Sunday, September 16, 2007

Singin' the Market Research Blues

Good data is hard to find. It's so easy to get the other kind! If you feel like singin' the blues whenever you try to find reliable business information, you're not alone. A lot of other marketers are singing the same tune.

Solid information is critical, the basis for making any marketing plan or decision. Yet, finding that information is easier said than done. The Internet seemed like it would be a quick fix to the problem. While the Internet does serve as a bountiful source of business statistics and information, it has thus far proved both a blessing and a curse for business research. The information on the Net can be inaccurate and difficult to locate without spending a lot of time with fruitless searching.

Clifford Stoll says in his book, Silicon Snake Oil, "There is no easy, complete access to information. Never was. Never will be." Although there may be no quick and easy source for accurate business information, we offer in this article a few places to look for helpful data.

The Personal Touch
Unlike much Internet information, libraries are not only catalogued and organized, they offer the most user-friendly sources of business information available: librarians. These wizards of information provide the personal touch by expertly guiding us through the ever-increasing maze of available knowledge. Infinitely patient people, librarians spend most of their time gently guiding those of us who search for business information but don't know where to find it. Whether your questions concern finding dates of trade shows or defining prospect lists in a special database, the staff of a good business library is trained to help.

The Internet
You don't need to end up disappointed when you try to collect business facts on the Internet. To help lower your frustration level, we recommend the following addresses for free on-line research. Groups such as universities, governments or professional associations generally maintain these sites.

Completely devoted to patent information, including search engines for a variety of categories.


www.lib.umich.edullibhomeIDocuments center/frames/statsfr.html
Well organized and maintained site with a variety of hyperlinks to useful information including Census Bureau data, Securities Exchange Commission (EDGAR) filings and U.S. Industrial Outlook statistics.

Another excellent site with hyperlinks to the Wall Street Journal Interactive edition and Hoovers On Line Research, among others.

U.S. CENSUS BUREAU econ_cen.html
Economic census data including industrial products overview, annual survey of manufacturers and other good industry information.

Stock market information, excellent research hyperlinks including one providing connections to local newspapers and periodicals throughout the country.

Articles about demographics and trends throughout the country including a search engine.

Great site for industry news/information including press releases and hyperlinks to companies.

Hyperlinks to a wide variety of federal departments including WorldTech-Foreign Technology Alerts.

Just be careful, information alone can only take you so far. As Clifford Stoll says, No amount of data, bandwidth or processing power can substitute for inspired thought. We hope you use the research tools presented here with confidence, but always remember, it is up to you to process this data and convert it into good, profitable business decisions.

Deborah Henken served as VP of Marketing at several Silicon Valley start-ups, and in senior marketing and channel positions at Hewlett Packard, Informix and BEA Systems. She earned her MBA from the Kellogg Graduate School of Management at Northwestern University. Deborah is Founder of the Highland Team.

Susan Henken has directed marketing at consumer and health care companies for more than 15 years. She provided marketing consulting to manufacturing companies at Minnesota Project Innovation through a grant from the SBA and Department of Commerce and ran her own consulting business. She is currently Director of Marketing for Consumer Products at Compex Technologies. She earned her MBA from the Kellogg Graduate School of Management at Northwestern University

10 Ways to Avoid Printer Headaches

Even though technology is frequently changing, one thing remains constant - corporate offices will continue to print documents at a dizzying pace. Printing errors, poor print quality, and tired out-of-date equipment are the three main culprits of wasted money and time for an office. In todays workplace, dependable equipment is essential. Time is too valuable to have unreliable printers and long wait times for repair. Most business professionals agree that the efficiency of your office depends on the reliability of your printers.

Here are 10 ways to avoid those printer headaches:

Be Proactive - Dont wait for your printer to go down. Have routine cleanings performed and any worn parts replaced now before your printers experience critical errors that result in user down-time.

Select A Reliable Service Provider Your providers technicians should be fully trained and certified to work on your brand of printers. They should recognize how important your printing needs are and respond immediately to any printer issues you have. Your provider should also be able to give you detailed reports (or the tools to produce these reports) which will show your printer inventory as well as historical data on the services performed on each.

Service Programs You dont have the time to monitor your printers. Find a service provider that will automatically take care of the routine maintenance for you. Most providers will offer a variety of service programs to choose from. Select a program that will best suit your companys needs. Keep in mind that a good service program will include preventative maintenance in addition to same or next day emergency repairs. Having the right service program and provider could save you thousands of dollars a year.

Do Away With Multiple Machines With a multifunctional printer, you can fax, scan, print and copy all from one machine. By having an all-in-one printer, you can eliminate the need to have so many different machines and increase productivity.

Upgrade Your Equipment By upgrading your old tired printers, you can save money by having a lower cost per page as well as increasing your output speed. Many companies still use old outdated printers that can easily and inexpensively be upgraded to reduce costs and increase the efficiency of your office.

Refurbished Printers Consider a recertified printer for your office. Quality refurbished printers are often as reliable as new printers and allow you to upgrade while continuing to use the drivers already installed on your network as well as using the toners you already stock in your supply closet. A recertified printer from the right company will be completely refurbished inside and out and will perform flawlessly for years to come.

Having The Right Printer Before you purchase a new printer, think about what you need your printer to do and what your budget is. Knowing what size paper and what applications will be used will help your printer expert recommend the perfect printer for your needs. It is also suggested that you look at the cost of supplies along with their page yields to get an idea of how much it will cost you to use the printer.

Proper Training Your office staff should be educated on how to properly use the equipment. Knowing what printers they can use for a particular size paper, label or envelope can prevent costly service calls. Teaching all users how to correctly install the printer supplies will also reduce the need for emergency maintenance.

Proof Before Printing Printing a copy of your document to your monochrome printer to proof will not only save money on supplies and mileage on your valuable color printer, it will also save you from throwing away the more expensive paper if there is an issue with the print job.

Keep A Stock Of Supplies The #1 reason that a printer is unusable is because it has simply run out of toner. To avoid the cost of having a toner shipped to you overnight or wasting valuable time calling around hoping to find the cartridge at a local store, it is highly recommended that an adequate stock of toner is kept for each printer. Depending on how much a particular printer is used, it would be wise to have at least one cartridge on the shelf at all times. By keeping stock of toner you will also have a back up should you find that you have a defective toner. Unfortunately, no matter what brand toner you use or how much you paid for it, defective cartridges are inevitable.

Vicky Lee is the Marketing Coordinator for Manageflex Imaging Services (MIS) in Portsmouth, NH. MIS specializes in printers, supplies, service and support nationwide.

The Current Financial Market Situation

The last two days the stock market has recovered some lost ground. On Friday, it recovered because of the Fed action to reduce the discount rate. Much was said about this but what does it really mean? It means that banks can borrow money from the Fed at a reasonable market rate that hopefully allows them to invest and earn a profit. This helps with liquidity. It does not, however, address the most fundamental issues facing the market, unless it results in an overall reduction in interest rates along the yield curve.

Let me explain this. The basic problem with the "subprime" crisis is that liberal lending standards have resulted in large pools of assets that investors of all sorts have purchased at relatively low spreads over the market interest rates. This means that there is a low risk premium built into those investments. If in fact, the underlying mortgages have higher than expected default rates, higher foreclosure rates, and higher loss rates, the investors are not fairly compensated and the investments in those bonds are not worth what was paid for them. While we cannot predict the future, it appears that this will in fact be the case. Mortgage default rates are increasing, real estate values are decreasing, and the likely result is that more losses will accrue on those portfolios and the bonds will be worth less than full value.

Now let's say that you are a Hedge fund. If you purchased a lot of these bonds and in order to increase the return on the equity put into your Hedge fund, you leveraged those bonds by borrowing against them, then the value of your assets may be less relative to the debt you owe against them. Then the value of the equity investments in your fund can rapidly decline or become zero.

So what would a Hedge fund manager or any other holder of the bonds want to do? Sell them. The problem is that the market now perceives the risk to be a lot higher and so requires a higher return. That means they have to buy the bonds at a lower price. Consequently, the current holder of the bonds will have to write them off at a loss.

While the Fed has provided liquidity to the holders of these investments, allowing them to hold onto them longer rather than fire selling them, this does not affect the value of the actual investment in the long run.

So until the market establishes a new value for all these mortgage backed investments, we will not know the extent of losses that various players will incur. Only know this, there will be a steady stream of loss announcements coming out of the financial sector. We have not even begun to see these.

So how do you invest? Good question. The value of stocks have fallen appreciably. So it may be time to buy for the long term. On the other hand, the market might react negatively to these earnings announcements and stock values may suffer. The overall economy is strong. The folks losing money are the ones that should lose money. They provided funds to a mortgage market without adequate risk protection. Their losses will be someone else's gain.

My suggestion is that you expect more negative reactions in the stock market for certain firms. This will create some stock price volatility. Yet, in the long run, the economy will produce positive returns for most firms including financial firms. Virtually all firms have been punished in the declining market, yet some will not be that adversely affected. Pick your investments. Know if you can stay in for the long run or not. Evaluate the balance sheets of the companies you have invested in to see what their potential loss exposure is, and reallocate or not based on your findings.

Neither over nor under estimate what the Fed can do. If it can lower all interest rates, the value of bonds will increase and losses will be minimized. But the Fed can only control short term interest rates and the policies it pursues can have additional affects on the value of the dollar and future inflation, which can turn long term interest rates the opposite direction, reducing the value of long term bonds.

Author has 23 years on commercial banking and has served as president of a bank, loan approver for large commercial loans, and regional manager for commercial banking for a major US bank.

Taking Profits and Setting Exits

Most investors and many more market pundits continually talk about setting stops; they range from physical stops to mental stops to trailing stops to support stops to retracement stops or even moving average stops. It is easy to set a stop before you enter a position based off of your money management rules such as position sizing and expectancy. If you have a $25,000 account and want to risk 2% of the account on a $50 stock with an 8% stop; we know that the trade will allow you to buy 125 shares with a worst case scenario sell stop of $46.00 (assuming a 1-R risk of $4). This is wonderful but what should a trader do once the position gains 20%? Where should the stop be placed at that point to eliminate the chance of losing that quick 20% gain?

Several books attempt to explain how to take profits and many traders of the past have offered advice in books but most of it is fluff and subjective to opinion. I have heard people claim that they take a third of the position down after making a 20% or 30% gain while other traders take down half the position once a gain reaches 50%; but is this the correct way to manage money and positions? I thought so several years ago but have developed a more mechanical system that gives me precise exits at any time during an up-trend. It is a combination of a trailing stop and a retracement stop based upon the actual gain at any point in time. In a bull market, I will allow the system to loosen itself so I can handle a healthy pull-back without selling before a possible large move. For now, let me focus on my method for locking in profits without giving back too much.

For the sake of this article, I will continue to use the trade suggested above as the round numbers should be easy to follow.

Account Size: $25,000

Risk: 2%

Stop Loss: 8%

Share Price: $50

Shares to Purchase: 125 or $6,250

Sell Stop: $46.00

Worst case loss: $500 or 2%

If you are unsure how I came up with the numbers in this example, please go back and read my article on position sizing.

We buy the stock and it is up over 20% after the first three weeks of trading. What should I do to protect the profit I have already made?

Scenario #1: At $60, I will set a stop based on a 30% profit retracement.

To do this, you need to multiply the profit of 20% (or $10) by a 30% stop: $10*30% = $3

At this point in time, I will look to close the position and lock in gains if the stock drops more than $3 from the $20% threshold ($60 in this case). My trailing stop is now $57 which guarantees me a total gain of 14%.

Scenario #2: At $65, I will set a stop based on a 25% profit retracement. As my profit grows, my stop tightens so I dont give back too much. Again, this can loosen in bull markets and is also subject to longer term support and/or resistance lines. For the sake of this article, we will ignore all other variables.

To do this, you need to multiply the profit of 30% (or $15) by a 25% stop: $15*25% = $3.75

At this point in time, I will look to close the position and lock in gains if the stock drops more than $3.75 from the $30% threshold ($65 in this case). My trailing stop is now $61.25 which guarantees me a total gain of 23% if the trailing stop is violated.

Lets do this one more time with a 40% gain:

Scenario #3: At $70, I will set a stop based on a 20% profit retracement. As my profit grows, my stop tightens so I dont give back too much. As you can see from the three scenarios, my profit retracement has dropped by 5% as my profit has risen by 5%.

To do this, you need to multiply the profit of 40% (or $20) by a 20% stop: $20*20% = $4.00

At this point in time, I will look to close the position and lock in gains if the stock drops more than $4 from the $40% threshold ($70 in this case). My trailing stop is now $66 which guarantees me a total gain of 32% if the trailing stop is violated.

Please understand that I use these numbers since I like the separation of advances to be at least 10% from one retracement stop level to the next. Any investor or trader can substitute the numbers with something that makes more sense based on your own system and money management rules.

Outside of these selling rules, I also employ additional selling rules that use the long term 200-day moving average and long term support levels and trend lines. In a bull market, I will loosen the tight stops and look for longer term sell signals such as the moving average, a channel breakdown or even strong volatility movements that dont agree with the overall pattern (these may be obvious reversals on the daily and/or weekly charts). Other times, I have a specific price objective when placing the trade and will close the position if the objective is reached (even if the trend is still higher). A great example of this are the options I purchased in Tenaris (TS); I sold at $45 per call contact, yet they are now trading at $80 per contract. I bought above $10 per contract and had an objective to sell when the stock reached $145 which it did, so I sold my calls and moved on. Looking back, I got out much too early but didnt violate any of my rules which is more important than the additional gains. If I violated them on this trade and it worked out; what would stop me from violating them in the future and getting slammed with a heavy loss. I hope you get the point.

Chris Perruna -

Chris is the founder and president of, an internet community that teaches you how to invest your money with solid rules. We offer an extended no obligation monthly trial period starting immediately with two free weeks. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

Stock Research - Hedge Funds - If Bear Stearns Doesn't Know - Who Knows?

As the hedge fund world becomes bigger and bigger as more and more hot money seeks the elusive alpha of maximum performance, it is becoming apparent that more and more newspaper space will be devoted to hedge funds, and private equity. Recent news has taken us into the inner sanctum of Bear Stearns, truly a dominant investment firm in the world today. It might be argued that Bear Stearns is the best managed Wall Street firm in existence. Some might say Goldman Sachs. In any event Bear Stearns would have to be on the short list.

Investment firms for almost a decade sat by and watched hedge funds form, and amass vast investment capital pools while successfully charging 2% management fees, and 20% of the profits. Some of these hedge funds in a few years, have grown to possess capital bases equal to that of investment banking firms that have been around for generations. Taking some of the risks that were involved to achieve this performance is now coming home to roost.

Bear Stearns is the latest firm to stub its toe in the hedge fund industry. The firm is FAMOUS for quantifying and judging RISK before making its bets. This time however it seems that Bear Stearns threw its usual caution to the wind in embracing the formation of two hedge funds over the last year or so.

The second hedge fund was considered a more highly-leveraged version of Bears High Grade structured Credit Strategies fund which was formed last year. Both funds were managed by Ralph Cioffi, who up until recent events took hold, had the reputation of being a MASTER at this game, and the game is the subprime mortgage bond business.

Most people are not aware of it but Bear Stearns is the finest fixed income trading firm on the planet bar none, and this has been true for several generations. This makes recent events even more perplexing to understand.

Jimmy Cayne who is Bears CEO is embarrassed at the very least, and certainly upset enough that there will be major changes in the leadership of the units responsible for the pain being inflected on the firms reputation. This should not have happened at Bear Stearns, thats the point.

Actions Taken and Implications

Mr. Cayne has made the decision to inject $3.2 billion of Bear Stearns capital into a bail-out of the older fund. Bear is also negotiating with the banks that put up the credit facility for the other fund, the highly leveraged High-Grade Enhanced Leveraged fund. What Bear is trying to prevent is the forced sale of the debt obligations underlying the funds investments. These issues trade by appointment as they say, which means they rarely trade at all. Bear knows the Street smells blood, and will take advantage of any weakness that Bear shows.

So what are the implications of this latest hedge fund debacle? It clearly shows that the most sophisticated investors on the planet who put their money into hedge funds may in fact have NO IDEA what they are investing in. Instead, they are betting on the institutional reputation of the firms standing in back of the hedge funds. In this case nobody knew more about this market segment than Bear Stearns, yet they caught in a terrible position.

This is not Caynes fault, but as CEO, it is always his responsibility. I believe him to be the finest Wall Street executive of his generation. Nevertheless, his underlings certainly let him down, and they are among the highest paid people in the world today. Some of these industry veterans are drawing $10 million dollar annual incomes. Let the investor beware is the rule of the day, especially when it comes to hedge funds.

Richard Stoyecks background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and for a fuller version of this article please visit our website.

Surviving The Commodity Markets, PART 3 - Trading Guidelines For Different Account Sizes

Of all the important skills in trading, survival is number one. For unless we make it through the inevitable bad times, we won't be around to capitalize on the good. I've laid out some trading account guidelines that specify the account size required to conduct various commodity futures and option trading activities. Stick within these guidelines and you will have an edge on most of the commodity trading public.

Here are my general money management guidelines to improve your chances of commodity market survival and trading success:

$5,000 ACCOUNT
Risk no more than 10% max ($500)

A $5,000 account is really too small to follow these guidelines exactly, so your risk will be higher. You must really pick and choose your markets and entry points carefully - until the account grows to $10,000.


Buy one $500 option for each unrelated market. Buying one soybean, one soybean oil and one soybean meal is like buying three soybean options in the first place - unacceptable. Getting a good option for only $500 is not easy to do sometimes since we like to buy plenty of time and have the market reasonably close to the strike price for the best chance of profit.

With a $5,000 account we should not worried about making big percentage gains as much as participating in a reasonable move with an option delta of at least 0.6 or more. Buying multiple cheap commodity options far out-of-the-money is a suckers game over the long haul. Many times the futures contract market move will take place but we will still lose in the commodity option.

Stay as close to the money as possible (strike price close to the market price) to better simulate a futures contract and the real cash market. If the trade does not work out according to the Timeline forecast, it may be prudent to take a loss and preserve some of the option premium. Bear in mind we generally like to consider the total option premium as the stop loss order. Also, read the Thomas Swing Method lesson to give you an idea of how to trade the swings and do commodity option "granting.


The challenge with a $5,000 account is that some futures contact margins can be $2,000 and more. This will mean that only two different positions can be put on at one time, which is plenty for a $5,000 account. But if the TimeLine has a signal in four different markets at once, we will have to decide which two markets are best. This is usually just a guess, since we try to take all high probability commodity trades and never really know which ones will work out in the end. No one really does. Out of twenty-two markets you go with the chosen two to four and let them unfold.

Mother Probability is what decides the outcome. In addition, if we risk only $500 for each futures trade, there is not much price fluctuation room for some commodity markets. It may be enough for low priced corn and a few other normally quiet markets, but not enough for the majority. For example, many of the currencies have $1,000 swings each day.

For an overnight trade, placing a stop just $500 away from entry is like giving money away. The only alternative is to risk more, like $1000, but then we are risking 20% a trade and need only five losers in a row to wipe out the account. See the problem here? Because of this, for longer-term moves, a $5,000 account may be better suited for option spreads or even writing far out-of-the-money options. In other words, try to fund the account to a starting value of $10,000, if possible.


I personally believe one of the better methods for success with a $5,000 account may be writing commodity options (selling options). When writing options we have to be satisfied with smaller gains as a result of selling them far out-of-the-money, taking in $200-$300 each time. It will depend greatly on the particular market. Three hundred dollars every two months equals $1800 a year. This is a 36% return on a $5,000 account. Be sure to set realistic goals.

Once the account is built up, the numbers can be increased. As they say, after a period of success, you can always add a zero" to the quantity. Each option that is sold should be treated as if it were a commodity futures contract for risk and margin requirements. As long as the premium does expand past a $500 loss, we can continue to hold the option and let it erode in our favor.

We'll talk about the flexibility of larger trading accounts next.

Part Four of Six Parts - Next!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

Thomas Cathey - 27-year trading veteran heads the managed futures division of Thomas Capital Management, LLC. View his TimeLine Trading market predictions and get his complete, free 44+ lesson, "Thomas Commodity Trading Course".

Main site:

Basics of Forex Trading

Foreign Exchange Trading or simply FX or even forex describes the trading of different currencies of the world. The forex market is the largest in the world with trades amounting to more than USD 1.5trillion every day. Typically, most forex trading is speculative, with only a small part of the market activity representing governments' and companies' basic currency conversion needs.

The main centers for trading are Sydney, Tokyo, London, Frankfurt and New York. By virtues of it being a world market, it is a 24 hour market where online forex trading is conducted across the globe. This is a major advantage as it provides investors with a unique opportunity to react instantly to breaking news that is affecting the world markets. The forex market is known to have superior liquidity and thus there are buyers and sellers present perennially to trade in this market. The liquidity factor ensures price stability and narrow spreads and comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.

Unlike the stock market foreign exchange trading is not conducted through a central exchange but something similar to the OTC (over the counter market). It uses sophisticated forex trading software recognized globally. The most commonly traded currencies are the EURUSD, USDJPY, USDCHF and GBPUSD. Trading in the forex market means the simultaneous buying/selling of a currency. The combination of two currencies being traded is called cross. Forex trading is done without commissions and thus proves to be a hugely attractive opportunity for investors dealing on a daily basis. Moreover, the forex market is dynamic, and there exists trading opportunities at all times no matter whether a currency is strengthening or weakening in relations to another currency.

The spot market is the largest forex market as it has the largest volume of foreign exchange currency trading. The market is called the spot market because trades are settled immediately. In practice, however, it takes two banking days. There are virtually no restrictions in the forex trading and the forex market thereby allowing you to enjoy trading opportunities during any market condition. If you are a commercial investor, you may need to swap your trade forward to a later date. This is called forward trading and can be undertaken on a daily basis or for a longer period of time. Although the forward trade is for a future date, the position can be closed at any time and the closing part of the position is then swapped forward to the same future value date.

Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. Leveraging allows you to hold a position worth up to 100 times more than your margin. This is useful since it permits investors to exploit currency exchange rate fluctuations. However, without appropriate risk management high leverage can lead to both large losses and gains.

Spreads and Pips - The spread is the difference between the price that you can sell currency at and the price you can buy currency at. A pip is the smallest unit by which a cross price quote changes. This is shown when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9876 and an ask price of 0.9879. The difference is USD 0.0003, which is equal to 3 pips.

Up until recently, the forex market, given its large minimum transaction sizes and-stringent financial requirements, was dominated by big professional players like banks, hedge funds, major currency dealers and the occasional high net-worth individuals. However, now several global companies are now offering small companies, traders and investors small transaction trades with the same price movements and rates.

William Brister - An answer to your financial questions.