Friday, August 21, 2009
It did, and it was.
Well, I suffered the usual seller's remorse and started to worry that the stock would eventually rise without me. So, I placed a buy-stop on 100 FMBI at $10. As you know, that meant that if the stock rose to $10 or higher, it would be purchased.
It did, and it was.
This being a margin account, $1,000 of stock (plus a $9.99 commission) was purchased and placed on my tab, a tab which is now $4,557.78.
Hmm. I should probably place a sell-stop on HSP right now. That way if it plummets, I won't lose my best chance to pay off most of this silly margin loan.
I don't know. Every sell-stop I enter seems to be sold a few days later, at--by definition--a lower market price.
Oh well. Nobody forced me into this loan, and it isn't like I owe Tony Soprano. The interest rate is right around prime, and is tax deductible, unlike the juice I would have to pay to Mr. Soprano. I'll survive. I just want to win this one, even though I know how quickly I could end up losing.
Thursday, August 20, 2009
Not sure where that assumption comes from, but economic indicators never all point one way or the other. Maybe new claims for unemployment drop, while the number of people on unemployment rises a little bit--happens all the time. As I see in one of the news items today: The Labor Department said the number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8. However, the four-week moving average declined 2,500 to 6.27 million.
That's how tricky economic data can be--even though the number of people on unemployment ticked upward, the 4-week moving average declined. Moving averages, remember, help to show a trend as opposed to over-representing what happened just yesterday or just last week.
So, if you're wondering why it sometimes seems that nobody really knows where the economy is right now or where it's headed, there is a very good reason for that--nobody does.
Sunday, August 16, 2009
On the Series 7 exam you will see several questions about the registration of representatives and principals of a broker-dealer. One question might ask what happens when a registered representative volunteers or is called into active military duty. If he or she is away from the firm more than two years, does the license expire? Does he have to take continuing education courses in some cave in Afghanistan? Does she lose all the commissions she could have made on her "book of business"?
Not surprisingly, FINRA and the SEC are extremely accomodating when a registered rep or principal is called away from the firm to serve Uncle Sam. Here are the basic facts:
- license is placed on "inactive status"
- continuing education requirements waived
- dues, assessments waived
- two-year expiration period does not apply - exam might refer to this as "tolling"
- can earn commissions, usually by splitting them with another rep who will service the book of business
- the "inactive" rep can not perform any of the duties of a registered rep while on inactive status
You could see a question about a "sole proprietor" called into active military duty. If so, tell the test that the same bullet points above would apply.
Friday, August 14, 2009
Also, I see a broker and her firm being sanctioned for talking people into taking out home equity loans in order to buy variable life insurance. This action is probably just the tip of the iceberg; I know of at least one firm who trains their new rep's to do exactly that--or did when the housing market made such loans readily available. See the full announcement at:
Today's Friday Free Broadcast covers industry rules and regulations. Sometimes I think every Friday should cover that topic.