Category: MarketClub Techniques, Tips & Talk

Posted @ 3:27 p.m. EST on 4/23/08

Today we are looking at Apple (NASDAQ_AAPL) and Amazon (NASDAQ_AMZN). We are looking at both of these markets before their earnings are released after the bell today. We will be carefully analyzing each stock and coming up with the real conclusion that we believe makes sense.

We are using MarketClub's “Trade Triangle” technology, which has been found to be a superior tool for most traders. In this short video you will see how we analyze each stock and how you can do the same thing using these tools.

Nobody knows at this point what the earnings are going to be for either of these companies. It should be an interesting experiment for our “Trade Triangle” technology. Having said that, nothing is ever 100% accurate in trading stocks. However, if you're 80% right or even 70% right you can still do very well trading in stocks, futures, mutual funds, precious metals and the foreign exchange markets.

MarketClub’s “Trade Triangle” technology provides an elegant solution that has a history of being on the right side of the market.

Enjoy the video,

Adam Hewison
Co-founder of MarketClub.com

This just in:

Amazon.com 1Q profit rises 29 percent
7 minutes ago
(AP:SEATTLE) Web retailer Amazon.com Inc. says its first-quarter profit rose 29 percent, helped by solid sales in the U.S. and abroad.

Quarterly earnings climbed to $143 million, or 34 cents per share, from $111 million, or 26 cents per share, in the same period last year.

Those results beat Wall Street's expectations. Analysts surveyed by Thomson Financial had forecast a profit of 32 cents per share.

Revenue increased 37 percent to $4.14 billion from $3.02 billion in the year-ago quarter.

Sales in North America rose 31 percent to $2.13 billion from a year ago, and international sales grew 44 percent to $2.01 billion.

Apple fiscal 2Q profit jumps to beat street on Mac sales
2 minutes ago
(AP:NEW YORK) Apple says its fiscal second-quarter earnings jumped to beat analyst estimates as computer and iPod revenue grew.

The Cupertino, Calif.-based computer and electronics maker's second-quarter profit totaled $1.05 billion, or $1.16 per share, compared with $770 million, or 87 cents per share, in the year-ago quarter.

Apple's revenue rose almost 43 percent to $7.51 billion from $5.26 billion.

Analysts polled by Thomson Financial had expected earnings of $1.07 per share on $6.96 billion in revenue.

During the quarter, Apple shipped 2.3 million Macintosh computers, accounting for $3.49 billion in revenue _ an increase of 54 percent from the same quarter last year. It also sold 10.6 million iPods and 1.7 million iPhones in the quarter.

Today I'd like to share with you my worst trade ever. In retrospect it turned out to be my best trade.

Here's why...

I started in the commodities business as a broker for a company called Conti Commodity Services. Conti was a division of Continental Grain Co. one of the largest and oldest grain companies in the world. Back in the 70s, Conti was just starting a new division to handle customers in the brokerage business. I was lucky enough to have them hire me as I had no experience and very little education. But, I was enthusiastic and willing to learn.

So there I was at Conti Commodity Services dialing and smiling and looking to get business for myself and the company. All this was back in the 70s when grain prices were skyrocketing. After a brief time on the job I guess I thought I knew better than everybody else.

So here’s my worst trade...

I was following the wheat market, just like everyone else because markets were hot. All of a sudden a slumbering December wheat market shot up dramatically on no news. I thought to myself that wheat had gone up too far and too fast, so I went short (that is I sold something that I didn’t own). It had to come down, right? That alone shows you how naïve I was back then. Well, for 20 minutes I looked like a hero. Rather than take a small profit when I had it, I decided I’d sit and wait for a bigger profit (call that greed). Well, you probably know what happened next, wheat closed up the limit and I was unable to get out of my short position and finished the day with a loss. Well I said to myself that wheat has got to pull back tomorrow, right? In the commodity markets, things only go from bad to worse when you're on the wrong side of a trade and that's what happened to me and my wheat position. I am not going to bore you with the gory details or the pain I went through, but the bottom line was I lost $10,000 on that trade. It doesn't seem like a lot of money now, but back then when I was just starting up my career it seemed like an insurmountable fortune.

To be truthful it was the best thing that could ever happen to me and here's why...

I learned a very tough lesson in that wheat trade, one that I've never forgotten. I've learned that there are two sides to every coin, two sides to every sword and two sides to every trade. For every profit opportunity you see in the marketplace there is an associated risk that comes along with that profit. I learned the value of risk management and why there is no free lunch when it comes to the markets.

Later in my trading career I’ve lost much more than $10,000 in other trades, but it never bothered me because I was managing my risk. A friend of mine lost over a million dollars on one trade. To many, this would seem like an insurmountable amount of money to lose on one trade. But my friend is trading with $50 million, so a $1 million loss is only 2% of his risk capital which is certainly very manageable. It is when you lose 40%, 50% or 60% of your capital on a single trade that it becomes very difficult, if not impossible to come back from.

So when I say my worst trade happened to be my best trade; I mean it. In my mind that early loss in December wheat was a priceless education in risk management that I still use to this day.

I cannot say enough about risk management and how you should manage your risk, but here are some trading tips that will help you avoid disasters like mine..

You must use stops. You must be disciplined. You must be diversified. If you have those three core trading items in your portfolio, you can survive and thrive no matter what the market throws your way.

I hope that like me, your worst trade turns into your best trade in the long run.

Every success in trading and in life,

Adam Hewison
Co-founder MarketClub.com

This news taken from AP on 4/17/08. AP is a new addition to MarketClub’s growing list of news services:
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(AP:NEW YORK) Earnings reports dominated the tech sector this week, with strong first-quarter results from industry heavyweights like Google Inc. and IBM Corp. providing reassurance in a season dominated by economic concern.

Google said late Thursday that its first-quarter profit and revenue handily beat analysts' expectations, easing fears that the economic slowdown could hurt the company. Google said its total paid clicks grew 20 percent year over year _ less than in previous quarters, which Google attributed to changes meant to improve the quality of clicks and, eventually, generate more revenue from fewer clicks.

After Google's report, its shares soared, finishing Friday's trading up 20 percent at $539.41, marking the stock's largest one-day percent gain and a dramatic change from the past several months. Google's market value had declined 35 percent since late December as investors worried about broader economic weakness hurting the company.
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See how we view GOOGLE in this short video.

Enjoy the video. We encourage your feedback on all our posts.

Adam Hewison
Co- founder, MarketClub.com