Cheap stocks? To invest or not to invest?

Cheap stocks, the real question here to know when to put your money in on a company or once great company that has come crashing down (much like this graph you see before you). Well, it's hard to say, there are so many companies that are incredibly "cheap". But is this true or not? What exactly is a "cheap" stock versus an expensive stock. Just because CitiGroup, once a 300 billion dollar company is trading at $1 a share does that mean I invest in it? Yes, but only if you see healthy balance sheets, growth opportunities, a strong board, and if you can stomach volatility. It's hard to know when or when not to put faith in a stock that you view as a great bargain just because the price is so low. Take Las Vegas Sands for example, this casino Company once traded at $130/share in early 2007. Now it stands at around $2.00 a share or so, so do I buy it? Well, I'd say not now, Las Vegas Sands has a huge amount of debt and slowing growth in all their industries. The Board is well...a crapshot and there's no real guidance of where the company is headed. How about say...DryShips...company traded near $112 a year ago but now it trades at a horrid $3.90/share. Again, could be good in a year or so but balance sheet is questionable. I have no idea who's on their board and they have a lot of debt obligations.

Now if you take a company like, Navistar International. A great buy...it's trading at half of its 52 week high right now and it's just because the stock was inflated in my opinion. It pays a dividend and has little short-term debt, the company is making moves and deals (just thwarted off their Ford relationship) and I predict that industrials are going to be the 2nd leader out of this bear market.

Nordstrom, another great company that could be a steal right now. The last bear market saw Nordstrom hit $8/share but it bounced back in the last bull market to touch around $45. Nordstrom has great leadership in the company and they are still expanding. A loyal customer base and they own their own debt through Nordstrom banking. The stock is trading above the $6 low and is standing at $15. Of the big retail luxury giants Nordstrom is a safe bet and I think you can ride it for some time. Don't expect big returns but know that it's far from bankruptcy.

So if you're ever going to invest in a "cheap stock", don't. Cheap is what you buy at the grocery store for lunch. Inexpensive is what you buy when you see a bargain in something with value.

Trading in Uncertainty...buy Dividend yielding stocks

Alright so the market opened up horrible today, traders are still uncertain to where this market is going to go and we traded on fear not logic today. Regardless of the bounce back in financials and the Merck and Schering-Plough merger as well as the Dow/Rohm merger. We saw a negative ending day in the Dow as well as the Nasdaq. No real good news didn't help the tech sector either which as of late has been doing fairly against the Dow 30. One bright side of news was that BAC was seeking private funding, any news of private funding for banks is good news. It shows the less dependence our financial firms will have to deal with which could show signs of light. So, what do you do if you want to get into the market but are so uncertain you don't know whether to by WalMart or Walgreens? Best Buy or Gamestop? Johnson and Johnson or Proctor and Gamble? I'll tell you, invest in high dividend stocks, here are my 5 picks.

Merck- Well today there was a little merger action with Merck which shows good financial strength in the company. It may be volatile but the 6.30% dividend payout ain't bad...

Dow Chemical- Another merger stock today and a cheap play at around 7 bucks a share. This company has been hit hard but looks to be caught on an upswing. Pays a 8.40% dividend.

Goldman Sachs- Ahh, now this stock has been hammered and keeps going back and forth but a 2.0% dividend is huge for our bank stocks and again I see an upswing here from 77 to 1000.

Shipping Financial- Holy cow a 27% dividend? This stock is at a 52-week low and was darling for dividend players a while back. If rates go back up so will Shipping Financial.

Waste Management- Trading at a cool 20 bucks a share this garbage company pays a nice 5.00% dividend and yeah know what...peeps always got garbage.

So there you have it, I personally think I am going to dive into Shipping Financial tomorrow if there is some good positive feedback from research...keep on trucking

DOW Hits below 7,000...is this the end?

Today I saw something that I have not seen since 1997, the Dow hovered around 7,000 points. Back then I was about 16 years old and was right in the middle of the tech bubble. I was invested in Amazon.com and I'm guessing around that time it was in the 3 digit mark. Back then Dow 7,000 was a great thing, now that strikes Armageddon. Today's investors look at this as horrible, disgusting, unspeakable...etc. On top of that the government gave another 30 billion to AIG, so now we're broke and in more debt what does this all mean? Does it mean we are going to hit Dow 6,000, 5,000, 4,000? I think not, I think the market is incredibly over sold and we are in a panic mode. Which is understandable, housing has yet to stabilize, employment numbers (which are out next week) are not looking any better and the there is no clear sign of direction with the market, except for down. So what do you do with your money now.

Well the are two scenarios I like to think of:

1. You are in the market and have been for the past 2 years or so and don't know whether to cut your losses or stick with you "underwater stocks". I say stay with your holdings if you can stomach the losses and are invested in well balanced innovative companies. Companies such as Apple, Goldman Sachs, Hewlett Packard, Coca Cola, Jack in the Box, to name a few. It will take time and we will see positive strength in a year or so from these great value companies.

2. You have about 10K in your investment portfolio and are ready to invest but are scared shitless to throw your money out there. Well, you probably have no experience investing period so your stomach is probably, "light" at this moment. Keep saving your money until after March, then start looking at good investments. Starters like, Exxon Mobil, Phillip Morris, Apple, Caterpillar, US Steel, General Electric. These are great buys now but will take time to stabilize themselves again.

-Now if you can stomach upswings then trade in these companies now but set goals for

yourself. Do not, I repeat do not get greedy with your gains. If you want to make a gain

of 2 points a share then hit that point and sell. This market is too volatile to be playing

around with 10K.

This is truly what I believe and foresee happening in the next month or two. So bare with the market but do not become a bear...get it? If you don't email me...haha