Understand stock market in one minute!

LONDON, Nov 1 (Reuters) – Gold buckled under pressure from a stronger dollar on Tuesday after the Greek prime minister shocked financial markets by calling a referendum on an agreed bailout package and as the collapse of broker MF Global
dented commodities.

While the bulk of the global investment community worries about Greece (where there are more Porches than taxpayers reporting earnings of $50,000+ Euros), and trading gold, the action (as usual) is elsewhere. A surefire sign that bullion fever is past its prime? When the government decides to get in on the action!

The Royal Canadian Mint is capitalizing on the gold rush by offering a new bullion investment that is raising questions among some who staked their claims first. Best known for its coins and bullion, the Mint is tapping into the growing popularity of bullion by delving into the crowded market for exchange traded gold with a $250-million issue of gold receipts that will trade on the Toronto Stock Exchange.

Someone managing to convince the mint to get into the funds business is a red flag to be sure.. Also, when the chart of the price looks more vertical than a lightning rod, what happens when a storm really does come?

On the flipside? Look for evidence of real improving circumstances (a catalyst for a change in valuation for the better – like improving earnings) that are somewhat off the radar screen.

Nov 1 (Reuters) – Pfizer Inc’s quarterly results came in much better than expected, as sales of its medicines accelerated in emerging markets and in the nutritional products and animal health businesses it plans to divest. The world’s largest drugmaker raised its full-year 2011 profit forecast and reaffirmed that 2012 earnings will be little changed from this year, even after it cedes sales from its $10 billion-a-year Lipitor cholesterol fighter once cheaper generics begin flooding U.S. pharmacies on Nov. 30.

A chart evidencing the potential for lots of upside is far more comforting than the alternative. And there you go! That’s pretty much all you need to know to pick good stocks, and sectors (and even countries – like the U.S. market right now is the place to be) can be analyzed in a similar fashion. Hope the minute you’ve spent reading this was worthwhile.


About Mal Spooner

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.
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