Marc Barhonovich - The Common Sense Investor

December 2006 - America's Addiction

2007-01-16T08:31:00.000-08:00

America’s ADDICTION
No it is not food and it is not drugs, it is much worst. It is something that we cannot control until we grow too old for it to matter. And the worst part about it is that it is not only condoned, but we try to do everything in our power to get each other to do more of it.

We can’t help ourselves! We are taught from birth that it is OK and as we become children and young adults it is engrained into the fiber of our being. As adults, we just can’t get enough.

What is this addiction I am referring to that is so horrible…SPENDING.

Spending and the ever mounting DEBT that goes along with it.

Spending by Americans has become so prevalent that our entire economy and much of the world's depends on it. If consumers spend more, our economy does well and if they spend less, we go right into a recession. Think about how much of the world depends on our spending. In the 80’s, when Japan flourished, it was because we all wanted were Japanese goods and we still do. In less than two decades, Japan became an economic power house by selling us what we wanted. Now two of the most populous countries in the world are following suit, China and India are growing by leaps and bounds. They are growing by embracing capitalism…the capitalism of selling goods to Americans.

We are showered with toys and clothes and other things as kids. As we get a little older, we want everything we see. And the real problem today is that most parents do not know how to say no to their kids. In fact, they do not know how to say no to themselves.

It is natural that we would want to give our kids the things we never had. But did we grow up bad because we didn’t have it. Not hardly!!!

The kids are not the problem…the adults are the problem. We are taught to become addicted to spending early in life. And we are marketed to twenty four hours a day, seven days a week.

New houses, new furniture, new cars, TV’s, new stereo’s, new clothes, new shoes, new computers, new cell phones, new ipod’s, new blackberry, new cable services, new toys, new electronics of every imaginable kind.

We crave new things to spend on much like a junkie craves a drug or like a person who smokes craves a cigarette. We can’t help ourselves. And society only makes it worse.

No one ever tells you spending is bad because our very economy today depends on it.

We grow up with this addiction and don’t even realize it and everywhere we turn the addiction is fed. Look at how we are marketed too. It is in every single aspect of our lives. When you turn on the TV or radio you hear advertisements. When you open a magazine or newspaper, you are sold to. When you drive down the road or go to an event you see ads. When you get the mail or go on the internet. And if you lock yourself in your house and don’t look or listen to anything, they will still call you or even come knocking on your door to solicit you. Today we have entire television stations devoted to selling goods to addicts. Home Shopping and QVC have established enormous businesses around selling us what we want.

Americas favorite past time is watching TV. The average American household has the TV on 7 hours and 12 minutes a day. Hard to believe, isn’t it? And commercials run about every 10 minutes, whether we like it or not, selling us something.

And we can’t help ourselves…we have to spend. It is not just keeping up with your next door neighbor or friend, it is not just pleasing the kids, it is keeping up with ourselves. We spend when we are happy, we spend because we are depressed, we spend to make ourselves feel good, and we spent to make others feel good about us.

We have convinced ourselves that we need and want things on a daily basis. We give our family things on their birthdays or holidays because that is what is expected. In fact, we feel guilty if we don’t buy something for someone. We want the latest clothes and have the need to be up to date, wearing the latest fashions. We need the latest electronic gadget that comes out and many times we don’t even use it once we get it. How many times have you bought something from an infomercial only to have it sit in the closet until the next garage sale? I know I have…

What is great about our country is that you can even buy things when you don’t even have the money. Spending has gotten so out of hand that the average consumer debt per American exceeds $84,000.

American’s are famous for living past their means.

Currently credit card debt exceeds 2 trillion dollars and we add on average another 3 billion a month in new credit card debt.

Many consumers have not only spent what they earn today but have already spent what they expect to earn in the months and years ahead. But have no fear, the big retailers like Best Buy and Circuit City, will let you buy a new computer or TV and don’t even have to make the first payment for 2 years. You can buy a new car with nothing down as long as you make the payments.

SPENDING IS TRULY AN ADDICTION and most people just cannot stop.

And it is not just consumers…Our very own government has spent itself into one of the largest deficits in history. The US government currently has over $484,000 in debt for every household in America. Let’s look at how that breaks down…$53 Trillion dollars in debt, of which 30 trillion is Medicare and 13 trillion is Social Security. The other 10 trillion is everything else in this country, Federal borrowing, military, military pensions, state and local debt.

We run programs like Social Security and Medicare that will eventually bankrupt the country if they continue to operate like they do today.

The increase in Medicare alone last year surpassed what we spend on the countries entire defense budget. In 2004 alone, federal spending on Medicare and Social Security increased by $45 billion, to $789 billion. That one-year increase is more than the entire $28 billion dollar budget of the Dept. of Homeland Security.

THE PRICE OF ADDICTION….DEBT

Eventually we will all be forced to face our addiction.

Over the last 4 years, Mr. Greenspan dropped interest rates to the lowest levels in 40 years in an effort to spur the economy on.

Don’t you find it interesting that the press says that rates were lowered to help the economy do better but what they really mean is that rates were lowered so that consumers could borrow and spend more? The government needs the American consumer to BUY MORE. And they will lower rates to historic levels so that we can borrow more.

With rates at historic lows, Americans had a chance to pay down debts and pay down mortgages. Instead they saw it as a chance to get more credit and to buy bigger houses. Why not? With lower rates, you can get a bigger house for the same payments.

MOST ADDICTIONS NEVER END WELL…And this one is no different.

The debt of the US is now becoming so large that foreign governments are selling our dollar because they see the writing on the wall. In order to keep foreigners buying our bonds the Fed continues to raise interest rates to make bonds more attractive.

Consumers outside of the US continue to buy and flourish because they are not straddled with debt. The Japanese have some of the highest savings rates in the world. The Chinese and Indians are new consumers and have huge appetites for goods. This unprecedented demand is causing commodities, like oil and copper, to move up in price. This causes inflation, whether we like it or not.

The Fed is forced to raise interest rates to stem the rise in inflation and keep foreigners financing our debt.

The debt of the American consumer continues to grow and the cost of carrying that debt is beginning to rise. The money that we spent on all of the things we really didn’t need is beginning to cost us more each month. In the next few years, those really cheap adjustable rate mortgages will begin to cost us more.

The one place most American’s have made money, the equity in the appreciation of their homes will begin to drop as interest rise. Most American’s will owe more on their houses and the value will become less.

RETIRE TODAY…

When I tell you to retire today, I don’t really mean to stop working because most of us can’t and won’t be able to for many years. But we can retire from SPENDING.

Think about many of the retired people you know. Most are much older and in some ways much wiser. They have lost the need to SPEND. They have overcome the need to impress friends with new cars and new clothes. They don’t need 42 pairs of shoes, just a few really comfortable pairs will do. They have no desire to buy the latest gadgets. Their idea of a nice day out is not a trip to the store to buy something but maybe a walk in the park or a trip to the beach, which in this country, cost absolutely nothing to do. Yep…It is free!

While the rest of the world is like the Hamsters you see running on the wheel and never getting anywhere, they have jumped off. They don’t spend to achieve happiness or approval from family and friends. They don’t have the stress of huge debts. They are out of the spending rat race….BRAVO.

LIVE STRESS FREE…

We should all try to retire. Try to retire all debts and try to retire from that nasty spending habit.

Congress and Mr. Greenspan have coined a cute word that should be the core of a stress free and profitable lifestyle. PAYGO

It is what we are trying to teach our kids. PAY AS YOU GO…Save the money you need to buy something and don’t buy anything that you don’t have the money to pay for on the spot. I realize that a house is the one thing that you will need to borrow money for because of the size of the purchase but if that is your only real debt then a stress free life is yours for the taking.

Think about the money you will save if you only buy what you have the money for. If you PAY AS YOU GO then you will truly savor your purchases. You will only buy what you truly want and need. I also recommend paying cash for items too. There is something about peeling off $20 dollar bills to buy something that makes you pay more attention to what you are doing, as compared to swiping that credit card.

GET A HOLD ON YOUR SPENDING
GET RID OF ALL DEBTS
PAY AS YOU GO
LIVE A STRESS FREE AND PROFITABLE LIFE
It’s just COMMON SENSE…

Have a profitable day,

Marc Barhonovich
Publisher

August 2006 - Merits of MainScale

2007-01-16T08:28:00.000-08:00

Many investors along with the media tend to associate volatility with risk. A time tested and very successful trading system profits from the daily volatility in the market. With volatility here to stay, you may want to find a way to take advantage of the constant market movements.

· The Automated Profit System does everything for you.

· No decisions are necessary

The way MainScale profits…

A prerequisite to any MainScale stock is solid fundamentals. Cash in the bank, little to no debt, growing sales, and insider ownership are just some of the factors taken into consideration when looking at a possible candidate. With such high levels of volatility in the market place today, it is difficult to manage a profitable portfolio. The fact that MainScale is a disciplined system is the foundation for its success.

ü NO Studying complex trading systems!

ü NO watching the computer screen for endless hours!

ü NO emotions or guessing when to get in a stock or when to sell!

ü NO waiting for faxes or emails, so that you don't miss a trade!

None of us can predict the sometimes irrational movements stocks make. With markets and stocks becoming more and more volatile, it is only a matter of time before our stocks bounce all over the place. The day to day gyrations is how MainScale and its subscribers are making a killing in the stock market and it all happens automatically.

There are always two terribly tough questions associated with any stock, when to get in and when to get out? MainScale eliminates any confusion by giving simple buy and sell instructions. You set it and forget it. I have never seen a system quite like this one. They use increment buy and sell limit GTC orders. The GTC orders are a necessity in order to cash in profits on the stocks’ quick and explosive movements. I have seen stocks move over 200% in a matter of minutes only to come right back down. If you were not able to get a trade in during that tiny window, you would have missed a 200% move in the stock. By having your orders already in place as Good Til Cancel (GTC), they stay there until they are executed even if you are out playing golf or relaxing at the beach. Trading in increments allows an investor to make profits while the stock makes its typical daily gyrations.

For example, if an investor purchased a stock at $1.50 and it had a $.20 buy and sell increment, a sell order would be in place for $1.70 ($.20 above $1.50) and a buy order would be in place for $1.30 ($.20 below $1.50). As always, those orders would be GTC limit orders. The use of Good Til Cancel orders is absolutely necessary for the system to work. You can have all your profits occur without ever looking at the stock market during the day. The GTC orders give you the freedom to do whatever you would like and still profit in the stock market. If the stock continued lower, more buy orders would be completed. CNXT is a prime example of how sticking with the system can produce awesome returns. In a 12 month period, CNXT cashed in 30 profits with just under $5.00 per share in profit. Amazing! The stock drifted lower for a while allowing an investor to build a heavy inventory (own multiple scale positions of the same stock) of the stock. With the stock moving northward since May 2005, that inventory has been liquidated into cash in the bank.

Totals

Stock Name:
Conexant Systems

Banked Profits

$18,050

Stock Symbol:
CNXT

# of Profits

30

Start Scale:
$2.00

`

Per Share Profit
$4.75

Scale Increment:
$0.15

Current Value

$13,604

Scale Bottom:
5.30

Cost Base/Open
$14,136

Start Date:
9/1/04

# Shares Open

7,600

Money Management, I am no professional…

The question I always ask when I am considering a stock in my portfolio is, “How many shares should I buy?” MainScale has developed a proprietary tool known as a Scale Bottom Multiplier to solve that precise issue. The SBM is calculated for you through a proprietary algorithm which, based on how much money you would like to use per stock, tells you how many shares to purchase during each scale transaction. For example, if the SBM is 7.90 and an investor has $20,000 allotted for the stock, he/she should compute 20,000/7.90 which equals 2,532 shares for every buy and sell transaction for that given stock.

Let’s Summarize…

Start Scale Price – The highest recommended purchase price suggested. This is the proprietary price where value has been calculated.
Increment – This is dollar amount in which buy and sell orders should be placed.
Scale Bottom Multiplier – The proprietary SBM is used as money management tool to protect an investor’s portfolio while maximizing return.
All of the information above is given to you at the beginning of each month for all 20 stocks in the portfolio. You can choose to trade as many or as few of the recommended stocks that you feel comfortable with.

MainScale is a revolutionary system that has capitalized on the markets daily movements, it is that simple. I have not come across any other system for the day-to-day investor that is so simple and yet so profitable. With market volatility here for good, those who adapt to the market will make the big returns while those who don’t will be scratching their heads.

July 2006 - Independence Day

2007-01-16T08:26:00.000-08:00

July 2006 Newsletter
Independence Day is the national holiday of the United States of America commemorating the signing of the Declaration of Independence by the Continental Congress on July 4, 1776, in Philadelphia, Pennsylvania.

At the time of the signing the US consisted of 13 colonies under the rule of England's King George III. There was growing unrest in the colonies concerning the taxes that had to be paid to England. This was commonly referred to as "Taxation without Representation" as the colonists did not have any representation in the English Parliament and had no say in what went on. As the unrest grew in the colonies, King George sent extra troops to help control any rebellion. In 1774 the 13 colonies sent delegates to Philadelphia Pennsylvania to form the First Continental Congress. The delegates were unhappy with England, but were not yet ready to declare war.

In April 1775 as the King's troops advanced on Concord Massachusetts Paul Revere would sound the alarm that "The British are coming, the British are coming" as he rode his horse through the late night streets. The battle of Concord and its "shot heard round the world" would mark the unofficial beginning of the colonies war for Independence.

The following May the colonies again sent delegates to the Second Continental Congress. For almost a year the congress tried to work out its differences with England, again without formally declaring war.

By June 1776 their efforts had become hopeless and a committee was formed to compose a formal declaration of independence. Headed by Thomas Jefferson, the committee included John Adams, Benjamin Franklin, Philip Livingston and Roger Sherman. Thomas Jefferson was chosen to write the first draft which was presented to the congress on June 28. After various changes a vote was taken late in the afternoon of July 4th. Of the 13 colonies, 9 voted in favor of the Declaration, 2 - Pennsylvania and South Carolina voted No, Delaware undecided and New York abstained.

To make it official John Hancock, President of the Continental Congress, signed the Declaration of Independence. It is said that John Hancock signed his name "with a great flourish" so "King George can read that without spectacles!."

The following day copies of the Declaration were distributed. The first newspaper to print the Declaration was the Pennsylvania Evening Post on July 6, 1776. On July 8th the Declaration had its first public reading in Philadelphia's Independence Square. Twice that day the Declaration was read to cheering crowds and pealing church bells. Even the bell in Independence Hall was rung. The "Province Bell" would later be renamed "Liberty Bell" after its inscription -

Proclaim Liberty Throughout All the Land Unto All the Inhabitants Thereof

THE MOST IMPORTANT CIVIL HOLIDAY IN THE UNITED STATES

I think it is so important to understand the history of this holiday and its significance to all Americans and the rest of the world.

The story is simple but so very powerful. Because of the guts and determination of our fore fathers, the citizens of the United States of America are free. We are free to do what we want, become what we want, live where we want, and say what we want. We are admired and appreciated by most of the world and we only declared our independence a few hundred years ago.

Look at how many societies have now come to appreciate and long for this same freedom. Look at how many societies are now free because of our lead.

Look at the people that live the dream…our dream of being free.

I would have to say that hundreds of years from now, much of the world will look back at this day when the United States of America declared its freedom and realize that it was on of the most significant dates ever in the history of the world.

It is such a simple holiday. But in many parts of the world billions of people long for one simple thing…FREEDOM.

Enjoy the fireworks, the good food and your families and friends. And for a brief minute remember what we have, how important it is, and all of the people that came before us to fight for our freedom and those who die every day to protect it.

GOD BLESS AMERICA and all of you.

MARC BARHONOVICH

June 2006 - Summer Forecast

2007-01-16T08:24:00.000-08:00

Summer Forecast
Short-term: Looks like the market made it through the storm of the last few weeks and is set up for a rally

Long-term: Dark Clouds on the horizon. As the summer progresses and heads into the fall, look for a major correction to get underway.

Last month our headlines read "The Market looks Toppy" and within a week of writing that letter the market fell out of bed with no warning at all. The S&P dropped over 5% and the NASDAQ collapsed more than 8%. Are we smart or what???

Of course, all of the pundits had a reason but it was all of the reasons that we have been warning about for months. Higher oil prices, higher gas prices, higher commodity prices, higher interest rates, mountains of debt, an over extended consumer, a declining dollar, and a housing market that is now slowing way down.

The correction was ugly the last few weeks. But if you followed the basics that we spoke about last week and had your stops in place, you came out of the correction unscathed. The market did suffer damage. The advance decline line is weakening, downside leadership expanded, many of the leaders of this bull market suffered bad corrections, and volume increased on the drop, meaning that institutions were getting out.

Institutions are the 800 pound gorilla you have to pay attention to. The best way to notice their movements is in the volume. They tend to move in and out of the market together and when they do move it shows up in much higher volume. The last few weeks the big down days in the market came on much higher volume than the up days…the big boys were selling. What we are looking for now are some big up days with a dramatic increase in volume to show that institutions are buying.

Because the market is now over sold we fully expect to see a rally of some sort unfold over the next month. The power (volume) behind that rally will tell us how healthy the market really is. We are not expecting a good prognosis!!!

This bull market is already on borrowed time since the average bull market runs about three and a half years and we are now past the average.

Inflation continues to be a problem and is only getting worse, not better. In fact, April's core Consumer price index rose 2.3%, well above the Fed's comfort zone. The stock market has a history of not doing well during times of increased inflation.

Oil prices have moved higher again and the consumer is suffering at the gas pump. All of the experts keep saying that oil prices are going back down. All of us who are just using COMMON SENSE can plainly see that they are not. It has been a year since oil jumped to $70 a barrel and last hurricane season when GAS topped $3 bucks. Lot's of things can move oil higher from here but I really don't see any things that will change and cause oil to move it back down and allow it to stay down. China, India, and SUV's are here to stay.

The real problem for the market going forward is interest rates. I believe that Mr. Bernanke would like to stop raising interest rates but can't. With inflation numbers increasing (like last weeks core PCE deflator up 2.1%) if the Fed stopped raising rates now the market would really drop wondering if the economy has weakened to the point that the Fed is forced to stop raising. Interesting predicament Mr. Bernake is in after just landing his new job less than 6 months ago. He can't stop raising rates because inflation is accelerating but if doesn't stop soon he will throw the entire economy into a recession because the consumer has so much debt.

After 16 rate hikes and interest rates rising 4% from its low point many companies and consumers are beginning to feel the pinch. David Rosenburg at Merrill Lynch says $2.5 trillion of household debt - roughly 21% of all mortgage debt outstanding - will reprice this year. US household debt increased 8.6% in 2000, 8.6% in 2001, 9.7% in 2002, 11.4% in 2003, 11.1% in 2004 and 11.7% in 2005. The ratio of debt service payments to disposable income is at an all time high (around 18%) despite the lowest interest rates in 40 years.

Richard Russell, well known investment advisor who has followed the market daily since the mid-1950's says: "The bear market was held back after 2002, but held back at tremendous sacrifice to the long-term health of the nation, Specifically, the bear was back through a series of (credit) bubbles, which include a bubble in stock values, a bubble in bonds, a bubble in debts and deficits, and an enormous bubble in housing….To my mind, this is the perfect setting for a monster bull market in gold and an equally massive bear market in paper."

So far the market has not collapsed but gold is at 25 year highs and telling us that we better be very careful at this point in time.

Mr. Waren Buffet, who for 50 years never thought it necessary to own a foreign stock, now owns more shares of PetroChina than any other company? As he has stated at a recent Berkshire Hathaway annual meeting, "A lower percentage of our intrinsic value is represented by the common stocks we own than just about at any time in our history."

While stocks may rally at the beginning of the summer we are certainly in the late innings of the game. As an investor it is important to know as many pieces of the puzzle as you can and know when it is important to be more cautious than other times.

This is a time to be cautious!!! I am not saying you should run and bury everything in the back yard because that would not be prudent either. You should not own a stock in this environment without having the proper trading disciplines in place. Make sure you have stop loses on all positions and that you are always getting rid of your weaker stocks. Remember that when the market goes down (bear market or correction) 3 out of 4 stocks go down with it. That is not very good odds. If your stocks go down you want them to be sold out so that your money is safe and available for you to invest once the correct has run its course.

If you are scale trading using the proprietary MAINSCALE APS system these corrections are exactly what we need to generate profits. The volatility of the market dropping allows us to accumulate new positions and the subsequent rallies create profits. Stick to the system….it is proven to work in any type of market UP, DOWN, or SIDEWAYS.

I hope everyone has a wonderful summer. It is a great time to relax and enjoy family and friends. Take some time off…you have earned it and your family deserves it.

Have a Profitable Month

MARC BARHONOVICH

May 2006 - Market Looking Toppy

2007-01-16T08:23:00.000-08:00

Market looking toppy…are you prepared?

With the market looking shaky, it is vital to re-evaluate your positions to maximize profit and reduce downside risk. With that being said, it is important for investors to understand a common characteristic of market tops that is quite different from market bottoms. Market bottoms are often V-shaped and sharp while typically accompanied by a selling climax. After the selling stops, it often takes many months for bases to develop and the real leaders emerge when those bases are broken out of on the upside with good volume. It is rare for a substantial percentage of stocks to make bottoms; base-out and breakout before the final low in the indexes are made. This is important to know…always remember that the trend is your friend. Get in early but make sure the trend is truly on its way to the upside.

Market tops are quite different. Tops take much longer and result from fewer and fewer stocks making new highs. After the few strong leaders hold the market up, they finally crack leading to a market consolidation which can be very costly if you are not paying attention.

The market has been slowly losing upside momentum all year. On a weekly chart, the S&P’s OBV is decreasing despite the market moving higher creating a negative divergence. To add insult to injury, stochastic’s show the market as over bought. Those two major factors are telling quite the story. It is almost like playing poker knowing what your opponent is holding.

Even three out of four strong stocks typically retreat in a downside correction, and it only gets worse from there. Housing will continue to cool through 2006, oil is going no where but up, and Iran troubles are just beginning.

Did you know that there has not been a major oil find since the 1970’s? Gas at $4 to $5 a gallon is just around the corner…literally. With crude oil taking up approximately 50% of the cost of gas, look for gas prices to now rise at almost the exact percentage that crude goes up. With other factors remaining more and more constant in the price of gas, crude is now the “x” factor in determining what we pay for gas. Did you notice that Exxon made $8.4 billion last quarter? Guess what…they are expected to make even stronger profits next quarter.

I am not blaming Exxon and big oil for our gas prices. They have run a solid business with billions invested. Simple supply and demand is causing the cost of crude to run. Some may argue that they control the supply thus controlling the market. Some also argue that some oil reserves are overstated which could mean there is even less oil than we expect. With China and India growing exponentially and war torn areas holding reserves, it is only going to get worse before it gets better.

CSI subscribers have been trained and informed on how to profit in this type of market. With the market topping, evaluate your limit orders and tighten your stops. On the short side, weak stocks are going to get weaker. Despite all the wildcards out there, it stills boils down to COMMON SENSE!

Josh Weis

Contributing Editor

First Quarter Update

2006-04-06T06:31:00.000-07:00

First Quarter UPDATE

6 stocks under $6.00 for 2006

Hopefully all of our subscribers loaded up on our beginning of the year recommendations. So far our performance has been nothing short of spectacular and it is only the first quarter. It looks like the fun is only just beginning.

Our undervalued stocks trading under $6.00 are performing quite well. Our one speculation is our one loser so far. Out of the six stocks recommended for 2006, four of our picks have very nice profits, one is breakeven, and one is negative. It shows us that it always important to diversify and never hang your hat (or investment dollars) on one stock.

Let’s look at how we are doing so far:

Sun Microsystems (SUNW) up 22%

JDS Uniphase (JDSU) up 75%

CMGI Inc. (CMGI) even

Conexant Systems Inc up 57%

Anegentics down 42%

iMergent, Inc. up 83%

Two of our stocks have almost doubled in value in the first three months of the New Year. Hang on because there is more to come.

Imagine if you would have invested $10,000 in each pick for a total of $60,000.00.

Your portfolio would currently be worth $78,762.00 or up 31.27% for Q1.

Up 31% even with one stock in the portfolio down over 42%....

The Common Sense Investor

The power of good stock picking and proper diversification.

PORTFOLIO UP 31% for Q1

*For all subscribers currently holding our 6 picks for 2006, we would recommend keeping a 25% trailing stop loss on any stock that has moved up more than 50% from your original purchase price.

First Quarter Update

2006-04-03T11:27:00.000-07:00

Is That a Light at the End of the Tunnel or...

2006-04-03T11:26:00.000-07:00

Is That a Light at the End of the Tunnel or is that a Freight Train???

The market continues to move higher and we continue to profit but at this point in time it is important to understand what the market is up against and what can derail this thing at any time.

We will try to put the obstacles in some order of importance but they all present problems moving forward.

1) INFLATION: Gold is telling us something, along with silver, copper, oil, gas, and every other commodity. The US used to be able to control inflation. When inflation started creeping higher, the Fed simply raised interest rates, putting the breaks on the economy and inflation would stay in check. Today with China and India fueling much of the world’s growth and using more and more of the world’s commodities, inflation is not something that our Fed can control. Another added problem is that the Fed flooded the world with easy money for the last five years trying to mitigate the effects of the collapse in the stock market. They did help the economy stabilize and recover but in the process created an inflated real estate bubble that is starting to unwind.

2) HIGHER INTEREST RATES: 15 rates hikes and more to come. It takes a while for interest rate hikes to filter into the economy. The US consumer has a negative savings rate and is leveraged to the hilt. And the worst part about this is that a major portion of the consumer debt today is adjustable. As rates continue to rise, so will the payment on mortgages, credit cards, and all other revolving debt.

3) DEBT RIDDEN US CONSUMER: An overspending, overleveraged, and under saving US consumer. Spend...spend...spend...the American way. Household debt as a percent of disposable income is now at 150% up from 60% just 25 years ago. When interest rates were low, people borrowed more money out of their appreciated houses and SPENT it. Now they have higher payments on the new debt and higher taxes and don’t have the ability to borrow more now that there house has quit going in value. Interesting to note.... delinquencies on mortgages rose 4.7% last month to the highest level in two years. In Michigan, Indiana, and Wisconsin foreclosures are the highest in 20 years and in Texas delinquencies were 8% in December. And this is with a good economy and rates still relatively low.

4) OIL and GAS: Oil is at $67 dollars a barrel today with no hurricanes in sight and no natural or man made disasters. Gas is over $2.55 per gallon for regular. As we have stated many times before...higher oil and gas prices are here to stay. What has always worried us is where prices will end up the next time there is a natural disaster, terrorist attack, or war. Will GAS go to $5.00?

5) FEDERAL DEBT LEVELS: The Senate has just raised the national debt ceiling to $9 trillion, representing 70% of the GDP. Interest expense is now the third largest category of the federal budget, only exceeded by defense spending and domestic welfare. Is the US government on the verge of drowning in its own debt?

6) DECLINING GREENBACK: With our massively growing domestic debt and our trade deficit setting new records every single month or trade imbalance now exceeds 2 billion a year. Foreigners must invest 2 billion to finance this imbalance. If they decide to stop our interest rates will rise quickly. As they buy more and more of our government bonds, we continue place ourselves at the mercy of the foreign governments that are buying these bonds. Mainly China and Japan. The more in debt we become the more the rest of the world sells our dollar because we become less of a superpower every day.

7) VULNERABLE FINANCE AND BANKING SYSTEM: The best kept secret on Wall Street is the derivatives game. There is more money in the high risk (I know I can’t lose) derivative game than there is in our entire banking system. And Hedge funds that were developed to mitigate risk for high net worth individuals now are mostly made up of high risk bets. Any unexpected ripple in the financial markets or the economy can become an avalanche overnight.

8) RISING COST OF WAR and NATURAL DISASTER: Multiple Hurricanes were not in the budget nor was a war that will never end. The hurricanes also add to the increased cost to build everything because the devastated areas are taking many of the supplies that would normally be used in other regions.

DON”T PANIC....

THE SKY IS NOT FALLING....

We wanted to give some things to keep and eye on. Watch long-term rates. They have been stable but over the last few weeks are beginning to rise to levels not seen in several years. A warning flag! Watch the dollar and notice if it begins to fall in earnest. If it does, this could cause foreign investors to begin to take money out of the US. Lastly, watch inflation. If it continues higher, which it looks that it is, then the Fed will be forced to continue to raise rates. Higher rates and higher dollar are never good for the stock market.

We just need to be aware of our own irrational exuberance. The market still looks good and we are not telling you these things so you will run out and sell everything. As always continue to follow the MainScale APS system of scale trading. Always have your GTC buy and sell limit orders in place so that you are ready to profit from all of daily gyrations that the market is prone to make.

Stick with the Automated Profit System (APS) and profit in any type of market.

Have a profitable day,

Marc Barhonovich

WHY US BONDS ARE THE NEW KEY TO OUR ECONOMIC PUZZLE???

2006-03-02T07:19:00.000-08:00

WHY US BONDS ARE THE NEW KEY TO OUR ECONOMIC PUZZLE???

What ever happen to “Three Steps and a Stumble?”

It just goes to show you how times are changing and how the US government is becoming less in control of its own destiny. For the last century there was a saying on Wall Street that you could take to the bank. If the FED would step-up or raise interest rates 3 times in a row the economy would stumble or begin to slow down.

So what do you call fourteen steps and no stumble….yet?

It is becoming very obvious that the Federal Reserve doesn’t have near the power that it once did. Up until the 70’s you basically had the US and Europe as the major economic forces with America leading the way. Then Japan began to tap into American consumers need to buy “stuff.” They began to supply US consumers with anything and everything they wanted. We in turn would send the Japanese our American dollars to pay for all of the “stuff” we wanted to buy. In less than two decades Japan became a major international player financed by the American consumer.

What did Japan do with all of the trillions of dollars we sent them? Besides building many of the worlds largest companies they also bought our US bonds. It was a safe place to store much of the wealth that Japan was now accumulating.

Fast forward to today…

Today there is an economic freight train controlling the world economy. It is called China!!! We have written about it many times before but China is now in control of the world’s economy not the US.

For the first 25 years after World War II, America was a net creditor. Even after we began to generate small trade deficits during the 70’s and 80’s, net foreign buying of US government securities remained negligible for decades. That began to change in 1995 when net foreign purchases of US long-term securities helped finance soaring business investment, which increased by over 80% during that period.

Since 2000, American borrowing from abroad has steadily increased from a bit less than $500 billion in 2001 to more than $1 trillion last year. The bad news is that this increase in borrowing has not been to finance an expansion in business but instead to finance a $320 billion Federal Government deficit and a $726 billion dollar trade deficit. The trend is worsening.

The Federal government’s deficit continues to grow and the US sells BONDS to finance this deficit. The over-indebted, overweight, over-spending American consumer continues to buy more “stuff” and our trade deficit continues to soar.

Today we are sending billions of dollars to China so that they will make and send us more “stuff.” China just like Japan two decades earlier are buying US BONDS. Net foreign investment in US long-term securities topped $1 trillion dollars in 2005 for the first time.

Why would China invest in US BONDS???

In order for China to keep growing it needs the American consumer to bring home big paychecks, so that they can keep up the bigger mortgage payments on bigger houses, with lots of space, which they can fill with more and more “stuff” from China.

By buying US BONDS the Chinese keep long-term interest rates low so that the US consumer will borrow and spend more.

Even though we have seen 14 interest rate hikes by the FED, our longer-term interest rates have gone up very little. In fact, currently the rate on a US 2-Year note is higher than the 10-Year note. In the very short-term you can see how it helps the US consumer but longer-term it becomes very obvious that the United States is beginning to lose control of its own destiny.

Unfortunately, for the Chinese, in order to keep themselves afloat, they need to keep the American capitalist economy afloat as well. Because if our consumption were to collapse, so would their job creation program and their export dependent economy.

AMERICA for so many years was truly independent. WE depended on no one else for anything and with our independence we have always controlled our own destiny. But now America is becoming more and more dependent on things like oil and now the foreign purchase of bonds to keep us afloat. You can see how, step by step, we are becoming more dependent on the actions of others for our well being.

It would be a real shame for our future generations if we let this trend continue!

WATCH BONDS to understand where our economy is headed.

If foreign purchases of bonds begin to wane for any reason and you begin to see longer-term rates rise any further I believe you will see an immediate and dramatic slow down in the US economy.

WE will keep you informed.

Have a profitable week,

MARC BARHONOVICH
Publisher

Stock Tip - Buy

2006-02-14T11:59:00.000-08:00

Buy when market indexes are in an uptrend. This reduces your risk on the long side and improves the longevity of bullish moves in the stocks that you own.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Stalling

2006-02-13T14:16:00.000-08:00

The market can signal distribution by what some call "stalling action." In this case, the market will be moving higher on heavy volume and then suddenly have trouble making further upside progress while volume remains high, indicating that heavy buying is being met by equally heavy selling, resulting in a day where very little upside progress is made depsite the strong volume.

Notice the small hints the market exposes...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Correction please

2006-02-07T07:05:00.000-08:00

The purpose of a downward correction in the lower part of the handle in a cup-and-handle base pattern is to put holders through one last decline and shakeout as well as to have a normal correction and pullback in price after the initial strong move up off the bottom of the cup into the upper half of the whole chart pattern.

Readig the chart...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - When to sell

2006-02-06T07:30:00.000-08:00

Ask any professional trader whether they use stops and they will probably say yes. Knowing when to buy is important, but knowing when to sell is what brings home the bacon. The proper use of stops, whether it is based on support and resistance, volatility, or a target price, can further you along in the process of making money. It does not matter what price you paid for a stock. What matters most is what you sell it for.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

$100 a Barrel for OIL … $4 per gallon for GAS

2006-01-31T07:29:00.000-08:00

$100 a Barrel for OIL … $4 per gallon for GAS

Will be here sooner than you think!

Oil prices spiked above $74 a barrel during the hurricane season and gas jumped over $3 per gallon within a week. Since the end of the storm season oil dropped back to as low as $57 dollars a barrel and gas dropped back under $2.50. The fall in oil prices happen just in time for the Christmas season and helped to fuel a nice year end rally.

Oil prices, however, have been on the rise again reaching a three month high of over $68 a barrel. Geopolitical situations around the world are adding significantly to upward pressure on oil prices.

America’s BIGGEST PROBLEM…

Oil prices today are being driven higher by an ever growing demand from the US, Japan, China, India, and now Europe. This has caused and will continue to cause steady rise in crude prices. If growth in the world economy continues and it surely will, the demand for oil will out strip supply.
The scariest part of this situation is the location of the oil reserves that we are dependent upon. Keep in mind that the countries with the largest oil reserves are:
1) Saudi Arabia
2) Canada
3) Iran
4) Iraq
5) Kuwait
6) United Arab Emirates
7) Venezuela
8) Russia
9) Libya
10) Nigeria

Problems currently exist for the US in 5 of these top ten oil countries.
Iraq’s oil production is only half of what it was before Sadam Hussein and the network of terrorist in that country are determined to make sure it stays that way.

Disagreements between Russia and the Ukraine have led to temporary cut backs in natural gas. With a crumbling economy and political power plays, Russia is tenuous at best.
Relationships between US and Venezuela’s Hugo Chavez aren’t exactly peachy.

In Nigeria, 10th on the list of reserves but the 5th largest supplier to the US, rebels continue to attack oil facilities.

And last but not least….IRAN. Iran is very worried about global warming and broke the U.N. seals on its nuclear power projects to develop a cleaner source of energy (I’m Joking). The world doesn’t trust Iran playing around with anything nuclear and threatened sanctions. Iran responded by moving $50 billion out of European banks and threatens an embargo on all oil exports.

SUPPLY and DEMAND issues + GEOPOLITICAL PROBLEMS = DISASTER

Wall Street and most investors have been convinced that oil prices are up on a temporary basis and will be headed lower in the near future. This same group seems to want to discount the affect that oil prices are having on the economy, on the consumer, and on corporate America.

Over the past 30 years, the price of oil would have periodic price spikes but always settle back down to normal levels. Less than two years ago oil was below $30 and it was just three years ago that oil was below $15 dollars a barrel. Since 1869 US crude oil prices adjusted for inflation have averaged $18.59 per barrel compared to $19.41 for world oil prices.

We have been accustomed to oil prices that have maintained reasonable levels and we have fooled ourselves into thinking that this is what will happen today.

WRONG !!!

The world is ever changing and many of the changes that have taken place over the last few years have had a direct affect on the consumption trends of oil and therefore have pushed prices to levels never witnessed before. The one thing that is different about today’s increase in oil prices is that IT IS HERE TO STAY.

The consumption trends that have been put into motion over the last few years will not only continue but grow exponentially over the next 50 years.
The consumption trends I am speaking of are not just that of the US, but the growth of emerging twin economic power houses. I am referring to China and India.

The world currently consumes over 80 million barrels of oil a day. China’s growth has been well documented over the last several years. By 2040, the economy of China will be larger than that of the U.S. And by 2060, India looks to have a larger economy than both.

By 2030 (less than 25 years from now) India’s population will overtake that of China. By then China will have 1.4 billion people and India will have close to 1.6 billion people. That is 3 billion people combined, all of which want to live and consume like Americans.

If the world is currently consuming 80 million barrels of oil per day with only 1 million barrels a day in spare capacity, what will oil consumption be 10, 20, or even 30 years from now.

Oil consumption in China has grown exponentially over the last several years and is showing no signs of waning. India hasn’t even entered the picture yet. With over 80% of its population under 45, and 50% under 25, look for the economy of India to begin to explode in the very near future.
The trends I am describing are demographic and economic trends that cannot be stopped. These are good trends and we are prepared to profit from these trends. But the one overriding ramification of the growth and success of China and India is higher oil prices.

HIGHER OIL PRICES ARE HERE TO STAY…

We are learning to live with higher oil prices and our economy is adjusting to this phenomenon. The US economy has remained remarkably strong in the face higher crude. We believe this has happen because the rise has been gradual and the economy and stock market have had plenty of time to adjust. Even with oil at $50 and $60 dollars a barrel (not imagined just a few years ago) the economy has remained OK.

NO ROOM FOR ERROR…

Geopolitical issues are very tricky in today’s inelastic oil market. If IRAN decides to show the world they mean business and stop exporting oil, we could see oil prices surpass $100 barrel over night. This scenario would be problematic for the economy and the stock market.

It is going to happen and it is only a matter of time.

IT IS UNAVOIDABLE…

We believe oil over the next 5 years will easily surpass $100 dollars a barrel and gas prices in the U.S. will be over $4.00 per gallon.
With any major disruption to supply of crude from the many rogue countries that supply us the black stuff, we could see oil over the $100 level in a few short weeks.

This spells trouble for the United States economy because of the debt that the American consumer continues to hold and add to. High debt levels of individuals and low savings are only exacerbated by higher prices at the pump.

Supply and Demand…economics 101

America, Europe, and Japan all continue to be huge consumers of the worlds oil supply. Now China and India want to enjoy the capitalism and grow and flourish. Because of the shear number of people in these two countries (quickly approaching 3 billion compared to 300 million in the U.S.), the demand for oil will continue to skyrocket. Prices will too!!!

This is the one overriding factor that will continue to keep a lid on the stock market and keep the economy from really taking off.

We look for the stock market to continue to stay in a broad trading range, much like it did throughout the 1970’s. Unless you are able to pick really good stocks and have an understanding of when to buy them and when to sell them, you will have a hard time profiting in the stock market. The days of Buy & HOLD are long gone!

If for any reason, oil prices were to spike above the $90 level than all bets are off. In this situation we would look for a sharp drop in all equity markets.
Of course you can simply follow the recommendations of The Common Sense Investor which provides the investing discipline you need in this type of market. We will continue to educate our investors on the use of stop losses so that your hard earned capital is always protected from the unexpected market debacle.

Have a Profitable Week,
MARC BARHONOVICH
Editor

The Trend is Your Firiend...Or is it?

2006-01-24T05:56:00.000-08:00

The market started the year a whole lot stronger than anyone expected. It got out of the gates like a raging bull…..The breath of the market was excellent, volume was good, and the new HI list expanded dramatically, which is the exact action you would like to see in a healthy market. Seasonal strength typically runs through April bringing huge amounts of extra money flowing into the market from mutual fund distributions, year-end bonuses, pension plan contributions, income-tax refunds, and many other forms.

The market dropped over 200 points on Friday but if you take a peak at the underlying action, the broad market had over 500 stocks making new HI’s and less than 50 making new Low’s. The market looked a lot uglier on the surface than it really was.

The big drop in the averages last week serves as a reminder that this is NO time to throw caution to the wind. We stated in our year end commentary that the market was up against several negatives that should not be overlooked. We expected these negatives to really begin to hamper the market’s progress during the first half of the year.

We expected earnings to begin to slow and we are seeing signs that the slowdown is really beginning to affect the market over the last week with YHOO, INTL, AAPL, GE, C, and several others either missing or warning about earnings slowdowns. Rising interest rates (with an inverted yield curve) and higher oil prices (we will write more about this subject next week) have always been bad for the market and we have stated that this time should be no different. Gold and most other commodities are showing us that inflation is a problem. Sugar just hit a 21 year high. The labor market is tight and is showing signs of higher wage inflation to come.

The housing/real estate market is slowing down and so is the appreciation of prices. This means that the game of consumers borrowing equity to live off of is coming to a halt. Remember that the housing boom made up 30% of our economy’s growth during this recovery and consumer spending has accounted for 70%. The consumer has more debt than ever and with no more equity appreciation to borrow to live off of and interest rates increasing, the negative implications for the economy will be significant.

The Presidential cycle (one of the most reliable cycles in the market) more often than not portends a major market correction and markert bottom in year two of the cycle. We are currently in year two of this cycle.

How do we make money in this type of market?

You have to be selective on the stocks you are investing in. Buy only the strongest sectors such as medical (DVA, NVS, CMED, BNT, and STJ) and energy related companies (SWN, EOG CHK, TMR).

DO NOT CHASE STOCKS. Buy only when a stock pulls back to its 50 day moving average and begins to turn higher or a stock breaking out to fresh new highs after a proper consolidation.

KEEP STOP LOSSES IN AT ALL TIMES. In a bull market that is living on borrowed time you don’t want to be out of the market but you do want to manage the positions you have very carefully. Never risk more than 10% when making a new purchase and remember to move your trailing stops higher as your stock moves higher.

Following these simple common sense rules will force your portfolio back into cash once the market goes into a full fledged correction. This allows you to lock in your profits and build your cash during a correction so that you have plenty of capital to invest once the market finishes the correction and begins a new bull phase.

We believe that the market has a little more to go on the upside over the next 6 to 8 weeks. The quality of the next rally higher will tell us how much power is left in this old bull. That being said....we still believe that 2006 will bring a major correction of more than 10% with a good bottom being made late in the year and maybe even the start of a brand new bull market.

HAVE A PROFITABLE WEEK

Marc S. Barhonovich
Publisher
www.thecommonsenseinvestor.com
www.mainscale.com

The Good, The Bad, and The Future

2006-01-23T05:45:00.000-08:00

The Good, The Bad, and The Future

How quickly another year has past. If you lived along the Mississippi Gulf Coast or in New Orleans it has probably been the longest year of your life.

What were some of the highlights for 2005? Oil and gas prices would have to be the hottest topic with prices at the pump topping $3.00 per gallon this year and oil settling in over $60 a barrel. Those unbelievable storms that battered the United States…Katrina, Rita, Dennis, and Wilma are just a few highlights of the 13 hurricanes and 26 named storms making it the busiest and costliest hurricane season ever.

The President struggled and the space shuttle returned to flight. Iraq is still a challenge but there were signs of great progress with a constitution being approved by the voter in October and a new assemble elected in December.

A new Pope was selected (Benedict) along with a new Supreme Court Chief Justice (Roberts) and a new Chief of the Federal Reserve (Bernanke). The last of the Union dinosaurs are on life support. General Motors and Delta are proof that companies can’t survive in today’s competitive landscape and also meet the demands of union workers.

Our news anchors have changed and so is the way that we listen to our music. The iPod with more than 30 million shipped now allows the user to receive music or video when they want where they want it and how they want it.

On the business side of things….the economy was strong. In fact it was much stronger than any one would have imagined. In the face of 13 interest rate hikes, soaring gas prices, continued terrorism, and ever mounting debt, the economy still grew at a solid 4.1% with inflation still remaining in check. 1.89 million jobs were created in 2005 with non-financial business profits surging 49% to $868 billion dollars. The S&P 500 saw earnings growth of over 15% which is more than double what was expected.

The markets were all over the map but turned out to be much to do about nothing closing the year mostly flat. The Dow was down .6%, the NASDAQ was up 1.4% and the S&P was up 3%.

HOW DID WE CLOSE THE YEAR ???

Both of our newsletters had outstanding years….MainScale.com completed its 3rd full year of publication in October and closed 2004 with 213 profits and a return more than double the S&P. Since inception the S&P is up 50.72% while the MainScale Automated Profit System is up over 155% providing investors a return that is 200% greater then the market and getting better each year. The Common Sense Investor has also had a stellar first year giving investors timely market picks and a discipline game plan for investing in those stock picks. LVLT earned 53% in just two months, GM made us tons of money as it went down, BWNG rewarded is for our patience with a 27% return. Other winners included JDSU, COMS, GNTA, and PFE.

THE FUTURE…OUR VIEW OF 2006

The economy is due for a slowdown. The housing market, which lead this current economic expansion, has definitely peaked and while we don’t look for a crash in prices we don’t see them expanding in 2006. The consumer, which accounts for two-thirds of the economy, is loaded to the gills with debt. This is the economy’s Achilles heal! With high debt levels, higher interest rates, high gas and heating costs, and higher property taxes, consumers are tightening their wallets. The economy will have to deal with a one-two punch….slower housing market and a consumer that just can’t spend like they have over the last few years.

We look for the economy to begin to show signs of fatigue in 2006 and slow down in earnest. One obvious and very reliable indicator of this is the current flat yield curve. When the rates of 10 year bonds and the short term Fed funds rate are the same or invert the economy typically slows shortly after….we will see!

Calling interest rates is like trying to predict the weather in Florida. Many things have to be weighed to determine what the Fed will do with rates. Inflation is definitely increasing and so are most commodity prices lead by oil and copper. The dollar has done better with the Fed rate hikes but the real estate market is starting to feel the pinch. Foreign investment in our bonds continues to keep our longer term rates low but will they keep buying if our rates stop rising and our foreign debt continues to grow?

Mr. Bernanke is entering as Fed Chief in a tough spot. The rest of the world is growing as are we which is causing an acceleration in inflation. There are no signs of China, India, Brazil, Japan, and others slowing down any time soon. Much of the worlds grow is being fed by the China-India engine which will charge ahead for many years to come. China has become the 6th largest economy in the world and this year is expected to move to 4th. Because of this the Fed is becoming less influential at leading the world in monetary policy. Although inflation is a problem our Fed may not be able to stop it by raising rates in the US. If the Fed continues to raise rates too much our debt-laden consumer will be forced to retrench and stop buying thereby slowing the economy. If the economy slows the Fed may be forced to lower interest rates which will cause foreign investors to stop buying our bonds which in turn funds our national debt. This would also cause the dollar to begin to fall again in earnest. NOW THAT”S A CONUNDRUM!!!

We look for the Fed to keep interest rates where they currently are and at the first hint of an economic slowdown start to lower them again. The Fed will risk a longer-term inflationary problem to keep the consumer afloat. This being said, Bonds should do OK in a stable to lower interest rate environment.

I believe the Dollar will begin to come under pressure again in 2006 causing the world some indigestion. Our Government debt and our consumer debt or out of hand and that will be reflected in a dropping dollar.

Real Estate prices have peaked and we don’t see a crash ahead but we do see prices lower across the country in 2006. Housing affordability index just hit a 15 year low and inventories of homes are at historic highs. Mortgage rates are up as are taxes, electric bills, and heating costs and with 50% of US mortgages now variable, the consumer will start feeling the pinch.

Oil prices should remain in this general area and spend 2006 consolidating the huge move up over the last 3 years. Although many economies will continue to grow in 2006 none of the larger economies should accelerate to the point of pushing oil over the $70 price range.

SO WHAT DOES ALL OF THIS MEAN FOR THE MARKET ?

Another tough year for the major indexes! Down for the first 3 quarters hopefully making a more substantial bottom in the fall with a year end rally getting us close to even. I believe the market will begin to move lower anticipating an economic slowdown over the next 18 months. The good news for the market is that valuations are starting to come back to historic norms and become more reasonable. After 5 years of a market correction and net losses for the indexes and the last 3 years of solid corporate growth stock valuations are looking reasonable. This will buffer any drop in the markets and we believe will keep any corrections at 10% or less.

Just like the last two years it will be a stock pickers market with two ways to make money. You can have a discipline system like the MainScale.com APS system that profits from the daily and weekly gyrations in certain undervalued blue chip stocks or you can use a proprietary stock picking newsletter like The Common Sense Investor.com which provides investors with stock picks in any category that looks to outperform the markets.

WHAT ARE SOME OF THE AREAS THAT SHOULD DO WELL IN 2006?

We will be searching out leaders in the Biotech, Medical equipment, and Medical software areas. We want to invest in the cures, the new equipment to implement new medical procedures and the software to help the entire system run more efficiently. With the Baby Boomers getting older this area will be an investment hotbed for many years to come. Internet commerce and content stocks should continue to do well in 2006. Certain technology stocks should do well. Just watch the products that consumers are clamoring for and buy the leading companies. Apple’s iPod and Motorla’s Razor are two good examples of companies introducing products and dominating their space. Semiconductor companies should also do well by supplying the brains for any new intelligent product launched. Oil and Gas companies and related service industries should be bought on any corrections as should the gold stocks. Both should continue to do well in 06. The worldwide demand for oil will only continue to increase causing prices to remain high benefiting the refineries, service companies, drillers and others in the sector. With the continued increase of inflation and worldwide demand for the yellow metal, gold stocks should also be bought on any pullbacks. We will also be watching the indexes of many foreign markets and look to buy the emerging leaders, just like we did when Japan took of this year. Our Japan Index recommendation (EWJ) has moved up over 30% since we said to buy.

Buy the strongest stocks with sound fundamentals and good up-trending chart patterns and keep stop losses on all positions to limit losses when you are wrong. Short only the weakest stocks with major problems that won’t be overcome anytime soon, like Fannie Mae, Blockbuster, or Krispy Kreme. Also keep your buy stop losses in place at all times in case the stock begins to turn around.

The approach is just COMMON SENSE. Stick with it and stick with us as we strive to provide you with the best investment available along with top quality customer service.

I hope everyone has a very profitable New Year.

MARC BARHONOVICH

Publisher

The Tsunami…One year later

2006-01-23T05:43:00.000-08:00

The Tsunami…One year later

What a difference a year makes in the lives of the many people who suffered one of the world’s worst natural disasters. An earthquake just a day after Christmas only 90 miles off the shore of Indonesia sent not one but three tsunami waves destroying hundreds villages, thousands of homes, and drowning hundreds of thousands of people.

On this one year anniversary I had the great fortune of being able to travel to northern Indonesia, specifically the Ache province. I went with Bishop Robert Lynch the Chairman of CRS International, to speak with the people of Ache and see the progress being made in this vast area of destruction. Like any catastrophic event, what you see on the news does not begin to show you what is really happening in this poor Muslim country.

I never realized that three waves hit the coastal area (not one as reported) and that many of the people were actually killed from the second wave which hit forty minutes after the first. It was the biggest and because many thought the first was it, they began to come back to assess the damage and help others. More than 90,000 were buried in mass graves which we drove by on many of the roads and more than 140,000 others were never found, simply washed out to sea.

We all read about what was expected next…starvation, disease, and uncertainty of any relief because of ongoing fighting by the rebels. Within days, not only did relief show up but in a big way with our military playing a big part along with multiple NGO’s (non-governmental organizations) such as CRS, CARE, CARITAS and many others. If an Indonesian was fortunate enough to make it through that horrible day then help was available in some form and survival made certain.

The work over the last year by the many NGO’s, lead by CRS would make every American proud and will forever change the way Indonesians look at westerners. These people begged our military not to leave after the initial emergency began to subside and although many groups have left the area, CRS and a few others have made long term commitments to the area understanding that it will take a minimum of 5 years or more to get this region back together and able to function on their own.

Before I went to the Ache province of Indonesia I had read about groups providing food, water, medical aid, and building shelters. What I witnessed is a commitment by CRS and others to not only meet the short term emergency needs of the people but to also re-establish the community helping to build or fix schools, parks, government buildings, Mosques and churches, hospitals, health clinics, roads, drainage and water systems, markets, piers, power generation, and much more.

The tsunami washed away more than 1 million homes and 650 villages leaving the people in tents and temporary shelters. Now you can see construction of new homes everywhere you go. These homes are a significant improvement over what was washed away constructed to survive a 7.8 magnitude earthquake and fully-equipped with running water, sanitation, and electricity. The timber used in these homes is legally harvested from reforestation projects and the local contractors and laborers are hired as soon as possible in order to support and reinvigorate the local economy.

I did not realize from the news reports that significant portions of land actually washed away because of the tsunami and the remaining land has sunk 1 to 2 meters because of the earthquake. On top of this, most if not all records were lost, so land ownership and titling has been a major issue that needed to be resolved in many cases before building could begin.

Much of the infrastructure was destroyed. Roads have to be rebuilt and in some cases like the island of Pulo Ache, the road system has to be completely redesigned because much of the land that the original road was on is gone. People collected drinking water in shallow wells and most of these were contaminated by seawater up to 2 kilometers from the shore. Many of the wells have been cleaned and are recovering. Pump stations and new gravity fed water systems have been built with more to come.

It is estimated that more than a quarter of the working population, more than 600,000 people, in the Ache province have lost their jobs as a result of the tsunami. Markets have been built; cooperatives were awarded grants to assist in the re-establishment of their businesses. CRS has assisted over 500 traders, including poultry farmers, fish traders, gold thread embroidery artisans, joinery workers, and many others to get their trades re-established.

The unexpected benefit of this tragic event was the peace accord signed between the military and the rebels which has stopped fighting that has gone on in this region for decades. The presence of westerners and other helpers from around the world has calmed the area and bred a new healthy attitude. I had a chance to speak with many of the local people and they are so happy and appreciative for all of the help from the many NGO’s working daily in Indonesia.

I realize it is not something you will see on the news but I have witnessed the tremendous progress first hand. The people of Meulaboh, Banda Ache, Pulo Ache, Singkil, Blang Pidie, Calang, and Nias over the next 5 years I believe will be much better off than they were before the tsunami. All of the organizations helping to rebuild the region are following the creed of CRS, “building back better.” Although progress is being made it is because of the shear magnitude of the undertaking that it will take several years to rebuild these areas.

It is my humble observation that this area of the world will be forever changed by the Christmas Tsunami of 2004. These people who were controlled by military and feared for their lives are now free to roam the streets without restraint. These beautiful kids will grow up liking and accepting westerners, Christians, and all who came to help when they lost everything. They told me how sad they were when our military left after the initial emergency subsided and how much they appreciated all of the help they gave in their time of need.

Most cultures pass their history on to future generations in their art. If you have the opportunity to travel to this beautiful country you will see paintings of the big wave, people being swept away, and children alone. You will also see as many paintings of the many different NGO’s helping, US military helicopters and ships bringing food, and Christians helping Muslims. This is a very good thing.

Stock Tip - Stalling

2006-01-18T13:42:00.000-08:00

Stock Tip - Distribution

2006-01-13T10:39:00.000-08:00

After a market has run up and appears to be extended, look for past days of distribution. There should be 3 to 5 noticeable days of distribution before the market starts a down move. Be aware that the down move can be either a consolidation or that the market has simply over done itself.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Take notice

2006-01-09T13:46:00.000-08:00

The Dow has just crossed 11,000 for the first time since 2001. New highs make huge news and usually spur on a rally. A new high typically gives the public confidence in the market.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Unusual indicator

2006-01-05T13:21:00.000-08:00

One way to measure the markets strength or weakness, open an IBD to the New High/New Low page. For example, the market showed great strength on January 4th when 490 new highs were mad compared to only 33 new lows. It pays to look at the market in unique ways.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Don't live in 2005

2006-01-03T11:57:00.000-08:00

What a year 2005 was. Learn from all your mistakes and successes from 2005 but make sure not to live in the past. You don't drive by looking in your rear view mirror do you? Let 2006 be your most profitable year yet.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Return on Equity

2005-12-29T10:59:00.000-08:00

Return on equity (ROE) measures how efficient a company is with its money. Most outstanding growth leaders in past market cycles showed a return on equity of 15 to 17 percent or higher. You can assume the higher the better, so that a 25 percent ROE is better than 17 percent and 35 or 40 percent is better than 25 percent.

It just mkaes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Strong signs

2005-12-28T12:56:00.000-08:00

The strongest cup and handle patterns will always show a powerful powerful prior uptrend in price of at least 30 percent on large, increased volume over many weeks in the uptrend.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Stalling

2005-12-22T06:57:00.000-08:00

Stalling in a stock is similar to "churning" in that it describes a day or week within which a huge amount of trading volume is occuring in a stock but the stock is unable to make any further upward price progress, indicating that big sellers are unloading stock as eager but late buyers are coming in.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Churning

2005-12-20T07:21:00.000-08:00

"Churning" occurs when a great deal of volume occurs but the price barely advances.

It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Don't do it

2005-12-19T07:51:00.000-08:00

You never want to sell short a stock that is running up and looks too high in price or PE. It could be high for a good reason and could move higher.

Short the weak companies, not the strong...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Profitable

2005-12-19T07:43:00.000-08:00

Of all the factors that affect stock price, profitability is the most important. Winning stocks should show earnings per share in the latest quarter up at least 25 percent versus the same quarter a year ago, and preferably much more.

Making money just makes COMMON SENSE.

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Should I chase it

2005-12-19T07:38:00.000-08:00

After a stock breaks out, make sure not to chase it if you miss a "safe" buy point. Stocks rarely go straight up or straight down so wait for a pullback. This allows you to enter the position with less risk and with more upside potential.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Peg it

2005-12-13T10:57:00.000-08:00

One way of pegging the possible top in a greatstock is by measuring how much its price-to-earnings, or PE, ratio has expanded. The PE of a leading stock that meets all the earnings growth parameters will expand more than 100 percent from where it was when the stock began its whole move.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - What are they

2005-12-12T10:25:00.000-08:00

When everybody is running around saying how great a stock is, then everybody who can buy probably already has, and the only direction for the stock to go at that point is down. When it is obvious and exciting to everyone, it's too late.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Class in session

2005-12-08T13:47:00.000-08:00

It does not pay to argue with the market. Experience teaches that fighting the market can be a very expensive lesson.

Class dismissed...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Hot Trading Tip 7 December 2005 - Market indexes

2005-12-07T08:25:00.000-08:00

Stock Tip - Rules

2005-12-07T08:24:00.000-08:00

When shorting, keep in mind that if a stock pays a dividend while you are holding a short position, you must pay back that dividend. Most investors are unaware of this simple fact but it makes complete sense. You are borrowing the stock and any dividend payment should be owed to the "actual owner" of the stock. This rule can mean the difference between profit and loss.

Know the rules...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Gold

2005-12-06T12:42:00.000-08:00

When inflation is a concern, gold stocks tend to do very well. So, when inflation is on the move, look to the golds for golden profits.

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - New highs and lows

2005-12-06T12:29:00.000-08:00

Keep an eye on how many new stocks are making new highs and how many are making new lows. A strong market has many new stocks making new highs with a few lows. A market can look very strong but only have limited leadership, so keep an eye out.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Beating the Blues

2005-12-06T06:02:00.000-08:00

BEATING THE BLUES

It is that time of the year again. Winter time, the holidays, and years end all wrapped into one. For many it is an exciting time….time to be happy, thankful, and full of joy. But for many others it can be stressful, intimidating and down right depressing.

In the US, there are more than 30 million people that suffer from some type of depression more than 120 million worldwide) and twice as many women as men have the disease. The disease has been studied for years but for the most part is poorly understood. I realize that a portion of the group with depression is genetically predisposed but what about the millions of others.

Depression cost $31 billion dollars a year in lost production. By the way, this depressing statistic came from Eli Lilly, the maker of Prozac.

What is depression? There is NO lab test for it. Scientists have been looking for the genes for years that explain behaviors like mania and depression. Primates, like chimpanzees, don’t get depression. Why do humans?

I know that there really are people who look and act depressed but how do we really know they are and how do we really know what is causing it. There is in fact some evidence of chemicals in the brain called dopamine, serotonin, and others, but actually is poorly understood.

I am no doctor and I try to bring a COMMON SENSE approach to everything but they way I see Prozac and Zoloft handed out like candy is frightening. In a prior business I owned I had an office staff of 5. In a casual conversation it came out that 4 of the 5 were taking one of these drugs. Needless to say I was shocked. I think if you asked around, you would be shocked as well.

What I am learning is that the first line of defense against depression is DRUGS. I personally believe that a lot of this is PROFIT motivated. You can’t make in money telling someone exercise or smile more. But doctors keep people coming back who say they are depressed so that they can prescribe more medication. There is a lot of money selling pills.

Let me offer a more COMMON SENSE approach to this “disease.” You have nothing to lose and can always go and get more chemicals.

EXERCISE is number 1…it is proven to work and has no adverse side affects. As a by product you may actually lose a few pounds.

Listen and read UPBEAT positive upbeat things. Don’t give to much attention to things that are depressing.

Consume limited amounts of ALCOHOL. I realize this is very hard to do during the holidays so if you have to drink just do it in moderation and don’t drive. Make a deal with yourself that on the nights you do drink you will do yourself a favor and exercise the next day.

Try to solve any and all problems that you can control. And never worry or spend time pondering things you can’t control.

Remember “Worrying is like a rocking chair; it gives you something to do but doesn’t get you anywhere.” That little saying always stuck with me for some reason.

Stay away from negative people and people who complain a lot.

Don’t go to bed mad. Solve the problem, get a good nights sleep, wake up fresh and move toward your positive goals.

I know the Dermatologist will kill me for saying this but get a little SUN on your face and body when possible. It will make you feel healthier and look healthier.

Most important of all….SMILE. Smile at yourself and smile at others. It is contagious!

COMMON SENSE approach to a healthy and Happy Holidays.

Have a Profitable Week,

Marc Barhonovich

The proposed “AMERICAN SUCCESS PENALITY”

2005-12-01T12:57:00.000-08:00

The proposed “AMERICAN SUCCESS PENALITY”
Stupidity reigns supreme in the House and the Senate

Exxon announced record profits for the last quarter of over $10 billion dollars on $100 billion in revenues. How un-American is that!!! How dare them spend the last 100 years building a worldwide business and then generate a record 3 month profit of $10 billion!!!

That is what we are hearing from our wonderful elected officials, the men and women that make up the House and Senate for the United States of America. In an effort to win votes they play upon the emotions of our citizens criticizing “BIG OIL” for making too much money at a time when people are suffering from higher oil prices.

Before I go any further, you have to understand who the big bad “BIG OIL” is. IT IS US!

When I say us, it is any shareholder of an oil company like Exxon and most likely, any person that owns a mutual fund since most have shares in some of the oil companies. “BIG OIL” is not like the Wizard of Oz, some unknown behind a curtain, controlling things. You and I are “BIG OIL.”

Millions upon millions of everyday average American citizens own oil company stock either directly or through mutual funds, ETF’s, closed end funds, variable annuities, and many other ways.

When “BIG OIL” companies make a profit they do two things with it. They either pay a dividend to shareholders or reinvest it back into the company to grow the business and create future shareholder value.

How did Exxon, Chevron, Mobil, Shell, and other oil companies become what they are today? By building a business over decades, making a profit, and using that profit to expand the business even further. They even keep some of the profit for times when oil prices are much lower, like they were just a few short years ago, so they can continue to operate even when they are losing money. We call this smart business.

They use that profit to buy and lease more land, find more oil, and build reserves so that they can supply oil to us in the future. They buy equipment, build oil rigs, build pipelines, and buy huge oil tankers so that they can ship oil to refineries so that we have fuel for our cars and heating fuel for houses. They develop new ways to explore and drill more efficiently so that oil and gas would actually cost us less in the long run. They spend billions of dollars just trying to find new pockets of undiscovered oil and gas miles under the surface so that we do not run out of fuel.

“BIG OIL” does all of these things despite of all of the government bureaucracy, environmental regulations, taxes, and litigation and still manages to make a profit. They manage to make a profit from a business that takes more capital than any other and is built around a commodity that fluctuates up and down daily, a commodity whose price cannot be controlled. Despite all of the obstacles “BIG OIL” still manages to make a profit.

Speaking of profit…our intellectually challenged Congress fails to recognize that the oil industry operates on profit margins of less than 10%. XOM had to generate 100 billion in revenue to make 10 billion.

So now let’s do the most un-American thing we can possible do…Let’s penalize them for their success. Don’t forget that when I say “penalize them” I really mean us (the shareholders).

Attempting to exercise a “profit tax” on one specific industry because the commodity they distribute has gone up in price demonstrates GROSS DISCRIMINATION.

These companies already pay a 35% corporate tax and as shareholders we pay an additional 15% tax on the dividends. Why should this industry be forced to subsidize another fat government program?

Making money is fine as long as you don’t make too much! Senator Boxer calls for self-sacrifice for the “Big OIL” companies. Hawaiian Senator Inouye suggests, “that in the midst of pain, in the midst of suffering, the public sees headlines about record profits.”

These Senators and Congressmen called for the CEO’s of the nations biggest oil companies to come to Washington and defend its business. What they were really doing is defending shareholders right to earn a profit.

Threatening to impose an arbitrary “profit tax” demonstrates a flagrant misuse of federal power.

If the congress wants to penalize a company, why not Microsoft? Good old Microsoft does not have to build drilling rigs, or buy land, or have supertankers to carry their product. They have software that can be shipped over the internet and can be updated with programmers. Microsoft’s NET Profit Margins are over 35% and they have over $60 billion dollars in cash. In fact, they generate so much cash that they paid shareholders a special dividend of $3.00 per share. NOW THAT IS A WINDFALL PROFIT!!!

Should we develop a special tax for companies with the biggest profit margins like Microsoft and Google? Or maybe a special tax for companies that have the most sales like Wal-Mart regardless of their profit margins or how many people they employ.

What really irks me about this entire “windfall profit tax issue” is the shear stupidity of the Congress men and women and Senators who brought up this ridiculous idea in the first place. They gave no thought regarding the shareholders who own these companies or the gross discrimination that would be taking place. They gave no thought regarding how this stupid tax would affect corporate America and their ability to make a profit. They gave no thought on who they really want to help and who they are penalizing.

They want to help their lower-income consumers who are suffering because of higher gas and heating oil prices. But do you help these people if they drive a SUV which uses more gas. Do you help these people run their heaters at 85 degrees instead of 75 degrees all winter? Do we help higher income people that sacrifice by driving a smaller car with better gas mileage or those who buy a hybrid? Maybe we give special tax incentives to those who live in the south and don’t have to use near as much energy during the winter to stay warm?

Now you can see how ridiculous this subject really is.

Please pay attention to each Senator and Congress man or woman who has pushed this issue because they truly don’t deserve to be in Washington. The stunt they are trying to pull is strictly self serving and a blatant attempt to play on peoples emotions.

If Congress would pay more attention to there own pork barrel spending we would be much better off. Instead of inventing a new tax to penalize shareholders and the company the employ hundreds of thousands of workers lets track down the billions of wasted dollars in Washington. FACT: In 2003, the Federal Government could not account for $23.5 billion dollars in spending. Can you imagine looking in your checking account and not being able to account for $1,000 dollars of spending and the government can’t find $23,500,000,000 of spending. WOW!

A recent inventory check of California’s state vehicles revealed that 30,000 are missing or unaccounted for. Even at $5,000 a piece that is over $150 million that Senator Boxer could use to help the poor people of California.

During our next election please look at the track record of your local Senator or Congress person and VOTE NO to stupidity in congress.

Have a Profitable Week,

MARC BARHONOVICH

Stock Tip - How long should it be

2005-12-01T07:55:00.000-08:00

A cup and handle base should be at least six to eight weeks in length, starting with the first week closing down off the stock's top. What a great formation to trade.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Back to the basics

2005-11-30T05:50:00.000-08:00

It is always important to learn as you go and to always stick to the basics of trading. Use this time of year to evaluate all of your previous trades. What did you do right and wrong? Were stop losses used? Were exit and entry points properly used?

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Are you exposed

2005-11-29T10:39:00.000-08:00

It is very important to not over expose yourself to one side of the market or the other. Always go long the best stocks in the market and go short the weakest.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Cutting losses

2005-11-28T07:01:00.000-08:00

It is very important to always determine an exit strategy upon entering each position. A rule of thumb is 7% to 10% below your purchase price. If the stocks happens to drift lower hitting your exit point, under no circumstances should you continue to hold the position. For whatever reason, the stock did not do as expected. You simply need to exit that position and enter a better and more safe position. Staying disciplined ensures that you will not experience any huge losers which can kill a portfolio.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Enjoy it

2005-11-23T06:29:00.000-08:00

It is time to give thanks. We are very blessed in more ways than we can ever count. During this time of year, take advantage of the opportunities to be with your family and friends. The stock market and the money wil always be there.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Liquidity matters

2005-11-22T06:09:00.000-08:00

Make sure to be aware of a stock's liquidity or lack of liquidity before entering a position. An easy way of doing this is to observe the stock's average daily volume as well as the spread between the bid and the ask price. The less liquidity generally makes it harder to get out of a position in a hurry without running the price down.

Invest in liguid stocks...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Market signals

2005-11-21T14:14:00.000-08:00

Stock Tip - Sectors

2005-11-18T10:54:00.000-08:00

Look for the leading and lagging sectors. It is much safer to ride a long position in a sector that is leading the market. On the flip side, shorting stocks in a weak sector can produce solid returns.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - It is good to add

2005-11-17T08:15:00.000-08:00

In a bull market, one way to maneuver your portfolio toward more concentrated positions is to follow up and make one or two smaller additional buys on stocks as soon as they have advanced 2% to 3% above your original or last purchase price. However, do not allow yourself to keep chasing a stock once it is extended too far past a correct buy point.

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Stochastics

2005-11-16T08:00:00.000-08:00

Stochastics
A technique of technical analysis used to help identify overbought and oversold markets. If the stochastics reading is below 20 it is considered oversold. If the reading is over 80 it is considered overbought.

Marc Barhonovich
Publisher
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www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Historically speaking

2005-11-15T07:49:00.000-08:00

If your stock is not in the top-performing group, at least one or two other stocks in its industry group should have high EPS and Relative Strength ratings. Sixty percent of the best winning stocks historically have been part of a strong industry group move.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Get some sleep

2005-11-14T12:04:00.000-08:00

Never operate from a position of fear. If your stocks are keeping you up at night, sell to the sleeping point.

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - New highs

2005-11-11T13:29:00.000-08:00

Make sure to keep an eye on stocks making new 52 week highs or stocks that are near their highs. These stocks get a lot of attention and tend to run much higher.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Good sign

2005-11-10T06:23:00.000-08:00

Purchase stocks where management has a large stake in the company. This shows they are going to do all they can do to make the company grow and prosper. It also shows they truly believe in what they are doing. Since they know more than we do, it can be very profitable to join them.

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Exit strategy

2005-11-09T10:55:00.000-08:00

Always have a plan to exit a stock. Very few people do and it is very easy to get hurt if you do not have rules. Determine your exit strategy on every stock you purchase before you purchase.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Buy when...

2005-11-09T06:18:00.000-08:00

Stock Tip - IBD reading

2005-11-08T10:46:00.000-08:00

Look in the IBD daily to see where new highs are being made. Take notice of what stocks and more importantly what industries are leading the market. It also imperative to know what industries are struggling.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Add to your position

2005-11-07T05:49:00.000-08:00

Stock Tip - Double bottom

2005-11-04T07:09:00.000-08:00

Double-bottom patterns can have faulty characteristics. It is not sound in the majority of cases, for example, if the middle part of the "W" goes into new high ground. A proper looking double-bottom "W" has the middle part stopping before the old high.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Know the market

2005-11-03T07:06:00.000-08:00

The last two month's of the year are typically strong. Knowing this will allow you to ride your longs a little longer and to exit your shorts a little quicker.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Sticking around

2005-11-02T08:18:00.000-08:00

When selecting potential winning stocks, it can help to check out the monthly chart covering a period of many years. A stock could be emerging out of a 10-year base and old price high as well as shorter-term proper pattern that could add to its potential.

Look at it from every angle...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Stay strong

2005-11-01T08:15:00.000-08:00

Almost all chart base patterns are built because of a correction, or decline, in the general market indexes. In a sense, market corrections can be viewed as healthy for the future, because they are building the new patterns from which leading stocks can emerge, refreshed, a few months later. But you have got to stay awake to recognize them.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Give yourself some room

2005-10-31T12:28:00.000-08:00

Happy Halloween!

The market's are now more volatile than ever. This can make trading difficult at times. Make sure to give yourself some wiggle room when placing your stops and deciding your exit points. There is nothing worse than barely getting shaken out of a stock because your stop was to tight only to have the stock move where you thought it would shortly there after.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Keep an eye out

2005-10-27T08:09:00.000-07:00

Watch other big players in all the different industry groups. Their earnings news can be a sign of what is to come in the rest of the industry. Wall Street tends to react to any news so a stock you do not own can cause movement in the stocks you do own.

Keep an eye out...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Uncommon knowledge

2005-10-27T05:35:00.000-07:00

Stock Tip - Industry

2005-10-26T06:30:00.000-07:00

It is always a good habit to analyze what industry's are producing the best. Home building and construction have been the obvious leaders over the past couple of years but now medicals appear to be one of the front runners. When indutry's are strong, it is much easier to find a winner. Even if the overall market is weak, the best industry's typical hold.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Rules

2005-10-25T07:13:00.000-07:00

The market just does not make sense sometimes. Those who leave investing to chance will quickly be down and out. Create rules for investing and stick with them. If a stock breaks a trend, simply eat the small loss and search for another winner. It only takes one big loss to wreck your portfolio. Rules will avoid the big disaster and they will also make sure you take in profits as a stock moves higher.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Relative Strength

2005-10-24T06:38:00.000-07:00

After a market has been beat up for sometime, look for stocks that remain strong. The best tool for finding these stocks is to look at a stocks relative strength. A stock's relative strength is a measure of how well the stock has held up compared to the rest of the market. A stock can still be going down and have a strong relative strength because the market as a whole could be doing much worse. When the market gets its feet under it, stocks with high relative strength should be the first to move and have the most strength.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Relative Strength

2005-10-24T06:24:00.000-07:00

After a market has been beat up for sometime, look for stocks that remain strong. The best tool for finding these stocks is to look at a stock's relative strength. A stock's relative strength is a measure of how well the stock has held up compared to the rest of the market. A stock can still be going down and have a strong relative strength because the market as a whole could be doing much worse. When the market gets its feet under it, stocks with high relative strength should be the first to move and have the most strength.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Earnings season

2005-10-21T07:10:00.000-07:00

Earnings season can be very confusing. A stock can have a 70% increase in revenues only to get hammered by the market after the announcement. It may be wise to take any profits before an earnings announcement. Let the market react to the news and re-enter at the appropriate time and price. You may kick yourself if you are long a stock that gaps UP 10% or more but you will be thankful when the reverse happens.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Public consensus

2005-10-20T12:56:00.000-07:00

It seems that everyone has an opinion on the market or a stock. Disregard what everyone says and rely upon your own research. Take a common sense approach to every transaction.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Exposure

2005-10-19T08:57:00.000-07:00

Stock Tip - Go short

2005-10-18T08:54:00.000-07:00

Going short is an art in and of itself. be very careful when shorting. Make sure a stock give very clear signs of weakness before making your move. A safe rule of thumb is to make sure the 50 and 200 day moving averages have begun to roll over.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - New highs

2005-10-17T13:06:00.000-07:00

These are normally the new leaders in the new bull phase, and they will go up farther and faster than other stocks even after the others eventually gather momentum.

Get them early...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Relative strength

2005-10-14T07:09:00.000-07:00

After a market has lost its downside momentum and looks poised for a move up, look for stocks with strong relative strength. They will be the first stocks to lead the new move and they tend to move quicker than others that previously lagged.

Go long the best stocks...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - What to do

2005-10-13T07:05:00.000-07:00

When the market is not giving a clear signal of where it wants to go, what do you do? The wisest thing to do is to be in cash or at least hedged. The current market is showing mixed signals of where it wants to go. Those who guess in the market are rarely right. Always let the market tell yo uwhat to do. When the trend is up, trade accordingly and vice versa. Remember, cash is always an investment.

It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Is the market shifting

2005-10-12T06:13:00.000-07:00

Shifts in market direction can be detected by reviewing the last four or five stock purchases in your own portfolio. If you have not made a dime on any of them, you could be picking up signs of a new downtrend.

Notice a shift ASAP...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Toppy

2005-10-11T11:36:00.000-07:00

A sign of a stock topping can be when you observe four or five down days followed by two or three up days whereas before you would have seen four days up and then two or three down.

Let the market tell you your next move...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Don't chase it

2005-10-10T06:46:00.000-07:00

Stock Tip - Practice makes perfect

2005-10-07T09:53:00.000-07:00

The more time you spend with charts, the more skilled you will become. You will not only be able to recognize patterns that signal enormous stock moves, you will also be able to detect patterns that are absolutely defective and must be avoided. This is of enormous value in helping cut down on your costly mistakes.

Practice makes perfect...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - New breakouts

2005-10-06T12:51:00.000-07:00

Stock Tip - Correction time

2005-10-05T12:46:00.000-07:00

Stock Tip - Stay with the strong

2005-10-04T12:37:00.000-07:00

The majority of strong, healthy stocks that have not suffered too much distribution or professional selling in their chart bases should show more weeks up on greater-than-average weekly volume than weeks down on greater-than-average. An outstanding stock might show seven or eight weeks up on or above-average volume and only three or four weeks down.

More accumulation than selling...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Double Bottom Chart

2005-10-03T13:03:00.000-07:00

Caution Ahead

2005-09-30T14:12:00.000-07:00

CAUTION CAUTION

The CAUTION Flags are out on the stock market it is time to be careful

Many times a good defense is your best offense. Look at many of the great football teams that have gone on to win the Superbowl. Defense is what won the game for many. Granted, you have to score points to win the game but if you give away fewer points than you score, you will always come out on top.

It is the same way with investing. We need to play offense and make profits. Pick good companies with good fundamentals, with great looking charts, and with the market in a solid uptrend. You ride your winners till they show you that they can’t go any higher and then you get rid of that stock and find a new stronger horse to ride.

BUT the way to make consistent long term positive returns is to make sure when the market begins to look shaky and stocks begin to tumble, you are ready to take profits and cut your losses and go back into cash.

IT IS JUST COMMON SENSE... there are no medals for being a hero in the stock market. You don’t get a purple heart if you ride a stock from $50 to $5 and lose a bunch of money. It is up to you to protect yourself if the market gets bad and your stocks start dropping.

Let’s look at the BIG PICTURE. I recommend you take out a yellow pad and take out 2 pages. On one page, write all of the good things that are helping the market now and will over the long term. On the other page, write all of the negative things that are affecting the market today and will over the longer term.

This is a simple COMMON SENSE approach which will tell you at any point in time how cautious you should be. Don’t get me wrong...you should always protect yourself in the stock market, it is just that sometimes you should be even more cautious than others.

POSITIVES for the market:

Big cash positions within companies. Advance/Decline line is still positive and in an uptrend. NYSE Specialist short selling is still very low. The major averages are still above their 200 day moving averages. Interest rates, although up are still low relative to historic rates. Put/Call ratio is bullish (meaning everyone is scared). Brokerage stocks and utilities are still acting well and they are good indicators of the overall market. Several big foreign markets are doing very well...i.e. Japan.

The bottom line is that even though the market has made little to no progress for the year it is still just a few percent from its highs. The trend is still up and the bull market that started 3 years ago is still kicking.

NEGATIVES for the market:

Short term interest rates have been raised 11 times and are up 2.75% from their lows. Oil has doubled in price over the last year and gas prices are up over $1.00 per gallon at the pump. New home sales fell 9.9% in August to the slowest pace since November 2004. Both new and existing housing inventories are rising at a rapid clip and the housing supply gauge just hit a 5 year high. The problem with a slowdown in housing is that over half of the growth in the US economy over the last 3 years came as a direct result of the housing boom. Consumer confidence dropped 18.9 points to 86.6, one of its lowest readings in two years. If rates are rising and the consumer is becoming less confident why would housing do anything but continue to soften? NOT a good scenario.

Most commodities are substantially higher and gold just hit a 17 year high. The most recent PPI (Producer Price Index) rose at the fastest rate in 15 years – 5.1%. Few stocks are leading the market higher and several leading groups are in their own private bear markets...Retailers, Autos, Newspapers, Housing, Internet, Chemicals, and Paper to name a few. Wal-Mart (consumer) and General Electric (business) are both heading lower and they are good proxies for the market. The A/D line is losing momentum and many stocks are now in downtrends.

Did I mention that GAS prices and INTEREST rates are up and INFLATION is accelerating.

There has never been a period in the history of the stock market where the market does well when inflation is on the rise and typically the market performs poorly when interest rates are rising. WILL THIS TIME BE DIFFERENT......I DOUBT IT !!!!

I am not trying to scare you and tell you to sell everything because that just would not be prudent. Many of the things that I have brought to your attention have been building over the last several months but the market has continued to move higher. Why has it moved higher? Who knows?

This is why you only ever trade what you see and be prepared for what you don’t see. If the market trend is up and it continues to move higher than you do what the market tells you.

Remember, THE MARKET IS ALWAYS RIGHT !!! So what do we do NOW?

In a transitional market (a market that is moving from an uptrend to a sideways or down trending market) it is important to be much more cautious with your holdings.

Continue to ride with your strongest stocks. Make sure your stop losses are in place with any stock you own. Place you stop losses at or just below the 50 day or 50 week moving averages. Place you stop loss orders Good Till Cancel so that they will remain in place until you change them. Sell any stock that you have been in longer than a month and are not performing.

Remember , CASH is an INVESTMENT.

Be very selective if you buy anything at all. As you come out of underperformers put the money into the bank.

If you are Scale Trading, keep doing exactly what you are doing. The MainScale Automated Profit System is designed to do well in any type of market so just stick to the system.

It is also not a bad time to start adding a few SHORTS. When you are shorting a stock you are selling a stock you do not own with the agreement you will buy it back at some point in the future. You profit as the stock drops.

You only want to short stocks that are the weakest stocks you can find. Stock that are trading below there 50 day moving averages. The reason for this is that if the market keeps rallying these stocks usually will not rally as much and if the market falls than these stocks will usually fall faster and farther.

Look at Fannie Mae (symbol:FNM) and its performance over the last 2 years. While the market has been going higher the stock has dropped from $80 to $45. This company has had many problems and the mortgage business is about to slow down with rising interest rates. What do you think will happen to this stock if the housing market slows and interest rates continue to rise? If the stock can’t go up in a positive market what happens when the economy slows and defaults start mounting.

Same story with GM and F, if they couldn’t make a profit in the last several years when interest rates were cheap and gas was under $2.00, how are they going to make money NOW?

With the market and the economic climate looking FAIR at best, it is time to sell the weakest stocks you own, tighten your stop losses so that you come out of things automatically if they begin to fall, and begin shorting stocks that are in down trends and have a weak outlook.

This is a COMMON SENSE approach to protecting our capital and the profits we have made over the last three years.

Have A Profitable Week,

MARC BARHONOVICH

Stock Tip - Something is wrong here

2005-09-30T08:25:00.000-07:00

A key indicator to watch as strong stocks break out of successive bases is the Relative Strength (RS) line. Each time a winning stock breaks out of a new base, the RS line should break out too. If it does not, it should follow the stock to new highs very quickly thereafter, thereby confirming the price move. A lagging RS line signals weakness and loss of power and leadership. Avoid buying stocks with this flaw.

The line will confirm either way...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Distribution...

2005-09-29T07:49:00.000-07:00

In any uptrend, there will come a point when selling activity overtakes buying. This is called distribution, and it is important that you recognize the action. The first day of distribution is when the index closes down from the day before but on volume that is higher.

Notice the distribution...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

A Must Read: Laus Deo

2005-09-28T10:28:00.000-07:00

Laus Deo

I thought that you and others may like to see this. One detail that is not mentioned, in DC, there can never be a building of greater height than the Washington Monument.

With all the uproar about removing the ten commandments, etc... This is worth a moment or two of your time. I was not aware of all this historical information.

On the aluminum cap, atop the Washington Monument in Washington DC, are displayed two words: Laus Deo. No one can see these words. In fact, most visitors to the monument are totally unaware they are even there and for that matter, probably couldn't care less.

Once you know Laus Deo's history, you will want to share this with everyone you know. But, these words have been there for many years; they are 555 feet, 5.125 inches high, perched atop the monument, facing skyward to the Father of our nation, overlooking the 69 square miles which comprise the District of Columbia, capital of the United States of America.

Laus Deo! Two seemingly insignificant, un-noticed words. Out of sight and, one might think, out of mind, but very meaningfully placed at the highest point over what is the most powerful city in the most successful nation in the world.

So, what do those two words, in Latin, composed of just four syllables and only seven letters, possibly mean? Very simply, they say "Praise be to God!"

Though construction of this giant obelisk began in 1848, when James Polk was President of the United States, it was not until 1888 that the monument was inaugurated and opened to the public. It took twenty five years to finally cap the memorial with a tribute to the Father of our nation, Laus Deo . "Praise be to God!"

>From atop this magnificent granite and marble structure, visitors may take in the beautiful panoramic view of the city with it's division into four major segments. From that vantage point, one can also easily see the original plan of the designer, Pierre Charles L'Enfant...a perfect cross imposed upon the landscape, with the White House to the north. The Jefferson Memorial is to the south, the Capitol to the east and the Lincoln Memorial to the west.

A cross you ask? Why a cross? What about separation of church and state? Yes, a cross; separation of church and state was not, is not, in the Constitution. So, read on. How interesting and, no doubt, intended to carry a profound meaning for those who bother to notice.

Within the monument itself are 898 steps and 50 landings. As one climbs the steps and pauses at the landings the memorial stones share a message. On the 12th Landing is a prayer offered by the City of Baltimore; on the 20th is a memorial presented by some Chinese Christians; on the 24th a presentation made by Sunday School children from New York and Philadelphia quoting Proverbs 10:7, Luke 18:16 and Proverbs 22:6.

When the cornerstone of the Washington Monument was laid on July 4th, 1848 deposited within it were many items including the Holy Bible presented by the Bible Society. Such was the discipline, the moral direction, and the spiritual mood given by the founder and first President of our unique democracy ."One Nation, Under God."

I am awed by Washington's prayer for America. Have you never read it? Well, now is your unique opportunity, so read on!

"Almighty God; We make our earnest prayer that Thou wilt keep the United States in Thy holy protection; that Thou wilt incline the hearts of the citizens to cultivate a spirit of subordination and obedience to government; and entertain a brotherly affection and love for one another and for their fellow citizens of the United states at large." And finally that Thou wilt most graciously be pleased to dispose us all t o do justice, to love mercy, and to demean ourselves with that charity, humility, and pacific temper of mind which were the characteristics of the Divine Author of our blessed religion, and without a humble imitation of whose example in these things we can never hope to be a happy nation. Grant our supplication, we beseech Thee, through Jesus Christ our Lord. Amen."

Laus Deo!

When one stops to observe the inscriptions found in public places all over our nation's capitol, he or she will easily find the signature of God, as it is unmistakably inscribed everywhere you look.

You may forget the width and height of "Laus Deo", it's location, or the architects but no one who reads this will be able to forget it's meaning, or these words: "Unless the Lord builds the house its builders labor in vain. Unless the Lord watches over the city, the watchmen stand guard in vain." (Psalm 127: 1)

Stock Tip - Earnings call

2005-09-27T06:38:00.000-07:00

It is no coincidence that many corrections and price consolidations that form base patterns last 12 or 13 weeks or even 24 to 26 weeks. This corresponds to the three-month cycle in which earnings are reported and shows that many professionals may wait for another earnings report to come out before they commit their funds.

Know before you spend...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Downward correction

2005-09-26T08:07:00.000-07:00

Stock Tip - Market distribution

2005-09-23T06:27:00.000-07:00

No uptrending market is turned down by justo ne day of increased volume selling, or distribution. Generally, three to five days of volume distribution over a span of two to four weeks is sufficient to turn the market's uptrend into a downtrend.

It takes morethan one...It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Your research matters

2005-09-22T07:27:00.000-07:00

It is vital for any stock you buy that you really understand the story of the company. The better you know the company, and the more you believe in it, the more likely you are to make sound decisions, and the more able you will be to stay with the stock through normal corrections.

Quality research is key...It just makes COMMON SENSE.

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - In for the long haul

2005-09-21T13:58:00.000-07:00

Stock Tip - Profitability matters

2005-09-20T09:01:00.000-07:00

Stock Tip - Not a good time to go short

2005-09-19T07:55:00.000-07:00

Stock Tip - Conventional wisdom

2005-09-16T06:23:00.000-07:00

When it comes to the stock market, consensus thinking and conventional wisdom can be deadly.

Be the odd man out...It just makes COMMON SENSE!

Have a profitable day,

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Alert - Buy INFO

2005-09-15T12:55:00.000-07:00

Looking for an Operator

Buy Now Stop Loss - $.60
With the consolidation of the telecom industry, Metro One Telecommunications (Nasdaq: INFO) has quickly become an undervalued play. With downside pressure dwindling to nothing, the stock has recently bounced nicely and with quick upside potential in the $1.15 area.

With the technical side looking very strong, the fundamental aspect is keeping pace. The company has $1.24 in cash alone with no debt and a current ratio just under 4. According to Market Guide, Insiders have purchased shares over the past six months. The risk/reward ratio in this trade is completely one sided with potential returns far outweighing the risks.

It just makes COMMON SENSE!

Marc Barhonovich

Stock Alert - Market shifts

2005-09-15T06:20:00.000-07:00

Stock Tip - Do not argue

2005-09-14T06:21:00.000-07:00

Stock Tip - Know industry groups

2005-09-13T09:04:00.000-07:00

Be aware of industry groups that may benefit from natural disasters. Do not feel guilty for profiting from companies that are able to create huge gains in disaster clean up and recovery. If you wish, donate 10 to 20 percent of your gain the Red Cross or Salvation Army. Louisiana, Biloxi, Gulfport and other areas need to be completely rebuilt. The $150 billion that the government plans to spend is going to go somewhere.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Geopolitical environment

2005-09-12T07:52:00.000-07:00

Keep an eye for events that may bring instant value to a company or product. Instances, good and bad, happen every day around the world. Play the stocks that react to global situations.

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem

Stock Tip - Change in pattern

2005-09-09T13:37:00.000-07:00

What you want to see in an uptrending market is prices and trading volume rising in tandem for the most part. That shows a market under accumulation, with more buying than selling. If this pattern changes and begins to reverse itself with higher volume on down days and lower volume on up days - watch out!

It just makes COMMON SENSE!

Marc Barhonovich
Publisher
www.CommonSenseInvestorNews.com
www.thecommomsenseinvestor.com
www.mainscale.com
www.wallstreettexasholdem