Investing

Finding a Good Stock Trade

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I preach that long-term investors should have a diversified portfolio tailored to their time frame and risk tolerance until I’m blue in the face around here. If you already have a that portfolio and you are fully funding it, only then should you think about shorter-term investing. Finding a good stock trade is the mission for short-term investing. What Is The Difference Between Trading and Investing? First, let me just say that day trading is a different thing. If you are interested in day trading, you’ll have to read about that elsewhere. Second, what is the difference between a stock trade and a stock investment? The answer is your intentions. A trade is something you plan to start and complete. If you plan to hold the stock without a trigger for ending your ownership, then that is an investment. For example, if I think XYZ Corp is trading too low at $50 per share, I might buy XYZ Corp with the idea of selling it for $60 per share. Whether or not this ends up being a good trade depends on whether I do get to sell it for $60 per share, and how long it takes for that to …

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Advanced Mortgage Tricks

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Advanced Refinance Tricks For the Financially Well Off Got plenty of money socked away for the kids’ college? Already have a retirement plan and funding it well? When someone asks about an emergency fund do you think, sure, which account would I use? Then, here is a trick for you. Mortgage interest rates are at historic lows. As I write this, it wouldn’t be hard at all to get a 3% mortgage if you have good credit and put 20%+ down. What if, you took $100,000 out of your mortgage with a refinance that lowered your interest rate enough to cover all closing costs, and then, put that $100,000 into a solid dividend paying stock? Just for example, right now, Verizon pays something like 4.85% per year at its current $52.50 stock price. If you took the $100,000 you got from your cash out refi, and invested in in Verizon stock as a long-term investment, Verzion would spend the next 10 or 20 years paying you the equivalent of 4.85% on your $100,000 stock investment. Which means you are earning more on your investment than you are paying on the extra mortgage principal. Now, you do have to pay 15% …

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Is There Really a Santa Claus Rally?

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There are so many investing maxims that it’s hard to know why anyone needs to do any research into stocks and bonds at all. I mean, how hard can it be to invest? Why do people put so much effort into it? At any time of year, there is a tried-and-true maxim to tell you where to invest your money right now. Stock Market Sayings *To the tune of Here Comes Santa Clause* Here comes platitudes, here comes platitudes… *End song* The most famous Wall Street market saying is: Sell in May, then go away. It rhymes! It must be true. The idea is that historically the market sort-of, kind-of, under-performs during the summer months. Of course, there are plenty of years where this isn’t true, especially now that Manhattan bankers don’t head for the country and stay there all summer long. There’s also a Super Bowl Stock Market Indicator which says that if the team from the AFC Division wins the Superbowl, then the market will have a down year. Conversely, if the NFC Division team wins, then the market will have an up year. My personal favorite is the Hemline Theory, or the Skirt Length Theory which suggests …

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Galera Therapeutics Decides Its Drug DOES Work

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So, I’ve been examining (procrastinating by looking at other stuff) the various tools that come with all of these no-cost investing apps like Webull, Stash, Robinhood, and the like. I’ve also been playing around with the idea of delivering some micro-posts here on FinanceGourmet. Usually, I try and fully cover financial advice, or financial independence strategies and topics, in full detail. However, maybe some quick hits would be valuable along the way as well. We’ll see how it goes. Galera Therapeutics Stock Rises 100% On Error Typically, when a company reports a big-time error, its stock goes down. Not Galera Therapeutics. Today, the company issued a press release before the market opened stating that it’s Phase 3 drug trial DID achieve statistical significance after it reported earlier that it DID NOT achieve statistical significance. The Company previously announced the Phase 3 ROMAN trial of avasopasem in SOM did not achieve statistical significance on the primary endpoint. Upon further analysis, an error by the contract research organization (CRO) was identified in the statistical program. Correction of this error resulted in improved p-values for the primary and secondary endpoints. Galera Therapeutics – Galera Announces Primary Endpoint Met Statistical Significance in Corrected Topline Efficacy Data …

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Is Best Buy Stock a Buy?

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Do you feel lucky? Well, do ya? Punk. Best Buy reports earnings next week on Tuesday 11/23/21. Is Best Buy stock a buy before earnings? As you can tell from the subheading, there is a lot of uncertainty around buying Best Buy stock here. Don’t get me wrong. Best Buy is doing really well. Sales are up. Some of that is from the pandemic. If you’re going to be stuck in your house you want a bigger TV, better speakers, a new Nintendo Switch, an Oculus VR headset. You get the idea. But, Wall Street is not stupid. They know that about Best Buy’s sales and it is all baked into expectations for the retailer. However, here is where it gets interesting. According to the Best Buy stock quote page on Yahoo Finance, the consensus projected earnings for Best Buy to report in Q4 is the same as it was for last quarter at 1.85 per share. Last quarter, Best Buy shattered that expectation by reporting 2.98 per share. So, where does that put us? There is the possibility that Best Buy and its upper management are strict, straight-arrow, by the books executives. On the other hand, there is the …

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Retirement Tax Triangle for Better Retirement Planning

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Financial advisors make their bread and butter from retirement planning. Unless you’re wealthy (or young), chances are that most of your money is in your retirement savings and home equity. That makes your retirement accounts the main interest of most financial advisors, so it’s in their best interest to make it sound complicated. Unfortunately, they are right. There are a bunch of little tricks to good retirement planning. Fortunately, most of them are easy to straighten out, like the tax triangle. Retirement Taxes Welcome to Retirement. Oh, while you’re here, we need to tax those 401(k) withdrawals. All too many new retirees find themselves surprised that withdrawals from their 401k accounts are fully taxable. It’s an easy mistake to make. After all, when you contributed money to your 401k it was tax-free (technically, pre-tax, but same difference). And, while all of that money sat in your 401k earning interest and dividends, it was tax-free. So, why wouldn’t it keep being tax-free? Unfortunately, that’s the deal you make with the IRS. A 401k plan is actually a tax-deferred account. As the name implies, the IRS allows you to defer, or wait, to pay the taxes. It is a huge advantage and …

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Tesla Shares Fall as Musk Offers To Sell

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Tesla Shares Fall as Musk Offers To Sell 1

People are always saying things like Bill Gates is worth $XX billion based upon the current Microsoft share price times the number of shares Bill Gates owns. While this is a reasonable approximation –and unless Gates is going to throw open his books, the only one we have– it is actually completely unrealistic. The same thing is true of Elon Musk, even though he has two big chunks of stock. Big Sells Equal Big Falls One of the problems with deciding that anyone is worth their shares times the share price is that the reality is that their shares are at once worth both more, and less, than the current share price. Ever wonder is Zelle a scam? In sort of a Schrödinger’s Cat of stock prices one can see how someone like Musk’s stock is worth both more and less than the current price per share. We got a nice example of the “less” thanks to Musk’s weekend tweet. On Saturday, Musk proposed selling 10% of his Tesla stock, if the people voted for it. By the time the poll ended, over 3.5 million people had voted (or more specifically 3.5 million Twitter accounts had voted). The result was …

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Dell Spins Off VMware

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It was kind of weird when Dell bought VMware in the first place. It was billed as sort of a move to get Dell into the enterprise space by having sort of an inside track with VMware. If that wasn’t weird enough the mechanics of the merger were even weirder, where Dell basically bought a lot of shares of VMware, but not all of them, allowing VMware to continue trading on the stock market, even though it was functionally a part of Dell… or sometime. Ironically, just when it seemed like VMware would be a significant part of the future of enterprise computing, it was made superfluous by the rise of cloud providers like Amazon, Google, and Microsoft providing their own virtual hypervisor platforms and management systems. Much of VMware’s market share these days is simply the inertia of companies that haven’t moved on. Anyway, Dell spun off VMware today by giving the 81% of VMware stock that it owned to Dell shareholders. For each share of Dell stock, shareholders get 0.440626 shares. In lieu of fractional shares, the company will pay out cash, so if you have 100 Dell shares, you’ll get 44 shares of VMware and cash for …

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What Is The Flippening?

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What is the Flippening? What does Flippening mean? When you get a word like that, you know it comes from the “new school” investors. Maybe it’s the meme-investors. Maybe it’s a new retire early term. When Is The Flippening Going to Happen? You just knew something like the Flippening would be about crypto. Is Acorns a scam? Now, I don’t usually do a lot of crypto advice here because, honestly, I think everyone is still figuring it out, and I’m not trying to build a cutting edge crypto reputation or anything like that. However, I cannot resist a good acronym or term, and the Flippening is just too good to pass up. The Flippening sounds sort of horror movie-ish, and you aren’t wrong, per se. The Flippening refers to the potential future event when another cryptocurrency, likely ether, overtakes bitcoin in market capitalization. In other words, when bitcoin and ether “flip” places as the #1 and #2 cryptocurrencies. Why Is There a Flippening? You have to really dig into cryptonetworks and how they work to get a full answer, but the short-version is that a recent upgrade to the ethereum network makes it more likely that ether, ethereum’s native token, …

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Trump SPAC Investing

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Anyone who reads Finance Gourmet on a regular basis knows that the new Trump SPAC isn’t the kind of thing I’m going to analyze, let alone recommend investing in. But, for some bizarre reason, I keep get some questions, so here is some really quick Trump SPAC company facts. What Is a SPAC? SPAC stands for Special Purpose Acquisition Company. It is sometimes called a blank-check firm. It’s a weird setup where a company that is a publicly traded company buys a private company, thereby acquiring its business and making it a publicly traded company without having to go through the official IPO process. What Is Trump’s SPAC? In this case, Trump Media & Technology Group, which has no products, no revenues, and no profits. Is merging with already publicly traded company called Digital World Acquisition Group. Now, Trump Media & Technology Group can be publicly traded. Check out my Zelle review. Why Is Trump’s SPAC rising so much? If you remember earlier this year when numerous investors piled into AMC in part as some sort of crusade to stick it to the man, then you have some idea of what is going on here. Investors, some old, some brand …

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