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The Tao of the Investor Dollar
by J. Dean Bowers
I dedicate/defy my former Professors at New Mexico State University
to
write a more informative introduction to investing
and economic psychology.
1929, October Surprise,
Black Monday, Back to School.
The Stockmarket is a creation that allows an investor/speculator to
purchase and
sell IOU's or the actual stock certificates on a market called
the exchange. Originally created to allow corporation(special
business
under the law treated specially for tax purposes and no one of its individuals
can be held legally reponsible
for the corporations actions. Otherwise the
owners are shareholders each owning and controling apart of the company.
The
corporation can also be privately held(owned by founders, members and managers)
This corporation usually has a President
or Chief Executive Officer and
an elected board of directors to oversee and plan the business of the firm.
The theoretical
goal of a firm maximizing shareholder wealth. A middleman
known as an investment banker starts the funding drive for a
corporation.
Introduction to Speculative investing
A public corportion has two main source of funding and owners
1.Bonds- Loan IOU issued by a corporation to investors paying interest at a specified percentage rate for a specified
time. If
the corporation fails these investors are paid first. This is the safest form of
investing in a company usually
having lower rates of return. However, bad companies exist thus
there are junk bonds.
2. Stocks- There are two kinds
of stock: common stock and preferred. Prefered stock is a hybrid having
characteristics and risk between that of bonds
and common stock(not used very often).
Common stock gives an investor/speculator a share of ownership at higher risk
(if
the company should fail) usually in hopes of a riskier increase in the
share price.
Higher risk higher the higher
the return relationship represents the gambling
or speculative risk of investing. Brokers are financially educated
salesman
that buy and sell shares of stock usually for fee or commission.
Corporations also invest and own shares of another corporations
stock
making large dollar and control issues relevant to an individual investor.
Caveat Emptor-Let the buyer beware
is an investment philosophy that should
always be observed.
There are many things that affect/effect the value
of
a share of stock some controlable by performance of the company some
not: Competition, collusion, politics, investor
expectation, the economy, and
interest rates externally influence share price. Internally price is affected
by a
firms products, performance, financial structure, and asset value.
Dynamic external trends for example investor sentiment
can be observed
by watching charts and indicators. Examples are average price,
moving averages, The high and low,
volume traded, volume direction,
insider(big$) trades etc. Internal trends (fundamentals)
measure financial and asset
performance observe by ratios
such as a shares price relative to its earnings. Other useful
ratios are the debt to
equity(bonds to stocks), return on assets,
return on sales, and price to book value. Number and dollar amounts of debt
and shares issued are required. The product, competitors, and economic
performance of the market sector should also
be considered.
The best way to invest is insider trading-investing based on priviledged
information. It is
illegal but it occurs. Stock markets are subject to
all the easy-money forms of crime any other shell-game is subject
to.
At any level of investment scams and organized crime exists. Fake stock
certificates, Boiler room operations(marketing
non-existing stocks), releasing
fake information, price fixing, collusion, and broker
churning(encouraging buys&sells
of bad stocks to increase commision).
Another consideration is financial window dressing(manipulating numbers or
cooking
the books).
Despite the risks involved and due to the greed of our banking system
this form of investing/saving
has increased over the last decade. The
United states banking system is privately owned by the power elite and
regulated
somewhat by the government. The Government is psuedo-elected
by citizens but is primarily controlled by the wealthy elite
and
corporate interests. The risk is all forms of saving or investing
involve giving your money or the use of your
money to someone trying
to make money. Banks buy low and sell high. Around the 1970's
Savings accounts have not kept
up with inflation so investors
have been forced to accept increased risk in order to save for
an education, a home,
or retirement. Even today similar to all other
countries Europe's Banks are Controlled by the House of Rothchilds(since
the 1600's).
Speculating in the banks of the wealthy is protected by the government up to certain dollar amounts
through
the Federal Deposit Insurance Corporation (FDIC) and the Federal
Savings and Loan Corporation(FSLIC). The Privately Owned
Federal Reserve controls the
banking system. Credit is a trap/tool of the wealthy. Remember even professional
wrestling
has credit cards for profit programs.
The stock market does not protect investments but it is somewhat
regulated
by the governments Securities and Exchange Commission.
All assets, houses and companies are owned by the power elite by
loans through the banks
they own. Even if paid for you can't sell without a buyer. I would
suggest reading about the
Old Money/The Robber Baron Era, Prohibition,
and the Great Depression/Market Crash of 1929. The wealthy that could no
longer openly take the assets of the poor/oppressed through crime created
the depression to sieze as many assets as
possible at the expense of
peoples lives. The country did not recover until after we went to war
with Germany WWII.
During which both sides the allies and the Nazis
were supplied by our corporations for money. The 40's and 50's were
a
rebuilding era. 60's and 70's were rebellion and inflation. 80's and
90's were about Monopolies, One World, and
government excesses. Here
we are in 2000 still as corrupt, greedy and uncivilized as we were
in the Dark Ages but
we act more civilized in our crimes and collude
better through the use of technology. The Secret everything is about
money
sex and power. Control the money and you can control and
exploit the people. Organized crime, exploitation, and mind-control
are
still the norm.
In the 1980's an investment vehicle called mutual funds started a trend
of investing
in the stock market instead of savings accounts. A company or
or group of investors pool money together to buy a number
of stocks to
reduce the risks of investing in the market or an individual stock. This
destabalized the assets of the
banking system having less deposits on hand to
lend. Prices were high and so was the but low sell high philosophy of
banking. The exodus to the markets was further complicated by corporate
mergers and multinational conglomerations.
This is an era of legalized
monopolization and collusion. Funds are now offered by insurance companies,
banks, and
investment corporations. Most investors to reduce market risk
dollar cost average. Buy $50 each month at the end of a
year you purchase
at an average cost rather than the high or low.
Another twist in the investment saga is the
information technology age.
Traditional Stockbrokers roles have changed as have their source of income.
An individual
can place buy or sell orders and manage their own stock
portfolios(mini-mutual funds) on their home computers using information
that traditionally was only accessible by brokers. Brokers are now becoming
paid advisers and planners rather than
salesmen. Our level of education
is steadily becoming equal.
Increased investor risk: This has made the scams
and
insider information trading systems more sophisticated.
Futures market involves speculation on the price
of a crop or commodity
such as wheat or green chile in the future(prepurchasing). An option
allows you to purchase
a contract to buy/sell (call/put) a commodity or
stock at some time in the future. Risky unless your a farmer trying to
protect your crops, with knowledge of the growing season,
and can predict the weather despite our electronic ability
to control it.
Derivatives and Foreign Exchange rates: speculating on investments derived
from other investments(multi-level
investing)or those in other countries
based on their differing laws and regulations. Speculating whether or not
the
value of currency will increase or decrease.
INVESTING ADVICE OR FINANCIAL SELF-DEFENCE
1.
The best defense is a good offense which involves planning,control,
and execution. Fear over money matters lets others
control you.
2. Do not make impulsive decisions. Resist panic investment and
endorse objective investment decsions
such as stop loss and market
orders. If it sounds to good to be true it is.
3.Read beating the Street by Peter
Lynch for some qualitative
investment advice. Live life don't just watch it. You cannot research
a store or company
from just your view on a computer monitor.
4. Dollar Cost Average. Do not try to time the market.
5. Start
investing young to take advantage of compounding.
6. Stay away from individual stocks until you get a feel for
selection
and trading. Try a stock market simulation game to
develop trading skills.
7. Do not get overwhelmed in get rich
quick systems. The only
secret system to wealth is insider trading.
8.Unless you have more balls than brains
do not day-trade or play with
options and derivatives. (Caveat-you have a wealthy insider friend that
wants you to
get rich quick.)
9. Taxes are a worry for the wealthy and the disappearing middle class.
Watch and plan for
them but do not make a major deal out of tax planning
as most of us are trying to figure out where to get money to pay
them, rather then
to reduce them and keep more money.
10. Insurance (Risk Management) is speculating something
bad might
happen and playing CYA.Health, House and Home insurance should be
purchased as you can afford to protect
investments and assets.
Not as an investment.
11. If the wealthy try to reduce your investment dollars in the
Markets invest in the government. T-bills, T-bonds, Certificates
of deposit and Sometime US Savings Bonds are good
low risk investments
if they meet your investment horizon and earn an amount above inflation.
The only thing they
can control is the interest rate stock prices can be
artificially driven up or down.
12. Earning money on your
money slowly, consistantly and securely is
better than taking loses. If you are making large amounts of money
without
heeding any of this advice, my hats off to you in hopes
that someday you will teach me.
The Tao
of the Investor Dollar
by J. Dean Bowers
I dedicate/defy my former Professors at New Mexico State University
to
write a more informative introduction to investing
and economic psychology.
1929, October Surprise,
Black Monday, Back to School.
The Stockmarket is a creation that allows an investor/speculator to
purchase and
sell IOU's or the actual stock certificates on a market called
the exchange. Originally created to allow corporation(special
business
under the law treated specially for tax purposes and no one of its individuals
can be held legally reponsible
for the corporations actions. Otherwise the
owners are shareholders each owning and controling apart of the company.
The
corporation can also be privately held(owned by founders, members and managers)
This corporation usually has a President
or Chief Executive Officer and
an elected board of directors to oversee and plan the business of the firm.
The theoretical
goal of a firm maximizing shareholder wealth. A middleman
known as an investment banker starts the funding drive for a
corporation.
Introduction to Speculative investing
A public corportion has two main source of funding and owners
1.Bonds- Loan IOU issued by a corporation to investors paying interest at a specified percentage rate for a specified
time. If
the corporation fails these investors are paid first. This is the safest form of
investing in a company usually
having lower rates of return. However, bad companies exist thus
there are junk bonds.
2. Stocks- There are two kinds
of stock: common stock and preferred. Prefered stock is a hybrid having
characteristics and risk between that of bonds
and common stock(not used very often).
Common stock gives an investor/speculator a share of ownership at higher risk
(if
the company should fail) usually in hopes of a riskier increase in the
share price.
Higher risk higher the higher
the return relationship represents the gambling
or speculative risk of investing. Brokers are financially educated
salesman
that buy and sell shares of stock usually for fee or commission.
Corporations also invest and own shares of another corporations
stock
making large dollar and control issues relevant to an individual investor.
Caveat Emptor-Let the buyer beware
is an investment philosophy that should
always be observed.
There are many things that affect/effect the value
of
a share of stock some controlable by performance of the company some
not: Competition, collusion, politics, investor
expectation, the economy, and
interest rates externally influence share price. Internally price is affected
by a
firms products, performance, financial structure, and asset value.
Dynamic external trends for example investor sentiment
can be observed
by watching charts and indicators. Examples are average price,
moving averages, The high and low,
volume traded, volume direction,
insider(big$) trades etc. Internal trends (fundamentals)
measure financial and asset
performance observe by ratios
such as a shares price relative to its earnings. Other useful
ratios are the debt to
equity(bonds to stocks), return on assets,
return on sales, and price to book value. Number and dollar amounts of debt
and shares issued are required. The product, competitors, and economic
performance of the market sector should also
be considered.
The best way to invest is insider trading-investing based on priviledged
information. It is
illegal but it occurs. Stock markets are subject to
all the easy-money forms of crime any other shell-game is subject
to.
At any level of investment scams and organized crime exists. Fake stock
certificates, Boiler room operations(marketing
non-existing stocks), releasing
fake information, price fixing, collusion, and broker
churning(encouraging buys&sells
of bad stocks to increase commision).
Another consideration is financial window dressing(manipulating numbers or
cooking
the books).
Despite the risks involved and due to the greed of our banking system
this form of investing/saving
has increased over the last decade. The
United states banking system is privately owned by the power elite and
regulated
somewhat by the government. The Government is psuedo-elected
by citizens but is primarily controlled by the wealthy elite
and
corporate interests. The risk is all forms of saving or investing
involve giving your money or the use of your
money to someone trying
to make money. Banks buy low and sell high. Around the 1970's
Savings accounts have not kept
up with inflation so investors
have been forced to accept increased risk in order to save for
an education, a home,
or retirement. Even today similar to all other
countries Europe's Banks are Controlled by the House of Rothchilds(since
the 1600's).
Speculating in the banks of the wealthy is protected by the government up to certain dollar amounts
through
the Federal Deposit Insurance Corporation (FDIC) and the Federal
Savings and Loan Corporation(FSLIC). The Privately Owned
Federal Reserve controls the
banking system. Credit is a trap/tool of the wealthy. Remember even professional
wrestling
has credit cards for profit programs.
The stock market does not protect investments but it is somewhat
regulated
by the governments Securities and Exchange Commission.
All assets, houses and companies are owned by the power elite by
loans through the banks
they own. Even if paid for you can't sell without a buyer. I would
suggest reading about the
Old Money/The Robber Baron Era, Prohibition,
and the Great Depression/Market Crash of 1929. The wealthy that could no
longer openly take the assets of the poor/oppressed through crime created
the depression to sieze as many assets as
possible at the expense of
peoples lives. The country did not recover until after we went to war
with Germany WWII.
During which both sides the allies and the Nazis
were supplied by our corporations for money. The 40's and 50's were
a
rebuilding era. 60's and 70's were rebellion and inflation. 80's and
90's were about Monopolies, One World, and
government excesses. Here
we are in 2000 still as corrupt, greedy and uncivilized as we were
in the Dark Ages but
we act more civilized in our crimes and collude
better through the use of technology. The Secret everything is about
money
sex and power. Control the money and you can control and
exploit the people. Organized crime, exploitation, and mind-control
are
still the norm.
In the 1980's an investment vehicle called mutual funds started a trend
of investing
in the stock market instead of savings accounts. A company or
or group of investors pool money together to buy a number
of stocks to
reduce the risks of investing in the market or an individual stock. This
destabalized the assets of the
banking system having less deposits on hand to
lend. Prices were high and so was the but low sell high philosophy of
banking. The exodus to the markets was further complicated by corporate
mergers and multinational conglomerations.
This is an era of legalized
monopolization and collusion. Funds are now offered by insurance companies,
banks, and
investment corporations. Most investors to reduce market risk
dollar cost average. Buy $50 each month at the end of a
year you purchase
at an average cost rather than the high or low.
Another twist in the investment saga is the
information technology age.
Traditional Stockbrokers roles have changed as have their source of income.
An individual
can place buy or sell orders and manage their own stock
portfolios(mini-mutual funds) on their home computers using information
that traditionally was only accessible by brokers. Brokers are now becoming
paid advisers and planners rather than
salesmen. Our level of education
is steadily becoming equal.
Increased investor risk: This has made the scams
and
insider information trading systems more sophisticated.
Futures market involves speculation on the price
of a crop or commodity
such as wheat or green chile in the future(prepurchasing). An option
allows you to purchase
a contract to buy/sell (call/put) a commodity or
stock at some time in the future. Risky unless your a farmer trying to
protect your crops, with knowledge of the growing season,
and can predict the weather despite our electronic ability
to control it.
Derivatives and Foreign Exchange rates: speculating on investments derived
from other investments(multi-level
investing)or those in other countries
based on their differing laws and regulations. Speculating whether or not
the
value of currency will increase or decrease.
INVESTING ADVICE OR FINANCIAL SELF-DEFENCE
1.
The best defense is a good offense which involves planning,control,
and execution. Fear over money matters lets others
control you.
2. Do not make impulsive decisions. Resist panic investment and
endorse objective investment decsions
such as stop loss and market
orders. If it sounds to good to be true it is.
3.Read beating the Street by Peter
Lynch for some qualitative
investment advice. Live life don't just watch it. You cannot research
a store or company
from just your view on a computer monitor.
4. Dollar Cost Average. Do not try to time the market.
5. Start
investing young to take advantage of compounding.
6. Stay away from individual stocks until you get a feel for
selection
and trading. Try a stock market simulation game to
develop trading skills.
7. Do not get overwhelmed in get rich
quick systems. The only
secret system to wealth is insider trading.
8.Unless you have more balls than brains
do not day-trade or play with
options and derivatives. (Caveat-you have a wealthy insider friend that
wants you to
get rich quick.)
9. Taxes are a worry for the wealthy and the disappearing middle class.
Watch and plan for
them but do not make a major deal out of tax planning
as most of us are trying to figure out where to get money to pay
them, rather then
to reduce them and keep more money.
10. Insurance (Risk Management) is speculating something
bad might
happen and playing CYA.Health, House and Home insurance should be
purchased as you can afford to protect
investments and assets.
Not as an investment.
11. If the wealthy try to reduce your investment dollars in the
Markets invest in the government. T-bills, T-bonds, Certificates
of deposit and Sometime US Savings Bonds are good
low risk investments
if they meet your investment horizon and earn an amount above inflation.
The only thing they
can control is the interest rate stock prices can be
artificially driven up or down.
12. Earning money on your
money slowly, consistantly and securely is
better than taking loses. If you are making large amounts of money
without
heeding any of this advice, my hats off to you in hopes
that someday you will teach me.
The Tao of the
Investor Dollar
by J. Dean Bowers
I dedicate/defy my former Professors at New Mexico State University to
write
a more informative introduction to investing
and economic psychology.
1929, October Surprise, Black Monday,
Back to School.
The Stockmarket is a creation that allows an investor/speculator to
purchase and sell IOU's
or the actual stock certificates on a market called
the exchange. Originally created to allow corporation(special business
under the law treated specially for tax purposes and no one of its individuals
can be held legally reponsible for
the corporations actions. Otherwise the
owners are shareholders each owning and controling apart of the company.
The
corporation can also be privately held(owned by founders, members and managers)
This corporation usually has a President
or Chief Executive Officer and
an elected board of directors to oversee and plan the business of the firm.
The theoretical
goal of a firm maximizing shareholder wealth. A middleman
known as an investment banker starts the funding drive for a
corporation.
Introduction to Speculative investing
A public corportion has two main source of funding and owners
1.Bonds- Loan IOU issued by a corporation to investors paying interest at a specified percentage rate for a specified
time. If
the corporation fails these investors are paid first. This is the safest form of
investing in a company usually
having lower rates of return. However, bad companies exist thus
there are junk bonds.
2. Stocks- There are two kinds
of stock: common stock and preferred. Prefered stock is a hybrid having
characteristics and risk between that of bonds
and common stock(not used very often).
Common stock gives an investor/speculator a share of ownership at higher risk
(if
the company should fail) usually in hopes of a riskier increase in the
share price.
Higher risk higher the higher
the return relationship represents the gambling
or speculative risk of investing. Brokers are financially educated
salesman
that buy and sell shares of stock usually for fee or commission.
Corporations also invest and own shares of another corporations
stock
making large dollar and control issues relevant to an individual investor.
Caveat Emptor-Let the buyer beware
is an investment philosophy that should
always be observed.
There are many things that affect/effect the value
of
a share of stock some controlable by performance of the company some
not: Competition, collusion, politics, investor
expectation, the economy, and
interest rates externally influence share price. Internally price is affected
by a
firms products, performance, financial structure, and asset value.
Dynamic external trends for example investor sentiment
can be observed
by watching charts and indicators. Examples are average price,
moving averages, The high and low,
volume traded, volume direction,
insider(big$) trades etc. Internal trends (fundamentals)
measure financial and asset
performance observe by ratios
such as a shares price relative to its earnings. Other useful
ratios are the debt to
equity(bonds to stocks), return on assets,
return on sales, and price to book value. Number and dollar amounts of debt
and shares issued are required. The product, competitors, and economic
performance of the market sector should also
be considered.
The best way to invest is insider trading-investing based on priviledged
information. It is
illegal but it occurs. Stock markets are subject to
all the easy-money forms of crime any other shell-game is subject
to.
At any level of investment scams and organized crime exists. Fake stock
certificates, Boiler room operations(marketing
non-existing stocks), releasing
fake information, price fixing, collusion, and broker
churning(encouraging buys&sells
of bad stocks to increase commision).
Another consideration is financial window dressing(manipulating numbers or
cooking
the books).
Despite the risks involved and due to the greed of our banking system
this form of investing/saving
has increased over the last decade. The
United states banking system is privately owned by the power elite and
regulated
somewhat by the government. The Government is psuedo-elected
by citizens but is primarily controlled by the wealthy elite
and
corporate interests. The risk is all forms of saving or investing
involve giving your money or the use of your
money to someone trying
to make money. Banks buy low and sell high. Around the 1970's
Savings accounts have not kept
up with inflation so investors
have been forced to accept increased risk in order to save for
an education, a home,
or retirement. Even today similar to all other
countries Europe's Banks are Controlled by the House of Rothchilds(since
the 1600's).
Speculating in the banks of the wealthy is protected by the government up to certain dollar amounts
through
the Federal Deposit Insurance Corporation (FDIC) and the Federal
Savings and Loan Corporation(FSLIC). The Privately Owned
Federal Reserve controls the
banking system. Credit is a trap/tool of the wealthy. Remember even professional
wrestling
has credit cards for profit programs.
The stock market does not protect investments but it is somewhat
regulated
by the governments Securities and Exchange Commission.
All assets, houses and companies are owned by the power elite by
loans through the banks
they own. Even if paid for you can't sell without a buyer. I would
suggest reading about the
Old Money/The Robber Baron Era, Prohibition,
and the Great Depression/Market Crash of 1929. The wealthy that could no
longer openly take the assets of the poor/oppressed through crime created
the depression to sieze as many assets as
possible at the expense of
peoples lives. The country did not recover until after we went to war
with Germany WWII.
During which both sides the allies and the Nazis
were supplied by our corporations for money. The 40's and 50's were
a
rebuilding era. 60's and 70's were rebellion and inflation. 80's and
90's were about Monopolies, One World, and
government excesses. Here
we are in 2000 still as corrupt, greedy and uncivilized as we were
in the Dark Ages but
we act more civilized in our crimes and collude
better through the use of technology. The Secret everything is about
money
sex and power. Control the money and you can control and
exploit the people. Organized crime, exploitation, and mind-control
are
still the norm.
In the 1980's an investment vehicle called mutual funds started a trend
of investing
in the stock market instead of savings accounts. A company or
or group of investors pool money together to buy a number
of stocks to
reduce the risks of investing in the market or an individual stock. This
destabalized the assets of the
banking system having less deposits on hand to
lend. Prices were high and so was the but low sell high philosophy of
banking. The exodus to the markets was further complicated by corporate
mergers and multinational conglomerations.
This is an era of legalized
monopolization and collusion. Funds are now offered by insurance companies,
banks, and
investment corporations. Most investors to reduce market risk
dollar cost average. Buy $50 each month at the end of a
year you purchase
at an average cost rather than the high or low.
Another twist in the investment saga is the
information technology age.
Traditional Stockbrokers roles have changed as have their source of income.
An individual
can place buy or sell orders and manage their own stock
portfolios(mini-mutual funds) on their home computers using information
that traditionally was only accessible by brokers. Brokers are now becoming
paid advisers and planners rather than
salesmen. Our level of education
is steadily becoming equal.
Increased investor risk: This has made the scams
and
insider information trading systems more sophisticated.
Futures market involves speculation on the price
of a crop or commodity
such as wheat or green chile in the future(prepurchasing). An option
allows you to purchase
a contract to buy/sell (call/put) a commodity or
stock at some time in the future. Risky unless your a farmer trying to
protect your crops, with knowledge of the growing season,
and can predict the weather despite our electronic ability
to control it.
Derivatives and Foreign Exchange rates: speculating on investments derived
from other investments(multi-level
investing)or those in other countries
based on their differing laws and regulations. Speculating whether or not
the
value of currency will increase or decrease.
INVESTING ADVICE OR FINANCIAL SELF-DEFENCE
1.
The best defense is a good offense which involves planning,control,
and execution. Fear over money matters lets others
control you.
2. Do not make impulsive decisions. Resist panic investment and
endorse objective investment decsions
such as stop loss and market
orders. If it sounds to good to be true it is.
3.Read beating the Street by Peter
Lynch for some qualitative
investment advice. Live life don't just watch it. You cannot research
a store or company
from just your view on a computer monitor.
4. Dollar Cost Average. Do not try to time the market.
5. Start
investing young to take advantage of compounding.
6. Stay away from individual stocks until you get a feel for
selection
and trading. Try a stock market simulation game to
develop trading skills.
7. Do not get overwhelmed in get rich
quick systems. The only
secret system to wealth is insider trading.
8.Unless you have more balls than brains
do not day-trade or play with
options and derivatives. (Caveat-you have a wealthy insider friend that
wants you to
get rich quick.)
9. Taxes are a worry for the wealthy and the disappearing middle class.
Watch and plan for
them but do not make a major deal out of tax planning
as most of us are trying to figure out where to get money to pay
them, rather then
to reduce them and keep more money.
10. Insurance (Risk Management) is speculating something
bad might
happen and playing CYA.Health, House and Home insurance should be
purchased as you can afford to protect
investments and assets.
Not as an investment.
11. If the wealthy try to reduce your investment dollars in the
Markets invest in the government. T-bills, T-bonds, Certificates
of deposit and Sometime US Savings Bonds are good
low risk investments
if they meet your investment horizon and earn an amount above inflation.
The only thing they
can control is the interest rate stock prices can be
artificially driven up or down.
12. Earning money on your
money slowly, consistantly and securely is
better than taking loses. If you are making large amounts of money
without
heeding any of this advice, my hats off to you in hopes
that someday you will teach me.
The
Tao of the Investor Dollar
by J. Dean Bowers
I dedicate/defy my former Professors at New Mexico State University
to
write a more informative introduction to investing
and economic psychology.
1929, October Surprise,
Black Monday, Back to School.
The Stockmarket is a creation that allows an investor/speculator to
purchase and
sell IOU's or the actual stock certificates on a market called
the exchange. Originally created to allow corporation(special
business
under the law treated specially for tax purposes and no one of its individuals
can be held legally reponsible
for the corporations actions. Otherwise the
owners are shareholders each owning and controling apart of the company.
The
corporation can also be privately held(owned by founders, members and managers)
This corporation usually has a President
or Chief Executive Officer and
an elected board of directors to oversee and plan the business of the firm.
The theoretical
goal of a firm maximizing shareholder wealth. A middleman
known as an investment banker starts the funding drive for a
corporation.
Introduction to Speculative investing
A public corportion has two main source of funding and owners
1.Bonds- Loan IOU issued by a corporation to investors paying interest at a specified percentage rate for a specified
time. If
the corporation fails these investors are paid first. This is the safest form of
investing in a company usually
having lower rates of return. However, bad companies exist thus
there are junk bonds.
2. Stocks- There are two kinds
of stock: common stock and preferred. Prefered stock is a hybrid having
characteristics and risk between that of bonds
and common stock(not used very often).
Common stock gives an investor/speculator a share of ownership at higher risk
(if
the company should fail) usually in hopes of a riskier increase in the
share price.
Higher risk higher the higher
the return relationship represents the gambling
or speculative risk of investing. Brokers are financially educated
salesman
that buy and sell shares of stock usually for fee or commission.
Corporations also invest and own shares of another corporations
stock
making large dollar and control issues relevant to an individual investor.
Caveat Emptor-Let the buyer beware
is an investment philosophy that should
always be observed.
There are many things that affect/effect the value
of
a share of stock some controlable by performance of the company some
not: Competition, collusion, politics, investor
expectation, the economy, and
interest rates externally influence share price. Internally price is affected
by a
firms products, performance, financial structure, and asset value.
Dynamic external trends for example investor sentiment
can be observed
by watching charts and indicators. Examples are average price,
moving averages, The high and low,
volume traded, volume direction,
insider(big$) trades etc. Internal trends (fundamentals)
measure financial and asset
performance observe by ratios
such as a shares price relative to its earnings. Other useful
ratios are the debt to
equity(bonds to stocks), return on assets,
return on sales, and price to book value. Number and dollar amounts of debt
and shares issued are required. The product, competitors, and economic
performance of the market sector should also
be considered.
The best way to invest is insider trading-investing based on priviledged
information. It is
illegal but it occurs. Stock markets are subject to
all the easy-money forms of crime any other shell-game is subject
to.
At any level of investment scams and organized crime exists. Fake stock
certificates, Boiler room operations(marketing
non-existing stocks), releasing
fake information, price fixing, collusion, and broker
churning(encouraging buys&sells
of bad stocks to increase commision).
Another consideration is financial window dressing(manipulating numbers or
cooking
the books).
Despite the risks involved and due to the greed of our banking system
this form of investing/saving
has increased over the last decade. The
United states banking system is privately owned by the power elite and
regulated
somewhat by the government. The Government is psuedo-elected
by citizens but is primarily controlled by the wealthy elite
and
corporate interests. The risk is all forms of saving or investing
involve giving your money or the use of your
money to someone trying
to make money. Banks buy low and sell high. Around the 1970's
Savings accounts have not kept
up with inflation so investors
have been forced to accept increased risk in order to save for
an education, a home,
or retirement. Even today similar to all other
countries Europe's Banks are Controlled by the House of Rothchilds(since
the 1600's).
Speculating in the banks of the wealthy is protected by the government up to certain dollar amounts
through
the Federal Deposit Insurance Corporation (FDIC) and the Federal
Savings and Loan Corporation(FSLIC). The Privately Owned
Federal Reserve controls the
banking system. Credit is a trap/tool of the wealthy. Remember even professional
wrestling
has credit cards for profit programs.
The stock market does not protect investments but it is somewhat
regulated
by the governments Securities and Exchange Commission.
All assets, houses and companies are owned by the power elite by
loans through the banks
they own. Even if paid for you can't sell without a buyer. I would
suggest reading about the
Old Money/The Robber Baron Era, Prohibition,
and the Great Depression/Market Crash of 1929. The wealthy that could no
longer openly take the assets of the poor/oppressed through crime created
the depression to sieze as many assets as
possible at the expense of
peoples lives. The country did not recover until after we went to war
with Germany WWII.
During which both sides the allies and the Nazis
were supplied by our corporations for money. The 40's and 50's were
a
rebuilding era. 60's and 70's were rebellion and inflation. 80's and
90's were about Monopolies, One World, and
government excesses. Here
we are in 2000 still as corrupt, greedy and uncivilized as we were
in the Dark Ages but
we act more civilized in our crimes and collude
better through the use of technology. The Secret everything is about
money
sex and power. Control the money and you can control and
exploit the people. Organized crime, exploitation, and mind-control
are
still the norm.
In the 1980's an investment vehicle called mutual funds started a trend
of investing
in the stock market instead of savings accounts. A company or
or group of investors pool money together to buy a number
of stocks to
reduce the risks of investing in the market or an individual stock. This
destabalized the assets of the
banking system having less deposits on hand to
lend. Prices were high and so was the but low sell high philosophy of
banking. The exodus to the markets was further complicated by corporate
mergers and multinational conglomerations.
This is an era of legalized
monopolization and collusion. Funds are now offered by insurance companies,
banks, and
investment corporations. Most investors to reduce market risk
dollar cost average. Buy $50 each month at the end of a
year you purchase
at an average cost rather than the high or low.
Another twist in the investment saga is the
information technology age.
Traditional Stockbrokers roles have changed as have their source of income.
An individual
can place buy or sell orders and manage their own stock
portfolios(mini-mutual funds) on their home computers using information
that traditionally was only accessible by brokers. Brokers are now becoming
paid advisers and planners rather than
salesmen. Our level of education
is steadily becoming equal.
Increased investor risk: This has made the scams
and
insider information trading systems more sophisticated.
Futures market involves speculation on the price
of a crop or commodity
such as wheat or green chile in the future(prepurchasing). An option
allows you to purchase
a contract to buy/sell (call/put) a commodity or
stock at some time in the future. Risky unless your a farmer trying to
protect your crops, with knowledge of the growing season,
and can predict the weather despite our electronic ability
to control it.
Derivatives and Foreign Exchange rates: speculating on investments derived
from other investments(multi-level
investing)or those in other countries
based on their differing laws and regulations. Speculating whether or not
the
value of currency will increase or decrease.
INVESTING ADVICE OR FINANCIAL SELF-DEFENCE
1.
The best defense is a good offense which involves planning,control,
and execution. Fear over money matters lets others
control you.
2. Do not make impulsive decisions. Resist panic investment and
endorse objective investment decsions
such as stop loss and market
orders. If it sounds to good to be true it is.
3.Read beating the Street by Peter
Lynch for some qualitative
investment advice. Live life don't just watch it. You cannot research
a store or company
from just your view on a computer monitor.
4. Dollar Cost Average. Do not try to time the market.
5. Start
investing young to take advantage of compounding.
6. Stay away from individual stocks until you get a feel for
selection
and trading. Try a stock market simulation game to
develop trading skills.
7. Do not get overwhelmed in get rich
quick systems. The only
secret system to wealth is insider trading.
8.Unless you have more balls than brains
do not day-trade or play with
options and derivatives. (Caveat-you have a wealthy insider friend that
wants you to
get rich quick.)
9. Taxes are a worry for the wealthy and the disappearing middle class.
Watch and plan for
them but do not make a major deal out of tax planning
as most of us are trying to figure out where to get money to pay
them, rather then
to reduce them and keep more money.
10. Insurance (Risk Management) is speculating something
bad might
happen and playing CYA.Health, House and Home insurance should be
purchased as you can afford to protect
investments and assets.
Not as an investment.
11. If the wealthy try to reduce your investment dollars in the
Markets invest in the government. T-bills, T-bonds, Certificates
of deposit and Sometime US Savings Bonds are good
low risk investments
if they meet your investment horizon and earn an amount above inflation.
The only thing they
can control is the interest rate stock prices can be
artificially driven up or down.
12. Earning money on your
money slowly, consistantly and securely is
better than taking loses. If you are making large amounts of money
without
heeding any of this advice, my hats off to you in hopes
that someday you will teach me.
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