On investing

As to investing:  given the high volatility in the market, this is a good time to be in cash.

Here are some suggestions that can be accomplished in the short term in preparation for the bottom:

  1. Stop using credit cards, these things are evil.
  2. If you are employed, or have an alternative source of revenue, pay off your credit cards.
  3. If you are not employed, or do not have an alternative source of revenue, talk with your local grocer, hardware store, or business owner about contracting as a custodian.  Even if you make only a few dollars an hour, at least it is an income and will do wonders for your psychological state.  Use some of the money to pay off your credit cards.
  4. Subscribe to an on-line brokerage house.  Subscription to reputable on-line brokerage houses costs nothing.  The first benefit of this is that you will avoid the outrageous fees and costs charged by your local financial advisor, portfolio manager, etc.  The second benefit is that you are taking the first step towards proper management of your investments.
  5. Create a Roth IRA within your account at the on-line brokerage house.
  6. Add a fixed amount each month to the Roth IRA, even if it is $10.00 per month.  If you are under 55, you can add up to $5,500 per year of after taxes money.
  7. Then be patient and do not get excited when the market rises or depressed when the market falls.  Actually, when the market falls, that is a very good thing.
  8. Be Patient.

Nathan A. Busch

3 Responses to “On investing”

  1. btusing2011 Says:

    Great advice. Credit cards have become the undoing of the American people. Work hard, invest wisely, and live within your means.

  2. David P Odom Says:

    Regarding investing, you had a post a few months ago about Jammin Java which resulted in quite a few comments by your followers. I’m not sure if you are aware of it or not, but the SEC is investigating what happened with this “pump and dump” stock scam. The following is the text from an email I received from http://www.pumpsanddumps.com

    We Be Jammin!

    September 12, 2011: Time for us to give out “I told you so”s again, following an announcement that the SEC is investigating Jammin’ Java Corp (JAMN) for a spring season Pump & Dump which we were screaming about as far back as April. We took tons of criticism for reporting on the obvious scheme that resulted in many making ill gotten profits while many more collectively lost 10s of millions of dollars.

    According to a Bloomberg report, the SEC probe was revealed by the filing of lawsuits intended to quash subpoenas issued in conjunction with the investigation. The SEC does not generally discuss their investigations, so such revelations could only come from court documents or those working closely with the SEC.

    Obviously, we are not surprised by the SEC investigation, as we called it back in April and we believe similar probes are in the works for more recent Pump & Dump subjects LSTG and POTG, amongst others.

    Shares of Canadian Internet developer Fresh Traffic Group (FTGC), are the subject of an aggressive SPAM email campaign. As well as being illegal, this is an especially despicable form of Pump & Dump, as the promoters are not identified and the scam targets those who don’t even expect to receive emails pimping stocks as they would had they subscribed to a tout’s email list. In the last 24 hours, we’ve received 19 spam emails from phoney and temporary email addresses, which are deleted as quickly as they are created.

    Habitual Pump & Dump insider, William Lieberman, is at it again, this time with Fox Petroleum (FXPT). Lieberman’s past escapades include Trilliant Exploration Corp (TTXP) which the FXPT website refers to as a gold mining operation. It’s not any sort of operation and is as dormant as they come. Less dormant, but just as scheme oriented, is Mammoth Energy (MMTE), another Lieberman undertaking that has resulted in significant losses and is reportedly involved in litigation. Needless to say, we struggle to find any sign of success within the multiple public companies across the energy, gold and lithium exploration industries that Lieberman miraculously has time to run manage.

    The regulators continued their punishment of transfer agent, National Stock Transfer, and its principals for violations of federal securities laws. Two weeks ago, the SEC obtained injunctions against NST while creditors locked the principals out of their offices. On Friday, the DTC placed a chill order on those stocks serviced by NST and placed a block on having DTC services available to them simply by changing transfer agents. The most active of the effected stocks is Emax Holdings Corp. (EMXC).

    On Friday, the SEC issued temporary trading suspensions on AEGX, ACII, AMNT, BSTR, CREBQ and GRPK citing a lack of current accurate information. These types of suspensions are issued over renewable 10 day terms until the required information is made available or the SEC deems the suspension permanent.

    On Thursday, in his Jobs Speech, President Obama called for the cutting of red tape for those companies wanting to go public. Obviously, we think that it is already too easy for scams to go public through the reverse merger process and we hope that along with the easing, stricter enforcement of the regulations and accountability are forthcoming. In support of our position, we cite the June 11, 2011 statement by the Director of the SEC’s Office of Investor Education and Advocacy:

    “Given the potential risks, investors should be especially careful when considering investing in the stock of reverse merger companies,”

    To that statement, we’d like to add the sentiment that investors should especially avoid those companies which are the subject of aggressive marketing campaigns conducted by paid promoters seemingly for the purposed of creating a market for insider stock. We believe that until the SEC increases their enforcement, investigation and prosecution efforts, schemes like that of Jammin’ Java are going to continue injure those who are easy prey for “get rich quick” cons.

    • David:

      Thank you for the article and the information. I called the Jammin Java stock scam in December 2010. It figures that the SEC would delay until the horse is out of the barn, the barn has burned to the ground, and termites have eaten the house. That institution is more useless than a purse without an opening.

      The best remedy for stock scams is due diligence. Study SEC filings, trace the players, follow telephone numbers, search on addresses to determine if these actually exist, visit the headquarters of the company to determine if it actually exists. Philip Fisher identified the best source of information: scutlebutt. The internet has more than 2 billion users. Certainly that vast “brain” can identify, locate, and eliminate any threat of a SCAM. All we need to do is figure out how to harness that power.

      Nathan A. Busch

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