stock market rules
The Dow Jones Industrial Average was at a record high after nearly six years, as the stock market today (Tuesday) rallied enough to push the index up nearly 70 points at the open.
Just minutes after the opening bell, the Dow sailed passed its all-time high of 14,165 hit on Oct. 9, 2007. Less than a half-hour into the trading session the Dow roared higher by triple digits propelling benchmark to yet another record.
By 1 p.m. the Dow was up 146.99, or 1.04%, at 14,274.81. The Standard & Poor's 500 Index added 17.32 or 1.14%, to 1,542.52, leaving it in striking distance if its record close of 1,565 hit in 2007. The Nasdaq climbed 43.39 or 1.37% to 3,225.42.
Money has poured into stocks over the last several months as individuals have begun to feel more comfortable about the health of the economy - but can it last?
"The question is, can the Dow maintain these levels? The market is interested in risk-that's why the Dow is higher, why the riskier currencies are higher," Matthew Lifson, currency trader at Cambridge Mercantile Group in Princeton told Reuters.
Does the Heinz Deal Mean Warren Buffett Has Become a Doomsday Prepper?
At first sight, Warren Buffett's deal with the Brazilian-led private equity firm 3G Capital to purchase H.J. Heinz Company (NYSE:HNZ) looks strange.
At $28 billion the famed ketchup maker is valued at a rich 23 times earnings, and Buffett won't even control the management, which is to be left to 3G. Given Warren's long and storied history, something doesn't make sense.
But maybe he's become a doomsday prepper.
In the age of Ben Bernanke, canned baked beans and the like seem to make as the ideal investment. Or maybe Buffett feels that the dollar is about to be wiped out by hyperinflation.
Of course, in those circumstances, you would normally buy gold, but maybe Buffett believes that the crash will be so severe that the economy as a whole will break down.
In that case, you'd want guns and ammunition. Buffett's holding company Berkshire Hathaway (NYSE:BRK-A and BRK-B) does not own a gun manufacturer, but a subsidiary manufactures shoes under license from Browning Arms Company, so no doubt a deal could be done.
However, an even more strategic asset in such an event would be imperishable canned food, and you can certainly imagine a gigantic stockpile of Heinz 57 varieties being accumulated in warehouses around Omaha, maybe accompanied by a lake of ketchup, allowing Buffett to corner the market in baked beans and condiments.
As Insiders Head For the Exits, Do They Know Something "We" Don't Know?
Whenever the markets begin to look toppy like they do now, I turn to short-term indicators to help me figure out "what's next" for the markets. It complements the fundamental analysis I rely on for the big picture.
Some people - lots of people, in fact - will tell you that this is a wasted exercise. Predicting the markets, they say, can't be done. I disagree if for no other reason that if that were true, guys like Jim Rogers, Warren Buffett, Steve Jobs, Richard Branson and Carlos Slim wouldn't be the legends they are today.
As I see it, learning to "read" the markets and anticipate its twists and turns is absolutely possible.
But let me qualify my statement. My goal is not necessarily to be "right."
Any savvy trader will tell you the objective is to get enough of a read - right or wrong -so that you can use the appropriate tactics needed to be profitable.
For example, the markets have one heckuva run and flirted with new highs in recent trading. To the casual investor, it appears that things are good because the economy is gradually recovering.
Nine Lessons From The Greatest Trader Who Ever Lived
The stock market has certainly produced its share of heroes and villains over the years. And while villains have been many, the heroes have been few.
One of the good guys (for me, at least) has always been Jesse L. Livermore. He's considered by many of today's top Wall Street traders to be the greatest trader who ever lived.
Leaving home at age 14 with no more than five bucks in his pocket, Livermore went on to earn millions on Wall Street back in the days when they still literally read the tape.
Long or short, it didn't matter to Jesse.
Instead, he was happy to take whatever the markets gave him because he knew what every good trader knows: Markets never go straight up or straight down.
In one of Livermore's more famous moves, he made a massive fortune betting against the markets in 1929, earning $100 million in short-selling profits during the crash. In today's dollars, that would be a cool $12.6 billion.
That's part of the reason why an earlier biography of his life, entitled Reminiscences of a Stock Operator, has been a must-read for experienced traders and beginners alike.
A gambler and speculator to the core, his insights into human nature and the markets have been widely quoted ever since.
Here are just a few of his market beating lessons:
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