It's pretty understandable, especially in a time when so many people are getting laid off, to take the forced job change as a time to reeducate yourself and try for a different career. One of the careers commonly being put forward as the next big thing is heath care. I will agree that health care is a critical component of our future economy. However I think it is important to not get tunnel vision during this economic catastrophe.
Lets look at IT in the 90's. IT went from something that was new and hard to implement to something that was critical for everything. IT workers we in such demand that even high schoolers were doing a lot of technical support jobs in their free time, in direct competition with oldskool 'computer engineers.' So imagine the situation. You are a computer user... emphasis on 'user' and it 'breaks'... the market switched from NEEDING a engineer with a masters or doctoral degree to resolder circuits back into place or to recode software... to a market that primarily needed knowledgeable people to run virus scans and backups... and maybe plug in new hard drives or video cards. Remember it used to be when you bought a PC there was a seal on the case that if it was broken, you would void your warranty. Now hard drives are user installable and components autodetect. ... and there is no need for a degree in computer engineering to do any of it... Things both got more user friendly and the users got more knowledgeable.
Lets apply this to health care. Already the mystique of a medical degree is wearing off. Not only to people get second or seventh opinions, but they can research their symptoms themselves on the internet. I've gotten prescriptions just by telling a doctor what I have... how much longer is he going to be able to charge $200 to write a note? Lets add a bunch of soon to be educated medical students who are going to be competing in this market further driving down the price.
Lets face it, we don't need to legislate a value of services, and by subsidizing expenses we only allow them to remain expensive. If a service starts to get too valuable, people will change careers to bring it's value back into balance with the market.
Sunday, March 1, 2009
Tuesday, February 24, 2009
Here's some guidelines I use in investing.
Check for Insider Transactions (SEC Form 4)
This is so simple it is extremely frustrating to hear people invest without doing it. It's called 'SEC Form 4' and it is a document corporate insiders are required to file shortly after making a transaction. There are a couple places that allow you to get current copies for free... one is from the SEC itself...but a prettier version would be with sites like Gurufocus.com ...there are a number of similar sites.
The premise behind using the SEC Form 4 is that corporate officers are inherently greedy. Therefor if they buy their own stock it is very likely to go up because they wouldn't be stupid and buy their own stock when they think something is going to go badly for a company. You do have to be careful, because sometimes they are stupid and make mistakes... so if a bunch of officers are buying in the recent future it's generally a safer bet.
If You Invest in Precious Metal, Take Possession
It's been said that you don't really invest in PM but speculate in it... any case... the general reason to hold PM is to hedge against the dollar. However, if the dollar collapses you don't exactly want to be standing around with 'paper' so get the metal.
Be Extremely Skeptical About What is Touted By The TV
Watching a financial report on the news and hear someone touting some stock? Honestly I have no idea why anyone pays attention to them. In my experience those are the companies to avoid, along with 'corporate advertisements' ... you know... selling the 'brand.' Companies should be spending their money selling products, not themselves.
Be Aware of Technical Traders
I'm just starting to get used to Technical Analysis and wouldn't trade solely on it... however, to some people it's a religion so learn how it behaves so you can anticipate what the technicals are going to do to you.
Don't Use Stoploss
If you can't follow your investments enough to reexamine a stock if the price plummets you probably shouldn't be investing. Using Stoploss is an unnecessary risk because it allows short sellers to crash a stock price. Basically, a short sells a stock and the price declines steeply which triggers your stoploss and you sell your long position at a lower price back to the short. You should have confidence in your investments enough to resist the temptation to sell at a loss. If you use insider transactions as a guide there is almost no excuse to sell at a loss.
This is so simple it is extremely frustrating to hear people invest without doing it. It's called 'SEC Form 4' and it is a document corporate insiders are required to file shortly after making a transaction. There are a couple places that allow you to get current copies for free... one is from the SEC itself...but a prettier version would be with sites like Gurufocus.com ...there are a number of similar sites.
The premise behind using the SEC Form 4 is that corporate officers are inherently greedy. Therefor if they buy their own stock it is very likely to go up because they wouldn't be stupid and buy their own stock when they think something is going to go badly for a company. You do have to be careful, because sometimes they are stupid and make mistakes... so if a bunch of officers are buying in the recent future it's generally a safer bet.
If You Invest in Precious Metal, Take Possession
It's been said that you don't really invest in PM but speculate in it... any case... the general reason to hold PM is to hedge against the dollar. However, if the dollar collapses you don't exactly want to be standing around with 'paper' so get the metal.
Be Extremely Skeptical About What is Touted By The TV
Watching a financial report on the news and hear someone touting some stock? Honestly I have no idea why anyone pays attention to them. In my experience those are the companies to avoid, along with 'corporate advertisements' ... you know... selling the 'brand.' Companies should be spending their money selling products, not themselves.
Be Aware of Technical Traders
I'm just starting to get used to Technical Analysis and wouldn't trade solely on it... however, to some people it's a religion so learn how it behaves so you can anticipate what the technicals are going to do to you.
Don't Use Stoploss
If you can't follow your investments enough to reexamine a stock if the price plummets you probably shouldn't be investing. Using Stoploss is an unnecessary risk because it allows short sellers to crash a stock price. Basically, a short sells a stock and the price declines steeply which triggers your stoploss and you sell your long position at a lower price back to the short. You should have confidence in your investments enough to resist the temptation to sell at a loss. If you use insider transactions as a guide there is almost no excuse to sell at a loss.
Subscribe to:
Comments (Atom)