Not a subscriber? Click here to learn
more.
|
| Home | About Us | Resources | Archive | Free Reports | Market Window |
|
Steve's note: We have a special week of DailyWealth planned for you... Over the next five days, you'll receive essays from my colleague Frank Curzio. Frank specializes in stocks under $10, and he's simply one of the best single-stock analysts I've ever met... He's always finding great investment ideas most folks will never hear of. I hope you enjoy his insight as much as I do...
The First Thing Penny Stock Traders Should Know in 2010By
Monday, January 25, 2010
When the editors of DailyWealth asked me to write a series of essays about penny stocks – my beat in the market – I thought my intro would be a no brainer:
Tell people how much money they can make when a stock goes from $5 a share to $30. After all, the reason I write a penny stock advisory is because of the big moves that are common in low-priced stocks. People love the idea of buying a boatload of shares for under $10 each and watching them climb hundreds of percent. But before we talk about stocks under $10 and the huge gains we can make, there's one important thing that's going to happen in 2010 I need to tell you... Stocks are going higher. And the government will get them there. In just the past few weeks, several Democratic senators have announced they will not seek reelection. The Democrats already lost a tight race for the Massachusetts senate seat vacated by Ted Kennedy. This is awful news for any political party facing a big election year. Letting the unemployment rate tick up and the stock market tick down would be political suicide for the party... which is losing steam built up by the hugely successful presidential campaign of Barack Obama. In other words, expect the party in power to throw money into every problem area in the economy in an effort to keep the markets high. Infrastructure, homeland security, health care, you name it... The political stakes are too high for politicians not to do something about all the problems the U.S. faces right now. You see, life on "Main Street" is the worst I've ever seen it. Unemployment is at its highest level in 26 years. At least 17% of Americans are out of work or working part-time jobs waiting for a full-time position. That's nearly one in five. The number of homes in foreclosure is at a record high. And with 25% of homeowners underwater on their loans (owing more on their house than it's really worth), this number will only go up over the next few years. Health care costs continue to shoot skyward. They're already 16% of the economy, and the government expects them to jump to 20% by 2017. Premiums, co-pays, and deductibles continue to rise. And now the current administration desperately wants to provide health insurance for 31 million people. Estimates put the cost of a new health care plan at more than $1 trillion. This is going to hit Main Street, too... Taxing just the top earners won't cover this. Middle-class families will help foot the bill. And to throw an ugly cherry on top, gasoline prices are at their highest levels in 15 months. This is the sort of stuff that makes the average voter start looking for a guy with new promises. What are the Democrats going to do in this situation? The same thing the Republicans – or anyone looking to stay in office – would do: Everything they can. Many folks are accusing our leaders of not doing enough to stimulate job growth. You can bet our leaders are listening... and they're already on the case. Here are just two things they're doing to ensure higher stock prices: They're keeping interest rates low. The last time rates were this low, in 2003 and 2004, the stock market soared for four years. With the Fed Funds rate so low, money market accounts, CDs, and Treasuries pay next to nothing in interest. And the Fed is telling us rates will remain low for the foreseeable future. I expect a lot more cash will flow into stocks, which offer a better return. And they're "printing" money and pouring it into the economy through stimulus packages. What you may not realize is: This process has just begun. Congress passed the largest stimulus package in our country's history in February 2009, the $787 billion American Recovery and Reinvestment Act (ARRA). Only 32% of the stimulus has been spent thus far. Based on the laws of the ARRA, most of the remaining cash must be spent in 2010 and 2011. In other words, there will be a huge amount of government cash flowing onto the order books of all kinds of American businesses. In the long term, this "fix" should lead to big problems down the road. But a trader who deals in stocks under $10 has to view the world in the short term. And while the current correction will likely take stocks lower for a few months, I think it will present a buying opportunity. This week, in my "Penny Stock Secrets" series, I'll show you how I plan to trade higher stock prices this year. We'll cover where to look for the most explosive gains... how to find the few sure-fire winners among thousands of microcaps... tips to trade these stocks safely... and a little-used method for buying the world's best businesses for under $10 a share. There are several opportunities to make at least 50%, 100%, even a 1,000% if we're lucky this year. Check back in tomorrow for more. Good investing, Frank Curzio P.S. I have just finished a full report on one of my favorite "under $10" stocks in the world right now. In short, it's a small firm that has recently landed a huge new contract with Apple. I encourage you to read the full story here... Market Notes
NEW HIGHS OF NOTE LAST WEEK
Celgene (CELG)... biotech Rio Tinto (RTP)... mining Akamai (AKAM)... networks Delta Air Lines (DAL)... airline Southwest Airlines (LUV)... airline EZCORP (EZPW)... pawn shops Icahn Enterprises (IEP)... holding company La-Z-Boy (LZB)... furniture Panera Bread (PNRA)... restaurants Cracker Barrel (CBRL)... restaurants CIGNA (CI)... health insurance Humana (HUM)... health insurance WellPoint (WLP)... health insurance Johnson & Johnson (JNJ)... health care Pfizer (PFE)... Big Pharma Merck (MRK)... Big Pharma Covidien (COV)... medical devices Sony (SNE)... electronics Toyota (TM)... automobiles Carnival (CCL)... pleasure cruises IBM (IBM)... computers and hardware Korean Electric Power (KEP)... Korea's electric monopoly
NEW LOWS OF NOTE LAST WEEK
Not many, but it's starting to get interesting... |
In The Daily Crux
Recent Articles
|
