Market for stocks or Stocks for the Market?

Is it time to start thinking about getting some milk to the cat? By “milk” I mean money and by “cat” I mean us.

As much as I am a fan for being in cash positions for this time of the year I can easily see the stock market now being a great place for solid, performing companies with great fundamentals. You may or may not remember fundamentals, they have NOTHING to do with velocity of trading or anything else.

It has to do with the fact that the company is making money, selling whatever it is that they sell and they look to have an average to decent future.

There are some stocks out there that fit the bill and even if there is a global depression they still might make money.

There are other stocks, such as the one pictured below that aren’t even good for holding villagers to be covered in vegetables and fruit with.

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As you can tell from the image, it looks like the two fellows in front are bidding on him or sizing him up. You should be doing that now with stocks that you are looking at. What are some things that you know that people will be buying or still need even during a depression?

Food? Clothing? Shelter? Some creature comforts? Start looking at stocks in these sectors and start looking at their fundamentals. If they have cash, a good solid cash flow and something that the public still needs, seriously start looking at investing in them, even for the short haul.

The computer industry is also a place to at least take a peek at. Yes, desktop computer sales have slowed as well as laptops but the new market of netbooks (smaller laptop computers that don’t have as many bells and whistles as larger laptops) looks like people will still want their smaller, inexpensive net surfing ‘puters.

The same holds true for data security companies. Now more than ever, people want to keep their information safe without spending a lot of money.

Don’t forget that with the newer models of cell phones that they are using faster computer chips as well and the chips have to be manufactured somewhere. Maybe it is time for some more research as what goes into the cell phone in your purse or pocket! I just want to get you thinking so you can do your own fact finding. Any tips you usually get from other people tend to be worthless because you are getting the stock advice second hand! By the time you get it, it may be too late to act on it because market conditions have changed. It is worth taking some time to look at different ways to generate income.

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Another source of income in researching stocks that are solid and not moving anywhere is writing covered calls. I touch on these in my book, Practical Money Making, and there is a ton of information on covered calls all over the Internet. Most brokerage houses have courses on learning options as well. If you plan on holding a stock for a long time, you may be interested in writing covered calls because it is a way to generate income on your portfolio if the stock stays within a certain trading range and doesn’t hit the price that you sold the call for or hopefully not drop into the abyss of near bankruptcy.

As always, please do yourself a favor and do your own due diligence. For more options information, Google “CBOE”. The Chicago Board of Options Exchange (I think I got that right) offers courses in learning options.

For stock market fundamentals, start digging up annual reports and start learning how to read them like they were rare secrets of the universe. You never know what secrets you may find if you actually take the time to look at an annual report or two!

After all, sometimes if you want to get milk to the cat, you need to go straight to the cow! And nothing says mooooove money into me then actually seeing what the company is doing!

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