Making Double Digit Gains for at least 6 years

Financial Analyst and Activist Darnell L Williams

Well it is time for you to start calling me names again. I have been telling you how to take a risk to make money. If you already have a 401K or a IRA that allows you to buy individual corporate bonds then you can do everything  that I can do.  That means that instead of calling me a braggart, you can make money yourself.   

          My favorite Bonds for December 2014           

ID                            Name of Bond                                                                S&P   Current Price  YTM

085789AE5   Berry Pete Co. Sr. Nt. 6.75% of 11/01/2020                       BB-   $800.00         12.346%

18683KAA9  Cliffs Natural Resources Inc. Notes 5.9% of 3/15/2020     BB-  $580.00         19.078%   

18683KAF8   Cliffs Natural Resources Bond 01/15/2018                         BB-   $655.00          21.56%

492914AS5   Key Energy Service s Inc. GLBL NT 6.75% of 3/01/2021    BB-   $610.00          14.69%

Here are 4 bonds that I bought in the past 8 days.  I am getting a "Yield to Maturity" (YTM) from last week to January 15, 2018 with an average Yield of 16.9185%. Then my average YTM interest will be from January 16, 2018 to March 15, 2020, 15.371%.  From March 15, 2020 to November 1, 2020, my YTM interest will be 13.518%. From November 2, 2020 to March 1, 2021, my YTM interest will be 14.69%.

So as you can see, I will get high yields for the next 6 years. The risk is that anyone of these companies can go out of business. If that happens, I may not get my principle from one or more of these securities. That is the risk I am taking to make this money.  These bonds are at the high end of the junk bond range (BB+ to C-). I never buy anything lower than B-.  

Now remember, don't hate, appreciate!

Many of you have Credit Problems

Some of you need a lawyer

Many people come to me for advise when they find out that they can't buy a house, car, or they are about to be sued for nonpayment of a bill. They usually come to me asking me to give a magic spell to get them able to buy whatever they want to buy. Yes, I am a descendant of the Cherokee Blue Klan but I can't help people undue stupid stuff that they have done in the past.

 

It is equally funny that these are the same people that tell me how tight I am with money and that I should spend my money according to what they think I should spend my money on. When I tell them that I protect my credit report, making sure that I get my payment  to creditors on time, they laugh at me and tell me that their creditors will get paid when they want to pay them.  Here is why they have bad credit and cannot buy things when they want it or need it.

 

My credit score by all three credit agencies is between 750 and 800. Because they do not care to protect their credit report, showing creditors how reliable they are in paying their bills, they are usually scored between 350 and 500.   

 

Everyone hits an occasional rough patch in his or her financial life. Unfortunately, some situations will hurt your credit score worse than others. Here are four common pitfalls that will negatively affect your credit.

 

1. Not Paying Your Bills On Time

 

Missed payments, also called delinquencies, are probably the most common black marks to appear on credit reports. These can happen for a number of reasons: you forgot to schedule a payment before you went out of town, you moved and forgot to give your new address to your creditor, or your finances were just too tight that month. Whatever the reason behind them, missed payments are likely to be reported by your creditor to the credit reporting agencies (especially if you didn’t contact your creditor to explain yourself).  A delinquency can stay on your credit report for up to seven years. But don't worry, the further in the past a delinquency is, the less impact it has on your credit score.

If a potential creditor claims that this is why you cannot get credit, you can contact the posting credit reporting agency with the delinquency to your credit file and contest the issue. If the creditor is in error, it may be removed.

 

2. Keeping Your  Credit Cards at the Maximum

 

Too much debt can also lower your credit rating. Lenders review your total level of debt compared to your total amount of available credit. If that ratio is out of balance (for instance, if your credit cards are almost maxed out), your credit score will suffer. Keep your credit card balances well below your credit card limits for optimal financial health.

 

3. Applying For Every Credit Account That You Can Find

 

I see many people stopped by store workers in the mall asking them to apply for an account and they will receive a free gift. Sometimes they will say that the application will not be turned in, just fill it out.  Sooner or later, this type of freebee will caught up on the creditor.

 

Applying for lots of new credit at once can also damage your credit. The number of applications you make for credit and loans is recorded on your credit report in the form of inquiries. A lot of inquiries in a short period of time can signify that you are desperate for new lines of credit and may reflect negatively on your credit score. It’s okay to apply for new accounts when you need them, just limit your applications to those cards and loans you have researched and truly need.

 

4. I Know My Credit is Bad

 

That is another badge of honor that I hear people saying. For some reason, they think that it will not catch up with them in the future.  All they are telling creditors is that their word is no good and they cannot be trusted.

 

Public records are never good to have included on your credit report. Bankruptcies, tax liens, and court judgments all fall into this category. If you have one or more of these negative items listed on your report, you’ve probably noticed a significant drop in your credit score. While these records are damaging, they won't stay on your credit report forever. According to the Fair Credit Reporting Act, public records must drop off of your report within seven years. If you have public records listed that are more than seven years old, you can file a dispute with the credit reporting agencies.

 

It is Christmas time. Remember this advise when you are out spending money. Think about how you are going to pay the bills on time when February rolls around and your creditors has their hands out. Your creditors can make you or break you in the future when it comes to buying big ticket items.  

 

I have a Christmas present for you!

Financial Activist and Analyst Darnell L Williams

Merry Christmas! I am going to give you a Christmas present. You can have as much money as you can get. Now before we go on, if you think that I am bragging then stop reading and go play some video game because this Christmas present is not for you.

 

Hopefully, you read my last two blogs on the world oil market. I am going to tell you how to make money on the oil market. I am going to give you a step by step program that is easy to follow. No, you do not have to be a genius like Cramer on CNBC. You don't have to know anything about stocks and bonds. But you do have to have faith in yourself, courage to put money into a program that yields way more money in the future.  You have to be able to follow a long term program.  If you can't do these things,  then stop reading and go play some video game because this Christmas present is not for you.

 

Now that we eliminated the people who don't want to receive this gift, we can move on with how you can receive it.

 

Oil and gas prices are cyclical. When I was 16 years old, gas was 28 cents. When I was 25 years old, gas was a $1.00. Just last year, gas was $3.85 per gallon. Between these time, gas prices fell.  These reason why gas prices rise and fall is because oil at the Well Head goes up and down due to Oil Speculators in the commodities market, world politics, or supply and demand because of economic conditions.  Here is what to do to take advantage of the situation of fluctuating oil prices.

 

Open a stock account

 If you do not already have a stock account, open one. If you have little money then I suggest you open a Sharebuilder's account. You can buy and sell stocks with as little as $7.00 a trade.  I am sure that all of you using a computer can afford to invest at least $7.00.

Open up and account by clicking on this https link and following the instructions.

https://www.sharebuilder.com/sharebuilder/default.aspx

 

Your stock buying strategy

You want to pick at least one oil stock to invest in. You will use a "Buy and Hold" Strategy meaning that you will buy stock every pay or whenever you can in your account.  You will continue to accumulate your stock companies for as long as 2 years or more. You are cost averaging your stock at the bottom of the cycle in the oil market.  At the bottom of the oil market is when no one wants to own oil stocks. This is when they are cheap!

 

How do you know when to sell?

No one knows when the top of your particular market will be. However, you will get your first clue when gas prices go back up approaching $4.00 per share and the evening news start talking about high gas and oil prices again. This is when everyone will want to buy your stock forcing the stock price to go up rapidly. This is when you start using "Stop Loss Orders," protecting your profits or in the case of Sharebuilders, sell the stock and buy your BMW.

 

What stocks should you buy?

Here is a list of oil stocks for you to consider buying. You can find out more about these stock or mutual funds by clicking on the stock or mutual fund symbols.

 

1.  Exxon Mobil  (Stock Symbol: XOM)

2. Chevron (Stock Symbol: CVX)

3. ONEOK (Stock Symbol: (OKE)

4. Nabors Industries (Stock Symbol: NBR)

5. Noble (Stock Symbol: NE)

6. Denbury Resources (Stock Symbol: DNR)

7. Newfield (Stock Symbol: NFX).

8. SeaDrill (Stock Symbol: SDRL)

9. ConocoPhiliips (Stock Symbol: COP).

 

Mutual Funds

1. United States Oil ETF (USO)

 

I normally do not like to invest in Mutual Funds but in some cases, I will allow such investments.  Some funds are specialty funds. United States Oil ETF (Computer Symbol: USO) is a fund whose sole purpose is to diversify investments in the oil industry.  

Summary:

 In 2008, I told the public my plans for making money in the Corporate Bond Market. Some said that I better go take my meds. Others said that I was a braggart instead of duplicating what I was doing. Yet others wanted to make some type of political statement out of what I was trying to do. As a result, I live among the rich on Chesapeake Bay while my opposition struggles with money in life.   

You have a choice, continue what you are doing or change and make something wonderful happen for you!

Merry Christmas and Good Luck!

 

The Real Reason for Falling Oil and Gas Prices

OPIC was created to put a floor on oil prices. Now if that is the case, why don't OPIC cut oil production? This will cut supply of oil in the world and stabilize prices. From this, you can see that the Saudi Arabian Government, the major country in OPIC can care less about stopping falling oil prices.

 

I hear people say that we are getting a tax cut for Christmas. No, prices are falling because the world is awash with oil. The flip side of that is the higher cost oil production in the US will have to shut down US oil wells. Fewer well permits are already happening.  This means unemployment for oil workers and oil supply workers.

 

What many people in America do not know is that the United States has more enemies around the world than what Americans realize. Saudi Arabia wants the US to shut down new oil wells. Iran and Russia is trying to get away from pricing oil in dollars.  When this video below was made on November 26, 2014, oil prices were in the $70 range. December 10, 2014, oil prices closed at $63.82 and the stock market lost 268.08 points.

 

The markets are starting to sense that more is going on than just falling oil prices. 

 

Darnell L Williams

This is all because the bankers and politicians are trying to cover their own asses.

Look at this video below by clicking on the picture. If that does not work, click on the https link below.

 

https://www.youtube.com/watch?v=PRrwmrZ0sAQ

 

The Real Reason for Falling Oil and Gas Prices  

 

Christopher Greene of AMTV explains the real reason for falling oil and gas prices.  

Here is why I am buying oil stocks. You buy oil stocks when no one wants them. When supply falls because of the oil war, prices will rise and take oil company stock prices with it. You the speculator or investor make out like a bandit!

 

Borrowing Money Against Your Investments

I woke up this morning and turn on TV. I found out on CNBC,  a cable financial channel that the Dow Jones Averages was down 250 points. That got me up real quick. I had to find out what was going on.

 

It did not take long for me to find out that China decided to deny investors the right to place Corporate Bonds with a Standard and Poor's credit rating of BBB and below as collateral for borrowing money.  That meant that many tens of millions of dollars in loans came due immediately.  In the business, we call that a "margin call." ( Do not get that mixed up with a booty call!)

 

DEFINITION of 'Margin Call'

 

A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your account value decreases to a value calculated by the broker, exchange, or government's  particular formula.

 

This is sometimes called a "fed call" or "maintenance call."

 

You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets.

 

DEFINITION of 'Margin Account'

 

A brokerage account in which the broker lends the customer cash to purchase securities, cash, goods, or services. The loan in the account is collateralized by the securities and cash. If the value of the stock drops sufficiently, the account holder will be required to deposit more cash or sell a portion of the securities.

 

In a margin account, you are investing with your broker's money. By using leverage in such a way, you magnify both gains and losses.

 

Here is the Problem!

 

The price of oil is going down. Some of these companies and countries floated junk bonds like Venezuela's oil financing bonds.  Due to falling oil prices, China does not want to be caught with worthless bonds, collateralizing portfolios.

 

Venezuela’s state-controlled oil company will sell dollar bonds for the first time in six months as the government seeks foreign currency to end shortages of imported goods.  If these bonds default it would be like receiving goods from the store and not paying for them because your credit card is no good.

This action against such bonds especially bonds to finance oil operations around the world caused tens of millions of dollars to come due. People and governments had to sell off portfolios to bring in enough cash to satisfy the margin call.  The reaction, stock and bond prices around the world went down quickly.

 

Don't Snicker

Many people bought cars and homes with this borrowed margin money. Governments financed activities for the people like water and sewer projects. Yet corporation financed everyday activities in the business like stop gap payroll and benefits such as healthcare for employees.  For many, this was the start of layoffs in some businesses.  

A Stop Loss Strategy

Opening Day on the New York Stock Exchange

In the past, I wrote a blog about buying Alibaba Group Holding Limited (BABA) on the New York Stock Exchange (NYSE), purchasing the stock at about $99.50 per share. I told you that at least one of my friends bought the stock at $90.00 per share. I also told you that the stock should be bought using a "In Favor/ Out of Favor" Strategy.  I think it is time to examine some Definitions.

 

DEFINITION of "In Favor/ Out of Favor"

 

An industry or stock to which many analysts and investors do not pay attentions to. Out-of-favor industries or stocks tend to have a low price-earnings ratio and may therefore be undervalued. That is, the low price does not necessarily come from a fundamental problem with the company, but may result simply from apathy on the part of investors.

 

Value investors sometimes seek out-of-favor industries and stocks for long-term investments.

 

In the case of BABA, the stock went on sell on the NYSE as an unknown company. Therefore, investors did not know the value but the financial media talked up the stock. Once the media interest fell away, the talking subsided and the price fell.

 

 

DEFINITION of 'Beta'

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.

Also known as "beta coefficient."

 

DEFINITION of 'Stop-Loss Order'

An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a position in a security.

 

Although most investors associate a stop-loss order only with a long position, it can also be used for a short position, in which case the security would be bought if it trades above a defined price.

 

A stop-loss order takes the emotion out of trading decisions and can be especially handy when one is on vacation or cannot watch his/her position. However, execution is not guaranteed, particularly in situations where trading in the stock is halted or gaps down (or up) in price. Also known as a “stop order” or “stop-market order.”

 

How Using A Stock Loss Strategy Can Make Money In BABA!

BABA has a high BATA and fluctuates in price wildly. The price range of this stock had a low of $82.81 and a high of $120.00. As the stock rose to $120.00 per share, I had to leave to train my grandson for his next track meet. I placed a "Stop-Loss" Order for all my friends accounts for their stock. I bought the stock for them at $99.50. I placed the "Stop Loss" order at $111.00. So if something happened to their BABA stock, they will still make about $11.50 per share or 11.56% on their investment.

 It only took 3 days for the stock to collapse, making the stock price fall below $111.00 that triggered the "Stop Loss" order. The stock today, Dec. 1, 2014 sells for $105.99.

From this, you can see how a "Stop Loss" order can save a profit from becoming a loss. In this case, the speculators made 11.56% in two weeks. As you can see, no investor can lose money by purchasing stock late and sell early.

 

http://finance.yahoo.com/echarts?s=BABA+Interactive#%7B%22range%22%3A%221mo%22%2C%22scale%22%3A%22linear%22%7D

Alibaba Group Holding Limited (BABA) Price History

 

Alibaba Group Holding Ltd. ADS Using a "In Favor" Strategy

Jack Ma, Executive Chairman of Alibaba Group Holding Inc.

You may recall several financial blogs back when I told you that one of my friends wanted to know if I was going to buy Alibaba (Stock Symbol: BABA) when it came to the market on an IPO. She bought the stock at $90.00 per share.  Then the stock went up to $99.00 before the market corrected and the stock fell to about $86.00.

As I told you before, I usually do not buy stock for my account but I do buy stock for my friends accounts. October is the time that I divest accounts and at the end of October, I buy stock in anticipation of the "Year End Rally." On October 30th and 31st, I started buying Alibaba stock at $99.50. The stock hit a yearly high of $120.00 and a low of $82.81 per share.  As of the date of writing this blog, the price is $115.10.

 Why did I start buying this stock? I did because Alibaba is "In Favor" with investors.  I will sell this stock when my friends need the money or when Alibaba falls "Out of Favor"  with investors.

 

Why is it "In Favor?"

Alibaba.com mainly links Chinese suppliers to foreign buyers. Alipay, a privately owned affiliate that’s not part of the listed Alibaba Group, functions as the equivalent of PayPal in processing 75 percent of the group’s transactions.

Alibaba’s customers trade anything and everything, from silkworms to Boeing 747s. The family of Ma Yu, a Starbucks barista in Ma’s hometown, likes buying cooking oil, sacks of rice and toilet paper.

“It’s even cheaper than supermarkets, and you get way more choice according to experts.

Some $248 billion flowed through Alibaba’s retail portals last year, equal to 2.6 percent of China’s $9.38 trillion gross domestic product.

On Nov. 11, 2013, the Chinese twist on Valentine’s Day known as Singles Day, Alibaba logged $5.75 billion in transactions. By contrast, Cyber Monday 2013, the biggest U.S. e-commerce day, rang up less than $2 billion.

For this year’s Singles Day, Alibaba is becoming even more ambitious, staging the promotion globally. It’s targeting $8.2 billion in transaction volume, according to Bloomberg Intelligence.

Alibaba is making money: Net profit tripled to $3.7 billion in the year ended on March 31. While net income fell 39 percent in the three months ended Sept. 30, in part as a result of the cost of integrating new businesses, revenue jumped 54 percent during the quarter -- beating analysts’ estimates.

“The growth potential of Internet companies in China is many multiples greater than in the U.S.,” says Shane Oliver, who helps manage $131 billion at AMP Capital Investors in Sydney. “Businesses which can take advantage of that, such as Alibaba, seem incredibly attractive.” In line with AMP policy, Oliver declined to say whether his firm bought the stock.

Institutional Investors

BABA stock was so popular among institutional investors that the two major IPO ETFs fast-tracked it for inclusion in their funds well ahead of their usual considerations. The Renaissance IPO ETF (IPO) added Alibaba stock to its fund after five days of trading. The bigger First Trust US IPO Index Fund ETF (FPX) added Alibaba stock on Sept. 19, its first day of trading, because it happened to coincide with the date of its quarterly rebalancing. Normally, FPX only adds stocks that have traded for at least seven days.

You get a technical analysis on this stock by clicking on the picture. If that does not work for you, click on the link.

https://www.youtube.com/watch?v=UpGHCsF9NLI

Alibaba Group Holding Ltd (BABA) Stock Chart Technical Analysis for 11-14-14  

 

If you want other technical analysis on other stocks, click on the link below.

 

https://www.youtube.com/channel/UCn2JOViAAWssWefchGpTNvw

 

EXXON Using a Buy and Hold Strategy

Price of Fuel

We are in the month of November.  As I told you in early October, I do not buy investments in the month of October. In fact, I am basically a noninvestment grade corporate bond investor.  But I do buy some stock and I buy stock for my friends with their money.  I sold their stock in early October and bought in late October in anticipation for  the yearend rally.

On October 30th, I started buying Exxon Mobil Corporation (Stock Symbol: XON)for my friends using a "Buy and Hold" Strategy.  The high this year has been $104.76 and the low has been $86.91. The lowest that I received for my friends has been $97.11. The price as of the time I am writing this article was $96.50.

Gas Pumps

Exxon Mobil Corp.'s stock recorded a trading volume of 13.23 million shares, above its three months average volume of 11.80 million shares. The company's shares oscillated between  $95.72 and $97.16 during a recent session. Over the last three trading sessions and over the past one month, Exxon Mobil Corp.'s shares have advanced 2.19% and 2.09%, respectively.

However, the stock has fallen by 4.56% since the start of this year. The stock is trading above its 50-day moving average of $94.99, while the 50-day moving average is below Exxon Mobil Corp.'s 200-day moving average of $97.89. Additionally, the stock traded at a PE ratio of 12.16 and has a Relative Strength Index (RSI) of 59.09.

 

In my opinion, this means that XON is at or near its bottom prices. This stock is ideal for buying a little each pay and selling at a higher price. This is called a "buy and hold" strategy. The best account to use for people with very little means to invest is the Sharebuilder's Plan.

People have a mono-view of things. Looking at the oil market is no different. People think that because gasoline prices are falling, that this is a "win-win" for the public. Such people do not know how the economy works. For example, low price oil can put fracking oil producers out of business and furlough workers. Fracking Oil Supply Companies will suffer and people will be furloughed.

 

To watch this video, click on the picture. If you do not support this type of video, click on the link below.

 

https://www.youtube.com/watch?v=qY9z-26rnQw

 

Plunging Oil Prices Have Unpredictable Impact on Politics, Economics

Exxon Corporation can produce profitable oil even if they shut down fracking operations and will have plenty of oil ready for a rising oil and gas market, meaning the price of XON will rise.

Buy and Hold Strategy Using an IRA or 401K

Have you ever wondered how Warren Buffett got to be listed on the Forbes 2012 World’s Billionaire list? At an early age, he invested using a "Buy and Hold Strategy."  He looked at companies on the cutting edge of the economy, invested money in them over decades and sold their company stocks when the companies showed signs of maturing.

 

If I was just starting out, I would open a Roth IRA at an online brokerage firm and put $25.00 or more a mouth in the account. Next, I would go to Wal-mart, Best Buy, or look at Technical Media Shows that explorer new types of consumer products that are the current fads in society.

 

If you want to learn about investing, click on the link below.

 

http://www.mybanktracker.com/investing/basics/Understanding-Buy-and-Hold-as-an-Investment-Strategy/102389

Understanding "Buy" and "Hold" as an Investment Strategy