Posted on August 24, 2012 | Stock Superstars Report

Stock Superstars alert for the week ending 8/24/2012 updated.

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The IPO Prospectus: How to Read the Fine Print

Posted on August 24, 2012 | AAII Journal

As a mutual fund manager, one of the ways I gauge market sentiment is the height of the stack of IPO red herrings (preliminary prospectuses) in my in basket. This past summer, my basket was overflowing.
An IPO or “initial public offering” is the first sale of stock to the public by the company or existing shareholders. This year, every conceivable type of company is coming public, which coincides with most major market indexes trading near multi-year highs during the summer, although in the past month the indexes have retreated markedly.

Due to investor complaints about the performance of past IPOs, this section is now placed early in the prospectus. Normally this section is several pages long and should be read with great care, since it details potential risks which may include…

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Gadget Corner – BodyMedia FIT CORE Armband + Activity Manager

Posted on August 24, 2012 | Computerized Investing

Monitor your daily metabolic and lifestyle data to reach your activity and weight goals.

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AAII Investor Update: Learning From Groupon’s Plunging Stock Price

Posted on August 24, 2012 | Investor Update

The collapse of Groupon’s (GRPN) stock price provides a good lesson of how the rules regarding business models haven’t changed. The beleaguered stock has fallen by more than 80% since it first started trading on November 4.


Bond Resources

Posted on August 23, 2012 | Computerized Investing

The three best websites for information and data on corporate, municipal and government bonds.

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Using Currencies to Diversify Your Portfolio

Posted on August 23, 2012 | AAII Journal

Investing in currencies can reduce the overall risk profile of your portfolio, as currencies have different and less volatile returns than stocks and bonds.

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AAII Sentiment Survey: Bullish Sentiment above Average for First Time since March

Posted on August 23, 2012 | AAII Survey

August 23, 2012

Bullish sentiment is above its historical average for the first time since March 29, 2012, according to the latest AAII Sentiment Survey.


Bullish sentiment, expectations that stock prices will rise over the next six months, rose 5.1 percentage points to 42.0%. This reading ends a streak of 20 consecutive weeks with bullish sentiment readings below the historical average of 39%.

Neutral sentiment, expectations that stock prices will stay unchanged over the next six months, fell 2.9 percentage points to 32.2%. Even with the decline, neutral sentiment is above its historical average of 31% for the fourth consecutive week and the eighth out of the last 10.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 2.2 percentage points to 25.9%. This is the fourth consecutive week that bearish sentiment has declined. It is also the lowest level of pessimism recorded by our survey since March 29, 2012. The historical average is 30%.

Since bullish sentiment reached nearly a two-year low of 22.2% on July 19, 2012, optimism has rebounded by a cumulative 19.8 percentage points. Rising stock prices, a lack of new negative macro headlines and data showing that the U.S. economy is not stalling have all combined to improve individual investors’ moods. The optimism is cautious, however, as individual investors continue to fret about slowing global economic growth, Washington politics, and the European sovereign debt crisis. New negative headlines or a return of downward market volatility would dampen the current short-term optimism for stocks.

Bears and contrarians may notice that this week’s readings are close to those registered on March 29, 2012, right as the first quarter’s rally was reaching its peak. This is simply a coincidence (and hopefully not one that ends up foreshadowing future events). This week’s readings are well within the typical ranges we have seen throughout the history of the survey.

This week’s special question asked AAII members if they expect the Federal Reserve to announce another round of quantitative easing (QE3) within the next few months. More than half of respondents are not expecting the Fed to act. About a quarter of the respondents expect the Fed to announce another round of monetary stimulus. Other AAII members were split between being unsure, listing the odds of new stimulus as 50/50 or not expecting any action to occur prior to the November elections.

Here is a sampling of the responses:

  • “The economy is improving, although slowly. I do not expect another round of quantitative easing.”
  • “I don’t think they’re going to do it. Slow growth is acceptable. They’ve also held back to keep from looking political.”
  • “Unless the economy gets significantly worse, I don’t expect another round of stimulus.”
  • “I believe there will be QE3, but its real impact will be minimal.”
  • “I expect there will be another round of stimulus soon, but I don’t think there should be any more stimulus.”

This week’s AAII Sentiment Survey results:

  • Bullish: 42.0%, up 5.1 percentage points
  • Neutral: 32.2%, down 2.9 percentage points
  • Bearish: 25.9%, down 2.2 percentage points

Historical averages:

  • Bullish: 39%
  • Neutral: 31%
  • Bearish: 30%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat, or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.) The survey and its results are available online at:


Posted on August 22, 2012 | Computerized Investing

SmartFolio is a sophisticated asset allocation program that individual investors and professionals alike will find helpful when diversifying, optimizing and managing a portfolio.

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Screening for Stocks With Strong Secular Growth

Posted on August 22, 2012 | AAII Journal

Secular growth companies increase earnings in both good and bad economic cycles. This screen is designed to identify such companies.

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Sell of the week 8/22/2012

Posted on August 22, 2012 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Windstream (WIN) is his “Sell of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Sell of the week

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