Thursday, August 25, 2011
Wednesday, August 24, 2011
Saturday, August 13, 2011
Risk Management
So which is more likely to kill you, an earthquake or a war? Getting bitten by an alligator or being shot by the police? Well according to the National Safety Council, your chances of being killed by an earthquake are a mere 1 in 153,000, while dying from a war related incident happens to 1 out of every 137,141 Americans. Getting bitten or crushed by a reptile carries with it a 1 in 3,839,935 chance of happening (making it the 50th most common cause of death in the US), while police shoot and kill 1 in 10,666 of their fellow citizens (that's more than die of alcohol poisoning, but fewer than drown in the bathtub).
Meanwhile, the number one killer of Americans is probably the most preventable. It's heart disease, which claims one out of every six deaths. Which just goes to show how bad we as humans are at risk management. You are actually more likely to die from contact with hot tap water than you are to die of AIDS, but when was the last time you heard a public service announcement about the dangers of water? Unfortunately for us we usually conflate the grisliness of a death with its likelihood of occurrence, which causes us to improperly evaluate our risk.
The same thing applies to this stock market. You generally get two types of traders. Those who always hope that their losing stocks will go down, and those who are so afraid their winning stocks will lose money that they sell way too early. We've had our fair share of hits and misses here at Royalty Trades, but we've always done well for ourselves in the long run. The key, as always, is to have a properly diversified portfolio, and be when other are fearful, and fearful when others are greedy. Follow these steps, and you'll be well on your way to funding the retirement of your dreams.
Meanwhile, the number one killer of Americans is probably the most preventable. It's heart disease, which claims one out of every six deaths. Which just goes to show how bad we as humans are at risk management. You are actually more likely to die from contact with hot tap water than you are to die of AIDS, but when was the last time you heard a public service announcement about the dangers of water? Unfortunately for us we usually conflate the grisliness of a death with its likelihood of occurrence, which causes us to improperly evaluate our risk.
The same thing applies to this stock market. You generally get two types of traders. Those who always hope that their losing stocks will go down, and those who are so afraid their winning stocks will lose money that they sell way too early. We've had our fair share of hits and misses here at Royalty Trades, but we've always done well for ourselves in the long run. The key, as always, is to have a properly diversified portfolio, and be when other are fearful, and fearful when others are greedy. Follow these steps, and you'll be well on your way to funding the retirement of your dreams.
Wednesday, August 10, 2011
Bottom Forming
We were a little early in our long call last week, but we do think that stocks are oversold at the moment and we'll see a bottom forming sometime between this Friday and the next. For the record we are currently long BGZ, but expect to exit that position in the near future.
Wednesday, August 3, 2011
Well That Was a Doozy . . .
As you can see, we got in a little early, what with BGU going for $68.03 at the time of this writing. But we're actually fairly confident the market starts turning around tomorrow. So stay tuned.
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