|Tips For the
Novice Online Investor ( Part 1 )|
1. Keep a small position in high risk bio-tech or pure tech companies as one
of these companies may ultimately become an industry leader resulting in a huge windfall for you;
2. Re: tip #1, this position should not exceed 5% per $100,000 of your investment portfolio (less if you are a worry
3. Re: tip #2, these investments should never be within a retirement savings
account due to the risk
4. More re:tip #2, if you don't know which high risk companies to buy, look at the many on-line sites dealing with investment information or, better
yet, get your hands on a report from a leading small-cap tech or bio-tech fund, (look at the companies listed, and then do your own due diligence on
5. Maintain a commissioned broker account and "drive by" some of your selections just for a sobering opinion; (whether you advise your broker that
you have an on-line account somewhere else, I leave to your own consideration)
6. If you get lucky on one purchase, stay on top of it constantly for a decision on "running with greed" or "taking a profit". if you get lucky on
most of your picks you either should become a full time day-trader or, more likely, you are seeing the 1st sign of an impending correction that is about
to wipe out 20% of the value of your low-medium risk stocks and 50-75% of your speculative high risk stocks.
Charles von Ryan for FUTURECents.com
Tips For the
Novice Online Investor ( Part 2 )
It's been 6 months since I penned part 1 of this series. Lots of money has
been lost by investors all over the world. An unfortunate reality is that a
great part of the loss has fallen not on the large institutional investor, rather, on the shoulders of the small, individual investor, often a novice.
If you followed my advice in Part 1, you shouldn't be too badly affected (although even I admit that it's hard to confine your speculative plays in
tech or bio-tech to 5% per $100,000).
What do you do now? The Fed has reduced rates by 1.25 %, and although there
was an initial response (huge jump in the Nasdaq) all has basically petered out once investors realized that such a drastic rate cut was due only to the
serious belief that North America is quickly advancing into a recession.
After all, it was the 1st time in 20 years that computer sales actually
Hold on and do nothing. If you are lucky to have an individual stock that has performed well, you might want to sell and to consider a purchase of a
chip maker such as Advanced Micro Devices (AMD:NASDAQ) or Intel (INTC:NASDAQ) or, if you think George Dubbya will order the Justice
Department to leave Bill Gates alone [and you think there is a huge upside in video game platforms that offer internet access
(read X-Box for kids)...I'm a believer], look at Microsoft (MSFT:NASDAQ).
There is a growing fear that many American financial institutions will face bad or impaired loans in the next 2 quarters, especially as the economy in
the US slows. You may want to unload some of the US banks and buy some of the Canadian banks (less overall competition; high yielding dividends;
merger and acquisition possibilities, and cheap in US funds (after all, a good risk going forward is betting that the Canadian dollar will rise
against the US dollar).
If all of the above sounds too risky, and it may be for some of you, consider a few mutual funds that have a demonstrated track record and if you
don't mind watching paint dry, this might insulate you from the volatility that is sure to continue for the next 12 months. Ideally, I would have 5
funds: large cap US(30%), small cap US(30%), an international fund (10%), and in smaller amounts, 2 sector funds, 1 of which should be technology
(15%) and the other, in life science and bio tech (15%).
If tip #3 seems to risky, buy a guaranteed investment certificate and get back to the TV, you may be missing something on the Jerry Springer show.
Charles von Ryan for FutureCents (January 5, 2001)
Ready To Play
Are you an investor lucky or smart enough to be sitting with a bit or a lot of cash. You survived the recent Nasdaq correction having learned to buy
quality and to stick with it for the medium to long term. You have also learned to sell junk when it's at a high and in demand by less informed
investors. You are also a believer and follower of the simple "buy low, sell high" theory.
Well, it's a rare day when you can point to a clear cut example of how you can profit from this theory. An opportunity is available right now and it
deals with video and computer games makers, such as my favorite, the blue chip of the video game industry,
Electronic Arts (ERTS). Another opportunity
Co. (THDO). These companies have near-bottomed despite being profitable. Also note that ERTS has signed an exclusive deal with America
Online to feature on line gaming.
The stock prices have been depressed due to the slow down of sales of various games due to the consumer not wanting to spend big money on these
"old" system games when the new Sony PlayStation 2 will be coming out this fall
(as well as a new products from Nintendo and Saga, not to mention the new Microsoft X box to be introduced early next year). It is reported
that these systems will all feature on line capability. Thus, there will be great sales and revenues but not until the new hardware gets in place in the
next 6-12 months.
So if you want an opportunity to buy low and sell high it is this sector, right now (you should do your own due diligence and
if this takes 1 month you should still be ok). ERTS is trading at $62 13/16 (52 week high $124 7/16, low $47 5/16); THDO is trading at $5 9/16 (52 week
high $17 1/8 and low $4 1/4).
Charles von Ryan for FUTURECents June 15, 2000