How to Use CNBC to Your Best Advantage
In
review you now have 7 stocks and 1 ETF. Consolidated
Edison Inc. (ED) or another utility, Kraft Foods Inc. (KRFT) or another food
stock, Eaton Corp (ETN) or another industrial stock, Potash Corporation of Saskatchewan, Inc. (POT) fertilizer, and U.S.
Bancorp (USB) or some other financial (Bank) stock of choice, an oil or gas stock
my recommendation was Chevron Corp (CVX).
Copper ore Freeport-McMoRan Copper &
Gold Inc. (FCX) but any metal mining sector stock would do. Last picked was a tech stock Microsoft Corp. (MSFT). Remember you can own any stock in the sector
not the one I recommend. I like the SPDR Gold Shares Trust GLD ETF.
Jim Cramer
I have recommended you watch CNBC. Things to remember when watching Jim Cramer
on Cramer’s Mad Money.
Cramer is very concerned with your capital preservation. He doesn’t want to loose you money. This is a good thing! He will not jump on a stock on the bottom
since it is risky. This protects your
money, but looses your gains. So what
happens is when a stock is at the bottom Cramer is hesitant to recommend that
stock, remember his first concern he does not want to loose you money. So you miss 65 percent of the climb before he
jumps on board. Same is true at the
tippy top, he says take some off but not all so when he says emphatically to
sell you have ridden it down 50 to 60 percent down too. When he jumps on a stock to sell it many
times he is jumpping on at the bottom take First Solar, Inc. as an example his
sell, sell, sell was at rock bottom. It
is up now.
If you have convictions you need to follow your
convictions. When there are two good
stocks you are just as likely to be right.
Cramer liked Walgreen Co. (WAG), I liked CVS Caremark Corp. (CVS) better. Cramer liked Lowe's Companies Inc. (LOW)
where I liked Home Depot Inc. (HD). I
proved correct in both instances. Cramer
changed and agreed with me. (Cramer does
tell you when he is wrong and changes his mind, which I think is good.) I never liked the drugstore space, but I did
buy HD in the mid 20’s and rode it up.
Never, Never buy or sell anything based on the lighting round. And, I do believe you should read his books. I have purchased all and read all but one.
The best thing you can learn from Jim is disvercation. Learn it well it will help your
portfolio. The second will be
dividends. 50% of the gains in the
S&P 500 are reinvested dividends. Be
sure to get your automatic dividend reinvestment feature turned on with your
broker if it is not already.
I don’t care what Crmer or Fast Money say a share buyback is
not good for stockowners. It is good for
hedge funds, and the CEO of the company.
So when you see or hear of big buybacks it is a warning sign, not a good
thing, the people who mililupate the stock market are mililupating your stock. For the big guys who trade around stock it is
good they can sell some, and buy it back latter if it goes down but keep the
shares they trade around. For the CEO it
is a way to milipuate the stocks price so he gets a bonus at year end. For you it is the company throwing away its
money. Dividends is the only thing that
will work for you.
Fast Money
I like Fast Money; it is on TV just before Mad Money, and is
for after you understand everything you hear from Jim Cramer on Mad Money. If you can’t understand Jim then skip Fast
Money until you do. It is on just before
Mad Money. It is also on at the halftime
of the open market and called the Fast Money Halftime Report during the day,
noon New York time.
I find the advice given on Fast Money just as helpful as Mad
Money. I have made the most money with
three of the contributors. I advise you
to listen to them closely. Their are
some new advisors on now that come on infrequently. Karen Finerman is a value investor. Just by following her recommendations you
cannot really go wrong. Sometimes she is
wrong but has a more right than wrong track record. So of her recommended stocks are slow to come
in.
A Value Investor is http://en.wikipedia.org/wiki/Value_investing “it generally involves buying securities
whose shares appear underpriced by some form of fundamental analysis”. Warren Buffett, has argued that the essence
of value investing is buying stocks at less than their intrinsic value. Karen’s
advice is long term a year or longer years.
Karen
recommended Microsoft Corporation, MSFT and Bank of America, BAC. I bought the second and wish I had the first
when she recommended it. Both when up by
50%.
Pete
Najarian is an options trader and I learned how to invest in options by
listening to him and studying. He and
his brother have made me a lot of money.
If you are not using options you are leaving money on the table. Pete is not on as much as he used to be and
he doesn’t do as much advice on options since Options Action started airing on
Friday’s. I recommend you start reading
about and learning options. Cramer on
Mad Money doesn’t like options, since in a whoosh up you lose the underlying
stock. That can happen, but you are
leaving money on the table. His brother
also comes on Fast Money occasionally.
They are good and when they have given specific options advice I have
always made money, selling covered calls, or buy this stock and sell this call
covered on top of it (Known as a Buy Right by the industry and sometimes they
use that term and expect you to know what it means.) Pete’s advice is short a week, or months at
most.
Guy
Adami is good at pointing out the cliff on the side of the road you are driving
on. His recommendations are good and the
best ones are the recommendations he gives over and over again. He sometimes says we have talked about X
stock forever. Some of his advice goes
for years like Karen’s. He liked US
Bancorp, USB and Church & Dwight Company, CHD. I bought the first and wish I had bought the
other. Listen to what he has to
say.
Options Action
A half
hour show only on Friday’s. This is for
the advanced investor. You can learn
about options. I recommend you watch it
but not play with options at first except for selling puts on stocks you want
to purchase and covered calls on stocks you own; until you really understand
options.
The
only problem is now on CNBC the options advice is of a higher level than it was
at first when CNBC first started teaching about options. I make a lot of return on my money selling
puts to buy stock and selling covered calls on the stocks I own.
The Other CNBC Shows
I don’t
invest in currency or futures yet so have no recommendations yet.
T3Live on YouTube
These guys are good for the daily drift on the markets. Usually outdated a day or two later. You can watch them on U Tube. They will teach you charting. Charting is used on Wall Street. Leonardo de Pisa (Fibonacci (pronounced
fib-o-nawch-ee)). With Fibonacci Wave
theory they product the stocks advance and decline. Look this one up on the internet if you are
interested. There are books written
about it and others know way more than I do, and it actually does work in real
life.
Good information. I have learned a lot listening to CNBC. Thanks.
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