* Highly Recommended *
What to Do with Some of Your Money in 2006
At
the beginning of January I wrote in ETR that the investment
market was looking positively "schizophrenic," trading
up one day and down the next and ending the month right back
where it started. Under most circumstances, a market like this
is very difficult to profit from. Consider the commentary I
received from an investment newsletter yesterday:
"This
market remains a difficult one to trade. I say that because
for the last several weeks, neither the bulls nor the bears
have been able to take control. To give you an example of just
how difficult this trading climate has been, consider the following.
Over the past two months, both the Nasdaq Composite and S&P
500 have each oscillated within a tight 4% range... When we're
stuck in the type of tight trading range we've experienced for
the past two months, trading becomes more of a challenge..."
When
I wrote about this in January, I made four suggestions as to
what to do with your money under those circumstances. One of
my suggestions was to, seek investment strategies that can increase
in value whether the market trades up... down... or flat.
With
that advice, I highly recommended that you investigate ETR's
flagship trading system, the Three
Minute Trader, which thrives under precisely
these conditions. This is not a "swing for the fences system."
It is designed deliver a moderate monthly return, and a high
percentage of gains vs. losses. In January, the service delivered
9.39%... in February, 11.77%... and just yesterday, March closed
out with a gain of 8.87%.
If you would like to learn about a risk-averse, high-reward strategy that can deliver strong returns in an up or down market... this is the service that gets my highest recommendation.
- Will Bonner
How to Write Great E-zines
This morning, I wrote a letter to one of my clients, a very smart guy who publishes a large investment e-zine. I had heard that his open rates were poor and I could see, from the financial statements that come to me every month, that his revenues and profits were descending. After reading a week's worth of his e-zines, I felt I knew why.
I wrote him:
"I've been reading your e-zine for several weeks now, and I must tell you that I think you should check your open rates. If they are not what you'd like, the trouble may be in how inconsistent the writing is.
"Your stuff is usually dense and clever. Today's was sort of technical and glib. As a reader, I'm wanting a friendly, familiar voice ... and I'd be more than happy with just a single interesting idea from you every day.
"Imagine your e-zine as a housemate and each issue as the first thing he/she says to you when you wake up in the morning."
I think that last insight is really good, if I do say so myself. And one person who really knows how to do it is Matt Furey.
I've recommended Matt to you before. He's a martial arts/fitness expert who is also a damn good marketer - particularly on the Internet.
About a week ago, I signed up for his daily e-zine. And I've been blown away by it. It's good. Really good. Quick, hard-hitting, and persuasive.
If you want to learn how to write for the Internet ... if you want to understand how to get your e-zines opened ... subscribe to Matt Furey's Inner Circle http://www.mattfurey.com/furey_inner_circle.html and study what he does.
- Michael Masterson
"The greatest mistake you can make in life is continually fearing that you'll make one."
- Elbert Hubbard
Beware "The Big Mistake"
By Robert Ringer
It was a sad day in the hallways of my son's high school last week. Students were in a state of mourning for "Tom," a popular senior who sported a near-perfect academic record.
Tom was also a starter on the varsity basketball team and involved in many school activities. Ironically, just days before his "demise," he received word that he had been accepted at Princeton.
Then, overnight, Tom became a poster child for the case of EQ over IQ. Notwithstanding his stellar record of making consistently intelligent decisions throughout his young life, his "emotional intelligence" failed him when he needed it most.
The good news is that Tom did not die. By his demise,I was referring to his being expelled from school for having drugs in his backpack. Worse, there apparently was evidence that he had taken it one step further and was actually selling drugs.
The news stunned the entire school community. I didn't know the young man personally, but I had heard enough about him to be aware that he was respected and popular with students, faculty, and parents alike.
So, the question everyone is now pondering: What on earth was an intelligent, all-American young man like Tom thinking when he brought drugs to school? I can only conjecture that it was a combination of not thinking much at all (at least not about the possible consequences of his actions) mixed with a bit of senior omnipotence.
This sad and shocking incident struck a bell with me, because I have long been fascinated by the ramifications of "The Big Mistake." What I'm referring to here is a mistake so big that it can destroy such precious assets as reputation, marriage, and earning capacity. In extreme cases, it can even cost a person his life - and often has.
I want to be very careful here to avoid leading anyone to draw false inferences from what I'm about to say. For all the reasons I've written about in the past, I believe it's important, and healthy, for a person to be action-oriented. Bold, consistent action is the preeminent factor that determines how an individual's life plays out.
Further, risk-taking is implicit in the term action-oriented.Success is not possible without risk-taking action. A near corollary to this is that success is not possible without failure. Thus, the wise person takes consistent, bold action and embraces failure, because he understands that each failure brings him one step closer to success.
So, how does a person differentiate between bold action that leads to The Big Mistake and bold action that leads either to success or to "healthy" failure? This is a sticky wicket, to be sure, but I don't believe it's as complicated as it appears to be on the surface.
In Message #1408, I discussed the topic of common sense at length. I stand on everything I said in that article, and I firmly believe that common sense is your best defense against making The Big Mistake.
But what makes it tricky is that the form of The Big Mistake can vary widely. Some Big Mistakes are made impulsively, on the spur of the moment, while others are made after considerable reflection. In the latter case, the problem usually is that the person allows his intellect to get trampled by his emotions.
A classic example of The Big Mistake being made on the spur of the moment would be when the legendary Woody Hayes, Ohio State's head football coach for 28 years, punched a Clemson player during the 1978 Gator Bowl. The morning after the incident, Hayes was fired.
Woody died on March 12, 1987, at the relatively young age of 74. Though I wasn't a Woody Hayes fan, I felt genuinely sorry for him during his last years. He lived out the remainder of his life as a sort of pathetic figure who had lost everything because of one impulsive moment that led quickly to The Big Mistake.
Nicole Simpson, on the other hand, is an example of someone who made The Big Mistake by allowing her emotions to override her intellect over a long period of time. After the infamous O J purportedly raped her on their first date, she certainly had the intelligence to know that she was getting involved with an incredibly bad human being. Yet, she chose to continue the relationship ... and ultimately married him.
Again, do not draw a false inference here. I am not implying that Nicole Simpson deserved to be hacked to death. On the contrary, all who knew her described her as a loving and caring person, as well as a great mother.
Nonetheless, I believe she made The Big Mistake by becoming involved with someone who was notorious for living life in the fastest of the fast lanes in fast-lane L.A. And she continued making The Big Mistake by staying with OJ after repeated spousal-abuse episodes.
So, my purpose here is not to chastise an innocent victim of a cold-blooded murder, but to point out just how costly The Big Mistake can be. We are warned early on about what happens to children who play with matches. The problem is that, as adults, we are often overconfident about handling matches.
Now, you might be thinking, "That may be true. But O J made The Big Mistake, and he didn't suffer any consequences." There is no question in any sane, honest person's mind that he didn't get what he deserved - being hung upside-down, Mussolini style, at the entrance to the Los Angeles Memorial Coliseum.
But he did lose his most-cherished asset - his phony nice-guy image. In addition, he lost his capacity to earn a living ... he lost his beloved fast-lane life in Los Angeles and was virtually forced into exile in Florida ... and he lost most of his friends.
O J may put on a happy face in interviews, but I'd be willing to bet that he feels like he's trapped in a living hell (not to mention the possibility of a greater hell that may be waiting for him when he crosses to the other side).
The Big Mistake is another one of those subjects that deserves a thousand-page book to discuss in any kind of worthwhile detail. However, since I won't be writing a thousand-page book on the subject anytime soon, I'll end my abridged observations on this subject by making two last points.
First, you should constantly remind yourself that, as a human being, you are not omnipotent. If your gut tells you that something is wrong, don't ignore it because you believe you will "somehow work it out." There is a fine line between rational risk-taking that feels right and irrational risk-taking that feels wrong. Trust your intellect and your gut rather than your emotions.
Second, the good news: In most cases, people get another chance. In the case of Tom, he has the opportunity to convert The Big Mistake into the most positive learning experience of his life. At his age, and with all that he has going for him, he has a lifetime to overcome the mess he's created for himself.
If Tom has learned the lesson of just how costly one major error in judgment can be, he can become something greater than he might have been had he not made The Big Mistake in the first place. And, someday, he will have the opportunity to reap extra dividends from his experience by telling his children and grandchildren about how a foolish mistake almost destroyed his life.
And so it is with all of us. If you've made The Big Mistake and are now suffering as a result, you have the tools to overcome it. I'm not talking about resources, but resourcefulness.
If you've been fortunate enough to avoid The Big Mistake till now, your best bet is to be ever vigilant about not falling prey to it in the future. By all means, take action. Lots of action. Bold action. And don't be afraid to make digestible-size mistakes. Failure is a stepping-stone to success; The Big Mistake can be a stepping-stone to irreversible disaster.
Today's Action Plan
Don't let fear of failure keep you from taking bold action to achieve your goals. As Robert Ringer points out today, failure is a stepping-stone to success. Just make sure you recognize the difference between action that could lead to failure and action that could be a life-destroying mistake. The Big Mistake can sometimes be converted into a positive learning experience ... but far better to avoid making it in the first place.
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"I was laid off as the IT Director of a credit union due to budget cuts - and instead of pursuing another position with a company, I am diving into real estate. I plan to obtain my license in 2 to 3 weeks. Also, I always had tremendous confidence in my writing skills and recently it was discovered. I now have received a freelance project as a writer for an exclusive subdivision in Austin, Texas.
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What You Need to Know About Carbs to Live Long, Lean, and Healthy
Yesterday, I told you that "low-fat" diets are missing the point. Rather than focusing on the "amount" of fat, you should focus on the type of fat. And the same is true for carbohydrates. Rather than "low-carb," your focus should be on choosing "healthy carbohydrates."
All carbohydrates break down into glucose in your digestive tract. However, good carbohydrates (foods that are natural and unprocessed) break down very slowly. These foods also provide a rich source of fiber and beneficial vitamins and minerals. The best sources of healthy carbohydrates are non-starchy vegetables, whole fruits, and legumes.
Unhealthy carbohydrates are those that have had their fiber, vitamins, and minerals stripped away by processing. And because they are refined, they release glucose into the bloodstream very rapidly. This causes a spike in insulin levels, which, kept up year after year, can lead to obesity, heart disease, diabetes, and cancer. Carbohydrates to avoid include sugar, soft drinks, flour, cereal, breads and baked goods, pasta, and fruit juices.
The message is the same: Mimic the diet of our ancestors and eat unprocessed, natural foods. Do this and you will enjoy robust health, a lean body, and greater satisfaction from the foods you eat.
- Jon Herring
It's Good to Know: The Price-to-Earnings Ratio
By Andrew Gordon
I often talk about a stock's P/E or price-to-earnings ratio in my articles for ETR. While P/E may be one of the most common ways of evaluating a stock, its interpretation can be difficult for novice investors - especially since all P/E ratios are not calculated the same way. Here is some basic information to help you understand what it means:
-
Some analysts calculate a stock's current P/E ratio by using the past six months of the company's earnings (net income from continuous operations found in the income statement) and the estimated earnings of the next six months.
-
Those who use the "trailing P/E" ratio, work with the past 12 months (often designated as "TTM" or Trailing Twelve Months) of actual earnings. You'll typically see this ratio used on the Yahoo! Finance stock screener.
-
The "forward P/E" ratio is typically based on the estimated earnings for the next 12-month period. Although it is not as reliable as the current or past P/E data, it nonetheless gives you an idea of the expectations of a company's potential growth.
-
Historically, 15 has been the average P/E ratio. If a stock has a P/E of less than 15, this may indicate that it is undervalued. Above 15, and you may be getting less than your money's worth. Find a P/E in the single digits and there's a good chance that you're looking at one heck of a bargain-priced stock with an upside that can earn you a nice profit.
Keep in mind that there is much more to a stock investment than P/E ratios ... but they are a good place to start.
(Ed. Note: Andrew M. Gordon and his staff, along with Dr. Erik Epp, have created a new free weekly e-letter called Money Insight: Useful Ideas for Growing Your Money Quickly and Safely. In this age of cheap "information," Money Insight deciphers the best safe-money strategies from the deluge of mainstream financial news and uncovers undervalued opportunities for quick profits. Check it out at:
www.earlytorise.com/moneyinsight/etr_money_insight.html.)
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Word to the Wise: Omnipotence
"Omnipotence" (om-NIP-uh-tuns) is unlimited power, authority, or force.
Example (as used by Robert Ringer today): "What on earth was an intelligent, all-American young man like Tom thinking when he brought drugs to school? I can only conjecture that it was a combination of not thinking much at all (at least not about the possible consequences of his actions) mixed with a bit of senior omnipotence."
