More specifically, a stock that has a beta of 2 follows the market in an overall decline or growth, but does so by a factor of 2; meaning when the market has an overall decline of 3% a stock with a beta of 2 will fall 6%. Betas can also be negative, meaning the stock moves in the opposite direction of the market: a stock with a beta of -3 would decline 9% when the market goes up 3% and conversely would climb 9% if the market fell by 3%.

Higher-beta stocks mean greater volatility and are therefore considered to be riskier, but are in turn supposed to provide a potential for higher returns; low-beta stocks pose less risk but also lower returns. In the same way a stock’s beta shows its relation to market shifts, it also is used as an indicator for required returns on investment (ROI). If the market with a beta of 1 has an expected return increase of 8%, a stock with a beta of 1.5 should increase return by 12%.

There are many options to find the beta of a stock but I like the free,option at google: http://www.google.com/finance/stockscreener#c0=MarketCap&c1=PE&c2=DividendYield&c3=Price52WeekPercChange&region=us&sector=AllSectors&sort=&sortOrder=

Trade carefully

Eric Leriche
http://www.investorrules.com

New York Attorney General Andrew Cuomo’s office on Wednesday served subpoenas on four U.S. banks and four European lenders, the source said.

Cuomo is targeting Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs Group Inc, Morgan Stanley, UBS and Merrill Lynch, now owned by Bank of America, the source said.

The investigation comes as Wall Street and major banks around the world are attracting scrutiny from regulators stemming from transactions that occurred in the run-up to the subprime mortgage meltdown and financial crisis.

The Wall Street Journal on Wednesday reported that U.S. federal prosecutors, working with securities regulators, were conducting a preliminary criminal probe into whether four banks misled investors about their roles in mortgage bond deals.

The banks under early-stage criminal scrutiny are JPMorgan Chase, Citigroup, Deutsche Bank and UBS, the newspaper reported on its website, citing a person familiar with the matter.

The banks have also received civil subpoenas from the U.S. Securities and Exchanges Commission as part of a sweeping investigation of banks’ selling and trading of mortgage-related deals, the report said.

A spokesman for JPMorgan told the Journal the bank had not been contacted by federal prosecutors and was not aware of any criminal investigation. The other banks either declined comment or were not immediately available.

The reports come less than a month after the SEC charged Goldman Sachs with fraud over its marketing of a subprime mortgage product.

Federal investigators are also probing Morgan Stanley, The Wall Street Journal reported on Wednesday. The bank’s chief executive, James Gorman, said he had no knowledge of any such investigation.

The companies that rated the mortgage deals were McGraw-Hill Cos Inc’s Standard & Poor’s, Fitch Ratings and Moody’s Investors Service, a unit of Moody’s Corp.

The New York attorney general’s investigation was first reported by The New York Times.

Spokesmen for UBS and Deutsche Bank declined to comment, and a spokeswoman from Credit Agricole declined to comment on the New York Attorney General’s investigation. The other banks did not immediately return messages seeking comment.

I`d be careful going long on banks in general. Disclaimer: I own PUTS on Morgan Stanley because, in a nutshell,  whatever the outcome it is clear they will impose some kind of restrictions that will make it more difficult fr banks in general to make money thus one way or the other it`s not good news for the banks and as such I expect banks to take a hit.. But again, if the markets continue to be bullish they night dodge the bullet (again) so don`t go crazy on the Puts…

JMHO

Eric LeRiche

Investorrules.com

The overall character of the behavior of price action indicates the likelihood, but not the certainty, that current resistance will stand up and repel price back toward underlying levels of support.  Stocks could be putting in a top of some significance.

Time will tell.

Eric$