Michael ain't no chump.
This is a sample of what could be.
Let's turn it into a graphic novel.
Otherwise. . . . .

$20 In Princely Sums

 

Out of curiosity and a desire to be worldly, I picked up "Trading for Dummies" in order to more fully understand the world of stocks and business and feel like "a gent about town" with one line of cocaine going up each caked, powdered nostril in New York City office towers with the quick tip, the faster buck, and the intrigue of "a spy novel". But unfortunately, "Wall Street" is not like that in the slightest and you'll only "smack into a wall" if that's your "hay-wire attitude" of the rank amateur. Maximum liberty is achieved by those who exhibit the most self-control, and I offer you this sane "study-guide" for an often impenetrable subject by densely-laden text and detail-minded authors who make the moniker, "For Dummies", only make one feel "stupider". But no more! Read and learn, and get "a slight feel" for how this stuff works. . . . . but don't run off "half-cocked" and hold "yours truly" liable!

So here we go, starting with:

Just what in God's name is "the stock market" anyway, and what do those figures stand for?

To understand what "The Dow Jones Industrial Average" stands for, first understand that a corporation issues shares, or ownership in a company in a piece-by-piece basis that gives an individual VOTING POWER over how the outfit is run and a matching return on the profits relative to HOW MUCH they own.

The stock market in the U.S. represents the total value of all the stocks, weighted relative to how important "or how much swing" a big-player has compared to others "in a composite picture" that can be weighed across many different indices "to come up with a number". In other words, if a "Blue Chip" company does well-- their $250/share listing is going to have more clout than a scurvier dog trading for $5/share as the market, "on the whole"-- is either heading up or going down.

The market and all subsequent adjustments of figures is an index "of all held opinion" between the push/pull of supply n' demand between the intra-day stock exchange hours of 9:30 A.M. to 4:00 P.M. (Eastern Time) and mapped out for however long a period one chooses "to watch", the impulse to sell for "as high as possible" and to buy for "as low as possible". . . . . and this is all expressed in a constantly "changing number" with different sub-pieces of the market known as corporate sectors, broken down into individual companies with their own numbers representing dollar value. The strikingly, BLINDINGLY OBVIOUS never moves things because it all counts on mystery "and a bit of expectation" for something that either may or may not be there-- projected future earnings which as you know, "one buys a right to" with a block of shares-- assuming that there will not be a mushroom cloud outside your window the next morning. Doubtlessly that is true, but the whole "Wall Street" industry is about wheelin' n' dealin' "more sizzle" than there is "steak"-- presuming that not everyone will riot "for value" at the same time and sink the market.

And remember that not everyone can count on the wily sociopathy of a screen idol like Christian Slater, walking off with a pistol, the beautiful girl, and a suitcase of money through some airport. 

Or at least that's how it worked in the movies. . . . . His vision, his way, the young late '80s hustler out of some dubious, long-forgotten filmscape as the sun slowly began to set on America. . . . . that is, with the last 25 years of the credit boom "balance sheet ninjitsu" based on sly misappropriation of confidence "in solid things".

Much of the time, folks who start off with the stock market are like dabblers in the world of "Sports Betting" who tug on their bookie's sleeve and make small, uninformed bets on an ole' sentimental favorite, having visions "of big money"-- but in all odds, "getting their asses creamed" and limping off like Kurt Vonnegut after a night "at the whore house" ended up with a razor held to his throat. What is this, "Slaughterhouse 5"? More like $50 and your slaughtered self-esteem "on a bad bet"! Maybe one night "you did get a surprise", but even a conscientious hog wallowing in self-pity "wins sometime"!!! But mostly not. . . . .

Another one you have to look out for is the tweaked-out lil' risk-addict who is usually shown is mobster movies as the guy whose knee-caps they bust out with a sledge-hammer "as an example to the rest". To him, the stock market "is a video game". . . . . and though it's certainly "possible" to make money this way, it's a marginal, obsessive-compulsive way "to go" which oftentimes leaves guys ruined like leaves blown in the wind. Either these characters are featured on "60 minutes" as con artists or "as wounded chiselers who thought they could beat the system, but didn't".

1) Under the "Hi" and "Lo" section, the fractions stand for how much-- approximately speaking-- a stock costs out of whole dollars, "then some" as "short-hand".

2) The "Dividend Amount" tells you how much you got "per share" ($ Amount) based on the most recent quarterly payment projected out to "the end of the year" as it stands "as is".

3) The "Dividend Yield" tells you what % of your money invested was profitable, based on the closing price of the stock.

4) The P/E or Price/Earnings Ratio, tells you basically how much money you put in proportionally to earn all your money "and $1 back", based on comparing "the closing price of the stock" with the average earnings ("Dividend Amount") of the last four quarters combined. "Blue Chip" stocks cost more to initially purchase, but are stalwarts of market confidence where there is far less risk than say, "penny stocks" in half-assed oil wells or dropped mine shafts in mineral exploration where the gains can be fabulous-- IF YOU PUT THE CHIPS ON THE RIGHT ONE. It is interesting to note that for years and years, those ill-fated "Tech stocks" had a high P/E Ratio, in a nation of speculator's mania based on that good ole' "greater fool theory" of who would pay the higher price, but had basically "no profit" to show forever and yon until faith collapsed and wiped out those who should have "thought with their head" instead of trendy, fast-talkin' millennial rhetoric of "transhumanist/technological"/"end of history" posturing in the magazine spreads that went the way of bison meat like so many rotted carcasses. See?

5) "Trading Volume" tells you about the movement of the stock, whether there is a rally "to the top of the mountain" or a panic "to abandon ship", or at least teeter-totter between the two like a see-saw of either flame-out's or potential deal-sweeps to rally toward an oggled champagne glass of fine toasts.

Let's Investigate Mr. Coca-Cola for some Refreshing number-play that adds up to "a full six pack":

Take the Dividend, 64ข (0.64) and divide it (/) by the Dividend Yield of 1.3% (0.013) to get approximately 49.25. . . . . in the neighborhood of the "Hi/Lo" figures at the end of the day at the far right of the column. Continuing on this vein of thought--

If you multiply (0.64) by 1.3 then multiply it by "51", (-- the closing price of the stock) you come up with "40", the Price/Earnings Ratio and a bit extra: but remember the old idea in math of X-to-1, so it's inherent that you add in another "whole digit" and remember that this is "a rough estimate" and the listing is not splicing it down to the decimal with the play of projections/actualities.

This figuring "roughly holds true" because Coca-Cola is a fine old stalwart whose price level isn't dramatically fluctuating like crazed profits n' losses, which "typically means trouble" or even some sort "of junk bond". . . . . Make sense?

"On Mutual Funds". . . . .

*** The most hilarious ratio, when you stop to think about it, is the 80/20 rule, or the occult secret of the pentagram and rule of fifth's. It appears in nature as a magical proportion that 20% will always be the trouble-makers, and 20% will always be the most productive. Isolate that group, and once more it will split into fifth's. For investors with an ass-kickin' portfolio, if you have 80% in stocks and 20% in bonds you can expect to average out 12% a year over your "Twin Decades of Aggression". If you reverse it and put 20% in stocks and 80% in bonds you can expect to make 5%, which may or may not barely keep ahead of inflation.

*** Another great rule is "the law of 72/X%". . . . . or how long it will roughly take "to double your money", working out an average rate.

Presume that your money is growing at 13.4%/year and project this as "an average".

Take 72 and divide it by 13.4.

That will roughly be the amount of years it will take until your money "doubles", before adjusting for taxes and fees that dampen the wild growth as the principal rolls into interest, and the money rolls in like the provident, tight-fisted "Horatio Alger" miracle you are!

(-- It will take somewhat over 5 years for your money to double)

As a general rule, it's far easier "to settle for a nice, moderate mutual fund" if one has under $200,000 to spend and wants to keep out of the barroom brawl of figures and licking one's finger and holding it up to the wind "for hint or sign", because "there's so much to learn" and one doesn't want "to be taken to the cleaners" by a certain "demonic fifth" I'm about to introduce you to, for benefit of knowing glances.

You gotta laugh at this. . . . . 

One classic trick in the seat-of-the-pants world of "Wall Street Cowboys", or at least their sociopathic office chair-warmers, is to make financial commitments that deep down inside, they know they can't cover-- but by putting up "a good front", they can lure investors in "to seal up the difference". It will "all work out" so long as no one "catches on" as he throws out longer and longer bets, partly out of good will, partly out of greed, partly out of an addiction to an adrenaline kick.

Usually this happens when an insinuation gets out, a la Bernie Madoff-style, of rumors and planted information passed around "the cocktail circuit" about "a magical mystery fund" as a friend or subordinate tugs on the sleeve of another like a duped "cat's paw" only wishing "to be helpful" as everyone dances a happy jig through the "Candyland" board game of easy gains, not comprehending "the hungry end" that waits for them on the other side like the yawning cavern "of oblivion". A bad situation can arise when "the trickster" in question secretly invests money that doesn't belong to him, but the whole thing collapses along with a friend or loved one's fortune and he definitely "makes himself scarce" with a vacant cubicle and unreturned phone calls, the said "hungry end" of greed's sociopathic orange jump suit behind bars.

You must understand that the stock market "is like a game of golf", a slight breeze of percentages that over time putts the ball into the cup throughout the length of the full 19-hole course, with a small snifter of peppermint Schnapps at the clubhouse. Don't lose sight of this!

A more pathetic situation can arise when one is led astray by the ether of their own greed and the jolly companionship of a slick operator or two offering you something "slightly illicit". Mega profits, magical solutions, or a way "to beat the system" away from this world of hurt n' grime as they slap your shoulder and pass out cigars like Fedora-wearin' uncles out of a 1940's filme noir routine.

The system is supposed to be "fool-proof".

You throw out a coin, you double your money.

You throw out a dollar, you double it.

Then you put up everything you own and all of a sudden a detective kicks down the door and a violent scuffle breaks out. Someone is dead and on the floor, and you're fleeing "for your freedom". . . . . your stake forgotten as they shout over the telephone to run from city to city.

You can't go to the police out of either fear or humiliation, and you'd be laughed right out of the stationhouse as they'd shrug and tell you that one shouldn't have "gone for the big score" in the first place. Make sense? Furthermore, don't see the stock market as "a video game" or else the whole thing, over time, has a way of collapsing like a bad round of "Tetris". . . . . think: sowing the seeds for a successful "harvest season" like an old Dutch farmer.

EEEEAAAGHHH.

A Wall Street listing is like a contestant at a bodybuilding contest who impresses the judges and "oohhing" n'  "ahhing"   audience as it struts and shows off its mightiness and overall accomplishment for all "in the running" to see. . . . . the payoff of all the investment, labor, and ingenuity put into this glorious (free) enterprise. Becoming an expert with the figures and ratios is a way to judge the overall health and comparative proportions of different weight classes spread across various fields of endeavor, whether you're selling computers or airplanes. (-- or even websites of dubious entertainment value)

Obviously someone is not going to win the contest if they've worked on nothing but their biceps and have completely neglected their chest and shoulders, because what it shows is a lack of "good form" offered up to the ideal of what someone or something should be. A man can wear five layers of clothing to make him "look stronger", or the naive may mistake fat for "flex", or someone may inject themselves with steroids which is only so good as long as you have access, but ultimately "the truth will lay bare" like an ape shot out a tree.

A very down-to-earth CEO named Donald Keough who once ran the Coca-Cola company wrote of his experiences as a farm boy working on a cattle-ranch during the summers whom hustlers would spot, and try to oversell him on the relative health, weight, and quality of a bull over the fence. The "player" may have been the best flatterer and conversationalist in the world, but that was mostly a device to distract the lad's attention from the more pathetic truth at hand "of what was trying to pass muster". As he learned, "watch the bull and not the man" or half-way listen and figure why the hell this guy is being so friendly when the way of the world is mud, piss, and smoke.

  x

 "Dirty Harry" says so!

What makes the stock-market different from say, bodybuilding, is although any competitor may have "a change in fortune", or "blow out a knee" or something tragic and quite unforeseen, usually a great many of the companies-- instead of building good, solid muscle-- are like balloons filling up with hydrogen which are taken to the crash n' burn "flame-out" when it was "too little substance" built on "too much hype" being "traded too fast" when just about everyone wakes up "with a hangover".

Better join A.A. or "Appalachia Anonymous" for where you'll be living!

Trading Strategy

 -- Know what "phase" of the economic cycle you're in, like the cycle of the moon and rotation of the financial cosmos.

Use your computer to:

Interpreting Income Statements-- e.g. "The Bottom Line"

1) Revenue (-- Net sales)

    -- "Raw cash taken in", before other factors are considered such as sales discounts, adjustments for returns, (i.e. other gimmicks that would cause money to fly out the door in the final tally)

2) Expenses (-- Cost of Goods Sold)

    -- Overhead. freight, salaries, health insurance, sales discounts, candy canes, depreciation of buildings & equipment (-- known as amortization, adjusted for with payments on a loan and with tax deductions for such a thing in a business-friendly climate). Then you have to pay for patents, copyrights, and intellectual property, and then not forgetting taxes and interest. On one side of a ledger on any balance sheet, you have EBITDA or (Earnings Before Interest, Taxes, Depreciation and Amortization)

3) Gross Margins (-- Gross Profit)

    -- This is the total by the time EVERYTHING is factored in, when you subtract the cost of goods sold from net sales, leaving you with $$$

The All-Mighty Formula for this:

The Gross Margin Ratio = Gross Profit (Margins)/Net Sales (Revenue) and is best measured over the course of a couple of years "to get a feel" for the overall efficiency of a company.

Efficiency = "Higher Profit", or more juice out of the company unless ruthless cost-cutting eventually becomes counter-productive!

<                                    

Though Home Depot is more efficient and over twice as big, both are heading toward a state of improvement, with Lowe's speeding up from behind like a smaller, swifter race horse. This method with "Gross Margin Ratios" lets you see how much "bang you get per buck" in terms of running an efficient shop.

THE NEXT SECTION OF THE INCOME STATEMENT. . . . .

. . . . . tallies up the expenses of running a business, including the cost of "overhead" and the administrative offices (-- in other words, the corporate brass). Always watch if a company's expenses are increasing faster than its gross profits, which means it has major problems "controlling its costs". If it can cut costs while increasing its profits, then bonus cherries! Just don't "oil the machine of productivity with the blood of the workers", though.

<                                    

THE INTEREST PAYMENTS section tells you how companies are doing in the short-run, paying off their creditors. And remember, such debts are tax-deductible!

To figure out a company's fiscal health, use the interest expense number and the earnings before interest and taxes (EBIT) number.

Remember: the difference between "EBIT" and "EBIT(D)A" is that the latter takes account of the drag of the cost of depreciation and the lift that the government will give you in a business-friendly climate. Think of it as "air resistance". If "EBIT" isn't there, you can find it by subtracting interest and tax expenses from operating income (i.e. gross profit minus such expenses)

This number-fuckery determines whether the company is generating enough income to cover its interest payments using the interest coverage ratio.

The All-Mighty Formula for this:

Interest coverage ratio = EBIT/Interest expenses

Companies with huge ratios certainly will have no trouble meeting their interest payments and may be considered "sound".

Compare Home Depot with Lowe's:

Though Lowe's is in a weaker position, it ain't exactly in trouble. . . . . it has 14 times more income it needs in order to make its interest payments. Analysts generally agree that a company is in trouble whenever its interest coverage ratio falls below "3". Lowe's has "less clout", but is gaining momentum while the reverse is true for Home Depot, even though it is still "that much mightier".

TAX PAYMENTS or "Income Tax Expense" is another section. Corporations have teams of tax lawyers that do their damnnest to make sure that the company pays less than the 15-38% it is required to "under law".

DIVIDEND PAYMENTS are the profits that corporations kick out for each share of stock owned every quarter after the company's board of directors get together, review company profits, and in turn figure out precisely what the dividend will be. Lots of inter-corporate/shareholder politics are involved, not necessarily for "the truest health of the company", and passing out the profits is not "tax-deductible", in case you were hoping!

Now there are two ways to check a company's profitability with ratios.

The All-Mighty Formulas:

Operating margin = operating income (-- another way to express "EBIT")/gross profit (-- net sales)

Net profit margin = earning after taxes/gross profit (-- net sales)

Check out these comparative charts:
 

Once more, what is demonstrated by these figures is that Lowe's is the swifter, speedier company-- "a hungry upstart"-- while Home Depot is "the grand old man". To think of it another way, it's perhaps the difference between "Pearl Jam" and "AC/DC" in the 1990's.

LOOKING AT CASH FLOW--

There is a difference between "sales tallied up" and actual "cash in hand". Income statement forms tend to look at the rosiest picture, assuming "the chumps'll pay up" with something called "accrual accounting" that averages how long it takes to collect the money "and make payroll".

Operating Activities-- The actual cash a company has from the business it brings in, counting "the wear and tear" of its stores and equipment.  "Depreciation" can be counted in many ways, like with a dividing "straight-line" idea that averages out "the write-off" over months and years.

BUT BACK TO CASH FLOW:
Check out this chart:

Home Depot had a drop in cash from from 2002 from 2003, which warrants "closer investigation" to find out "why". Perhaps "they stumbled", or rehabbed the stores.

Financing Activities. . . . . is when a company either issues or repurchases its own stock because it's trying to raise money. This can either mean it's "in trouble" or is trying to expand in a major, productive way.

A negative cash flow from financing activities usually means that a company has either paid off debt or repurchased its stock (-- to maintain control). The reasons for "positive" or "negative" can be complicated, but know the overall picture with a narrative "before you jump to any conclusions".

As you can see, both these companies have put out stock.

Investment  Activity. . . . . this shows how much a company spends its money for growing long-term assets, such as new buildings or property, equipment, or even other companies.

The following chart shows that Home Depot and Lowe's are both investing a lot of money, presumably for expansion because they opened so many stores in that period.

SCOURING THE BALANCE SHEET

The balance sheet is made up of three sections.

1) Assets

    -- Everything the company owns

2) Liabilities

    -- Debts or money owed

3) Shareholder's (Owner's) Equity

    -- All the claims made by the stockholders to collect "their piece"

The balance sheet gets its name because "Liabilities" plus "Shareholder's Equity" equals "Assets".

The list is numbered from what is most flexibly turned into cash (-- liquidity) such as marketable securities (-- bonds), money market mutual funds, accounts receivables (-- calling in debts from those who owe the company money on credit), and inventories that can always be resold.

On the asset side are holdings such as buildings, land, and equipment.

On the liabilities side  are mortgage or lease payables.

Retained earnings are what is funneled back into the company for reinvestment.

Another important thing to find out is "The Accounts Receivable Turnover"

First, figure out the average amount of sales on credit in a year then divide by 365/days/year

Accounts Receivable Turnover = [Sales on Account (-- credit)/Average "Accounts Receivable" Balance (-- what the customer typically owes)]/365

Figure out "The Inventory Turnover Ratio" by using a similar principle

Inventory Turnover Ratio = [Cost of Goods sold/Average Inventory Balance (-- how much a fully-stocked inventory costs)]/365

*** When it is taking longer for the company to collect cash and turn over its inventory, trouble may be ahead.

Analyzing the Debt Situation

"The Current Ratio" figures out whether or not a company can pay its debts.

Current Ratio = current assets/current liabilities

A ratio that's too low implies a company that is having a hard time paying its short-term debts. One that is too high may indicate may mean that a company is not using its assets efficiently toward growth. Again, check out "how all the race horses are running" and how they look next to each other in a similar market.

"The Acid Test" is a little bit different and calculates the values minus the inventory, which is always harder to convert into cash "when push comes to shove". This consideration mostly applies to a financial institution thinking about making a short-term loan to a company. In any case, they want a (1:1) because you only lend an umbrella when it ain't rainin'! If a company can't get a short-term loan, that means trouble and its share price will drop.

Acid Test Ratio - (Current Assets - Inventory)/Current Liabilities

Remember-- there are three types of "Earnings"!

1) Gross Profit

    -- "The Whole Schmeer"

2) Operating Income

    -- Cash "in the till" (-- or register, through the doors of your store) after subtracting "Operating Expenses" that leaves you with (EBIT)

3) Net Income

    -- What you have by the time "you factor in EVERYTHING"

More Ratios!

Price/Earnings Ratio

P/E = Stock Price/Earnings Per Share

How much bang do you get per dollar invested. . . . . or rather, how much do you get "banged" or pay out to collect a dollar in return?

Generally, it is said that a company which is 14 times or more overvalued than its "Earning per Share" you "wink at", but use your head. . . . . Coca-Cola ain't goin' "belly-up" anytime soon!

The trailing version tells you what it was. The forward version tells you what is projected. . . . .

Price/Book Ratio

This figures out the market's valuation of a company compared to the actual value a company shows on its financial statements. The higher the ratio, the more "faith" the market has in a company-- an intangible magic.

Price/Book Ratio = Stock Price/(Book Value - Total Liabilities)

Return on Assets (ROA)

This figures out how efficiently management uses the company's resources, though it doesn't quite show you how well the company is performing for its stockholders. The higher the number, the better.

Return on Assets = Earnings After Taxes/Total Assets

Return on Equity (ROE)

Investors are far more interested in this figure which measures how well a company is doing for its shareholders, by the time the net profit is laid out on a slab like a buffet. The higher the figure, the better, obviously!

Return on Equity = Earnings After Taxes/Shareholder Equity

WHAT MATTERS MOST: (EPS) or E.arnings P.er S.hare. . . . . otherwise seen as "Dividends" under the stock listings in your good ole' newspaper.

And seriously, folks. . . . . in our wicked media age, would you want to base your "outlook on things" upon the "conflicted interests" of these three?

Do the math.

THE PURPOSE of all THESE
FACTS, FIGURES, RATIOS,
& DEATHLESS TORTURE

No pain, no gain!

-- Figure out price charts

THE POINT OF ALL THAT DEATHLESS TORTURE IN THE BEGINNING was to give you the tools "for a reality check" so you can look at a particular stock-- with the interplay of supply n' demand, and mixing in with what you already know about the world-- and figure out whether or not "you should even be on this train", or if there's something "wrong with the engine" that the less observant won't "figure out" until they're stranded "out in the middle of nowhere". . . . . and whether or not it can scrape its way out of a crisis, or if that's even "the smart bet" to begin with; which you may not be certain, if the entire society "is drinking the Koolaid" of fragmentary or hallucinogenic "collective madness" when no one quite dares "to peek under the hood".

When prices move higher or lower, they're trending-- "higher" or "lower" and what you have to remember is back there with the stock listing in yer' good ole' newspaper-- which, by the way-- is probably "old news" depending on how closely you're tracking this market. . . . . what matters is "the see-saw" of price-volume which is best demonstrated visually on a chart with price history like curling cycles. You're going to laugh at me, but to the extent that you can think of this graph as "a smokin' hot guitar solo" with waves and peaks, that rises and falls with rolling "merrie metal harmony", whether "up or down", but preferably up as girls throw their panties at the stage and hop up and down for profitable eye-contact and fuck-trailer prestige. Righteous, dude!!!

If you visually look at "a lil' sector" of a chart there is a little section that has its own "trough" known as the support point-- prices refuse to fall further than this level. . . . . and conversely, there is "the peak" known as the resistance point where the market during that stretch in time is getting skeptical that the stock can sell for any greater than this price.

In a bullish market, "there comes a surprise" with a sudden high volume of trading-- represented with this sudden spike that "defies all reason" and "bucks the trend". One might find it in their interest "to take a risk" and start buying this stock up, joining in with the crowd "rallying on high volume" and buying it "on the breakout".

But then "the market pulls back on low volume" because less folks are climbing on board "this newest, hottest thing" The thing to do is to hover around "like a vulture" and wait for the price to fall, like heavy metal in the discount bin in 1993, or indirectly speaking-- in 1999 when I discovered a cachet of old music and a pretty girl like a prospector in overalls holding a shovel in the air "and whoopin'" like an alkie on payday.

But then, waiting a certain length of time "until the stink wears off"-- the stock or lifestyle or trend or product or Hollywood actress rises again to new heights and the cachet is EVEN MORE VALUABLE as "the double-top"-- buy for the safest bet of all and masturbate in a jacuzzi with a Bettie Boop toilet seat hanging on the wall. You can't BUY that kind of class!!!!!

-- Yeah, well. . . . . . you can have a POPEYE toilet seat!!!!

ell anyway, as Winona moonlights on this winsome, wonderful prospect (-- and deliberates on whether or not to hire back that Private Investigator "to have me killed") on with the show, eh?

But the double-top can be repeated over and over again, even when a stock "is range-bound" or caught in a pathetic little rut, but that's for you "video poker players" throwing long bets on nickels and I sure didn't get nowhere in life putting my 2ข on "The Darwin Awards" or "Howdy-Doody Gang-Bang" for that shall be weeded out "like film festival seating", a "double-bottom" when no one attends and a clown-dummy known as David Wain weeps in the corner with a bowler hat over his eye for the fate of alt-comedy, about as robust as a limping Jew trying to flee the torch-bearing Missourians, but thrown in with the pit-bulls of "the free market" which didn't honor your opus anymore than we did Jane Fonda when she tried to tilt a local election and stirred up the stewing, burblin' wrath "of the pork-rind contingent" like a white trash-fire.

We love PIGS. . . . . and here's our mascot:

Awww, hey. . . . .

If all humor is based "on a touch of cruelty", you're putting me "in my place". Don't you know when to stop?!!!!!!!

S.O.S. . . . . "S.ave O.ur S.tock-tip page before it degenerates further into visually-gratifying self-indulgence.

You want more? THAN PAY ME!!!!!! Your contributions have been niggardly cheap, like I've been squabbling with "Otis" down at the street corner. And you know that neither one of we'se niggerz, black or white, wanna work!!!!!!!!

When you read a stock-chart that covers a certain period of time, say-- intra-day, intra-week, or even intra-hour or intra-minute for all you precisionists out there-- there will be four figures: where the stock opened (-- on the first trade), closed (-- on the last trade), and the high and low fluctuation points of that period. What is far more important is "the close" because that seals up "that average time slice" and sets the stage for the next trading day.

Here is a stock on "an up-trend", nearly reaching "a maximum double-top" (-- toward the center) but then on "a down-trend" with little profitable spikes one can take advantage of before it starts "picking up again" toward the end of the period. To think: that a great deal of our economic woes has to do with the weighted interests "of big players" riding trends, speculating against trends, "waiting with baited breath" before stepping in "like Daddy Top-Hat", or having more of an incentive to deal with the abstracts of finance instead of REAL WEALTH CREATION found in goods & services and investment thereupon "like a golden seal of quality".

But something to remember. . . . . is that stocks with the most dramatic price volume hikes, over the longest period of time. . . . . say, months or years-- are the ones where you can make the most dramatic sweeps in a way that "proves safest". Now, it is possible to make a lot of money "VERY QUICKLY" if prices change dramatically with a sharp spike, but one has to be watching the market "like a hawk" and have safeguards in place either to buy the stock or dump it at a certain $$$ level in case you can't be watching the numbers "all the time". For safety's sake, it always helps not to "commit on the band-wagon too quickly" and see if the spike is truly something "lasting", or is just in record industry parlance: "a one-hit wonder" before it goes back to its tired old range-bound ways, building up its value slowly & surely (-- hopefully). It's almost impossible to truly predict when you've "picked up the best deal" or sold "at the maximum price" because the market "is a strange beast". . . . . that cannot be squarely predicted, only forecasted like the weather.

PERSPECTIVE: Some patterns to look out for in the long term is "The Cup & Saucer" on the left and "The Double-Bottom" on the right. Time and time again, these are what charts tend to look like so you know "the ole' Statue of Liberty" play "and won't be too surprised" when you see how the market "shapes up". KNOWLEDGE IS POWER!!!

Be forewarned-- that like in bodybuilding, there may be all kinds of esoteric exercises and potions and strategies, but that does not make up for simple ground-covering "commonsense" when you follow the basics honestly and forthrightly, like football players hopping through tires and pushing against mattresses "as they go for the win".

It's up to you "to cut through the cobwebs of your mind" and stay focused!!!

When I was talking about the guitar solo example, when the stock is ASCENDING there are higher "highs" and higher "lows" as it builds to a peak. When a stock is DESCENDING there are lower "highs" and lower "lows", when sometimes the stock may reverse itself and bob back up "or retrace" before once more trending lower and lower. One could practically draw lines over an extended period of time, from the most recent point on the graph backwards "to map out a visual line" of this shifting range of where you could practically "expect the stock to go" and from there, make educated guesses and react. . . . . given a few days of caution, whether to get excited with a bit of extraordinary activity to make profit and do your best "to eek past The Law of Averages".

Check out these patterns and what you can roughly expect from them:

For "The Flags", the channels are staying consistent.

For "The Pennants", the channels are narrowing.

Details, Details, Details. . . . . you gotta know how to "work the trading floor" like a gunslinger with "the lingo" and terminology.

Check this out:

"Market Order"-- When you place one of these, it means that you grab the stock from your broker on "the sales floor" at "whatever the going rate", hopefully after you've done your research and know WITH CONFIDENCE that right there is the stock you want.

***NOTE*** What exists before your broker in some markets is like a table, a platter of options. Assume that you wanted to get the best price on an old "Super Mario 3" Nintendo cartridge. One might be going for $1.89, another for $1.93 and still another for $2.00 even. "Close in price", and your hired hand is going to attempt to grab "your best choice" even as the selection flies on and off the table with the purest example of this being those hollering fellers down on the floor of the stock exchange executing the biggest, most important business of the day for the largest entities.

Trip-Wire Tactics

-- These following concepts are set up like either a VCR clock radio, or a shotgun tied with a string pointing at the door "so you can rest easy".

Here we go:

Buy Limit Order: When a stock reaches a certain price or lower, let your broker automatically move in and pick it up for you. . . . . this could prove to be a real bargain in the future.

Buy Stop Order: When a stock reaches a certain price or higher, let your broker sweep it up on your behalf because this stock is now getting "hot".

------

Sell Limit Order: When a stock reaches a certain price or lower, let your broker sell it; theoretically in order "to cut one's losses".

Sell Stop Order: When a stock reaches a certain price or higher, let your broker sell it; the market is probably "overheating" and it's time "to get out".

Limits = Floors
Stops = Ceilings

---------------------

MORE Trip-Wire Tactics

Stop-Limit Order: What makes this one different, is once a stock reaches a certain price "you change tactics" and set up "new specifications" of how and where to proceed. If there are three conditions before you buy a stock, two events must sail through the gates of caution before it becomes "a serious contender".

Day Orders: These are only good for that single trading period "while the clock is ticking" through a particular morning and/or afternoon.

Good til' Canceled Orders: Unless you say otherwise, or it's in the terms and agreements that they are otherwise set to expire after a period of days or weeks, "your executive command" is taken at face value until it is either fully carried out "unto death" as the situation provides, or until one otherwise "cancels".

Don't lose track of this stuff!
Write it down!

When you deal in stocks, one understands that "you win some, and lose some" but always have "an exit plan" of when "to kiss it goodbye". One thing to look out for, is that they don't own stocks "on the margin"-- or front stock value for losses that you will otherwise "have to pay out of pocket". Much with "selling short", or betting that a stock will come in "diminished" (-- with betting spreads on different levels) so you "pocket the difference". For indeed, what is stock market but a casino?!

If you play a decent, conservative game of "Tetris" without taking foolish, unnecessary risks, ever-ratcheting up the intrigue and the danger "bit-by-bit" as you inch toward "the big score", whatever that may be-- when "one is never enough"-- then you can retire "healthy, wealthy, and wise" unlike Mr. Bernie Madoff who should have kept it to "bytes for a bit", perhaps of the 25ข variety down at the local arcade where you can always knock the side of the machine, bear your teeth in the frustration "of good fun", and leave.

GET IN THE RING!!!

Gotta know "Your Venues"

"The N.ew Y.ork S.tock E.xchange" (NYSE) is the "Big Leagues" that admits only the biggest, most lionly contenders.

"NASDAQ" or "The N.ational A.ssociation of S.ecurity D.ealers A.utomatic Q.uotation System" is a bit more like that Nintendo game buffet I was talking about earlier, and the main difference between them and the NYSE is that the royal hall has one man assigned per corporation to manage the prices like a royal attendant while out here on this smaller, faster growing venue, the brokers are wheelin' & dealin' via computer screen "on the quick draw".

"AMEX" or "The A.M.erican Stock E.X.change" deals in lower-card companies which is the equivalent of "the bush-league", curb-side vendors full of the young & hungry. . . . . or old tired "stand-by's" who ain't goin' "any higher" like some of the old hands in Sylvester Stalone's gym in the original "Rocky".

(This may sound quirky, "and makes perfect sense" when you think about it, but usually "NASDAQ" is the easiest tent to sneak under with a long and storied history of colorful characters "who took long bets" and built some very well-known companies. I wink at this as "a half-Jewish bullshit artist" here at "Insufferable Industries")

Here's Something for You--

www.virtualstockexchange.com 

And when you're ready. . . .

    a) "The Wall Street Journal" (www.wsj.com)

    b) "Edgar" (Government Earning Reports)  (www.sec.gov/edgar.shtml)

    c) "The Beige Book". . . . . two weeks before the Federal Open Market Committee (FOMC) meets, a booklet comes out that tallies their thoughts at: (www.federalreserve.gov)

    d) Standard & Poor's (Analysts' Report) (www.standardandpoors.com)

        -- Business Week allegedly has some extra info at: (www.businessweek.com/investor)

    e) Hulbert Financial Digest (Stacks up investment letters in one place). . . . . (www.Hulbert-Digest.com)

http://www.wired.com/magazine/2010/12/ff_ai_flashtrading/

(Back to "Notes on Economics")

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"You want a-nuther song? Well I ain't plain' one mutherfuckin' note until someone comes up here and puts sum money in my god-damned tip-jar! You know I only came here for one purpose. . . . . to take yor fuckin' cash! Why, I could make more profit puttin' out my meth-head neighbor's asshole and ringin' a bell, hollerin' 'Man for sale! Man for sale!'

. . . . . . . . . . . . . . . . .

(Rheeee of Crickets)

. . . . . . . . . . . . . . . . .

("I heard that, Missy!")

ฉ 2010 by Insufferable Industries

Drop "The Bard" a line at
michaeladams_s@yahoo.com

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