Hurry Up—Things Might Get Better By Lynn Carpenter 
It’s a well-known fact that value investing, widely admired and honored, is the very model of the path to buying low and selling high. The irony is that it’s easier for people to follow the path when it doesn’t matter. In a bull market, value stocks may be slightly overlooked names, but if you go astray into popular ideas, what the heck. Everything’s going up. In a bear market, though, value stocks are downright scary ideas. They’re hard to love. It’s not my term, but many value experts call them the unloved, the hated, the despised. Compared to other stocks, they’re cheap in terms of price compared to their earnings, sales, cash flow or assets per share. This year, value investing is working exceptionally well. I know it for a fact. But what are investors looking for? Trends. Ideas. Secrets. They want to know what to buy if interest rates change, if we have a recession, if oil prices drop… And you can hardly blame them. It’s the scary factor. Value’s not for cowards. More than that, it’s not particularly intuitive, even if you’re brave enough to buy the unloved. Would you have bought value stocks like a foreign airline, an employment agency, a company heavily invested in real estate this spring? They were values, and they’ve all gone up. The reason I can tell you so emphatically that value is working exceptionally well is not because of some glib deduction that dividend-paying stocks are beating growth stocks, or that low P/E stocks are edging out high-P/E stocks. It’s not even because the S&P value index is beating the S&P growth index, which is a travesty as far as I am concerned. I can say how value is performing because I seek it out the hard way. Each year I take a survey of about 150 industry groups to find out which ones are storehouses of value stocks. INTERNAL ENDORSEMENT Winners Cherry Pick!
Losers Bottom Feed Thousands of stocks have just fallen 40% or more... most will continue to tumble… but you should still overpower the markets. Because a select few stocks are now set to roar back for outstanding near-term gains.
It’s time to party like it’s 2002
You don’t want to miss out… because, today, you can jump into any one of seven companies at what should be their once-in-a-lifetime lows… each is poised to take you to new highs. Grab this low-hanging fruit here. | And this year, value is mopping up the place. With the transition to Investor’s Daily Edge, I was a little slow and began my research in December and wrote my annual sector outlook in late February. In the March Rising Tide issue, I highlighted what I thought were the seven most undervalued industries and what I felt were the best stocks in each of them. I added them and a few more to the Rising Tides Market Outlook 2008-2009 report in early March. Now it’s three months later, and 26 of the 32 stocks I highlighted as best stocks in the worst industries are winners. The six losers are down only modestly. For comparison, only one in three stocks in the whole market are up even a hundredth of a percent this year. These results are unusually fast. I expect good things to come from my annual “Rising Tides” report because it spots value in a way you can’t find with simple search. It’s based on historic P/E ranges and “drifts” for industry leaders over the past decade or longer. It’s a ton of number crunching enhanced with judgment, and it takes me weeks to do it each year. Normally, some of the undervalued sector selections may begin to move up quickly, but often value takes its time. Usually, I expect the deeply undervalued industries to get righteous in 12-18 months. Having so many undervalued stocks go up so consistently in three months, in a bear market, is something worth noting. It tells me two things, and I hope you are paying attention because it affects your potential results as an investor: Most important, value stocks tend to lead the way out of bear markets, and that is happening now. With an election looming, I’m not sure we’ll see a bull market recovery this summer, but the odds for one in late fall are very, very high. Second, that means your best shopping days are in danger of running out. Yeah, I know, “buy when others are fearful” is standard advice. But I can give you a better reason than that. Respectfully, Lynn Carpenter P.S. To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. [Ed. Note: For more companies that can protect and grow your wealth, check out Lynn Carpenter's Rising Tide Letter. She recommends companies that consistently deliver outstanding results. Click here for more info.] The Investors' S&P By Lynn Carpenter You’ve no doubt heard that most mutual funds fail to beat the S&P 500. That suggests they aren’t very good. I don’t think I’ve ever seen anyone explain how so many professionals can do so badly. At most, researchers who have studied the phenomenon suggest fees and transaction costs are the reason. But that’s not the whole story, because you couldn’t beat the S&P 500 if you faithfully bought the S&P 500 itself every year. Not if you invested regularly. The S&P results (and the Dow, Nasdaq and any other index) are a sort of hoax. I’ll use a stock example to show you the process. Suppose you bought a stock in January that was up 20% as we round into June—about 4% a month. That’s nice performance in a bear market. Now, suppose you bought a stock last month that was doing even better. It’s gone up 15% in only two months. You’re hot. Next, you find another winner that goes up 10% in one month. You’re really hot. Each choice is better than the one before it. What happens to your results? Your average falls from 20% to 17.5% when you add the second stock. And with the third one, it goes down to 13.3% overall. You kept buying better stocks, and your results kept going down compared to what you’d have if you’d just bought the one stock in January and skipped the others. That’s how index comparisons mislead investors. When the S&P is up 5% for the year, this measures the return as if you had made one and only one “purchase” of the S&P at the beginning of the year. But we don’t invest that way. That’s why I calculate an “Investors’ S&P” from time to time. In this version, I assume an investor puts $1,000 into the index on the first trading day each month. The results tend to be quite different from what the S&P is supposedly doing. In 2006, when I first calculated this, the S&P supposedly did 13.6% that year. But anyone who bought into it on a monthly basis made only 8.7%. Needless to say, lots of fund managers failed to beat the S&P that year, and not all of them were doing a bad job. Guess what fund managers do that indexes don’t? They keep adding shares. In a bear market, though, the effect of regular purchases works to the investor’s advantage. The more the market falls, the more shares a $1,000 investment buys. When the market recovers, those extra shares you got on the way down sweeten profits on the way up. This year, the S&P is down 4.6% from the beginning of the year to June 2. But investors who put in money regularly are doing better than that. Much better. If you had put $1000 into the S&P at the beginning of each month this year, your return would be 1.2%. That’s quite a bit better than -4.6%. And suppose you stop right now and the S&P finishes the year slightly positive, ending the year at 1540. For the index, that would be a 5% gain. For the regular monthly investor, the return would be 11.4%. More than twice as much. That’s what bear markets do for you. Everyone focuses on how they are “losing” money because they only see the price quotes going down, not the opportunity to buy extra shares for the same money. But if you are continuing to buy in a bear market, you are accumulating assets at great discounts. You want to know where the dollar is getting stronger? I’ll tell you… look to the stock market. It’s hard to throw money into the market when it’s sinking. But that is exactly what you should hope for if you are buying. You will make more money on what you invest during a bear market than you will in all but the most runaway bull markets. [By the way, I know this will come up: about the undervalued sectors and best stocks I mentioned above—here comes the nudge—they are in the Rising Tides, RTVL Market Outlook 2008-2009 report, which belongs to Rising Tide Letter subscribers. If you want to know exactly what’s in it, sorry, you have to be a subscriber. Hey, I love you darling, but no specific investment names before we’re married—you have to be a Rising Tide subscriber to get Rising Tide reccos. But I will say this, I work cheap. Rising Tide is only $99 a year, and the sector report is worth more than that all by itself. The great investments are still good buys.] INTERNAL ENDORSEMENT 152% Overall Return Last Year… 13 Winners Between 46% and 173% in the Last 90 Days Forget what you’ve heard about how tough it is out there - how the market is falling, and the sky is too! In the last few months, subscribers to Rick Pendergraft’s K.IS.S. Investing had an opportunity for gains of 159% on Continental Airlines… 173% on the ETF that tracks the Dow… 129% on the ETF that tracks the Nasdaq… 89% on Verisign and another 71% on XM Satellite Radio. And here’s the REALLY good part… for a limited time you can gain access to Rick’s research FREE for life… keep reading for all the details. | If you enjoy IDE's daily investing advice, you'll definitely be interested in checking out our sister publication, Early to Rise. Each morning, you'll get powerful wealth-building advice covering real estate, entrepreneurship, personal finance, marketing, and much more.
Sign-Up for Early To Rise today!
To unsubscribe, Click here To change your email address, Click here To cancel or for any other subscription issues, write us at: Investor's Daily Edge
245 NE 4th Ave, Suite 201
Delray Beach, Fl 33483
Phone: 877-465-1416 | 
12.37
22.66
