Novel Investor • Page 9 of 13 • Compounding investing wisdom...

How To Avoid Securities Fraud

July 12, 2012

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Jon

That Nigerian official doesn’t need your help getting money out of the country, you don’t have a long-lost uncle that left you millions in a Malaysian bank and money still doesn’t grow on trees. Securities fraud, or investment fraud, is a nonstop problem and thanks to email, we’re bombarded by it every day.

Special thanks to my most recent spammer for inspiration:

To Subscriber’s,

Current Price: .01
Short Term Price – .70
Rating: STRONG

Don’t Miss: A corporation Made for Advancement along with gigantic potential!!!

E-Commerce will be definitely growing increasingly popular and also the use with Internet video is definitely flourishing together with it. The company is the Web’s newest manifestation to get enterprises along with possible purchasers for you to faultlessly be connected via movie, is going to stimulate re-homing of the company’s technologies by way of a variety of advertising and marketing paths plus boost model awareness through on the web procedures like search engine optimisation of the company’s internet site, popular advertising, Google, in addition to cross-promotions with other google in addition to online video programs.

This is the abridged version with ticker and company name removed, but this penny stock pump and dump scheme went on for another 300 words of promotional nonsense. It’s a perfect example of securities fraud. Continue Reading…
Market Order Vs. Limit Order

July 10, 2012

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Jon

The two most popular and easiest ways to buy/sell a stock or ETF through an online broker is with a market order or limit order.

For every trade to happen, there needs to be a buyer and a seller at an agreed upon price. It’s the basic premise of how the stock market works. Of course, how that happens will depend on the different order types you use.

For the average investor out there, when it comes down to market order vs. limit order, one offers more advantages than the other.

Supply and Demand

Each stock trades differently based on the number of shares available (supply) and the demand for those shares. Big blue chip stocks tend to have a large amount of available shares, high daily trading volumes, and lower price fluctuations between trades. Continue Reading…
Happy Hour: Fourth Of July & Earnings Season

July 6, 2012

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

Fourth Of July

Happy B’Day America! Although falling on a Wednesday is not optimal for celebrating. Whoever is in charge of this calendar thing, needs to make sure that July 4 always falls on a Thursday or Friday (or Monday, but preferably Friday so there’s no vacation/sick days lost). There’s nothing wrong with a three or four day weekend. But five days, that’s pushing it. Anyways, hope everyone had a great Fourth of July!

Second Quarter Earnings Season

Well, we burned through half the year already. It’s earnings season again. The second quarter earnings season will kick off on Monday, July 9 with Alcoa’s earnings after the market close. Continue Reading…
Happy Hour: Health Care Tax And Little Green Men

June 29, 2012

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

Obama Care Tax

There has been a lot of information released on the Health Care ruling by the Supreme Court this week. I’ve done my best to sift through what is worth reading. For the most part, have limited the sources to the Wall Street Journal and the Tax Foundation.

Anyways, it looks like we’ll have to listen to the health care debate until the elections. I’ve already seen several commercials about the need to repeal the law. It’s just one more reason someone needs to invent an auto mute for commercials.

The Supreme Court upheld the health care law in their 5-4 ruling (193 page decision), with the individual mandate being constitutional as a tax. So much for no higher taxes on the middle class Mr. President. Continue Reading…
How To Compare Online Brokers

June 28, 2012

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Jon

When you compare online brokers, it’s easy to be overwhelmed with all the choices and options. It’s easy to be drawn in and distracted by promotions and added features. But is it really a deal?

These days every broker offers similar features and competitive pricing. Still, not all online brokers are the same. Some specialize in specific assets, account types, or advanced trading systems.

Make sure you are comparing apples to apples when it comes to your money. Before you make that first deposit, here are a few important things to consider when you compare online brokers.

Ask Yourself These Questions

Before you do anything, answer these questions: Continue Reading…
The Safety Of Brand Loyalty

June 26, 2012

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Jon

With market share, the goal to be and stay number one can be a great growth driver. Companies that have mastered brand loyalty offer some of the safest investments with the best profit and growth prospects available.

This means better returns for investors with the added protection from economic downturns. Of course, most companies don’t have the marketing strategy figured out to grow brand loyalty.

As investors, we should avoid companies with little to no customer loyalty. But when we do come across a company that has built a growing loyal customer base, it’s worth a second look and possibly an investment.

Defining Brand Loyalty

The American Marketing Association defines brand loyalty as:

1.The situation in which a consumer generally buys the same manufacturer-originated product or service repeatedly over time rather than buying from multiple suppliers within the category. 2.The degree to which a consumer consistently purchases the same brand within a product class. – AMA

As investors, we want to find companies that people are choosing of their own free will. Given two or more options, people will always buy Company A. These are the brands that people will buy for life, tell their friends and family about, and act as human billboards. If it happens often enough, the company builds a consistent loyal base that grows exponentially. Continue Reading…