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| Slacker Wealth |
| About a slacker's attempts to have a liquid, inflation adjusted net worth of one million dollars with as little work as possible. Includes broker reviews, investing newsletter reviews, reviews of other investing sites, and general thoughts on various investing strategies. |
| Language: English |
| RSS Feeds for this Blog |
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| Unique Visitors: 219 |
| Total Unique Visitors: 544337 |
| Visitors Out: 792 |
| Total Visitors Out: 792 |
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| When Should You Sell a Losing Stock? |
| 2008-04-26 14:21:00 |
I'm no expert or financial genius, but in considering whether to sell or keep the shares, I'd think about the following things:1. Do you have solid reasons to think the company will turn around? E.g., is there new/better management in place now? Is there a new plan being implemented that you think will increase profits, etc? If the company is in a declining industry, what reasons are there for an industry turnaround?2. What were your reasons for investing in the first place? If they were good reasons (gut feelings or someone else's recommendation don't count), are they still valid now?3. Why would anyone else (a competitor, regular investors) buy the company now? Reasons for buying an unprofitable company could be that its assets (cash, equipment, building, ...
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| Sold Dupont |
| 2008-04-23 12:45:00 |
In my last post, I weighed selling Dupont (DD) before its earnings release. I succumbed to temptation/fear? and sold it on Monday for $52 a share, for a gain of 15.7%. Good thing, too, as it fell after earnings and I just learned that the idiots on Fast Money recommended it as a buy. A Fast Money recommendation always indicates to me that a stock will go lower. (Same thing with Jim Cramer and Harry Domash--at some point in the future I'd like to post about stock recommendations from these people.)I think I'll have an opportunity to buy DD again in the low $40s at some point in the future. I can be wrong, of course, and the stock could go to $60. That's ok. I made my profit.I feel a bit guilty, though. I like to think of myself as a buy and hold investor.
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| A Retail Investor's Musings on Dupont and Overseas Shipholding Group |
| 2008-04-18 22:57:00 |
I've had some shares of Overseas Shipholding Group (OSG), a tanker company, for a while. I'm wondering whether I should sell it, and buy it back later at a cheaper price. It's $74.9 a share as of this Friday's close. It's been as high as $91.49 in July before tanker rates plunged. Since then, OSG has waddled between the $50s and $70s. In addition to the 52 week high, I had multiple chances to sell in the $80s and mid $70s and buy in the mid $50s, but I did nothing.Each time the cause of the run up was slightly different. First there were the idiots on Fast Money on CNBC, pushing the stock. (That turned out the best time to sell, as it often does.) Then there were the interest rate cuts, which were predictable. Then there was a rise in shipping prices. Th...
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| Missed Buying Philip Morris in the 1980s? You've Got Another Chance |
| 2008-04-15 23:10:00 |
I recently bought some shares of Philip Morris International (PM). It's the second largest seller of cigarettes in the world. Excluding the US, which is the domain of Altria (MO), PM controls 16% of the market worldwide. I'm sure you heard of the Marlboro brand.While I think the stock will be a long term winner, I'll start off with reasons not to buy:1. PM's biggest market is Western Europe, where it makes 50% of its sales and holds 40% market share. Cigarette volumes in this mature market, because of smoking bans, taxes, and other regulations, are declining and are expected to continue to decline in the long term.2. Tobacco lawsuits are on the rise internationally.3. Earnings performance may be volatile, as it will likely swing with crests and troughs of developing nation economies.4. Sel...
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| Ethical Investing Carnival - April 7, 2008 |
| 2008-04-07 20:02:00 |
Welcome to the April 7, 2008 edition of the Ethical Investing Carnival. As last time, there were some great submissions. Glen presents Some Ethical Ramblings, which relates his "personal reflections of recent trades and investments, and a structure for analysing future trades and investments within an ethical framework"; Sustainability Reporting, about "The benefits of adopting sustainability reporting in today's climate"; and Tobacco, Super Funds and Ethical Investing examining "Australian's reactions to, and Australian super fund's dealing with, the tobacco industry in investing," posted at Measuring the Incalculable; Valuing the Intangible! Sagar presents 10 Surprising Economic Implications of a Barack Obama Pre...
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| Foreign Dividend Paying Stocks in Your IRA |
| 2008-03-28 23:56:00 |
The great benefit of IRA accounts is that your taxes on dividends and capital gains are deferred (or nonexistent in the case of Roth IRAs). The recent spin-off of Philip Morris International (PM) by Altria (MO), however, brings to mind a potential disadvantage of IRAs.Foreign stocks that pay dividends, depending on their country of origin, often have their dividends taxed in the foreign country. Suppose the company pays a dividend of $1 per share, you own 100 shares, and the foreign country has a 15% tax on dividends. When you receive the dividend in your account, you'll get $85 rather than $100. This is because of the foreign tax.If you own foreign shares in a regular account, these foreign taxes are deductible or can be...
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| Bear Stearns, etc |
| 2008-03-17 07:41:00 |
Perhaps it's obvious, but I think it should be pointed out anyway. If you work for a company that is publicly traded, don't invest too much in its stock. If the company goes bust, not only do you lose your job, but your investments as well. A lot of Bear Stearns employees, supposedly smart people, just lost their 401ks.One investment bank down, maybe a couple more to go.I had a couple of limit orders from a while back that I canceled. I'm trying not to buy anything until people stop talking about a bottom being in sight. There's still too much hope, I think.I'm also not selling anything. Let the dividends reinvest. I've got plenty of time to wait for them to go back up.Stocks I'd like to own (more of) in the future: NS or NSH, KFT, GE, PFE, PG, RAI, MO.Stock...
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| When Newsletters Contradict Themselves |
| 2008-03-10 23:21:00 |
This is my first post in quite some time. I've been super busy with grad school stuff, and will be until next week.Putting aside the question of why I'm reading investment articles in what little spare time I have, I couldn't resist writing this up:In an article on Motley Fool, David Gardner, one of the founders of the sites writes, "My intent here is not to suggest you buy Google today or hop aboard the Activision train or go load up on (God forbid) Time Warner" (my italics for emphasis).At the bottom, where the usual disclosure stuff is, it says that Time Warner is a Motley Fool Stock Advisor recommendation.So, here's the Motley Fool co-founder telling you not to buy Time Warner while the disclosure statement says that Motley Fool recommends you to buy Time Warner. What's up with that?
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| Ethical Investing Blog Carnival, March Edition |
| 2008-03-03 07:01:00 |
Welcome to the March 3, 2008 edition of the Ethical Investing Blog Carnival.Bloggers were invited to submit articles on ethical investing, which includes such topics as environmentally friendly, people friendly, animal friendly investments; what makes an investment "ethical," can it be profitable?, what commonly called "ethical" investments are anything but that?, is investing in the so called "vice" industry necessary unethical?, and the like.There were 24 submissions for this edition. Here are the best four:Hung Nguyen presents Adding Values to Your Investment: FTSE 4Good Index posted at Meaningful Issues in Today's World, saying, "Would you like to add not only value, but values to y...
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| Don't Waste Money Through Thoughtlessness: A Rant |
| 2008-02-29 23:04:00 |
The other day I passed by an HSBC bank that had a funny little ad in the window. It said "take advantage of our low $1.50 ATM fee." I'm not old, and even I remember when a $1.50 ATM fee was thought to be expensive. Nowadays most bank ATM fees are around $3. (If interested in articles about bank abuses, check out John Crenshaw's site.)I try to use my bank's ATM, which is still free. (Banks haven't been audacious enough to charge their own customers yet, at least for withdrawals. Charges for checking one's balance are not uncommon, however.) Occasionally, I'm forced to use other banks' ATMs. When waiting in line, I sometimes look at the discarded withdrawal receipts people leave on the counter and floor.It seems people like to withdraw $10 or $20, and they pay up to $3 to do so. That's 30% ...
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| Are Municipal Bonds Safe? |
| 2008-02-23 11:48:00 |
Some financial publications and newsletters, including Money, and Morningstar have recently started recommending Municipal Bonds, touting their safety and noting that depending on one's tax bracket, their yields are higher than those of federal bonds. The yield, after tax savings, is indeed better than what you can get on federal debt. The safety, however, I'm not so sure about.Municipalities issue debt to pay for various things, like road repairs, public transportation, education, etc. They pay the debt mostly out of the tax dollars they receive from property taxes, sales taxes, and use taxes. All bond issuers are given ratings, and this includes municipalities. To sell their municipal bonds, townships, school districts, etc, need top ratings, like AAA...
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| Random Stocks List for 2/22/08 |
| 2008-02-22 22:37:00 |
Here's this week's random stock list with closing prices as of Friday 2/22/08. More about the experiment here.1. VEOLIA ENVIRONN ADS (VE) $88.282. Tanzanian Royalty Exploration Corp. (TRE) $6.04993. Hitachi Ltd. (HIT) $72.404. PharmAthene, Inc. (PIP) $3.205. AEGON N.V. (AEF) $24.876. Lacrosse Footwear Inc. (BOOT) $16.907. Wet Seal Inc. (WTSLA) $2.878. Ralcorp Holdings Inc. (RAH) $56.049. Ford Motor Co. (F) $6.2510. Boston Beer Co. Inc. (SAM) $36.12
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| What's So Good About Kraft? |
| 2008-02-19 07:28:00 |
In what should be old news by now, Warren Buffet bought a sizable position in Kraft (KFT) recently. Besides this stamp of approval, which is all most people need, really, what else has Kraft got going for it?Headquartered in Illinois, Kraft makes and sells various food products around the world, from snacks to beverages to frozen dinners to diet foods to desserts. It is the largest packaged food company in North America, and second largest in the world. Pretty much any packaged supermarket category you can think of, Kraft has a product for it. You probably ate something it made today. If not, you will soon. Six of Kraft's brands generate over $1 billion in sales each year. You may have heard of them: Jacobs, Kraft, Nabisco, Oscar Mayer, Maxwell House, and P...
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| Random Stock List 2/15/08 |
| 2008-02-16 07:04:00 |
Here's this week's random stock list with closing prices as of Friday 2/15/08. More about the experiment here.Tyler Technologies, Inc. (TYL) $13.79Whole Foods Market, Inc. (WFMI) $39.12Dover Corp. (DOV) $42.04Nucor Corp. (NUE) $62.01Total System Services, Inc. (TSS) $22.11Merrill Lynch & Co., Inc. (MER) $51.64BioScrip Inc. (BIOS) $6.67FormFactor Inc. (FORM) $19.32XTO Energy, Inc. (XTO) $55.29Nordson Corp. (NDSN) $48.48
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| Funds of Funds -- The Good & Bad |
| 2008-02-14 14:03:00 |
Funds of funds are mutual funds that, instead of owning individual stocks, own other mutual funds. A couple of examples include Janus' Smart Portfolio Growth (JSPGX) and Vanguard Star (VGSTX). If you're thinking of buying a fund of funds, there are some things to consider.The potential benefits of owning a fund of funds include1. Diversification -- by buying one fund, you can automatically be exposed to bonds, various domestic stocks, and foreign stocks.2. Access to funds that are closed to new investors -- often the most popular mutual funds aren't open to new investors. But if a fund of funds already owns the closed mutual fund, you can buy it through the fund of funds.3. Lower initial and subsequent investments -- initial minimum investments of most mutu...
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| Simply Investing Blog Carnival |
| 2008-02-11 07:15:00 |
Welcome to the February 11, 2008 edition of Simply Investing Blog Carnival. There were many more great submissions this time around, and it was hard to choose the best ones.Editor's Top Three:Sagar presents 10 Reasons to Be Critical of the Federal Reserve posted at Currency Trading.net.Dorian Wales presents The Personal Financier: Be the Turtle - Why Timing the Market is Impossible posted at Personal Financier.Deb presents What Does The Yahoo/Microsoft Debate Mean For The Rest Of Us? posted at Marketvise, breaking down the pros and cons of Microsoft's recent bid for Yahoo.Runners Up: Leon Gettler presents The market talks to the Fed posted at Sox First, saying, "The market has told Ben ...
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| Investing With Borrowed Money |
| 2008-02-09 19:27:00 |
We all know what interest is. I like to look at it this way: Interest is a fee borrowers pay lenders to have access to a sum of money right away. Interest is a fee lenders charge borrowers to part with their money for a period of time. Interest is money rent.People borrow money all the time for non-investing purposes. This includes using credit cards to buy clothing or other consumer goods and then paying the minimum balance (seems kind of dumb to me) and taking out an auto loan to buy a car. In these two examples (there are many more) not only is the borrowing for non-investing, it contributes to one losing money. Not paying off your credit card balance in full makes the clothing, or whatever consumer good, you buy much...
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| This Week's Random Stock List |
| 2008-02-09 11:41:00 |
Here's this week's random stock list with closing prices as of Friday 2/8/08. More about the experiment here.1. Modine Manufacturing Co. (MOD) $13.682. Auxilium Pharmaceuticals, Inc. (AUXL) $33.333. The Pantry, Inc. (PTRY) $27.424. PetSmart, Inc. (PETM) $23.735. Coca-Cola Enterprises, Inc. (CCE) $23.286. Mid-America Apartment Communities, Inc. REIT (MAA) $46.447. Omega Protein Corp. (OME) $7.718. Omniture, Inc. (OMTR) $25.989. Cooper Tire & Rubber Co. (CTB) $17.2510. Cumulus Media Inc. (CMLS) $6.07
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| Paying for College & Also Paying for Barrons, etc? You're Probably Paying Twice |
| 2008-02-06 12:33:00 |
Most colleges subscribe to various databases. If you're paying for college (grad school, etc), whether for yourself or someone else, fees for these databases are included in your tuition.Two databases in particular, Lexis Nexis and Proquest, give you access to many financial/investing publications. These include, but are by no means limited to, Barron's, Business Week, The Economist, Forbes, Kiplinger's, Money, and The Wall Street Journal.If you subscribe to any of these separately, and you're paying for college, you're paying twice. If you're paying for college and don't read any of these, maybe you should, since you're paying for them anyway.It's true that the database versions don't have pictures and if you want to read them without a computer you have...
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| Ethical Investing Blog Carnival |
| 2008-02-03 22:31:00 |
This is the first of what (I hope) will be many blog carnivals on the subject of ethical investing. To me it seems there is a paucity of blog writing on this important issue. The blog carnival's purpose is to encourage more bloggers to write on the subject, and to assemble these posts in one convenient place for readers.Below are three excellent submissions that were accepted, out of a much greater number (many submissions were off topic).Hung Nguyen presents Socially Responsible Investment: Can it beat traditional mutual funds? posted at Meaningful Issues in Today's World, looks "at socially responsible investing (SRI). The idea is that by inves...
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| This Week's Random Stock List and a Response to Comment |
| 2008-02-02 11:50:00 |
Here's this week's random stock list with closing prices as of Friday 2/1/08. More about the experiment here.Dean Foods (DF) $28.42MoneyGram International, Inc. (MGI) $6.32Esterline Technologies Corp. (ESL) $47.22Fuel Systems Solutions, Inc. (FSYS) $13.03Daktronics, Inc. (DAKT) $20.78Stantec Inc. (SXC) $33.24Vestin Realty Mortgage II, Inc. REIT (VRTB) $9.7CSK Auto Corp. (CAO) $8.98Commerce Group, Inc. (CGI) $36.25Epicept Corp. (EPCT) $1.45Curiousjoe left a comment, making the point that given that there are more small caps than other stocks in the pool from which I'm randomly selecting stocks, my picks will have a small cap bias. If I modify, or do an additional experiment where picks are market cap weighed, I'll have a large cap bias.No matter what I do, C...
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| Why (Financial) Stocks Should Head Lower |
| 2008-01-27 12:20:00 |
It looks like there will be trouble in the Credit Default Swap market.Credit Default Swaps are used to transfer credit exposure of fixed income instruments, such as mortgages and bonds, between parties, to spread risk. It works in the following way. One party buys protection on a debt instrument from another party, the seller, who guarantees the credit worthiness of the debt instrument. If the instrument, let's say a corporate bond, defaults in its interest payments, for example if the company that issued the bond goes out of business, the seller of the credit default swap is supposed to reimburse the buyer. Basically, Credit Default Swaps are insurance on fixed income securities that holders buy to limit their risk. We can call Credit Default Swap sellers insurers.The combined value of a...
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| Random Stock Experiment List 2 |
| 2008-01-27 00:20:00 |
Last week I started my random stock picking experiment, to see how random stock picking compares in performance to that of professionals, my hypothesis being that it will do better than the majority.Here are this week's 10 random stocks with their closing prices on 1/25/08.Microsoft Corp. (MSFT) $32.94Endurance Specialty Holdings Ltd. (ENH) $38.61AZZ Inc. (AZZ) $33.25Alaska Communications Systems Group Inc. (ALSK) $12.73AMIS Holdings Inc. (AMIS) $7.71OPNET Technologies, Inc. (OPNT) $8.6Royal Gold, Inc. (RGLD) $30.23Aircastle Ltd. (AYR) $22.5Valassis Communications, Inc. (VCI) $Hercules Technology Growth Capital, Inc. (HTGC) $10.72I mentioned last week that I would use Stockalicious to track the stocks. I've decided against this, however, as half the time the widget wasn't loading. A few days ago, it prevented this blog from loading. I'll be looking for something better.
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| Get Higher Yields By Purchasing Loans |
| 2008-01-23 03:03:00 |
With the fresh .75% interest rate cut by the Fed and new cuts presumably to follow, yields on savings and money market accounts, and certificates of deposit will go from low to pretty much nothing. Treasury notes and bonds aren't paying much either, though bonds may make up for it by rising in value.If you're thinking about putting more money in dividend paying stocks or corporate bonds to make up the difference, you may want to consider diversifying a bit by purchasing loans from regular people like yourself. A few so called peer-to-peer lending sites have sprung up recently. These include LendingClub, Zopa.com, and Prosper.com. There is also something similar called Loanio, which is not yet live. Currently, LendingClub "lenders" are earning an average of ...
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| What's Up with Bernanke? |
| 2008-01-22 10:43:00 |
I don't have the academic credentials of the Fed chairman, but it seems pretty odd that every time the market is set to drop a significant amount, the Fed lowers rates either on the Funds rate or the discount window. Stocks were tanking in August 2007, so the Fed cut the discount window rate by .5%. In mid September 2007, with the market tanking again, the Fed cut rates by .5%.Yesterday markets around the world swooned. The DJIA, Nasdaq, and S&P futures indicated a big drop here. So what happens before the market opens? Bernanke cuts rates by .75%.The cut can't be any more blatantly tied to the stock market. But is the Fed supposed to be worried about the stock market, or the general economy? Granted, the stock market influences the economy and the economy influences the stock market, ...
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| If You Must Time the Market, Buy Only When Fear Takes Hold |
| 2008-01-20 18:39:00 |
Repeated so many times it's become a cliche, I'm sure you heard this one of Warren Buffet's famous aphorisms: be fearful when others are greedy and greedy only when others are fearful.It makes a lot of sense. That's how you buy stocks, and anything really, on the cheap.So why don't people do it? Why do the majority of retail investors lose money on the stock market?Small individual investors are fearful when times are bad, or are about to be bad--during a recession or when it seems there will be one. At such uncertain times, when you don't know how long your job will last, when there are no other job prospects in sight, and when the cost of your daily living goes steadily up all the while what stock holdings you've been able...
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| Random Stock Picking Experiment |
| 2008-01-19 22:55:00 |
At some point in the (near) future, I will review various investing newsletters and investing gurus. For some time I've had a theory that most newsletters and gurus that have decent performance records owe them not to their investing acumen but to the number of their picks. Over time stocks as a group tend to go up. You pick enough stocks, and your performance shouldn't be bad. That is my hypothesis.In the late 1990s, there used to be something called Monkeydex. It was an index of stocks picked by a monkey, and its performance beat that of many professionals. Sadly, it appears that the index is no more. I've decided to create my own version. Its results will be one measure against which gurus and newsletters will be compared.Every weekend, I will randomly p...
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| International & Domestic Inverse/Bear Market ETFs |
| 2008-01-18 08:26:00 |
If you think the markets will continue their decline, you might want to consider inverse ETFs. Some of these have become somewhat popular, so maybe you heard of them. But you probably haven't heard of all of them.Inverse ETFs use various derivatives to behave in the opposite way of their underlying indexes. For instance, the inverse Dow 30 ETF (DOG) does the opposite of what the Dow Jones Industrial Average (DJIA) does. For example, if the DJIA falls 1.5%, DOG will rise by about 1.5%. The correlation is not perfect, but it's close.An advantage of using inverse ETFs is that you can hold a short position while going long. In other words, it's like holding a regular stock, but you profit as if you have sold short. As there is no need for a margin account to d...
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| Blog Carnivals I've participated in Jan 1 through 15 |
| 2008-01-16 20:53:00 |
As a courtesy, I'm linking back to the carnivals where my submissions have been accepted.Investment Basics CarnivalCarnival of Twenty Something FinancesCarnival of Money, Growth and HappinessInvestment Quest: Festival of StocksCheck out the carnivals for loads of interesting articles.
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| Review: TradeKing |
| 2008-01-15 22:07:00 |
TradeKing Regular Individual AccountThe Good:1. $4.95 a trade for limit, stop, and market orders; $4.95 a trade plus $0.69 per option contract. Trades execute quickly.2. Great tools for options traders, including a Profit/Loss Calculator, which calculates your profit from rising option values, an Options Calculator, which calculates volatility and risk, subject to your criteria, a Probability Calculator, which determines the probability of target stock prices in the future, and an Options Screener.Moreover, TradeKing makes things faster and easier by letting you do multiple transactions on the same page. For example, let's say you want to write a covered call. At most brokers you will have to go to a couple of different places on the site, to buy the stock and to sell the call. At TradeKin...
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| Reinvesting Dividends -- Good Idea or Bad? |
| 2008-01-13 10:03:00 |
Investors sometimes wonder whether they should reinvest their stock and mutual fund dividends. I'd like to go through some of the advantages and drawbacks of doing so.But first, what's a dividend anyway?Usually a portion of a company's profits,* dividends come in three forms: stock, cash, and property. The two most common are stock and cash, with cash being the most popular. Sometimes distributed monthly, semi annually, or annually, the most common dividend distribution is quarterly. This depends on when the company's board of directors decides to declare a dividend.Mutual funds are required by law to distribute most of their income and capital gains, which are usually taxed at different rates. They usually do so at the end of the year.How do you get a dividend? In the case of both compani...
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| Defensive Stocks -- Are They Really? |
| 2008-01-11 15:40:00 |
Chances are, you've probably been hearing a lot about defensive stocks lately. I have been wondering about them myself, and decided to investigate how they have fared recently and in the last bear market.To this end, I chose to look at a (perhaps) random sampling of stocks that fall within the "defensive" category. These stocks, most of which you probably heard of are:Altria (MO) -- tobacco productsAnheuser Busch (BUD) -- Alcoholic beverage producerCoca Cola (KO) -- beverage producer.Consolidated Edison (ED) -- A utility company serving New York, and parts of New Jersey and PennsylvaniaDiageo (DEO) -- alcoholic beverage producerGeneral Mills (GIS) -- packaged consumer foods producerJohnson & Johnson (JNJ) -- all sorts of products in beauty, health, and...
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| How Not to Drive Traffic to Your Blog |
| 2008-01-08 06:52:00 |
I don't know if most bloggers want to make money online, but I'm one who does. A key element in getting people to click on your ads is driving traffic to your site, and that's what I'd like to talk about here--sort of. I'm a newbie, and as yet, while slowly building, my traffic is but a small drip. But I've already figured out how not to get traffic to your site. That's what I'd like to talk about here.Like many others, I started a blog, put up a couple of posts, and then was disappointed that the hits didn't come gushing in. Off to Google I went, searching for methods to get more traffic to my site. I turned up many recommendations. Yeah, yeah, quality content. But that takes time, and I want traffic now! I don't really ca...
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| Review: Scottrade Individual Account |
| 2008-01-07 13:16:00 |
Regular Individual Account Here's the good:1. If your bid price is between the bid and ask, your order is executed with lightning speed. You confirm your limit order, go back to your account home page, and notice that it's already been completed.2. You can buy OTC stocks3. There's a large selection of mutual funds, bonds, CDs, and preferred stock.4. Depending on your starting capital, $7 a trade is not too bad.5. They have a lot of physical locations, so you can always stop in to talk to somebody.6. Check writing from your cash balance if you qualify.7. Decent free research--there's a pretty good stock screener, and many stocks have either Reuters or S&P reports.8. Real time stock quotes, and a streaming ticker.9. Free account transfers.The not so go...
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| Dogs of the Dow: Do it yourself vs Mutual Fund vs ETN |
| 2008-01-05 23:34:00 |
There's a somewhat popular simple investing strategy called Dogs of the Dow: at the beginning of the year, one buys, in equal dollar amounts, the ten highest yielding Dow stocks (yield = dividend per share divided by share price). At the beginning of the next year, one replaces these stocks with the ten highest yielding Dow stocks, and on it goes.This simple strategy of buying and selling once a year has, according to the Dogs of the Dow site, generated a market beating average annual return of 17.7% since 1973.Now I don't know why the starting year is 1973 (could be because the original study, done by Michael O'Higgins used the period of 1973 - 1989) or what would happen to the average annual returns if the starting year were moved forward or back, but the ...
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| Review: Stock Gumshoe |
| 2008-01-05 13:31:00 |
If you're reading this blog, it's likely that you have at least one email account full of teaser emails from various financial and investment newsletters. Perhaps you receive a few emails a week from investment sites like The Motley Fool or Morningstar, goading you to sign up (for a monthly fee) to find out what their stock picks are. If you're tempted to sign up, you might first consider going to a blog I've recently discovered, Stock Gumshoe.As most teaser emails contain many hints about what investments the newsletter is selling, it's possible to figure them out without actually paying $1000s a year. That's what Stock Gumshoe does. The blog gets the same emails as you do, as well as those readers contribute, and it determines what the investments are. Th...
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| Bought a Certificate of Deposit |
| 2008-01-04 15:00:00 |
As it's very probable that the Federal reserve will cut interest rates again at the end of January and stocks probably will not do very well in the next two quarters, I've decided to buy a 6 month 5.1% APY Online CD from Washington Mutual.I hope they don't go out of business, as I really like their service. Yeah, deposits and CDs are insured up to $100,000, but I wonder whether insurance companies will be able to pay if big banks start going under.Still, I think the CD is a safer investment right now than most other things, and the yield on my savings account, now at 4.75% APY, will probably drop soon after the rate cut. While it doesn't exactly put me ahead of inflation as the real inflation rate is much higher than what the Fed says, for consumer prices for things like food and gas are rising sharply, hopefully it'll have me losing less money than just keeping it in my savings account.Despite my belief that stocks won't do as well in the near term, I have been eying Pfizer (PFE) for a while, and would like to buy it when it's under $20/share. It's got a lot of cash, a great, steadily rising dividend, and its price has been battered because its patents are expiring on some profitable drugs. It's pretty likely, however, that it'll develop new profitable drugs in the future, and I'd like to get in near the bottom.
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| Monthly update |
| 2007-12-31 15:37:00 |
Ad income: $0.38 (is this good for two blogs less than a month old?)Cash:Savings account balances: $2,131.49Scottrade cash: $23.24Firstrade Roth cash (CAMXX): $100.52Sharebuilder cash (BDMXX): $0TradeKing cash (RUTXX): $40.81Note: I've transferred my Sharebuilder account to TradeKing, which cost $50. However, TradeKing is supposed to reimburse me. Cash doesn't reflect this. Also not reflected is gift spending, which was on credit cards (will be paid off fully in January) and money I owe to my girlfriend, who bought gifts on my behalf. This should be under $200.Total cash: $2296.06Stocks and Funds:Blackrock Enhanced Equity Yield Fund (EEF): $113.12Janus Smart Growth Portfolio (JSPGX): $770.61General Electric (GE): $74.14Overseas Shipholding Group (OSG): $669.87Reynolds American (RAI): $593.64Royce Focus Trust (FUND): $148.66DuPont (DD): $484.99(RJA): $448.13Other Investments:Prosper.com: $100 (will describe this in a later post)Total Stocks/Mutual Funds: $3403.16Total Investments and Cash as of 1/1/08: $5699.22 (18.22% gain over last month, not that great considering what I started out with, but I'm happy it's growing rather than shrinking. I would be extremely happy if I gain, from month to month at that rate.)Pretty much all my gains this month came from work. All stocks, with the exception of FUND, which gave a pretty big dividend, lost value. EEF and RAI are both ex-div.
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| Investing in Agriculture, ETN, Jim Rogers |
| 2007-12-22 00:31:00 |
I've recently started a small position in The Rogers International Commodity Index Agriculture Total Return ETN (RJA). View the prospectus here.RJA is rather new, just starting out in October. It tracks the RICI-Agriculture Index, which "is an index of 20 commodity futures contracts, representing commodities consumed in the global economy." It "aims to be an effective measure of the price action of raw agriculture materials...around the world."The positive aspects about investing in agriculture:1. Worldwide demand for food (grains, livestock) is out pacing production, and is expected to do so for quite a while.2. Worldwide supply of food is at 30 year lows.3. An emerging middle class in places like China contributes to rising grain and livestock prices...
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| Bought a little DuPont |
| 2007-12-14 14:00:00 |
I've resolved to only build a core portfolio of dividend paying stocks of relatively large, steady companies.To this end, taking advantage of my last free trade at Scottrade before it expires, I bought $494.78 worth of El DuPont de Nemours & Co. (DD).The bad:DD is one of the largest autopaint makers in the world. As the US economy heads for a slow down or a recession, this isn't that good for the company.What should outweigh the bad above is that1. DD is the 2nd largest in world in the agricultural business. The demand for food already outpaces production, and this should continue. Moreover, DD should benefit from rising corn seed prices because increased biofeul production.2. Almost 60% of DD's sales come from outside the US. As the dollar falls, DD will make more on the currency exchange.3. Right now it has a 3.6% dividend yield, which is pretty good. DD also has a long, steady history of increasing dividend payments. Just recently it raised its dividend by about 11%.4. With a price/sales ratio of about 1.37, this is the cheapest DD has been in about a decade.5. The company has bought back shares, and intends to buy back an additional $1.1 billion worth.6. DD recently acquired IsoTherming Technology from Process Dynamics. This will help grow DD's Clean Technologies business because it provides refiners with a faster, cheaper way of producing cleaner fuel.7. Eventually, the economy will improve, so DD's other business segments, which are flat or shrinking now, will improve.I intend to keep DD forever, and add to my position on a hopefully regular basis. I might transfer it over to my Tradeking account, which has free dividend reinvestment, for compounded returns on the dividend.My next stock purchase will most likely be additional shares of GE.
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