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The Cockroach Theory

The Cockroach Theory

Where there is one, there could be many. | Norrabhudit/iStock/Thinkstock

When it comes to evaluating stocks during earnings season, Fagan Associates applies the cockroach theory to any hint of bad news: “Where you find one cockroach, there are usually more. Specifically, quite often one bad quarter begets another.” In an article in The Saratogian, the firm looks at several red flags to lighten up on an investment. For one, if a stock appreciates on relatively poor news, it could be bottoming out. Other red flags include a shakeup in upper management, accounting issues, and changes in a company’s strategic direction. “Remember, when you sell a stock, you are not saying ‘no to the investment forever,’ but rather ‘this doesn’t make sense right now.’”

TD Brings Option Strategies to Novice Investors

TD Ameritrade is trying to make it easier for novice investors use options. The new Trade Finder product on TD’s web-based Trade Architect app finds potential option trades basked on market expectations, analyzes the risk/reward of the trade, and helps investors with interactive walk-throughs and strategy explanations. TD said the goal is to “level the playing field for the individual investor with empowering tools focused on education and choices.” If a client decides the trade is right for them, they can place an order with just a few clicks.

Communicate Effectively

Take that fax number off your business card. | microgen/iStock/Thinkstock

For an industry that relies so heavily on communication, financial advisors seem to regularly violate Kevin Daum’s costly communication mistakes. The author and entrepreneur writes on that to boost meaningful communication and productivity, you should dump the voicemail and fax machines, while making sure you’re not boring your intended audience with long-winded or word-heavy messages, regardless of the medium. As Daum says, get to the point already. Time is money. Enough said.

Following the Money

Should you go with your head, or your heart? | microgen/iStock/Thinkstock

In difficult economic times, students often lean toward practicality over passion when it comes to academics, according to a new paper from the Institute for the Study of Labor in Germany. When unemployment rises, undergraduates will shy away from liberal arts and education degrees, opting for majors in business and engineering. Using two major U.S. databases, the research found that the share of men majoring in engineering goes up by more than 0.6 percent every time the unemployment rate increases by 1 percent. A similar 0.6 percent gain is seen for women in business fields. In fact, many of the shifts by women bring them out of fields traditionally dominated by females and into those that have been overwhelmingly male.

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