Cashing in on Bad News

July 16, 2008



Caution: Rough Road Ahead

Before I get to how we're making big profits in this bear market, I want to tell you what's ahead.

First, we will see a bunch of real estate-oriented banks go belly up.

I just went through a list of these public and private banks with a very well-known bank analyst, and I'd say you should expect to see 80 to 100 of them go under in the next 12 months.

Granted, that's nothing compared to the 1,000 banks that failed in the Resolution Trust days. And while it's bad news for the financials, keep in mind that the FDIC insures more than 8,000 banks.

When these institutions do fail, the big vulture money will come in and buy these banks -- let's let capitalism work.

Given the current state of the market, my downside targets are 1,100 for the S&P 500 (SPX), 10,000 for the Dow Jones Industrial Average (DJI) and 2,000 for the Nasdaq (NASD).

Two-Pronged Strategy for Success

When stocks are unambiguously cheap, we'll be aggressive buyers at ChangeWave Investing. But the best way to make money now is to take advantage of falling financials, retailers and other victims of this recession with our ChangeWave Shorts service.

ChangeWave Shorts Editor Michael Shulman will show you how to make 50% to 250% profits from falling stocks. Using simple, easy-to-follow put option plays, you can limit your risk, while capturing huge gains.

Michael's subscribers have had 26 money-doublers so far this year, and there's plenty more on the way, particularly in the banks and financial institutions. (Get in today.)

I'm advocating a two-pronged strategy here: Use ChangeWave Shorts to make money now from falling stocks, while positioning yourself on the long side in the best secular growth stocks in the ChangeWave Investing portfolio so that you are ready for the rebound when it comes. And it will come, boys and girls, but it won't be next week or even next month.

In the meantime, if you're not playing the short side with ChangeWave Shorts, you're missing out on a once-in-a-lifetime opportunity to make quick, easy profits in this bear market.



Toby

P.S. You should be using bad news and down days to position yourself on the long side for future gains, but if you want to see profits constantly rolling in, you need to play the short side. Try ChangeWave Shorts to start doubling your money today.

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Tobin Smith is the founder of ChangeWave Research, the editor of ChangeWave Investing and ChangeWave MicroCap Investor and a contributing market analyst for Fox News Channel. His market commentary can be found in the ChangeWave WaveWire and he provides more specific recommendations and advice through his ChangeWave Investing service. Click here to learn more about ChangeWave Investing.