Category: Investment Analysis

Investors should take full advantage of the unlimited opportunities offered in the stock market. The best way to take part in stock market investment is to obtain important and crucial information about the companies you are considering investing in. An investor should know as much as possible about the company, stock, management track record, and trends.

However, some information proffered by the mass media as stock market research made available by their paid commentators and analysts may not be at all unbiased research. The reliability of such information is doubtful, considering the subjectivity of the ideas submitted. This is not helpful to stock market investors. One must be aware that a lot of misinformation can be spread around in an effort to manipulate and influence the price of certain stocks.

How then does a stock market investor locate the vital information amidst the backdrop of biased claims?

Relevance of stock market investment research:

Stock market research provides for basic and technical overview of the analysis made on the stock. A stock market investment research allows assessment of actual value of the company. It delves upon the records and history of the company. The research also aims to foresee the future trends of the stock. Serious investors will utilize the information to build an excellent system to establish the investment.

A newsletter is defined as a publication which is distributed on a regular basis and which discusses one main topic for the benefit of its readers. Newsletters are published by clubs and business companies to provide their clients with company relevant information.

A stock market investment market newsletter is published to provide stock market investors with insights on the current trends in the market. These types of newsletters are distributed by trading companies to their subscribers and clients. A stock market investment newsletter provides news, analysis, interpretations, and commentaries that are related to the market developments and which are relevant to a trading company’s subscribers and potential clients. It is meant to help the stock market investor to choose the right investment opportunities and how to invest sensibly.

An investment market newsletter is very similar to other popular newsletters. It is usually written for stock market investors and usually contains the following:

* Company profiles – this information includes the company’s description, trading history, and its recent stock charts;

* News articles – these articles inform the stock market investors on the current trends in the market and the company’s recent developments and milestones in the stock market;

US banks and brokers face as much as $100 billion of writedowns because of soon to occur changes in Level 3 accounting rules. These writedowns would be in addition to the losses caused by the subprime credit slump, according to the Royal Bank of Scotland Group Plc. and as reported on Bloomberg.com.

If you think that the credit crisis that has been haunting world stock markets for the past couple of months may be about over perhaps you should think again.  That’s a lot of money in losses even for the big banks.

The Financial Accounting Standards Board’s rule 157 makes it more difficult for companies to avoid using market prices on their hardest-to-value securities, known as Level 3 assets, Royal Bank chief credit strategist Bob Janjuah wrote in a note today. While the rule hasn’t gone into effect yet, the biggest U.S. lenders and brokerages have already begun reporting their Level 3 holdings.
“This credit crisis, when all is out, will see $250 billion to $500 billion of losses,” said Janjuah, who’s based in London. “The heat is on and it is inevitable that more players will have to revalue at least a decent portion” of assets they currently value using “mark-to-make believe”.

If you are a stock market investor beware the month of October. Two of the most dreadful stock market crashes of all time occurred in the otherwise beautiful Fall month.

The Crash of October 1987 occurred on October 19, 1987. The amount the market declined from peak to bottom was 508.32 points, 22.6%, or $500 billion lost in one day. This was the largest one-day percentage drop in history.

The Great Depression Crash was actually spread out over October 21, 24 and 29, 1929. The amount the market declined from peak to bottom was more than 40%. The market continued to decline until July 1932 when it bottomed out, down nearly 90% from its 1929 highs.

While of course, the crashes of past years have no direct linkage to the markets of today this October looks to have crash potential. The recent panic caused by the unwinding of Yen carry trade positions could well flare up again in October as a large amount of ARMs are scheduled to be reset.

Since the need to unwind carry trades began with problems in sub prime loan mortgage housing markets the renewed attention to this market that the resets will bring has the potential to start another round of unwinding with disastrous results to equity markets.

You might wonder what the relationship is between Black Swans and the stock market? Now is a good time to find out as it appears that an entire flock of Black Swans have already flown in.

In Nassim Nicholas Taleb’s definition, a black swan is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations. Many scientific discoveries for him are black swans—”undirected” and unpredicted. An event often referred to as a “black swan” is the September 11, 2001 attacks.

Another example is one which actually involved a series of black swan events. This being the meltdown of Long Term Capital Management which started with the Asian financial crisis of 1997. This event appears to be closely related to the challenges faced by the hedge fund industry today.  

The term black swan comes from the ancient Western conception that all swans were white in color. In that context, a black swan was a metaphor for something that could not exist. The 17th Century discovery of black swans in Australia metamorphosed the term to connote that the perceived impossibility actually came to pass.