North Korea Nuclear Threat & the Stock Market

Todays warning from North Korea’s Nuclear Weapon test woke up the market.  Early morning it was down, but positive news from http://www.google.com/ going to buyout http://www.youtube.com/ kept the market upbeat.  Google Inc. becoming the number one search engine and the number one online video streaming company will create more growth and boost its stock price to the $500 target Jim Cramer of Mad Money on CNBC keeps talking about.  Cramer is right.  Google is still growing and although the price of the stock is big currently $430 the time to get in is now.  Technical analysis shows two big white candles proving a breakout of its $390-410 price movement for the past couple of months.  As long as there is no bad news and Google.com keeps surprising analyst with earnings the stock price will be pushed up again probably up until late January 2007.  A $500 price target is realistic.  Most people can not affoard a couple of hundred shares or even a couple of shares so I suggest CALL OPTIONS.  Even buying “In The Money” options for Google.com will be expensive.  The times I have traded options on Google.com I’ve bought maybe 1 month out and 20-30 dollars “Out of the Money” because I could simply not affoard any other at the time.  To buy 1 to 2 contracts way out of the money you are looking at around a $1200-3000 investment.  With a big price move upwards you could be looking at a 25-100% profit on investment (POI). 

Besides Google Inc. two other companies I am very fond of are Starbucks and Garmin.  Starbucks is doubling its store base creating major growth with increased coffee prices creates a money making machine.  Garmin on the other hand is really pushing their product awareness through tv commercials add-ons in cars and trucks.  GPS in your car is becoming like satellite radio.   Even my car has a button for XM Satellite radio in my 2005 Honda Element EX.  All I have to do is become a subscriber and its already to be used.  GPS is becoming ever more popular and will soon be one day a regular device like your standard radio.  The stories for these stocks are going to make my portfolio very happy.  Look for pullbacks and then buy or buy to hold to go through some price movement you can stomache and then sell with the profit you are happy with.  Stocks are kind of like buying a house.  For one thing you have to love the neighborhood because you aren’t necessary buying just the house.  The neighborhood represents the overall stock market and what it looks like and the rest of the stocks in its sector and their performance.  Finding the realtor and not paying those ridiculous sales commissions is finding the right online discount brokerage.  I prefer OptionsXpress Inc. because the website is fast, customer service is quick, and the orders are filled quickly.  The setup is easy to understand navigate too which is really important when you are ready to buy or sell.  Thirdly you want to know about the house you are going to buy.  You just don’t buy a house.  You go look at it, examine it, figure out if its worth the price the seller is asking, make sure it doesn’t have any big problems to be aware of, and the pretty the house is the better.  Face it.  Pretty houses sell much faster then ugly houses (unless the price is right and its gold untouched).  I mean pretty because the company has a good public image, has many faithful long-term customers buying the product or service, and its is making money keeping it looking pretty.  Plain and simple the company sells itself.  I hope my analogies have opened your mind some about the stock buying process.