Welcome to
"StockBreakthroughs Newsletter"
February 10, 2005.
In this issue...
Let's be honest...
Up to this point in 2005 the stock market has been going for a rollercoaster ride.
Although we've seen some nice UP-Days most days were down this year.
And there are also a lot of statistics going around the media like if the first week of January is bad the entire month will be bad and so will February in 65% of all cases.
And if January is a bad month, most times the entire year will be bad.
Another statistic I saw was that every year with a 5 - like 2005 - was a good year.
Well, so much for statistics.The one says this, and the other is the opposite. It'll be interesting to see which one is true.
But lets be honest. Not even I can make sense of the market at this point. And it also caught me off guard.
Now no one really rekoned with the markets going down this much. Most analysts were full of hopes at the end of December saying that this year will be a good year.
And just as I also thought that the market would rise again I got into a put option - where you profit in a down-market - with Starbucks (SBUX). My old time favourite.
Thus far!
The next day looked pretty good as well and SBUX continued going down.
But then...Oil prices went down again and there was good news about corporate earnings. And so the stock market went up again and so did SBUX.
Now it didn't worry me the first day around just because the market gained a bit of ground again. As you know, the markets will always go up and down. But as long as the direction i.e. the trend you're trading continues, you're OK.
But it didn't in my case.SBUX continued going up and I bailed out at a loss of 35.5%.
Too bad, but that's trading. No one, not even pro's that have been trading for decades are right 100% of all times. That's impossible. And that's why it is so darn important to have trading rules and stick to them!
I know that SBUX went down drastically again and hadn't I gotten out of the trade I wouldn't have lost anything.
But would have's and has been's don't count unless you have a crystal ball that you can look into the future with.
The thing is that trading rules are crucial and they work most of the times.
If you stick to them, you'll win more than you'll lose. If you don't, you'll lose more than you'll win! Its a fact that even the big shots on Wall Street will agree on!
Always remember: SURVIVE TO TRADE ANOTHER DAY!!!
In closing this week, here are some stocks that I've put on my watch list for a possible trade: Amerigroup Corp (AGP), American Eagle Outfitters (AEOS), Johnson & Johnson (JNJ), The Ryland Group(RYL) and Ebay (EBAY) that is going to split their stocks 2 for 1 on Feb.17.
Although Ebay went for a dramatic plunge, I firmly believe that they'll be back.
Just give it some time. This is what I found on Ebay in MSN Money:
http://moneycentral.msn.com/investor/srs/srsmain.asp?Symbol=EBAY
eBay Inc., a large-cap growth company in the consumer services sector, is expected to significantly outperform the market over the next six months with less than average risk .
Lets observe what Ebay actually does.
Yours in Successful Trading,
Ricky Schmidt
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