The Bull Hunters Guide

Last time in this blog, we introduced the concept of short selling, something that we’re going to be discussing over the next few entries. It’s a pretty simple technique that quite a lot of people are involved in, but like any aspect of trading, it involves its own unique set of risks and opportunities. As such, it warrants a closer look than you might have given it in the past.

What Exactly Is Short Selling?

Like we said last time, it’s a way to profit off of a bear market. You invest in a stock, but you profit when the value of the stock decreases rather than increases. Here’s how it works.

When you short sell a stock, you’re essentially selling a stock that you do not own. If that sounds weird to you, well… that’s because it’s a weird situation, and hard for many to understand. When you short sell, your broker is entering an agreement with you that they’re paying you for the selling of a stock today and that you’ll actually buy that stock at a later date, in order to restore balance to the transaction.

One typically engages in short selling when they expect that the value of a stock is about to fall soon. Say that you short sell on a stock that is worth $1000. You do this and the broker gives you that $1000. Then, before the time period expires in which you have to actually buy the stock in question, the stock collapses and is worth only $500. You’ve just made $500 off the decline of a stock!

Of course, there are risks to be had here. For example, if the value of the stock rises, then you’re still obligated to make the purchase. You might well find yourself having to shell out significantly more than you sold for in the first place. Next time, we’re going to take a closer look at what goes on in a short sell transaction.

See you next week for part 3 of Short Selling.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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Hey there. Welcome once again to our series of posts covering some of the most popular and effective methods for selecting stocks. These methods have been documented and compiled over the years, and while they differ dramatically in terms of execution and philosophy, they all share the common element that, depending on who you ask, they work!

While every stock selection is something of a gamble, it’s our hope that by looking at these time-tested strategies, you’ll begin to gleam some idea from them of how winning stocks are usually chosen, and begin to develop your own strategy that will be effective for you.

Beating The Dow

Today, we’re going to look at what is probably one of the simplest methods in all of investing. This method was first presented in a book by Michael Higgins called “Beating the Dow”, and is commonly known as the “Dogs of the Dow” method. Selecting stocks by this method couldn’t be easier. You simply take a look at the top 30 companies with the highest dividend yields, according to the Dow Jones Industrial Average, and then spread your portfolio among the top ten.

That’s really all there is to it. You just check back every so often, perhaps every quarter, and make changes based on what you see, so that your portfolio always accurately reflects the top ten dividend yield stocks at any given time.

Depending On The Dividends

Clearly, this strategy is depending highly on the dividends that you’ll receive from the stocks in question, but it always takes into consideration the future potential of those stocks. The idea is basically that, if a stock is in the Dow top 30, it will typically be a strong stock with enough of a foundation to weather passing storms and eventually return to a position of prominence, whereupon you can sell it for an amazing profit. In the meantime, you just enjoy those dividend yields.

Well, that’s it for now. Told you it was a simple method. Next time, we’re going to wrap this series up by taking a look at the last method on our list: technical analysis. Stay tuned!

See you next week for part 10 of Stock Picking Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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I released the original version of The Bullhunters Guide To The US Stock Market in December 2006. There were 1600 downloads within a matter of weeks. As of today, there have been 3770 downloads. The Bullhunters Guide has officially made Bronze status in the best seller stakes (just kidding. I’ve got no clue what that means)

I am officially over halfway through the new version of The Bullhunters Guide. This time it will include more indepth trading information about options, covered calls and more advanced strategies. Increasing your monthly cashflow by renting shares is one topic. I’m hoping this will shed more light on the US stock market for everyday people. Of course the strategies apply to most stock markets around the world. The bigger markets are just more suitable due to the liquidity of the stocks.

2007 has been kind to me. The Bulls have had a Run on the market and I haven’t needed to focus too much on Bearish Strategies. I will talk more about those strategies in the next book. Stay posted and I will keep you updated about the release date for the bigger and better version of The Bullhunters Guide To The US Stock Market – Due for release December 2007. Oh Yeah! It’s free too. Of course!

Go the Bulls!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2007

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Firstly Bullhunters, I would like to say that I am not a licenced Financial Planner and neither is Sean Rasmussen or Jamie McIntyre, so we cannot give advice on how to invest your money.  What I can do however, is share with you some insights of what Jamie talks about in his best selling book What I Didn’t Learn at School but Wish I Had.  After all, I wouldn’t be writing this blog if I hadn’t become a 21st Century Academy Graduate :)  And, if you are investing in the Stock Market and trading successfully, how are you going to make that money work for YOU rather than having to work for your money?

Please remember when you download this free ebook that the information presented here is based on Jamie McIntyre’s personal experiences as an entrepreneur, consultant, coach, investor and others he has modelled in detail.  You may have to modify them, do further research on them or adapt them to suit your personal financial situation.  Also, any information presented is given purely as an illustration and should not be construed as a specific investment recommendation.

The key to creating wealth is to make the space in Your Life for the money to show up first and foremost.  Jamie discusses  the following points, amongst many others,  and allows you to fill in your own details in the book itself so it is written in an educational format.  They fall under these categories: 

1. Financial Protection - this is the precise amount of money  you will require in liquid assets to be financially protected.
2. Financial Security - the amount of money you will need to achieve finacial security to cover the basic necessities such as food, clothing and transport.
3. Financial Independence - the amount of money you will need to achieve financial independence to be independent of working a J.O.B. (Just Over Broke).
4. Financial Freedom - this is attained when your investments provide enough income for you to live the lifestyle you desire for the rest of your life without ever having to work again.
5. Absolute Financial Freedom - this is when your investment income provides you with certainty that you can do whatever you want, as much as you want, whenever you want, wherever you want, with whomever you want, - without ever working again.

I have a big poster board that I drew listing these points with the amounts needed to achieve each level stuck on the door of my office so that I can look at it on a daily basis and know where I am up to.  So far, I have achieved step number two which is Financial Security and on the way to achieving Financial Independence by March of 2008. 

On this poster board, I also have some pictures that I have cut from magazines of places that are on my list to visit, a beautiful home similar to one which I would like to purchase and a photo of my newish car which I purchased at the beginning of the year.

I am not telling you this to impress you, but to impress upon you that planning for your financial future is imperative to living the life that you desire to live.

Working through the book helps you set up a reduction strategy to eliminate your bad debt (as opposed to good debt) for the purpose of using your money for the strategies of renting shares, property investing, running your business more successfully with a team of professionals and of course Internet Marketing strategies.  Jamie uses a synergy of all these strategies combined and wants to teach you how to develop a Millionaire Mindset and do the same. 

If you are reading this and are already trading, perhaps you may want to take a look at what else you could do with your finances to help reach your desired level of Financial Intelligence and quit working for someone else unless of course you enjoy what you do.  If the graduates reading this would like to comment and share something that really stood out for you from the book, I welcome your comments.

Sean’s wealth forum is a great place to meet other graduates and members who are doing their due dilligence into the homestudy so if you are so inclined, please visit the wealth forum and make some new friends.

To Your Financial Success

Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 - 2007

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Bullhunters Guide

Well Bullhunters… we have come a long way in the short time since the Bullhunters Guide blog started and I wanted to re-cap for you as there have been many new learnings in the understanding of how the US Stock Market works.

Firstly there was the fictional account of Wal-Mart’s founding which showed us how a business is incorporated and the getting of private financing for this to be made possible. Then we discussed how a corporation operates, what its objectives are and what gives shares of stock their value.

The components of the DJIA which is made up of 30 stocks and the understanding that when someone talks about the market being down 50 points they are generally talking about the Dow Jones in particular. The components of the DJIA were created by Charles Dow to simplify market watching.

21st Century Academy Graduates

Sean then came along and posted the wonderful story about Maria and Pierre retiring to the Stock Market. If you missed it, its well worth the read of how two of the 21st Century Academy graduates took on the renting shares strategy from the Jamie McIntyre homestudy program and ran with it. Within 10 months they sold their business and retired to the stock market so now they can work from home. Doing these strategies as you know does not take up a whole lot of time.

More DJIA

We then discussed the components of the DJIA and how some stocks are cyclical and some non-cyclical meaning that the cyclical stocks perform best when the economy is in the early stages of the business cycle and the non-cyclical stocks perform best when the economy is in the later stages of the business cycle. This is a case of needs vs wants.

The opposing investment strategies was about the capital gains and price to earnings ratio in which we learned of just two of the strategies that you can use when investing in the stock market. We also looked at more advanced strategies like trading options. There is so much to know before you even get started with trading.

Have a great week everyone and happy trading to all

Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 - 2007

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