Daily Investment Tips

Bill Gross, Fund manager of PIMCO, announced in March 2011 that the world’s biggest bond fund has cut its holdings of US government-related debt to zero.

The move to exit US government debt is because the fund is forecasting a rise in US bond yield. Such rises would hit the value of holdings of bonds as their price move inversely to their yields.

This was the quote from Bill Gross:-

“Yields may have to go higher, maybe even much higher to attract buying interest,”

written by Constantine Njeru \\ tags: Bill Gross, Bond Fund, Bond Yield, Bonds, Government Debt, Pimco, Price Move, Quote

Verizon finaly gots it’s hands on the Iphone, the big question is how the Iphone will impact on Verizon Revenues, profits and ultimately Verizon stock.

When Verizon reported their 2010 financial results, Verizon communications Executives projected revenue growth of between 4% and 8% in 2011, well above 2010′s 1.9%. They also estimate 11 million IPhone activations this year.

11 million iPhone activations is not peanuts, but keep in mind Verizon is spending near $4 – 5 Billion to subsidise the Iphone. That means the Iphone subsidy will eat into the profits.

Verizon stock prediction / forecast 2011

Verizon shares are currently trading 16 times 2011 forecast and historically the shares EPS has been 15. The stock now seems to be as high as it can get for 2011.

Expect the stock upside to happen, starting in 2012, because that is when the company will start showing the benefits of investing in Iphone. When announcing 2010 results, the company said it expected earnings-per-share growth in 2012 to about double 2011 number.

To quote Verizon executives thoughts on the future of the company “really explode over the next several years.”

written by Constantine Njeru \\ tags: Earnings Per Share, Financial Executives, Iphone, Iphone Activations, Peanuts, Profits, Quote, Share Growth, Stock Forecast, Stock Prediction, Stock Shares, Subsidy, Verizon, Verizon Communications, Verizon Stock, Year 11

The biggest investing dilemma for an investor is knowing when to buy or sell stocks. The best investing quote as to when to buy or sell stocks has to be the following investing quotes by Warren Buffet.

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

The following quote came from Buffet in 2010 at the height of the Credit crisis explain why he was buying stocks when others were selling.

When it’s raining gold, reach for a bucket, not a thimble.

This investing quotes should be a guide on when to buy or sell stocks

written by Constantine Njeru \\ tags: Attempt, Buy Sell, Buy Stocks, Buying Stocks, Credit Crisis, Dilemma, Investing, Investor, Quote, Quotes, Sell Stocks, Thimble, Warren Buffet

George Soros is known as “the Man Who Broke the Bank of England” after he made a reported $1 billion during the 1992 UK currency crisis. He bet against the British pound and won big.

I came across a quote by George Soros, that seems to give an easy answer as to how the famous speculator makes money in a turbulent world.

The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.

George Soros

It is clear what George Soros does, He evaluates multiple scenarios and takes position in each scenario. As the market unfolds he lets profits run on the correct scenario and cuts losses on wrong scenarios. At a single time he might be long on a position but still take a short position on the same.

To play this scenario game you need to use risk management tools such as options, futures and short sales.  For this kind of trading to be successful an investor needs to have sufficient capital to buy those tools.

written by Constantine Njeru \\ tags: 1 Billion, Bank Of England, British Pound, Currency Crisis, Economic Predictions, Financial Markets, George Soros, Investor, Losses, Money, Options Futures, Profits, Quote, Risk Management Tools, Scenario Game, Scenarios, Short Position, Speculator, Turbulent World, Uk Currency

Warren Buffet is the best investor in the world, when measured by ability to accumulate money. His investment advice on the best time to sell you shares can be found on the following quote by him.

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. By Warren Buffet

By greedy he means when the market is in a bull frenzy and every Tom, Dick and Harry is buying stock. When everyone is buying prices tend to go well above their true value and that is when a smart investor should be thinking of selling.

written by Constantine Njeru \\ tags: Attempt, Best Time, Buying Stock, Frenzy, Investment Advice, Money, Quote, Sell Stocks, Smart Investor, Stocks Shares, Tom Dick And Harry, True Value, Warren Buffet

John Paulson famously made a cool US 3.5 billion in 2007. He was among the few who had seen the housing boom was built on sand and bet against it.

How did he see it.

In a Wall street journal interview, I found this Paulson quote

“Where is the bubble we can short?” He was asking his staff. They found it in housing.

I think that is the one example on how to make money. Find a bubble and short it!

In the same interview Paulson gave a vague assessment of the market

He’s also betting against other parts of the economy, such as credit-card and auto loans. He tells investors “it’s still not too late” to bet on economic troubles.

Not to fast that was way back in January 2008.

written by Constantine Njeru \\ tags: Auto Loans, Bet, Credit Card, Economic Troubles, Economy, Housing Boom, How To Make Money, Investors, John Paulson, Market Predictions, Quote, Wall Street, Wall Street Journal