Market Wrap-Up for Feb.1 (TUP, ADM, UPS, DVN, FCX, CLF, more)

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It's amazing to see the market pundits chiming in with what the end result will be in Egypt and how every scenario is a win-win for the markets in general. Market pundits should stick to what they really know and not speculate in world affairs. But again, it's about TV ratings right? Some day business television will get back to covering just business.

Speaking of the markets, earnings dominated the headlines on this Tuesday. Winners includes Tupperware ( TUP ), Archer Daniels Midland ( ADM ), and United Parcel Service ( UPS ). On the downside, McGraw Hill ( MHP ) and Eastman Chemical ( EMN ) pulled back following their results. Energy plays rallyied as the whispers of more deals continue to put a bid under the market. Hess Corp ( HES ), Devon Energy ( DVN ), and Murphy Oil ( MUR ) all led the way today. Commodity plays were also a big part of the push higher today, as Freeport McMoran ( FCX ) and Cliffs Natural Resources ( CLF ) spiked higher. There was a definite push today to get us over Dow 12K. You can point to early monthly fund inflows perhaps. Don't get overly distracted by those numbers. Pay attention to the names in your portfolio and make sure you are positioned properly. If things get frothy, we will be prepared to move to the sidelines on some of our recommended names from a risk/reward standpoint. A rally built on booming energy prices is not one that helps many other industries unfortunately.

The real reason the markets have been going up is that valuations are reasonable and companies are sitting in a great spot. They have loads of cash, opportunities to buy smaller and profitable companies, and are now in control of their employees as far as job opportunities go (not too many people I know are looking to fuss about working more hours or taking on extra responsibility in order to keep their jobs). Margins remain robust, but again, could get hurt a bit if the bull market in commodity prices continues to accelerate.

As a shareholder, the many companies you invest in should be in a great position of strength. Yes, there are great stories about startups like Facebook and Groupon being valued at big dollars and some do dream of jumping into the startup world, but I will save that topic for another discussion. For every Facebook we hear about, there will be hundreds and thousands of startups that will never make any revenue, despite raising boatloads of money from private investors. The bull market for hype always seems to persist, but the reality of building the next Google, Amazon, or any other social media/ecommerce juggernaut is more of a lottery ticket than anything else. Playing with other people's money (angel investors, VC's) has never been sexier - and more fraught with risk for those willing to sacrifice years of their lives chasing ever-elusive and constantly changing social media themes/flavors of the day. As an entrepreneur myself, my advice to the lure of great riches is to pursue an area of great need, but also one that you have experience in as well. Do what you love, and if the field is robust, the money will eventually follow. Don't try and build the 5th best facebook competitor, but instead build a business where you can be #1 whether it is online or offline.

You may be sitting on a boatload of great recipes and all you need is a small storefront to open up the next great food franchise where you could be a leader. "Me-too" businesses are fine too, but make sure you are a good judge of demand for what you are pursuing to build. Hair salons are a dime a dozen, but if the location is good and the talent is in your hands, you can have a nice career. This I know firsthand as my dad has been cutting hair since he was 14. Bootstrapping Dividend.com was the best move I ever could make and it saved me the hassles of raising money before I even had a proven business model. Too often entrepreneurs make the mistake of raising a round first without having a real business model in place, then when it's time to raise the next round, they face a big haircut from a dilution standpoint if their business is going to be given the lifeline to live another day. Bootstrapping my own Dividend.com business was the best move I ever could make and it saved me the hassles of raising money before I even had a proven business model. Too often entrepreneurs make the mistake of raising a round first without having a real business model in place, then when it's time to raise the next round, they face a big haircut from a dilution standpoint if their business is going to be given the lifeline to live another day. Like in trading and investing, weigh the risk/reward carefully before you sign on the dotted line. Money is never free, so do as much if not all you can to bootstrap your way to actually making money.

Like in trading and investing, weigh the risk/reward carefully before you sign on the dotted line. Money is never free, so do as much if not all you can to bootstrap your way to actually making money.

I just got word from my publisher (FT Press/Pearson) that my book's release date is going to be moved up. My rep there told me that it's a good sign - I guess the pre-orders may be lighting up their radar. Be a Dividend Millionaire is my first book, so I can't really tell you what the outcome will be. My hope is that the book will resonate with many of the working class - it's where my roots are and it's all I know! I tried to make it as simple a read as you can find when it comes to investing anecdotes. There are some good personal finance tips in there as well. Also, I included some of my best trading tips for anyone that can't resist taking their shot at living a more manic lifestyle. It has been quite a transition from what many would describe was a daytrader's life to one that now resembles a bit of a pied piper for investing. One thing I learned back then and I still practice now is leaving my ego at the door when it comes to how I interpret the data and how the firm is run everyday. At the end of the day, it always come down to results and if people are happy with the work we do here at Dividend.com, then we've done our job.

I have to tell you that I don't miss the day-to-day ups and downs of waiting for the market to confirm if my trade targets were chosen correctly. As sexy as business television likes to portray trading, it is so far from the truth. It is, in fact, quite a lonely business - and one that keeps you wondering what purpose you are fulfilling in your life. It took having three kids and being glued to my screens day and night to realize that I needed to pursue bigger plans that could help many that are often seduced into investments/ideas that eventually wipe their hard-earned income away.

As Dividend.com grows, I often look back at what my feelings were at the time I was trading. The good days of being on the right side of the trade and talking to fellow traders who battled in the trenches everyday, to the down times when I would see days of gains be lost at the end of the week. Nothing made me more miserable than finishing the week on a down note. Eventually I realized the career I chose was not going to make me happy, regardless of the many up years I had. Launching Dividend.com was not easy, as I knew that the first year would be spent with 100% of the focus on building out our DARS rating system. That meant no trading, and thus no income for me. Knowing the need for what I was building was not a fad and was going to one day be a key source of information for investors is what drove me. How does the old saying go? "If you are not nervous, you are not risking enough." Every stock had to be ready as far as ratings go when we launched the site. That meant we needed to go back to each name every so often as the launch was nearing. I would equate it to a chef that has his hand in every dish that goes out of the kitchen. Guess what, this is still the way the ratings system works. No stock leaves the kitchen unless it has been checked by our team. There are no robots to push our ratings up or down.

Now I won't tell anyone out there never to try trading, but I do want you to be true to yourself. If you taste success in the markets, maybe you can build a business with your knowledge. Take the knowledge and those good results and make it a career of helping others. You will get more out of it and eventually you will see that one day it was the right move for you to build a reliable income stream from your career. As a trader, you are sometimes only as good as your last trade. It's not so easy to work with that sort of pressure for many years.

This brings me back to what investors should be thinking about these days. There are plenty of places that you can get great personal finance information, but not many places that you can get reliable and timely stock research. I hope investors realize that you get what you pay for when it comes to investment ideas. Dividend stock investing has been a rock for many investors for decades and I want to do my best to bring out the benefits to as many people as possible. Don't hesitate to get started if you haven't done so yet. The road to wealth is not about booking profits 20 minutes after taking a position. It's about building a portfolio of names in companies that will help you build a nest egg that you will one day be proud of.

Hustle as much as you can while you can. Everyone that is older can tell you that sometimes the mind is willing and the body is unable. Do as much as you can every single day you can and lay the groundwork for some awesome later years. There is still plenty to enjoy when you are younger and many of us will have some great times, but nothing beats playing with the house money once we get older and the portfolio allows us things we couldn't realistically afford in our 20′s or 30′s (sometimes 40′s too depending on what you have been able to do in your earning years up to that point).

Don't forget to check out our library of "Learn to Be Rich" articles which give you snippets about personal finance matters you should educate yourself about. And as always, check out our industry-leading "Best Dividend Stocks" List for the top dividend names to put money into right now.

Thanks for reading and if I can ask you one favor: send this newsletter to someone you know and let's get others inspired as well. I'll talk to you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: ADM , CLF , DVN , EMN , FCX

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