Investing Without Trailing Stops: Here’s Why 75% of Stocks Are a Sucker’s Bet

by Alexander Green, Advisory Panelist

A couple weeks ago, I explained why it is imperative to run trailing stops behind your individual stocks.

Sell stops ensure that your capital is protected and your profits don’t slip through your fingers.

However, one subscriber took me to task, saying that a trailing stop guarantees you won’t “sell at the top.”

Quite true.

However, “selling at the top” and its corollary, “buying at the bottom,” are not realistic investment goals. Here’s why…

The Danger of Selling High and Buying Low

For one thing, you never know the top or the bottom until you’re looking in the rear view mirror. And given enough time, all-time highs and lows are usually exceeded.

For example, you may sell a stock at its 52-week high – not a good

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[Again, my apologies for the late posting of this news blast, as I'm covering all the bases on my own today... - Best, James]TODAY:  The United States sells even more arms during a recession, Gorbachev's towering ego, more gas spats between the Kremlin and Kiev, Khodorkovsky talks about jail for life, the Pikalyovo virus spreads, Deripaska doesn't want Opel, and a EU human rights commissioner gets the state-approved tour of Chechnya.Russia and Ukraine are at each other's throats again over natural gas, with the Kremlin accusing Kiev of attempting to alter the contracts.  In a televised meeting with Gazprom's Alexei Millar, President Dmitry Medvedev said "As far as an idea of an advance payment for tariffs, then ...

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Monday August 17, 2009

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Life in Atlanta just got a lot more productive for those who want high-speed Internet at any place or time. Sprint (NYSE:S) today announced the launch of Sprint 4G mobile broadband throughout the Atlanta metro area. As a result, streaming video, fast file downloads and uploads and turbo charged web browsing are no longer just home, office or coffee shop benefits. Sprint 4G customers can enjoy a blazing fast mobile broadband experience across the city, whether they’re working at a remote location, relaxing in the park, sitting at a favorite eatery or as a passenger on the freeway or public transportation

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First, a historical note…US equities have just come off their best July since 1989. Overall, the market is up over 8% for the year. But if we look backward (after all, hindsight is 20/20), March 1989 also saw a huge run up. It was followed by an even stronger rally in July, during which volume dried up. It appears the same is happening now. What came next in 1989 was a big sell-off in September, followed by an even greater one in October.

Don’t look now, but history tends to repeat itself.

Also, consider the fundamental picture. We have rallied 48% from the March lows on the back of what? Good earnings? Good employment figures? Good spending figures? Expanding GDP? No.

We have rallied based on one of the largest and most concerted propaganda campaigns ever waged, supported by government stimulus. But no government can stimulate forever. The bottom line is this, if

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For Immediate Release

Chicago, IL – August 3, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Cigna (CI), United Health Care (UNH), Aetna (AET), Ford (F) and Toyota (TM).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

What's It Worth to Avoid Competition?

There is an extremely interesting post that looks at both the change in the Intrade odds of having a public health care option and the movement in the stock prices of the three biggest health insurance companies, Cigna (CI), United Health Care (

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Percent Changes by Major Category In the second quarter GDP fell at an annual rate of 1.0%, better than consensus expectations of a 1.5% drop (and my own expectation of down about 2.0%). However, the first quarter was revised to a decline of 6.4% from a decline of 5.5%. This was a surprise, since the previous two revisions had been in the direction of a smaller decline. Consumption: Negative After Being Positive The consumer was actually weaker in the second quarter than in the first, with personal consumption expenditures (PCE) falling 1.2% vs. a rise of 0.6% in the first quarter (org. up 1.4%). The swing in goods, particularly durable goods, was large with a decline of 4.0% vs. an increase of 2.5% in the first quarter for all goods and a decline of 7.1% vs. an increase of 3.9% in the first quarter for Durable Goods. Non-Durable ...

Below are some of the key sections of the Summary of the Fed Beige Book and my reaction to it interspersed. I have also bolded what I consider to be remarks worthy of emphasis in the report. "Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level..." In other words, the economy is no longer falling off a cliff, but it has not started to climb back either. This is consistent with most of the other economic data we have been getting recently. "Most Districts reported sluggish retail activity...Manufacturing activity showed some improvement in the Richmond, Chicago and Kansas City Districts; while St. Louis and Dallas reported some moderation ...

China turns it up another notch… now “concerned about the security” of U.S. investments… Chris Mayer tells the “story of today’s economy”… Mainstream celebrates latest home price index… our perceptive on the housing “recovery”… Three market sectors currently detached from reality… The truth emerges… why Ben Bernanke really bailed out Wall Street…

Here it comes, slowly but surely: “We sincerely hope the U.S. fiscal deficit will be reduced, year after year,” China’s Assistant Finance Minister Zhu Guangyao said overnight after talks with Treasury Secretary Geithner. Could he lay it out any more clearly than this? “The Chinese government is a responsible government, and first and foremost our responsibility is the Chinese people, so of course we are concerned about the security of the Chinese assets.”

The Chinese now own over $801 billion in U.S. debt, nearly double their holdings at the start of 2007 and by far the world’s largest

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Rosnano hopes to use President Obama's visit to urge him to introduce tax breaks for Russian companies, and conclude talks to establish a $1 billion venture fund with US companies to invest in Russia.  The number of unemployed could hit 18% by the end of the year casting serious aspersions on the government's anti-crisis plan.  Cherkizovsky Market may re-open by the end of the week, following a thorough cleaning.  Job cuts yesterday; today Oleg Deripaska's troubled GAZ group says that it may shut down several unprofitable units because of the economic climate.  Presidential aide Arkady Dvorkovich has said that all methods should be used to increase demand for housing.  Local pork producers are facing competition from importers of live pigs who use a customs loophole to dodge quotas and tariffs.  The Washington Post reports on ...

OMAHA, NE - Jun 29, 2009 - Green Plains Renewable Energy, Inc (NGM:GPRE) joined the broad-market Russell 3000(R) Index upon Russell Investments reconstituting its comprehensive set of U.S. and global equity indexes on June 26, 2009.