Crash Market Stocks - Financial Tips On Making Money In The Stock Market

As volume is slowly returning back to the market, we experienced our third day in a row of green trading as the market ended up almost 3% at Friday's close. Many are cheering this three day streak, hoping it is a sign for new beginnings for Wall Street and that maybe we can see positive growth after seeing the market get demolished in 2008. However, as I say time and time again on this site, I believe this "hope" is more like a prayer, as in my opinion, it's a long shot for anything positive to come out of 2009. Let's examine the facts.

Everyone is talking about the biggest thing in 2009. Obama taking over the presidency. Sure, this event is bound to stir up some positive movement (which maybe is behind this recent rally, a bit early in my opinion, but maybe), but I don't care if it's Gandhi, I can't see one man turning around this economic crisis anytime soon. Sure, the damage can be lessened, but there will be pain and struggling. That's what comes with a cyclical economy.

The market cheered Friday, as Obama spoke of a strong, aggressive stimulus plan to be passed ASAP. People think that as soon as he takes office, money will be handed out to everyone. Even if it is, to an extent, that money is going to have to come from somewhere and it's certainly not coming from tax dollars, as no one is making money these days (except bankruptcy attorneys). So even if new money is printed to support the economy, that event in itself will eventually take a toll on the economy.

I wanted to share a portion of an interview that CNBC conducted on Friday with Martin Feldstein, a very well respected economist that has seen much in his days. In times like these, we really do need to listen to these old dogs, who have seen times near to the ones we are currently in. I do feel like these times are like none other we've been in, but I also think there is wisdom to be learned from mistakes of our past. This is what he said:

"I think we'll be lucky if by this time next year we see the economy having hit the bottom and starting up, and that's still going to leave us at a very low level of economic activity even if the turn has come at that point," Feldstein said during a live interview. "But there's no guarantee that all of this put together is going to achieve that."

Government will have to change the tax structure for capital gains and corporations while also exercising caution against inflation, added Feldstein, an economist at Harvard and president emeritus of the National Bureau of Economic Research.

"We are facing an economic downturn that is worse than anything I have seen in the post-war period," Feldstein said. "American households have lost more than $10 trillion of net worth in the stock market and housing prices. They are cutting back on their spending...Where's the demand going to come from?"

He also addressed the severe problem of these home mortgages and that a process needs to be taken to get these loans re-written. Either way, he feels we are a long way from even hitting bottom! These are why I like these old guys, they stick to facts. They are not easily wavered by the emotional wind that blows the markets. In the end, fundamentals will show through.

This coupled with the the lowest manufacturing data we've received since 1980 (ISM index hit 32.4 on Friday) still makes me a bear in 2009. Sure, I plan on buying some stocks here shortly, to take advantage of some short term Obama gains, but overall, I don't see us out of the trenches yet.

This is a great time to get into this market and prepare to make some money. If you aren't in, I would encourage you to consider tracking it and think about getting in soon. If you don't have an account, Zecco.com is a great place to start as they offer free monthly trades and incentives for new investors. A lot of money will be made in the next three years. As for an update on my mission with Lending Club, I have submitted an application for a lender (they have a reviewing process to make sure my credit is good enough). As I start lending, and hopefully make some good gains, I will keep you all updated. Keep up the comments, I enjoy hearing other voices in this market. Have a good weekend and we'll see you Monday.

Did this look like your mall this past week? Well, probably not quite, but I definitely noticed a lot thinner crowd circling the stores these last couple of days. Retailers were hoping for a miracle coming into this last week before Christmas as sales continued to be sluggish week after week leading up to the holiday. Well, it seems as if that didn't happen. It's funny, media and analysts won't call it what it is. It must be the weather that prevented people from shopping this year, or everyone is waiting for the week after Christmas, for the sales. Come on, can we just face the fact that we are heading into one of the worst financial crisis of the century, and many folks aren't going out and buying that extra computer or coat that they did last year. The more they try and cover it up, the more they become vulnerable to devastation. Either way, as the magic 8 ball would say regarding retail for 2009, "Outlook Not So Good."

Early reports from MasterCard are showing retail sales down for November and December anywhere from 5.5% to 8%. They contribute a large portion of this to the 40% decline in gasoline prices, saying that in reality, the number is closer to 2%-4%. Do keep in mind that this is still with the fact of huge discounted prices we saw this year, which will cause profit margins to be slashed. So, when calculating actual net income, the number has to be pretty scary.

Whatever it may be, people just weren't shopping that much. Not only were they not shopping as much, but when they were, they were not going to malls. Amazon is claiming to have its best holiday season yet. As people are becoming more discount aware, they are flocking to the online discounts. I am looking for companies like amazon to make a big push the next couple of years. The biggest barrier to E-commerce was the lack of comfort many people (mostly older) had from buying from online vendors. Well, people are now biting the bullet, putting their prejudices aside, and going where the discount is. I had to people in my immediate family who had never even thought of shopping online before, get most of their gifts this year from online retailers. I'll be keeping my eye on more e-commerce companies like Amazon and Overstock for potential buys for my portfolio. We could see a strong push for these companies in 2009 and 2010.

Overall, the day as a whole was pretty boring and lethargic. I assume most people won't be back at their computers trading until at least Monday, if not after New Year's. The Dow finished up another moderate .56% with the trading volume at about 86.6M, extremely low. At any rate, I don't see any big moves being made until the volume comes back.

It is not good to see these early signs of suffering from the retailers as it should only get worse in 2009. I expect this to directly affect SRS, as vacancy, in my opinion, for commercial retail will surely bounce anywhere from 15-30% depending on the market, which should lead to a lot of defaults on these conduit loans that come due this next year and in 2010. This is why I chose SRS as my number 1 pick for 2009, despite the few negative articles which have been written on the inverse etfs. I feel very comfortable with it.

Well, we all have a lot of things to discuss in the near future as we begin to tackle this beast called 2009. I appreciate the input from all of you. There are a lot of smart investors out there that can bring some great concepts to this forum. Please feel free to contribute and share your own successes. Also, several of the readers of this site have joined up with Lending Club, the p2p lending site we discussed last week. I would also like to hear from those that have and any successes or frustrations you have had from them. As I have heard from few, it has been a great source for some serious returns(anywhere from 6-15%), which may seem impossible in this market, which is also why I would like to hear from you that have been involved. Please comment below and let us know of your experience, and if you're interested in joining, see Lending Club for more information.

I hope everyone had a great holiday. There should be some serious discounts at the malls this week, as retailers will be desperate to liquidate some of this year end inventory to pay for their new inventory purchases. So get out and get some goods. Happy Trading.

Well, we ended early today with a pretty uneventful day as we saw just a bit of Christmas Eve cheer to end the market up about .58%. So instead of talking about the few things that happened today, I thought I would take a peak into the future and give you my top 10 stocks for 2009. Most of these will be dealing with the first part of 2009, as I feel there could be some serious profits made on both the short and long side. If you are without an account, you can open one with free monthly trades at Zecco.com. So without further adieu, I give you my top 10 stocks.

1. SRS - SRS has taken a huge beating the past month as banks gained ground with bailout news and government intervention. Being involved in commercial real estate, I have a good knowledge of what is going on out there. The debt that is due the next two years is substantially larger than the residential we've already had problems with. With more retailers going BK next year, I can't see how SRS won't do well.

2. GDX - Although it may take a bit to get jump started, I have loved gold since it hit its recent lows. Our next problem will be inflation, when we figure out our bank problems, especially if we keep printing money like we are with a 0% discount rate.

3. FXP - Like SRS, FXP has also taken a beating the past month. Next year, as this recession plays deeper into the consumer, it should hurt exporting nations severely. Especially with the huge workforce in China and the building turmoil, I expect to see some serious interior rioting and government instability.

4. DIG - Like GDX, this may take a bit to find it's ground, but oil is acting much like a pendulum. It was pushed up into ridiculous prices earlier in the year when prices we're creeping to $200 a barrel. Now, it has been oversold as it lowers into the $30's. My guess is oil should be trading at around $75 a barrel and should stabilize there in 2009. It may take some time, but DIG should definitely get some love as it moves back up.

5. TBT - This ETF shorts the Lehman Treasury 20+. US Treasuries have been extremely overbought, as investors have lost a lot of confidence in the market. As a result, the returns on treasuries have hit pretty much 0%. I expect a serious retreat from treasuries in 2009 which should bear well for TBT.

6. VZ - This is my cash flow stock. Verizon has a great balance sheet with great market share for their sector. They also have a great dividend. They have proven to remain resilient during this tumultuous market. Although I don't expect huge gains from them, they act as my buffer and I still like VZ in 2009.

7. AAPL - Apple has taken a pretty strong beating these past two weeks due to some downgrades. The fact of the matter is, yes I believe tech will struggle more next year, but I believe Apple should lead the pack. With the amount of cash they have sitting in the bank, coupled with their extremely innovative product line, I can't see them remaining below $100 for too long. I know so much hinges on Jobbs health, but I think he can hold on for a few years.

8. YHOO - I think a buyout is imminent. And whether it is Microsoft or someone else, Yahoo's current stock price is way to tempting for a hostile takeover. E-commerce is on many company's radar for the future, and what better engine to lead you into it than Yahoo. I think it should take a quick pop soon as soon as someone can get financing to buy these guys out.

9. VMW - This was one of the most hyped stocks when it was publicly offered, shooting above $100 the first day of offering. Now, it has fizzled its way down to below $20 territory. Sure, they have had problems with management and competitors, but their technology and market share remains the same and as they integrate their technology with mobile phones and other devices, I see some serious upside for them in the future.

10. EEV - The explanation for this buy is much like the one for FXP. Emerging markets are a great buy when every country is buying. However, during a global crisis, everyone tries to keep things in house. I see some good profits from EEV.

So there they are. Mind you that some are long positions that I may not take until 2nd or 3rd quarter 2009, but I believe the upside is there. I still feel some of the above listed will continue to lose value, I just think they have the most upside for 2009 at their current levels. I hope everyone has a Merry Christmas, or any other holiday you are celebrating. Have a great evening, Happy Trading.