FXCM Mirco $25

Open a FXCM Mirco account and receive $25 to trade. There is a charge to withdraw the money, so I recommend trading with the money and seeing how much you can make. Trading currencies is not like trading stocks because the leverage is usually 1:100. For every $1 you control 100 units of currency and sometimes even 1000 units. Making $100 in one day is not unusual but you could lose the $25 within minutes. If you are interested in currency hedges read my 30 yr trade post.

Capital Structure

Here is another video courtesy of Marketplace.

Capital structure from Marketplace on Vimeo.

Land Mines

Like many investors, I turn on the computer or television and see stocks that jump up 100% and say dang why I'm I in XXXX instead of that pharma stock that found the cure to balding. Recently, there have been many pseudo GSEs that have seen values double or triple within weeks. However, while I missed most of these names, I am still very cautious. I am long FNM and have sold calls against the position. But I think the government should wind down both FNM and FRE for various reason, but will save that for another post. But I cannot predict the future so for INVESTING there should be a margin of safety. That means a moderate dividend yield, sizeable amount of cash and book value and market value are at a reasonable proportion. I have experienced trying to catch the tail of a rally only having it turn and bite my position to in half. While my experience differs from others I cannot advocate holding positions that lack fundamental reason.

Marking to Market

While the argument for mark to market has been less audible than in September. There are still proponents in the accounting, real estate and banking sector that feel it should be banned permanently. Some feel that mark to market caused a housing slump to spread into other sectors causing the Great Repression. While the arguments have reason they lack fundamentals and the conservatism US GAAP accounting is known for. Ironically this argument was only presented when prices were falling sharply. Land developers who used the increase in property values to expand lines of credits had no problem when values were skyrocketing but when the free fall started marking properties to market was absurd. The reason mark to market was enacted was for stakeholder transparency. FASB allows some assets to be marked at historical cost and an impairment test conducted annually. However, other assets are marked to the market or fair value to reflect true value. Marking to market saves money and time and avoids the subjectivity of an appraisal. Removing mark to market will overstate bookvalues for some companies that have no going concern. Companies that write up financial assets when there is economy expansion will be the same companies the write down financial assets when there is economy retrenchment.