Many people simply conclude… timing the stock market isn’t possible and doesn’t matter

Over the next couple of weeks, we’re going to explore some critical questions that most investors ask… like:

• Can you Time the Stock Market?
• Does Timing the Stock Market Make a Real Difference?
• How Can you Time the Stock Market to Minimize Risk and Maximize Returns?
• What must Investors Know when Deciding to Buy or Sell?

So, clear your blogosphere reading list… and tune back ever few days for our perspective on the critical question that always insights debate amongst investors. And in the meantime, be sure to sign of the latest free webinar. See you in a couple of days for our first discussion addressing ”Can you Time the Stock Market?”

With another FREE webinar just around the corner, I thought it would be fun to celebrate it in advance by announcing a giveaway to be held during the webinar. What a great way to spend a few minutes on a Tuesday evening and have the opportunity to win an Amazon Gift Card and other prizes.

Here’s some of the things you’ll enjoy during the Free Webinar:

• Discussion on How to Manage Risk and Reward When Investing
• An open forum for you to ask specific questions
• An analysis of buy and sell points of preselected stocks as well as ones you may be curious about (simply submit yours to me that evening).
• A discounted rate on other services available.

So, enjoy the contest… and good luck!

I look forward to seeing you at the Webinar… and remember to read the contest rules. You must be present at the Webinar to win the Grand Prize.

Thanks everyone for participating in the Invest in the Markets first webinar giveaway.

a Rafflecopter giveaway

The Growth Spurt

If you were to map LULU on the life scale of a company, it would be in the preadolescent years… with burgeoning signs of maturity with so much potential still to come. And the growth spurts are astronomical… and far from over. This “kewl” yoga inspired apparel, with their anti-stink pants and “ass shrinking” apparel is still a relatively small company in the early stages of growth. Recently, the executive reported same store sales up 26% for the last quarter, compared to 4-5% for the average retailer.

With only 150 locations in North America, there is plenty of room to expand. Yet, before they’ve even got their “mother” stores into more cities, they’ve already rolled out Aviva, their children’s line which targets 6-14 year olds. Already, they’ve seen this grow at a 86% clip and they continue to expand into swim wear and rogue biking clothes for men. All of these expansions, as well as the potential for 350 domestic locations, adds up to growth for many years to come.

But this growth is not merely a hope of things to come… it is a reality now too. LULU leads the growth metrics in its industry… with an expanding growth internationally too. With only 19 stores in Australia and New Zealand, one in London and one in Hong Kong, LULU has so much more room to expand within and outside of the domestic borders.

A Unique Stock

LLL.TO is a unique stock opportunity… trading on the TSX and as LULU on the US exchanges. Interestingly, for Canadians looking for a home-grown growth story in which they can invest using their Loonies and Toonies, LLL.TO is the perfect story. But it’s more than their Canadian west-coast heritage that makes them unique… it is also their products!

LLL.TO uses new fabrics and technology in their clothing that set them apart from their competition. With the use of synthetic fabrics, they are able to control costs when commodity prices fluctuate and the price of cotton gets more expensive for their competition. Now, they are taking their unique flare and expanding into “normal” clothing.

A Long-Term Position in Your Stock Portfolio

Lululemon has a pristine balance sheet… with no debt and approximately $409 Million in cash. Some pencil heads might note they are trading at 35xs next year’s earnings, but what they may fail to also point out is their 30xs growth rate. So, expensive is a little bit of a subjective evaluation. The fact is LULU is geared for growth for years to come… and when you find a stock you love, one that you know their products intimately, and they are able to put up the kind of numbers we’ve been seeing, it might just be worth holding onto for the long run.

And we’ve only just begun to touch on the multitude of reasons this stock is poised to bring your stock portfolio long-term gains. With e-commerce growing at an 85% clip which serves markets that do not even have LULU stores (but people want to be buyers of their products), and their expanding signature line which includes anti-bacterial fabric that inhibits bacteria from growing, expect great results for many quarters and years to come.

And their leadership knows how to make that happen… after all, Christine Day took over the helm as CEO in 2008 after serving for 20 years to make Starbuck the leader it is today. I’d encourage you to watch their video… I found it not only informative, but inspiring too!

So, if you not only want to look good and remain healthy in Lululemon’s lifestyle brand and you want your stock portfolio to look just as good and healthy in 2012, 2013 and beyond, than you may want to consider Lululemon Athletica… a true growth stock.

Presumptions of the Stock Market

Most investors, even those that have experienced the ups and downs of elation and crisis, hold fast to an inherent belief that the stock market is somehow rational. And why wouldn’t we? After all, the economic pundits of our day seem to have not only a prediction (which is often wrong) but also an explanation for every action and reaction in the stock market. They often use their pencils and erasers to link “A” with “D” conveniently erasing “B” and “C” from our memories. Then they point out, “See, it all makes sense when you consider….” All of the commentary and “professional” elucidation confuses and satisfies the average investor… lulling us into a “Santa Claus” belief.

Irrational Emotional Investing

Rational markets? Fair? Not a chance… let’s take a look at an example. Here’s how we got to this point… for months and even the past few years, we’ve been watching and waiting for signs of recovery. In 2009, people started talking about “green shoots” and other optimistic references. But it wasn’t until the end of 2011 that this optimism was founded in real numbers… with several companies seeing increasing revenues in an environment of cautious optimism.

After four months (record months) of increases in several stocks, we’ve seen a dip in the past several weeks. And the “professionals” who were late on the wagon of recovery are now trying to catch up to the latest changes. Europe? Sure, blame Europe again. But here’s where it moves from reality to fantasy.

It’s one thing for the US and Canadian stock markets to be impacted by what’s happening in Europe, or any other part of the world for that matter. After all, even when it comes to economics, It’s a Small World. Yet, that’s not a good reason to paint every stock with the same economic brush. Take ROST for example… a fantastic stock with no European exposure. Yet, it finds itself being held down by the reaction to Spain’s issues. Consider LULU… another company with no measurable exposure to Europe… yet, just because it is apart of the Canadian and US markets that are being dragged down, it too is experiencing some drawdowns on its stock price.

Divorcing Decision Making from Your Emotions

Maybe it’s time to refocus on the underlying story of the markets… not on the popular fantasy of hope and despair that seem to drive people’s investment decisions. After all, the St. Nicholas story is compelling… and a great model of how people can live their lives to reflect a greater good on a daily basis, not just at Christmas. But it’s about time we stop looking for Santa and his Reindeer in the sky and our non-existent chimneys. Similarly, rather than tuning into the latest reports from the pundits of where the markets are headed and why, we need to look at the underlying reality of the stock market. After all, earnings (particularly revenues) are steadily increasing in many Canadian (non-resource based) and US companies.

The stock market is not rational… nor fair. During days when we see triple digit drops, there’s no need to panic. Here at Invest in the Markets, we use the following motto to advocate strategic investing, not emotional investing: “Protect Capital, Minimize Risk, Maximize Returns.” Practically, here’s just a few brief ways of how that looks in these recent market conditions.

• Stick to the Plan – We use calculated stop losses that don’t take any emotion or reaction into account. These protect our capital, ensure we get out of losing positions early and with minimal losses as well as take our profits and put them in our pockets.
• Have a Shopping List – When a pullback happens and some of our favourite stocks drop in price, we add them to our shopping list. We never buy on the way down, in case it goes further than we thought or we misunderstood the reasons. Instead, we “buy the rise” and take advantage of discounted prices.
• Avoid Predictions through Preparations – One of the results of corrections and crises is the so-called “professional” advisors feed on our fears. They explain things in language we don’t understand and they pull out their erasers, removing the dots in order to connect the one’s that are left over. And it’s easy to do… because we all go in asking “why?” We look to them for predictions and they readily provide them to us… even if they are simply part of a larger pool of “advisors” who have been wrong time and time again. Instead of looking for predictions, choose a more realistic approach and simply plan through preparations. Use your plan, write out a shopping list, and act when the markets tell you it is the right time.

One of the most challenging things for average investors to do is to divorce their decision making from their emotions. Yet, if we are able to adopt a strategic plan that minimizes our emotional influence on our investment decisions, we’ll be more profitable and successful investors. Remember, it’s not fair… and it’s not rationale. Therefore, it’s hard to predict and react correctly and consistently. Instead, take hope out of your equation for investing. Go back to the basics and plan your actions, instead of reactions, so that you can avoid emotional investing in the stock market.

Cleaner Natural Gas

Energy conservation is a significant focus of many companies… and many, like WM, are switching their fleets to natural gas without subsidies. In fact, they don’t need subsidies because the cost savings is compelling. With natural gas for a vehicle at approximately $2 per gallon compared with an average $4 for the rest of us at the pumps, switching just makes “cents” and lots of it! So, Waste Management has committed to having 80% to 90% of their new truck purchases will be powered by natural gas. In fact, the only thing holding them back from having 100% of their fleet natural gas dependent is the lack of fuelling stations nation-wide.

But that too is an issue they are addressing… and not just for themselves. WM is in the process of building a natural gas refuelling infrastructure to service their fleet. Oh, and others are also welcome to use their infrastructure too for their fleets. In fact, WM has several public refuelling stations for those who own and operate natural gas vehicles. This kind of forward thinking expands their business model. With 28 fuelling stations and development toward nearly 50 by the end of 2012, WM is expanding to serve their fleet, other’s fleet vehicles, and those rare individuals who have made the switch to natural gas powered vehicles.

Of course, there are those that are looking to electric powered cars as the “green” alternative. But when you consider that most of the electricity used to recharge those batteries is powered by coal power plants, one might argue that these electric alternatives are even increasing the carbon footprint… making natural gas a more friendly alternative.

Here’s one more interesting note about this company… Did you know that they have 17 waste-to-energy facilities and 5 independent production plants that convert solid waste into natural gas to be used in their own fleet vehicles? Think about that for a moment… the same company that is being paid to take out the trash now converts that trash (the methane gas) into natural gas to be used to reduce their own costs and environmental impact.

So, if you are searching for an “ethical,” green investment, don’t look past the trash on the side of the road. For it seems in this case that one man’s trash is another man’s fuel. As you celebrate earth day and the beautiful planet we inhabit, consider taking a closer a look at this “green stock” known as Waste Management (WM).