And there’s joy at Fenway as  Boston Puts It To the Yankees.

If….you love the Yankees, I understand.

Every morning after a Red Sox game, Lisa’s grandmother tells me about the game. I already know what she tells me, but she gets quite excited at age 95.

She says, “Big Poppie (David Ortiz) clocked his third home run, and things are looking up for him” and “the stock market”, I add.

OK; not so fast, Randall. We have a lot of ground to travel before returning to solid ground. No banners hanging over Wall Street yet.

Just the same, the news is better.

Market analysts support viewpoints with statistics. Most of us find the data dreary. We scan the dull parts faster than a furtive glance.

Baseball stats dull the sound of the bat, the “wave”, and a Fenway Frank. Just the same, statistics and probabilities matter.

This summer, I went to my second Red Sox game. We sat perpendicular to third base. What seats! To my right and to my left, two middle-aged men kept track of every hit and every pitch for every inning.

I asked, “How come you do that?” They both said, “I just enjoy the game more when I do.”

So, for those who enjoy stock statistics, the attached SEI Investments commentary gives you plenty to ponder.

Quiz:  Can you guess the stat before reading the right coloumn? They all seem esoteric to me.

Here’s the article, “Small-Cap Stocks: Too Far Too Fast or Just the Beginning?” by James Solloway, CFA, Senior Portfolio Manager, Global Portfolio Strategies, SEI Investments, Inc.

Last week’s chart illustrated the current plunge of S&P 500 earnings. Today’s chart illustrates how this plunge in earnings has impacted the current valuation of the stock market as measured by the price to earnings ratio (PE ratio). Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1936 into the late 1980s, the PE ratio tended to peak in the low 20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s) and the dot-com bust (early 2000s). As a result of the current plunge in earnings and the recent 2.5 month stock market rally, the PE ratio has spiked to the low 120s – a record high.

Notes:
- Where’s the market headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

Source: Chart of the Day

On December 19th, 2008, Robert Brokam of the Motley Fool, asked John Bogle (born 1929), founder of The Vanguard Group, if we are heading for a depression (Bogle grew up during the Depression).

“Today, we hear a lot of people invoking the possibility of another Depression. So what is your take on today’s crisis? Are we looking at another Depression?”

Bogle answered,

“…This is my tenth bear market, defined as one that goes down at least 20%. And this is in a lot of ways the most difficult one that we have had because the gross excesses — the unacceptable excesses in our financial sector — are carrying over to the economy at large…I think the excesses of Wall Street and Wall Street’s greed have carried over and done substantial harm to Main Street and the people that make America go….”

In the Berkshire Hathaway 2008 Annual Report, Warren Buffet refers to the performance table (see page 4) tracking the 44-year performance of Berkshire’s book value and the S&P 500 index.

“…2008 was the worst year for each. The period was devastating as well for corporate and municipal bonds, real estate and commodities. By year-end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.”

There was no place to hide, and asset allocation didn’t matter.

An “Investment News” survey concluded that “70% of 329 advisers said that the economic downturn and its effect on clients have negatively affected their physical and/or emotional health.”

Jed Horowitz, author of the article, writes,

“Mental-health professionals say that stress can trigger depression, which can lead some advisers to feel unjustified guilt over unpredictable client losses.”

“As many as 80 percent of Americans are stressed about their personal finances and the economy, according to the annual survey conducted by the American Psychological Association,”

according to CNNHealth.com.

Dr. Katherine Nordal, the association’s executive director for professional practice said,

“This year…the No. 1 concern is both money and the economy. In my 30 years of experience…this was not the thing that would be high in complaint lists…what we’re seeing today is that the economy and finances are viewed as significantly more stressful, by more than 8 out of 10 Americans”

(7,000 Americans replied to the survey from April to September 2008).

During his March 24th press conference, President Obama reminded Americans that

“We will recover from this recession, but it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other — that’s when we succeed.”

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Recent news suggests, but may not be conclusive, that this recession has found its bottom and finds it attractive.

Figuring out when to put your money into the market challenges most investors. Making the decision, sending the buy order, or mailing the check takes certain amounts of courage. And it should! Investors lacking fear face unforeseen surprises. Investors with fear face market events with understanding.

Market tops appear when investors in some sector of the economy get too confident. What Robert J. Shiller labels Irrational Exuberance. Shiller believes that the stock market advances get magnified by “the baby-boom effect, the public infatuation with the Internet, and media interest,” and each faces a correction, an abating that could send stocks spiraling.
Shiller worries, and rightly so, that investors place too much hope in the stock market as their treasure chest for the future. While acknowledging diversification or asset allocation as essential investment components, Robert Shiller warns investors about using the sotkc markets as their only investment choice. For Shiller, it is axiomatic to have your eggs in more than one basket, and he is not referring to stock and bond baskets.

Shiller’s warnings and worries merit attention. ‘You got to know when to hold em, know when to fold em, Know when to walk away and know when to run.”

Read my article, “How to Watch a (Stock Market) Bottom”

Jeremiah (his name is the root for our word jeremiad) wrote about the children of Israel, “They dress the wound of my people as though it were not serious. ‘Peace, peace,’ they say, when there is no peace.” (Jeremiah 6:14 New International Version (NIV) Copyright © 1973, 1978, 1984 by International Bible Society).

You may not agree with biblical theology; you may find it harder to resist the constant threat of warring factions on this orbital globe. Peaceful dialogue between Democrats and Republicans is as difficult as trusting dialogue between Arabs and Israelis.

As long as people live, equity and bond markets will suffer the effects of hegemonic and internecine conflicts. Investors must endure the conflicts with hopes of resolution. War effects market moves; strategy is every investor’s expectation. Peace is what we all seek with hopeful prayers.

Read some of my other articles found as Ethos Musings

Most entrepreneurs have decided at an early age that they   they were willing to make sacrifices, discipline themselves and follow strict guidelines to be successful. They knew
how important it was to investing their time and money properly. When it comes to making investments, however, most people, are unsure of their abilities to make
decisions regarding business opportunities. Or, they miss critical opportunities because they do not have any confidence when it comes to making these decisions. If you
have the ability to make the necessary decisions to make the best investments, you may be a true entrepreneur.

That’s not to say that you shouldn’t avoid risk, whenever possible. In fact, the best way to prepare yourself in the area of investing is by reading business publications that
will relate to the topic, such as The Wall Street Journal.  Research is a critical step toward investing, and should be done with thoroughness and patience. Speeding through
this process will only cause you to lose money unnecessarily. In today~s technological world, intense research can be done through various internet search engines. Speaking with other investors will give you a better picture of the types of investments that are solid, and joining stock market clubs may help, as well.

Try this experiment, if you want to test your discipline. Commit to setting aside a certain percentage of your income each week to savings. If, after a few months, you have never been tempted to withdraw money from the account, and all your funds are still intact, you probably have the stuff to start investing. If you were not able to keep your hands
off the money, you need to work on your discipline, because investing takes this kind of discipline.

Investing in a new commodity can be a very risk business, and those who are anything less than savvy should avoid this type of investment. The best approach is to look at
the histories of those items which interest you and only commit money to those which have a steady history of growth for five or more years. While no investment is guaranteed
to produce lucrative results, it~s far more likely if you’re investing in those which have a positive performance history.

In the investment world, they say “diversify risk”. It’s the same as the old proverb that tells us not to put all of our eggs in one basket. In other words, do not invest all
of your money into one type of investment or even in one sector of the economy. Spread your risk by having investments in different areas of the economy.

As with any other enterprise, patience will see you through. Often, something that~s truly worthwhile will take a good deal of time before it begins to gel. You may have to wait for a few years before an investment begins to truly become lucrative, and those who aren~t willing to play the waiting game are either going to end up making no real return on their investment, or losing their hard-earned money altogether.

Another success trick for starting out entrepreneurs is to try to find a mentor. Here is a person who already made all the mistakes in business and can help you avoid them. They
will be of great assistance in guiding you in your business and your investments until you figure it out on your own.

Lester Surtere is the webmaster and operator of Fan  Fan Investing
which is a complete resource hub for Information about investing. For more details please visit www.faninvesting.com

Read some of my other articles found as Ethos Musings

Penny stocks give you a lot of leverage; consider it a long term option on a company’s future. You could select a good company in the midst of restructuring with a low stock price.

Penny stocks have a price below $5.00 usually. Some investors like low-cost stocks, or consider a .25 cent stock worth the risk. Perhaps they are right, but most times penny stock investors lose their money.
Stock prices reach a level consistent with corporations net worth; stocks rise to their intrinsic value in most cases. However, there are times, when you may discover a company with a product or service receiving attention. Watch the news of a prospective company, track the daily stock trading volume, research institutional owners (there won’t be many if any), and buy the stock when the trading pattern shows a long support line (trading at the same price with reasonable daily volume over a long period of time).

Peter Leeds provides reasonable and prudence when investing in penny stocks. Do your homework.

Most of us like being first, at the head of the line, the first picked for the team because it feels better to be first. On the other hand, first investors must take greater risks, the costs may offset the gains, the rewards may amount to nothing, and you could end up as the very last one in line with empty pockets.

However, if the private investment or placement works, the company goes public, and you still have a stake in the rewards, the benefits can be quite significant. Understanding how a private placement functions, what the requirements are for investing, and the full-extent of your risk requires your complete attention and diligence. Be circumspect; what glitters is not always golden.

Read some of my other articles found as Ethos Musings

Too often investors view the stock market like a roulette wheel or a toss of the dice. If I roll it all at the right time, I am a winner. If not, the big “L” ends up over my eyebrow and on my tax return.

Even those who abhor gambling slip into the casino on Wall Street. Although having no understanding of how the stock and bond markets work, they plod ahead with greed and fear engraved on their brokerage statement. Inevitably, the markets with uncanny perception take these investors for a ride down “Loss Lane”. There are obvious ways to avoid this frustration.

Gambling abdicates order for chance with a dependent hope upon luck. Some gambling, like a poker game, requires skill that leverages fortune. However, such schemes of chance and fortune can only bring you winnings occasionally. When this happens, “winners” acclaim their gains, but must be knuckled to talk about their losses. Essentially, your goal should include limiting your losses with consistent gains.

Every decision becomes sensible when order gets acknowledgement with an equal and greater aversion to reckless impulse. This requires having a system, a method, a discipline. Any set of rules or principles that have been tested by others will make the ups and downs of investing prudent. Using a consistent method, tested by demonstrated results, limits the impulse for greed while assuaging the pulse of fear.

A number of investment authors have developed prudent investment methods. This list may be of some help.

“Every prudent person acts out of knowledge, but fools expose their folly.”
Proverbs 13:16

Read some of my other articles found as Ethos Musings