He believes that investors will be waiting a very long time for a traditional bull market. He recommends being a value investor and not being afraid of keeping some investment funds in cash. In order to protect yourself on the downside, he recommends buying stocks that are cheap, based on discounted cash flow. Chapter 12 is important as he covers an often overlooked subject, when to sell. Most important, he covers how to find new stock ideas.

If you are looking for a concise easy read on investing in sideways markets, get The Little Book of Sideways Markets: How to Make Money in Markets that Go Nowhere.

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• vitaliy katsenelson - the little book of sideways markets pdf

The book is a collection of sayings, aphorism, and thoughts that will help stretch your brain. It is an easy read with only 128 pages, great for reading on a train or plane. In case you are wondering who Procrustes is, I’d rather not tell you to avoid ruining the concept of the book for you.

Taleb fans should find The Bed of Procrustes: Philosophical and Practical Aphorisms an interesting read.

Most analysts say that pharmaceutical stocks and consumer staples are the best places to put your money during rising rates. But there is one stock that will benefit big time from higher interest that doesn’t fall into either of these sectors. The stock is Apple Inc. (AAPL).

Why Apple? First of all, it has no long-term debt. Second, the company has a huge amount of cash. No wonder why I referred to Apple as a money market fund a few months ago. Although many articles report that it has about $51 billion in cash, that number includes $25.391 billion in what Apple’s accountants consider long-term marketable securities. But Apple does have $11.261 billion in cash and cash equivalent securities plus $14.359 billion in short term marketable securities, for a total of $25.56 billion.

Apple’s weighted average interest rate has been dropping for the last three years, as have rates in general, from 3.44% in 2008, to 1.43% in 2009, to 0.75% for the current year. Of the $25.56 billion in what is essentially cash, total income based on the 0.75% weighted rate is about $191.7 million.

If the rate increased to 3% and assuming the balance remains the same (but it should certainly increase), interest income on effective cash would rise to $766.8 million, and at 5%, the income would be $1.278 billion, or $1.18 in additional earnings per share, currently at $15.15 per share. This additional interest is a pre-tax number, but based on the companys effective tax rate, additional earnings would still be close to a dollar a share.

Plus there are no other expenses incurred in generating this income. No salaries, no capital expenditures of manufacturing equipment, no purchase of raw materials, no office space rental, no nothing; just some electrons on a computer screen. Talk about easy money.

If you want to check out the lists of stocks which have a lot of cash, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author owns AAPL.

By Stockerblog.com

The author, James Lang, was the first person to ever write a peer reviewed article on Roth conversions. He provides plenty of tables, charts, and graphs to make this topic easy to comprehend. He also includes several real life stories involving Roth IRAs. He covers how to measure the benefits of a conversion, why you may not want to convert your entire IRA, how much you should convert, and the risks and pitfalls of a Roth IRA conversion. Probably one of the most important sections in the book is ‘What if you Don’t have the Money to Pay the Tax on the Conversion Outside the IRA’. He even gives specifics on what you should do depending on what tax bracket you are in.

Anyone who has an IRA and not a Roth IRA should read The Roth Revolution now.

Ken Fisher Interview Part 2
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: I’m going to get back to the bunks shortly but I read recently that you’re moving your offices or some of your offices to the State of Washington?

Fisher: We have 325 people in the state of Washington., and we started moving people into Washington three years ago. We’re building a building in Washington because traditionally we like to own our own real estate and not to be in leased space. At this point in time, we now have about a third of our employees in Washington and we are not doing anything that I consider as very radical.

Stockerblog: What this was leading to was, I was wondering what you think is the future of California, not from a political standpoint but a financial standpoint in the next couple years.

Fisher: In the next couple years, California will largely continue on the trend that is has been on. Let’s just think that through. Forgetting about other things, the driving feature in California for some period of time now, forgetting about budgets per se, has been to slightly lose population While shifting the demographic of the citizenry and the voter base, away from productives towards non-productives.

That becomes a momentum unto itself because the productives move out of the state of California and the non-productives into California, the non-productive become dependant, if you will, on the professional political class, which provides more support for more big government which requires more spending which requires more taxes and/or bigger deficits., either way, which again drives more productives away. Until you break that cycle, which is not easy to do, and if not done quickly, California continues down the same basic path.

So if you look at this year, which is on a national basis, is a year that is aiming towards more fiscal responsibility, supposedly, or more conservative people being elected, House of Representatives almost certainly going to Congress, governorships shifting heavily away from Democrats towards Republicans, California isn’t going there at all. California is going to elect or in a sense you could say re-elect Jerry Brown governor. [Ed. note: Interview was Oct. 27] The legislature is going to remain heavily Democratic. The same dilemmas that Arnold Schwarzenegger faced as governor Jerry Brown is going to face as governor.

If you look for example at it from a different way and this is somewhat telling, if you look at the House races across the country that are thought of as toss-up races, the ones that could go either way, not a one of them is in California.

California isn’t shifting so its basic problems will remain the same. Its socio-political world has continued to tilt away from productives a little bit each year toward more unproductives a little bit each year, which maintains and establishes the voting populace at a little more dependant on the professional political platform.

Stockerblog: I think the fear from investors is, could the state go bankrupt, is that even a possibility, and if that did happen, then what?

Fisher: You asked about the next few years. The state is not going to go bankrupt in the next few years. The state’s going to have severe budget problems in the next few years. Might the state eventually go bankrupt? Yea, but not in the next few years.

I will make one point, that’s an observation that so far does not seem to get the light of day. In November, I turn sixty, and in my lifetime, my adult lifetime, there has never been a November election in California that did not have multiple bond issue initiatives on the ballot. For the first time in my adult life, there are no bond issues on the California ballot and nobody seems to notice that. The San Francisco Comical hasn’t written about it, the LA Slimes hasn’t written about it. That’s an interesting sign. It’s a sign to me that California isn’t going bankrupt anytime soon, but that’s also a sign that’s good that they can’t sell any bond issues anyway.

End of Part 2

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the article was written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

Ken Fisher Interview Part 1
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: I’d like to first ask you about your new book Debunkery. Why don’t we start out with you giving a description of what debunkery is and how you came up with the name?

Fisher: The name popped into my head. Debunkery is the process of what I talked about in my first question of The Only Three Questions That Count book, which is ‘What Do You Believe that is Actually False’. In Debunkery, the game, if you will, is to take things that are widely accepted and see if you can subject them to some catechism that shows that they are not true. That which is thought of as conventional wisdom is exposed as actually false, and therefore bunk, and therefore the process of debunking or debunkery.

Debunkery is a game that I try to convey in the book by using some techniques that aren’t necessarily terribly complicated, some of which are easier to learn than others but pretty much anyone can learn if they wanted. So part of it is not just showing the 50 things that people often believe that are bunk, but teaching them how to do the debunking themselves so that when they finish reading the book, they can do their own debunking.

Stockerblog: Let’s talk about Bunk #2 which is ‘Well Rested Investors are Better Investors.’ Now I think what you mean by that is the classic conservative type of investments like bonds or bank accounts, that type of thing, is not really the way to go; you really have to go into stocks to get the returns you are really looking for.

Fisher: Well you can view it that way, and that is one way to view it, but you see a lot of people on different web sites saying that you need a sleep-at-night factor, or sell down to the sleeping point; you hear all these things about sleeping and conventional wisdom. Or people say things like, “Well I’ve gotten out of the market and I’m not going to get back in until I’m more comfortable with things,” “I don’t think I could sleep if I owned category X now.” And the fact is, capital markets, in all their aspects, are ones where comfort is a very expensive item.

If you are prone to be comfortable based on what you own, you better reconcile yourself to low or negative returns. Most of the time when people buy the things that are most comfortable, they actually end up getting negative returns. The history of buying comfort is very expensive.

So if you think of any asset class, doesn’t matter whether it is stocks, bonds, commodities, anything, the time people are most comfortable with it is mostly really close to the peak. When people think they have the clearest future, it’s close to the peak. When they think they can’t see a clear future out there at all, that’s more often, close to a bottom.

Stockerblog: I know that some investors feel comfortable with municipal bonds, they are looking at possible increases in capital gains taxes, they are wondering, well if I can get 5% tax free versus nine or ten percent on my stock portfolio, which is going to be taxed at the state and Federal level, maybe that’s what I should be in.

Fisher: One of the things that they don’t think through in the way capital markets work is it’s not about whether you’re rational, and it’s not about whether your smarter or more rational than the guy down the road, the reality is capital markets discount that which everyone has been digesting for some time, and it’s virtually impossible to think that a concept such as the ones you just articulated isn’t exceptionally, widely digested by a very large number of people, who processed it and pressed it into securities at current prices.

So for someone to think, “I can get a better return off of something like that,” whatever it is, it’s very hard for people to get but it’s an arrogant statement. It’s saying my rational observation is somehow unique compared to all the other people confronted with the exact same phenomenon.

That’s one of the hardest concepts that people have is that markets are discounters of all known information. And while markets are not perfectly efficient, they are relatively efficient. So something as simple as taxes, millions of people have forever made decisions based on tax rate changes, and there is actually a very clear and demonstrable history which people don’t want to hear about, which is tax rate changes don’t end up having facts that people would predict because they are priced into the market long before those tax changes ever come to pass.

Stockerblog: I remember that was in one of your bunk chapters.

Fisher: One of the things you hear people say all the time are things like “Stocks will do well or badly, bonds will do well or badly,” you pick a category, it doesn’t matter to me, “because capital gains rates are going up or down, or because income tax rates are going up or down.” They somehow seem to forget that, and this is one of the points I use in Debunkery, is that history is actually very useful for debunking, because we’ve had a lot of times in the past where interest rates have gone up and own, and tax rates have gone up and down, and so if something as simple as that were to have the effect that people think it might, they would see those changes when those simple changes occurred in the past, and that’s easy to demonstrate.

I tell people all the time, stop and go back and check things. And very few people do, because what most people do is they go into simple observation of the way they think it out to work and they don’t go any further than that. This is Bunk #7, which is Go With Your Gut. Your intuitive reaction to things, again everybody else’s reactions which are not that different than yours, unless you think you are really unique which is a really arrogant statement, they are already priced into the market already.

End of Part 1

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns are available in the form of a free Excel list at WallStreetNewsNetwork.com.

If you missed last years interview, you can check it out as follows: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned above at the time the article was written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

Fast forward to the last couple of years…

Although my wife and I still enjoy the odd Friday evening at the pub we dont need to worry about transferring money into our savings account. This is because our bank does it for us. Weve set up our super simple automatic savings plan to ensure after 26 paychecks (every two weeks) my wife and I will have at least $2,600 in our high-interest savings account. I advocate (from our experience) setting up a bi-weekly automatic transfer plan with your bank is one of the best ways to save money. And its so simple. Whether its $25, $50 or whatever amount you can consistently commit to, after one year what may seem like small, slow drops in the bucket will add up to a pretty full pail of cash. The beauty of it all is – you probably wont even notice the money has been transferred it goes out before you have any chance to see it or burn it.

I promise you, if you get into the habit of spending only what you see (give or take) in your chequing account your out of sight, out of mind savings account will not only grow but youll be pleasantly surprised with the amount at the end.

(With a few clicks of a mouse and in a few easy steps…you’re done)

Sometimes, just getting started with a savings plan is the hardest part. There will always be a temptation for you to stop the transfers. I feel it every now and again myself. Same goes for my wife – those shoes at Winners are always calling her name! But on a serious note, if you can budget an amount to transfer and have some discipline to stick to it, youll be rewarded. We plan on using most of our savings to take a great trip this fall. Weve already paid off our flights so were halfway there. You could likely have your own getaway too with your own super simple automatic savings plan.

Do you have an automatic savings plan? If not, how do you save?

More Money Than God: Hedge Funds and the Making of a New Elite

Guide to Hedge Funds: What They Are, What They Do, Their Risks, Their Advantages (The Economist)

All About Hedge Funds : The Easy Way to Get Started

The Fundamentals of Hedge Fund Management: How to Successfully Launch and Operate a Hedge Fund (Wiley Finance)

Hedge Funds For Dummies

Hedge Funds: An Analytic Perspective (New Edition) (Advances in Financial Engineering)

The Hedge Fund Book: A Training Manual for Professionals and Capital-Raising Executives

Investment Strategies of Hedge Funds (The Wiley Finance Series)

Handbook of Hedge Funds (The Wiley Finance Series)

Trade Like a Hedge Fund: 20 Successful Uncorrelated Strategies & Techniques to Winning Profits (Wiley Trading)

August will be the third month of losses for the stock market out of the last four when the books close next Tuesday and we move into September. The major US indices have lost more than 5% across the board with the Dow down just 4.25% and the Russell 2K down 10%. The bearish price action looks like it will continue for the majority of September.

As of Wednesdays close a new, confirmed bear signal has emerged on the markets and its historically dependable. In addition to the slew warning signs from Mondays Equity Put/Call, the VIX crossing above its 200 day moving average and poor home sales we are seeing a short signal based on Acceleration Bands. Let me explain what this means

Perhaps one of the most difficult momentum indicators to trigger a buy or sell for the SP500 is Acceleration Bands the bands target the top/bottom 5% of bull and bear trends helping traders focus on only strongest moves. Check out our free Indicator How to Video on Acceleration Bands. The signals are easy a traditional Acceleration Band Buy Signal occurs after 2 consecutive closes outside the upper band while a Sell Signal occurs after 2 consecutive closes below the lower bands

Why is this Important NOW?

Wednesdays close marks the second consecutive close below the lower Acceleration Band meaning a Bearish Acceleration is expected in the market. The previous signals based on acceleration were profitable more often than not.

In the chart below you can see all SPY acceleration signals since 2008. Ive noted the entry/exit dates and entry/exit prices of each signalthe performance is based on the total signal result and max gain/loss is the max gain in the signal. Whats interesting is that about 75% of signals were profitable at one point during the signal. This means weve got a very good opportunity to short the market now.

To give you a better idea of what these signals look like on a chart we plotted the system on the chart below. This shows you the systematic entry/exits. Overall, you can see that these areas are the strongest trends over the past two yearsAcceleration Bands seek to highlight the top 5% of moves in a stock or ETF. Of course, the S&P500 (SPY) is an average so there are several sector ETFs experiencing the same signal. Other sector ETFs that are currently in bear accelerations are SPDR Energy (XLE) and SPDR Financials (XLF).

Whats Bottom line for TRADRs? Seasonality suggests that we could see strong selling pressure in September while the mid-term election cycle suggests a one year rally starting after the elections It would seem likely that a sharp seasonal sell-off could take place in September following by a strong fourth quarter rally.

SP500 Index Daily Acceleration Band Signals Since 2008

Trade well,

Andrew Hart ETFTRADR

Ok, lets jump into to comparing gold and silver as trading instruments. I get the same questions from new traders all the time and I think these two questions will help clear them up.

The questions are:

1. Why dont you give silver (SLV) trading analysis/signals?
2. Why dont you trade silver?

My answer to the questions are simple and the chart below displays my view.

The gold (GLD) signals I provide work with silver so you can just trade silver when I have gold long or short trade. This is the reason I dont provide much silver analysis because its duplicate info.

The chart below shows how gold and silver trade together when it comes to rallies and sell offs. But notice how volatile silver is while gold had a nice slow and steady trend upwards Golds low volatility trending characteristics is what I love about it. Silver on the other hand is all over the place making it easy to have protective stops triggered before the majority of the trend is over. The silver charts almost always look terrible (tough to read for a direction). I really dont like getting shaken out of a winning trade

To see chart and the rest of the article, click here.

by Chris Vermeulen