are saving time by shopping online--why not? no headaches, no mile-long lines, no crying babies or salespeople who always would rather be somewhere else than behind that register, providing you and me with quality customer service. . . YEAH RIGHT!

happy holidays to you and yours! I'll be writing again very soon!

Lesson Learned

So the Big DoorBuster Plan was a bust indeed! Chalk it up to being a “newby Black Friday shopper!” Driving by the BestBuy at midnight—there was already a line meandering around the corner of the building. Disbelief . . . that’s all I could feel and DOHHH! Maybe next year I will pack a turkey sandwich and park it outside in my soccer chair and forgo the thanksgiving festivities for an early place in line. Count me in as one of thousands of Americans who will overpay for an IBook that my son really needs!
____________________________________________

How did we get to be such patsies?

I heard an enlightening story on my Money Man’s show the other day. Dan was analyzing the reasons people are acting or reacting the way they are to the market’s current situation. The tale crossed between Freud and Skinner (anytime mom is involved you can betcha Freud thought it up—but the story had a definite behaviorist POV). Dan tells it way better than I do but here’s a recap . . . he says that inside all of us there is a little kid, a kid who is playing nicely as he was taught to play. He is good, responsible and obedient. He runs out into the street, very innocently after a ball and gets pulled back forcefully by the arm, spanked and scolded by his mother. So hard is her grasp that all he knows is the feeling of pain in his arm and the words--the harsh words are like daggers from the woman he cherishes and respects the most in this world.

Mom had acted out of love and care when she saw the oncoming car approaching you—she didn’t stop to think, she acts in your best interest and all you can associate with this experience is pain, shame and fear.

So we take that instance with us and store it away in our sub conscience. We are grown-ups now. We are responsible for our family and the financial well-being and futures of our children. We invest and save, we follow the market and it’s pendulum of ups and downs. We are good, responsible and obedient . . . we listen to what the market tells us to do with our money. Just when we are playing nicely—we are abruptly pulled back, jolted by a force that came out of nowhere to twist our arms and egos and punch us in the gut of our wallets and portfolios! Ouch!!!

You’re hurt. You did what you were supposed to yet you are in pain. So now you act out. You make decisions like a hurt, scolded child rather than a clear-headed, rational adult. Making emotional, desperate decisions—selling out when everything’s already gone down or being aggressive and buying more and more and getting burned like the guy who lost 6 billion dollars on a disastrous natural gas buy.

Dan’s message: Take control of your own mind.

Listen for yourself,
The Money Man Podcast: Short Term Trader's Perspective

Happy Thanksgiving!

As we come together with family and friends, we should keep in mind why holidays like these exist. . . a time to eat with no guilt, enjoy a football game, share laughter and smiles with loved ones, be thankful for all we have, and last, but not least, SHOP!

It is amazing that BestBuy would list on their website the steps to ensure DOORBUSTER purchases--which can only be bought with the possession of a little ticket. . . a ticket you can only get starting at 3AM on Friday morning. . . where you have to make sure you are in line hours before hand. You better believe it---there is a line at 2AM! It is my endeavor this year to secure a laptop at an outrageously reduced price for my son (as a christmas present).

No money talk today. When you're shopping on Black Friday, feel good that you are pumping more life into our economy! Buy smart and be safe.

The Shape of the Market

what happens when "the wave" starts at a ball game?

at the beginning, everyone's really into it...you watch it going around, anticipating the right time to stand up, throw your hands in the air with reckless abandonment, and come back down in a gradual motion as to ensure the perpetuality does not lose its novelty before it comes around to you again. Yes, it gives you a sense of accomplishment, instant success--exhilaration for the moment . . . to be an integral part of a moving organism, THE WAVE. Big fun at ball games, but not so much in the game of investing.

the moneyman warns us of becoming a part of the herd. (that was completely an unintentional plug for his book--Escape from the Herd 2006)

To be a good investor means to recognize the pattern of how things work in the market--to understand where it is, where it's been, and where it's going. . . .seems too easy to be true.



Dan says that viewing the market as a series of waves on a daily basis, going up and down is a tragic mistake that many people make. Stock charts, money market watches bombarding our visual senses with an array of colors---seems like in every business section of any given newspaper or business journal , you can inevitably find a chart of some sort, predicting this or reporting the history of that---but they all look the same. . . Hills and valleys.

Pretty picture, huh?

That is exactly what people like to see . . . a pretty picture, one that shows them that if they are down, an eventual high is to be expected soon, very very soon . . . can we stay afloat in an ocean of waves forever? Do we not fear that shoreline in the distant?

My eyes have just been opened a little wider by my dear MoneyMan.

While these charts are pretty to look at and may very well be informational and helpful in one way or another, they don't show you the big picture, or even close to the whole picture—but isn't that what we want to see? Haven't we always been told that a smart man takes a step back to see things from a different perspective?

Dan says a smarter man takes a few steps back and looks at the whole picture from the left side, right side, underneath and 100 miles away--even 10,000 miles away.

Money makes the world go round, right? According to Dan, that is precisely the "whole picture." He sees the state of the market as being cyclical rather than a series of waves. Don't ride those waves with it's ups and downs . . . be proactive, analyze and predict. If the market is cyclical, then at any point on that circle, there is a complete 180 from that point--look directly across, not two steps in front of you.

Tune into BizRadio 1320AM Houston & 1360AM D/FW to hear more of what my MoneyMan thinks. . . in the meantime, enjoy your 7th inning stretch and pay attention to the shape the wave actually takes ;)



The MoneyMan Report . . . 4-6pm . . .BizRadio Network

THE DOW IS AT AN ALL-TIME HIGH!?!?!? Holy smokes, that must mean my bucks rockin it! Not according to the MoneyMan Report . . .

Dan says it's easy to be fooled into thinking we have so much when we really don't--bummer right? Not really . . . better that we know what the truth is and how to fix it than live with our heads in the clouds . . . so this is good news for someone like me. I want to invest! I want to save! I want to understand what stocks I need to buy and what my dollar's worth.

Dan the MoneyMan says, “It doesn’t matter how many dollars or points it’s at, it’s how much stuff can you buy with it! In terms of gold or copper or steel, the DOW is falling miserably. Even in terms of medical care and college tuition, it’s been going down steadily over the past few years. "

So what works?

"Owning things that hold their value over time--owning companies, real assets, things that aren't just paper. Why are gold mining shares not up as much as gold and oil shares not up like oil?" Of course this doesn't mean that he is suggesting you get rid of all of the paper!

We like the real stuff! "Private equities," he says.

*note to self* what exactly is private equity-and is there a difference between private and public when it comes to equity?

~Private Equity is the ownership stake that results from investment in a private (not publicly traded) company. Investors in Private Equity generally are Individuals called Angel Investors, Business Development Companies, and Venture Capital Funds.~

Dan says," in this decade and going forward, the world values the real stuff more than it will value paper."

Paper is worth less-real companies are worth more, real assets are worth more! I can dig it. Makes sense to me how actually holding something in your hand means more than having a fortune cookie fortune on your plate---but i do fancy those lottery numbers on the back ;)

Did you know this? How could we have been so fooled by the ominous Mr. Jones? Do you find yourself sleeping better at night when you read in the WSJ how well the DJIA is doing? Think again, my friend.

So Dan asks, “why do we think the DOW looks so good to us?” Here is where I found myself on the edge of my seat . . .

Nuh-uh, not so fast . . . I’m not telling.
You’re going to have to find out for yourself: TheMoneyManPodCast

You should really tune in to 1320 AM in Houston and 1360 AM in Dallas/Fort Worth
between 4-6 PM week nights for

The MoneyMan Report with Dan Frishberg.

Ears perked, listen closely and you may hear
the sound of your money growing.