From WSJ: BP PLC’s shares fell as investors noted that considerable uncertainty surrounds the company even after the publication of second-quarter earnings and the ouster of its chief executive.
“You’re looking at a company with vast resources that made it clear after the initial fumbling with the situation that they were going to do the right thing,” said Michael Cavanaugh
The stock market continues it’s choppy movements and volatility remains relatively high. 20 pt days on the S&P seem to be the norm once again, and traders and investors are buckling in for the ride. (more…)
Lets take a look at AMED ($25.11). As recently as April 14th, AMED was trading above 64.00 per share. Since that time, there has been some negative news on the stock, including a class-action lawsuit1, an SEC investigation2 an earnings miss3 and overall weakness in the home healthcare industry.
When I was 22 years old, I went out on a limb and started my own painting company. (One of those student painting franchises). I had never picked up a paint brush prior to tackling this challenge, and soon found myself thrown into a 10 person operation that was producing $5-10K in paint jobs a week.
Before the production started I took a short 3 day training course. I went to school in Madison, WI, and the course was in Chicago. A weekend in the big City, learning about oil/latex based paints, sanding and priming, and customer service. Since I really had no idea what the heck anyone was talking about, I paid close attention to the process and the procedures that were imperative in making a little money, and learning about business.
The training program provided me with just enough confidence to hit the streets and start asking people if I could paint their house. Once, I booked my first Job (Thank you Mr. Harris) I soon realized that the confidence gained in training was merely enough to get me in a situation where I had to rely on my instincts. Being my first job, my instincts weren’t peppered by painting experiences, so luckily I had a “mentor” that was happy to share his experience (For a small fee). Thankfully, Mr. Harris appreciated the job we did, paid us, and became our first referral. We were on our way!
Looking at this life experience, it is hard not to compare this experience to investing, and draw an analogy which I believe is very correlated.
When someone first starts to invest or trade, they should take the time to learn or educate themselves to give them the confidence to enter into the pits of capitalism. Once the confidence is planted, it is time to invest, you should find out very shortly that the training was the confidence booster to get you going, however you are going to need some help to gain the experience. Once you get the experience, you are on your way.
So be it painting, plumbing, parachuting or trading….here are my words of wisdom for this weekend:
A pairs trade is when you are long one security, and short another. The variety of a pairs trade can differ in terms of dollars, number of shares, or differing ratios on either dollars or shares. There are many criteria one should consider before a pairs trade is placed, there are also several risks that must be addressed beforehand. This educational piece addresses some of the criteria. Due to the educational theme, please do not construe the information to follow as a recommendation to buy/sell any security mentioned.
A few years back I read a book titled “The Richest Man in Babylon“, it is a very easy read and offers advice on how to handle money. Babylon was a very wealthy ‘early’ civilization, that coincidentally no longer exits, as the citizens lost their wealth, and eventually their entire civilization. (more…)
First off, I want to wish everyone a happy and safe 4th of July weekend. Enjoy your weekend. I hope everyone has time to spend with friends and relatives. Sit back, relax, watch some fireworks and soak it in. I am really looking forward to watching the fireworks with my family, and am excited to get a little time to kick back. (more…)
