One instance where quantiy over quality is a good thing (part one)

What's an investment strategy that seems to go over the heads of most investors? The concept that investing is more about how many shares you own, less about how much they are worth.

For example: having one share at $100/share rise $10 is all well and dandy. But, if you have 10 shares at $10/share($100 value) rising $2/share...you end up profiting more for a lot less work.

110(or 100+10) < 120 (or [10*10]+[10*2])

If you've  invested much at all you know how easy it is for the $20 gain to be negligible (mainly due to commissions on the buy and sell execution). As you raise the scaling of the amount of shares, say quadruple it, the playing field alters dramatically. Quadrupling the shares (putting each at a value of $400) would increase the marginal difference to $40. And so on and so on until you reach a scale that will effectively render the higher stock price useless.

As an investor in the market, many of you know how easy it is for a lower priced stock to jump $2; and how hard it is for a higher priced stock to jump $10. Don't worry my point is coming up.

The reason for this illustration was to show how even with an unrealistic advantage (jumping $10 while lower price only jumps $2); the scenario where lower share prices are involved generally procure more earnings, even at a lower dollar return.

(part deux coming soon)

How investors should think vs. how they do think

Investors always believe that it's a great idea to sell sliding stocks, but they never think of true implications.

When you sell investments just to save face on the principal it ends up coming back to bite you. And this is not a case where the bark is worse than the bite.

If someone were to tell you that a few houses in an upscale neighborhood were on sale for 50% off, what would you do? Assuming you had the liquid capital, you would start picking off real estate lots like sitting ducks (during hunting season)! Now that we are on the same page...why is it that when stocks are cut by 50% in a "down" market; no one buys and everyone sells? Seems a bit counter-intuitive don't you think?

Make sure you think about this the next time great stocks such as Apple or Amazon are on "sale"(the latter of which one of us made over $100 in four hours last fall after buying super low).

Earning in Real-time

For many day traders, investing information site earningsBuzz will be an invaluable asset. The most benefited group of individuals, are those whose trading trategies stem from market-timing.

The idea behind earningsBuzz is to aggregate real-time news about stocks stemming from twitter updates. You may think that this is remarkably similar to StockTwits. On the contrary, earningsBuzz makes sure that all if the updates are relevant to the task at hand. Its news aggregator only tracks news from companies with an earnings report from present day, yesterday, or tomorrow.

This will help traders realize earnings potential (or shortcomings) in real-time; and allow them to adjust their trading decisions accordingly.