Stock Market Monday Effect

Today is Friday; the Dow has gone down for three days, what will happen on Monday?

Three days of dropping stock prices, that end on Friday, that has to be a formula for disaster. There is an overabundance of Mom and Pops volunteering to lose money in the Stock Market.

Sosua, Dominican Republic --- Friday, January 22, 2010
By Andy Graham of
Travel Gear

We Talked if Over and Decided
These nice people may go home over the weekend, lose their nerve and on Monday put in a sell order. Now, the stock players may short, already taken their profits on Friday and you, Mom or Pop pay the price.

Everyone has an opinion about Stocks, but I truly believe this recession is a double dipper; it is inevitable that the higher the Dow goes, the more nervous Mom and Pop become.

Fun stuff, unless your lose your shirt, I am lucky, I invest in my own site, and have no need to invest in the stock market. A great way to turn a fortune into a shoestring.

Bottom line, you may want to consider taking profits, and returning later.

Stock Market Monday Effect


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Methodology and price are everything. The trick is to invest in the stock market the Graham way--Ben Graham's way that is.

The trick is to have a margin of safety in all investments. Buying assets when
nobody wants them, and is pessimistic about them and selling them when nearly everyone is euphoric. Buying stocks that are selling for 2/3 of the net current asset value (cash+ current assets - total liabilities) of the company is one of easiest ways to outperform the the market.

Some of my best investments have been made at times when most people are running scared. Buying into stocks around the world. the Mexican debt crisis, Indonesia's late 90s early 00s...Hillary Clinton's first try at socializing medicine. At these times people will sell as if they think the sky is falling. This is the time to buy.

Several weeks after each of the Bali bombings, Sri Lankan suicide bombings, and coast of Thailand after the tsunami were great times for me to travel. Resorts cut their prices by 50-80. People and businesses were desperate for income and were compelled to sell their goods and services cheap.

People will tell you... aren't you scared? After terrorist acts, the security goes way up, and further attacks are not likely. Most natural disasters and terrorist acts are localized, and other areas will be broadly painted by media propagandists in a negative light, but otherwise be unaffected.

Finally, with a secure connection, one can even research and trade stocks at the beach or where ever. I've done this several times. Investing is a great way to beat the 9 to 5 rat race, much easier than moving 80 lbs. of gear from place to place. For Americans, you want to find the lowest tax jurisdiction in the U.S. since Foreign Income Exclusion doesn't apply to so-called unearned income. Hint: Check out our tropical territories!

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