In the world of investing there are three people I have enormous respect for. I admire them because of their ingenuity, their record for making people money and the fact that they are each different from each other. The first is of my grand dad's generation: he is the the world most famous and most successful investor - he is often called the Oracle of Omaha, Warren Buffet. His style? Value Fundamental approach. The next is Peter Lynch - creator of the world most succesful families of mutual funds: he is the ultimate stock finder and he is of my dad's generation. My own generation have our Warren or Peter, his name is Jim Cramer! Yeah Jim represents the ultimate growth guy - savy, quick yet intensely dedicated to the fundamentals.
This week, I beat Cramer to his game. You heard about CVS on here first, and this week we are three points up on the recommendation, and you know what? Cramer was on it on Thursday. I don't claim to be better than Cramer, but I claim to be close enough to read his mind before he sends the faithful to make us some money! CVS is a 6 months hold for me not a trade, the greying population is a plus for this stock ride it up until 34 after which you will sell and wait for a mow back..I'll keep you posted.
The market was very interesting this week and the month. It started rather crummy- but a deluge of good earnings reports on Thursday and Friday lifted the market. I am up on CVS, MSFT, and even what? Google! Anyway, it is earnings week again next week- I can't predict what will happen , all I know the earnings will decide the dance steps of the market. An interesting article to help all beginners in the market can be found here - enjoy!
Sunday, January 29, 2006
Tuesday, January 24, 2006
Put Your Money Where Your Mouth Is: INV 101
Investing is very easy! Hush! Most people consider savings in other words a very difficult proposition. But I have learnt that it is not very hard afterall. In fact it is easy. Often, it is making that momentous decision of just sitting on the sideline to join in the game that is hard. Once you are in, and you are just the common competitive homo-sapien then you always just want to beat your benchmark (which for me is S & P 500- more of that later). Indeed, if you want to beat that benchmark then you have to understand the market, the tricks and then you get hooked. Investing to you then becomes a piece of cake- it becomes just another visit to the mall, a dope you buy from the side of the street. And you see stocks you just wanna buy! That is why my task today is getting you to leave the fence and get into the market.
There are many gospels out there to 'would be' younger investors telling them to be invested and why. But consider this: On an average day I wake up - I brush my teeth and take my bath and get ready for work or school (Procter and Gamble -PG). I then get into your my car and drive to work(ExxonMobil and American Int. Group :AIG). After the day is over I stop over at your local retail store to pick up some food (Walmart- WMT) and then go home to cook. If I need more money for the week I may stop at my Bank (Bank of America- BAC) and head home. After cooking, I settle down to enjoy my meal and doze away with my TV on (Time Warner -TWX). The point in telling you all of these, is that i own every single stock I just mentioned! You see, I am patronizing myself each and everyday of my life. I am here to stay whether you like it or not- while you might be looking at me thinking I am spending, I am only beefing up my bottomline cos I am a part owner of these companies. You see? Do you want to be a consumer or a owner? I mean I don't really mind being both.
Having said this, when and how much do you need to invest. What all writers agree about is that the time to start investing is now. Your next hundred dollars can break the jinx. Open a very simple investment account with either Sharebuilder or BuyandHold and you can invest for as little as $2 per stock - in fact with that hundred dollars alternatively just buy two companies and you are on your way to success. What companies do you buy ? You might ask- that question we shall tackle next time. So long - will see you shortly.
**Additions: Here is a very interesting article on saving, investing and priorities- check it out
There are many gospels out there to 'would be' younger investors telling them to be invested and why. But consider this: On an average day I wake up - I brush my teeth and take my bath and get ready for work or school (Procter and Gamble -PG). I then get into your my car and drive to work(ExxonMobil and American Int. Group :AIG). After the day is over I stop over at your local retail store to pick up some food (Walmart- WMT) and then go home to cook. If I need more money for the week I may stop at my Bank (Bank of America- BAC) and head home. After cooking, I settle down to enjoy my meal and doze away with my TV on (Time Warner -TWX). The point in telling you all of these, is that i own every single stock I just mentioned! You see, I am patronizing myself each and everyday of my life. I am here to stay whether you like it or not- while you might be looking at me thinking I am spending, I am only beefing up my bottomline cos I am a part owner of these companies. You see? Do you want to be a consumer or a owner? I mean I don't really mind being both.
Having said this, when and how much do you need to invest. What all writers agree about is that the time to start investing is now. Your next hundred dollars can break the jinx. Open a very simple investment account with either Sharebuilder or BuyandHold and you can invest for as little as $2 per stock - in fact with that hundred dollars alternatively just buy two companies and you are on your way to success. What companies do you buy ? You might ask- that question we shall tackle next time. So long - will see you shortly.
**Additions: Here is a very interesting article on saving, investing and priorities- check it out
Saturday, January 21, 2006
Mavericks don't pay, Geeks do!
This is my first footnote since I started this little blog. Through this medium I will from week to week give you my take on the market. This is the market's take. The Dow was down largely due to disappointing earnings from GE and Citigroup. NASDAQ was terribly wounded due to badluck in Google (GOOG) due to spar with the Dept. Of Justice - broadly tech stocks were disasters - Motorola (MOT) and Intel (INTC) disappointed. Internationally the Oil crunch began again squeezing the markets crisis in Iran and Nigeria were largely responsible as well as terribly cold winter in the Tundras of Russia and South East Asia. In addition to all these, the Nikkei Stock Index (Japanese) crashed largely due to allegations of book fudging at Livedoor ran by maverick CEO, Mr. Horie. The story of Horie is one of maverick, maverick, maverick. That is why that is my new rule for the week.
Thou shall not invest money meant for retirement in companies ran and controlled by mavericks. In short, buy maverick stocks not maverick companies. Okay, confusion? Non. Maverick companies: Google (GOOG), Microsoft (MSFT) and Apple (AAPL). Maverick stocks: Livedoor, Enron and Worldcom. These companies have one thing common: big mouthed, ill educated CEOs that can hardly match their promises round after round yet was able to warm themselves to the media. If you have mad money to play with, you are allowed to invest - but please know when to get out. When the trading columns expand beyond average for two days straight that is the first tell tale sign, when the stock become the darling of even the most bearish wall streeter all you should be seeing is sell, sell, sell! GOOG, MSFT and AAPL have amazing products that we all see and use everyday, they dont need to proove profits to me, I know it! Moreover their CEOs either look geeky or are known smarts- not big mouths. On wall street, remember GEEK pays.
For the coming week, my bets are on three sectors outperfoming the rest: the stocks of UNH and co, the health care managers have been overbeaten, so are the internet stocks. If you are not yet on the GOOG or YHOO train (you can only own one of a kind) this is a unique ops to jump onboard. Lastly, oil will continue to outperform and the best way to edge your bets are either natural gas or coal stocks: FDG/BTU (coal plays) or CHK/ECA are my picks for both hedges. Stay focused, cos this week is gonna be a ride. We will largely be flat however unless we get some really extraordinary news.
Additions**: This week I am buying CVS and HSY for my simulation portfolio. CVS is buying some 700 Albertsons store and it is down today (Monday) so I am taking advantage of the meltdown- I consider CVS a value-growth company with great potential upside. With a relatively low PE multiple to its pure peers like Wallgreen (WAG) and an above par operating margins and quarterly revenue growth of 14% if one uses the rule of thumb that you should trade twice of your revenue growth that means this company is trading 7 points below current fair market PE and 10 points below the next (PE for next year is 17). The new medicare bill and the gale of patent loss that will hit Big Pharma is good news for stores like CVS that make more money from relaxed medicare and generic drugs. Imagine this also - this company just inched up their healthy dividend as they have always done. This company will pass the Warren Buffet Test anyday, its debt-equity ratio is about 30% exactly just where the master is comfortable with. As for me I like what I see. As for Hersheys (HSY) this is a true global growth play, expanding rapidly in S. America I see China with it new affluent middle class consuming more candy and what better growth player will take advantage of this than HSY. Moreover, it is down from its 52 week high after a terrific quarter before the chocolate crazy halloween, this Valentine is another chocolate craze that will add 5% to the company's bottomline and to America's waistline. Don't say I didn't tell you - I simply love HSY one of the best all time managed companies that will rank with MO, JPM and GE anyday for over 75 years on the stock exchange and it is the best of breed where it plays even though you can hardly call this turf a growth business.
Thou shall not invest money meant for retirement in companies ran and controlled by mavericks. In short, buy maverick stocks not maverick companies. Okay, confusion? Non. Maverick companies: Google (GOOG), Microsoft (MSFT) and Apple (AAPL). Maverick stocks: Livedoor, Enron and Worldcom. These companies have one thing common: big mouthed, ill educated CEOs that can hardly match their promises round after round yet was able to warm themselves to the media. If you have mad money to play with, you are allowed to invest - but please know when to get out. When the trading columns expand beyond average for two days straight that is the first tell tale sign, when the stock become the darling of even the most bearish wall streeter all you should be seeing is sell, sell, sell! GOOG, MSFT and AAPL have amazing products that we all see and use everyday, they dont need to proove profits to me, I know it! Moreover their CEOs either look geeky or are known smarts- not big mouths. On wall street, remember GEEK pays.
For the coming week, my bets are on three sectors outperfoming the rest: the stocks of UNH and co, the health care managers have been overbeaten, so are the internet stocks. If you are not yet on the GOOG or YHOO train (you can only own one of a kind) this is a unique ops to jump onboard. Lastly, oil will continue to outperform and the best way to edge your bets are either natural gas or coal stocks: FDG/BTU (coal plays) or CHK/ECA are my picks for both hedges. Stay focused, cos this week is gonna be a ride. We will largely be flat however unless we get some really extraordinary news.
Additions**: This week I am buying CVS and HSY for my simulation portfolio. CVS is buying some 700 Albertsons store and it is down today (Monday) so I am taking advantage of the meltdown- I consider CVS a value-growth company with great potential upside. With a relatively low PE multiple to its pure peers like Wallgreen (WAG) and an above par operating margins and quarterly revenue growth of 14% if one uses the rule of thumb that you should trade twice of your revenue growth that means this company is trading 7 points below current fair market PE and 10 points below the next (PE for next year is 17). The new medicare bill and the gale of patent loss that will hit Big Pharma is good news for stores like CVS that make more money from relaxed medicare and generic drugs. Imagine this also - this company just inched up their healthy dividend as they have always done. This company will pass the Warren Buffet Test anyday, its debt-equity ratio is about 30% exactly just where the master is comfortable with. As for me I like what I see. As for Hersheys (HSY) this is a true global growth play, expanding rapidly in S. America I see China with it new affluent middle class consuming more candy and what better growth player will take advantage of this than HSY. Moreover, it is down from its 52 week high after a terrific quarter before the chocolate crazy halloween, this Valentine is another chocolate craze that will add 5% to the company's bottomline and to America's waistline. Don't say I didn't tell you - I simply love HSY one of the best all time managed companies that will rank with MO, JPM and GE anyday for over 75 years on the stock exchange and it is the best of breed where it plays even though you can hardly call this turf a growth business.
Thursday, January 19, 2006
Why Do You Invest?
Investing can be a very cumbersome process. Research shows that on the average, you must spend one hour per week for each stock you own. For average diversification, let us assume you have a portfolio of ten stocks (as I do, I will get to that later), that means you are required to check those stats up on Yahoo! Finance, do some homework on Moneycentral and listen to those conference calls for 10 hours! That is more time combined than your average person spends in church, in shops or even driving per week (if you are not a junkie). But those ten hours are necessary to insulate you from the critical ups and downs of wall street: basically you have to do your homework. But that gets me to the subject of discourse today: why do you invest?
It will be foolhardy for anyone to spend 10 hours weekly of their precious lives weekly without having a good reason for doing so. The reason you invest will be directly related to your stock picking strategy and your horizon for holding on to your investments (short, intermediate or long term). The manner you invest will also be affected by the reasons you are investing. In my opinion you can invest for a number of reasons. One fellow said he is investing to leave his children a great deal of inheritance: I don't blame him, but my friend then the stock market is not for you! Simply buy life insurance for less than 12 dollars a year and you can be very well assured you successors will have a very good life after you sucker is thrown in the grave!
The first market type people invest simply to generate cash for daily living. If that is you then you need to be looking at terrific growth stocks like Google (GOOG), Broadcom (BRCM), Seagate (STX) , Genentech (DNA), Amgen (AMGN) or Apple (AAPL). Basically the best place you want to be is technology or biotechnology. Those are terrific growth sectors. Utilities and transportation as well as Oil and Gas also offer significant opportunities in this day and age though they might be one step too far in 2006 in my opinion. This profile is very risky, it is a boom-burst cycle. You have to chase growth and that means taking investment as a full time job: mutual funds can never be a very nice way to play this so you either put in the ten hours multiply by four or you are screwed. Cos Jim Cramer will game the market like you trust me, and the guy is a genius- how you beat him still beats my imagination.
However, some people also are trying to game the market so that they can be comfortable in retirement. The name of the game here is asset preservation and right sizing. Depending on how far you are away from retirement, you want you portfolio to be rightly sized in growth, value , international and bond holdings. This spread and asset diversification will allow you to hedge the market appropriately and avoid being caught up in an Enron like mess when you are 5 years away from retirement. Any one that has 5 years to retire and was caught in enron by the way was playing with fire and they knew it. Enron was an unbelievably hot growth stock working wonders, about to be retirees go value and bonds not growth: don't be greedy!
And to you my young friend that will like to retire early like me, we have a new game in town. This group of people are young and fresh minds, lucky one that have a good paying white or blue collar job in their twenties. If you want to stop working at 45-55 to go travelling or build that your dream home in the desert of mexico or coast of florida then you need to get into my head! The way to go is simply two words: dividend reinvestment. This means you need to get into dominant market players like ExxonMobil (XOM), MO (Altria) or Bank of America (BAC) all which I own, with terrific dividend yields and invest in them one step at a time applying the lessons of dividend reinvestment and dollar cost averaging. What will make you money is disciplined approach to investing in select group of what Jim Cramer calls Best of Breeds. Just pay up and watch it grow with dividends payment above 2% (inflation adjusted) much better than any money market yield for that matter, and then you use it to buy more. With couple of little additions yearly, you are on you way to Hawaai baby!
Can I Afford to invest? How do you pick the stock ? Where do I do it? You might ask- I am here to help, next time I will use my own personal nest egg of 10 bullet proof (or you can say ridden) stocks to show you what is going on in my wacky brains! It is a simple step by step methodology that will show you a poor student can start early as well- remember that for every year you don't invest 2000 dollars between the ages of 18 and 25 you are losing quarter of a million dollars twenty five years down the road.
It is time to say good bye today. Always remember you will lose more money thinking a good stock is expensive than buying an expensive stock thinking it is cheap. That is from experience. See you next time..and stay in brain wave mode!
It will be foolhardy for anyone to spend 10 hours weekly of their precious lives weekly without having a good reason for doing so. The reason you invest will be directly related to your stock picking strategy and your horizon for holding on to your investments (short, intermediate or long term). The manner you invest will also be affected by the reasons you are investing. In my opinion you can invest for a number of reasons. One fellow said he is investing to leave his children a great deal of inheritance: I don't blame him, but my friend then the stock market is not for you! Simply buy life insurance for less than 12 dollars a year and you can be very well assured you successors will have a very good life after you sucker is thrown in the grave!
The first market type people invest simply to generate cash for daily living. If that is you then you need to be looking at terrific growth stocks like Google (GOOG), Broadcom (BRCM), Seagate (STX) , Genentech (DNA), Amgen (AMGN) or Apple (AAPL). Basically the best place you want to be is technology or biotechnology. Those are terrific growth sectors. Utilities and transportation as well as Oil and Gas also offer significant opportunities in this day and age though they might be one step too far in 2006 in my opinion. This profile is very risky, it is a boom-burst cycle. You have to chase growth and that means taking investment as a full time job: mutual funds can never be a very nice way to play this so you either put in the ten hours multiply by four or you are screwed. Cos Jim Cramer will game the market like you trust me, and the guy is a genius- how you beat him still beats my imagination.
However, some people also are trying to game the market so that they can be comfortable in retirement. The name of the game here is asset preservation and right sizing. Depending on how far you are away from retirement, you want you portfolio to be rightly sized in growth, value , international and bond holdings. This spread and asset diversification will allow you to hedge the market appropriately and avoid being caught up in an Enron like mess when you are 5 years away from retirement. Any one that has 5 years to retire and was caught in enron by the way was playing with fire and they knew it. Enron was an unbelievably hot growth stock working wonders, about to be retirees go value and bonds not growth: don't be greedy!
And to you my young friend that will like to retire early like me, we have a new game in town. This group of people are young and fresh minds, lucky one that have a good paying white or blue collar job in their twenties. If you want to stop working at 45-55 to go travelling or build that your dream home in the desert of mexico or coast of florida then you need to get into my head! The way to go is simply two words: dividend reinvestment. This means you need to get into dominant market players like ExxonMobil (XOM), MO (Altria) or Bank of America (BAC) all which I own, with terrific dividend yields and invest in them one step at a time applying the lessons of dividend reinvestment and dollar cost averaging. What will make you money is disciplined approach to investing in select group of what Jim Cramer calls Best of Breeds. Just pay up and watch it grow with dividends payment above 2% (inflation adjusted) much better than any money market yield for that matter, and then you use it to buy more. With couple of little additions yearly, you are on you way to Hawaai baby!
Can I Afford to invest? How do you pick the stock ? Where do I do it? You might ask- I am here to help, next time I will use my own personal nest egg of 10 bullet proof (or you can say ridden) stocks to show you what is going on in my wacky brains! It is a simple step by step methodology that will show you a poor student can start early as well- remember that for every year you don't invest 2000 dollars between the ages of 18 and 25 you are losing quarter of a million dollars twenty five years down the road.
It is time to say good bye today. Always remember you will lose more money thinking a good stock is expensive than buying an expensive stock thinking it is cheap. That is from experience. See you next time..and stay in brain wave mode!
Wednesday, January 18, 2006
Welcome
Hello peeps,
Welcome to my mind. I have a problem. What can i do about the voices I hear in my head? I have an idea, but i can't execute. What do you suggest i do? What I will do is why you are reading me. I am here to vent- I am here to say what I think about the market. It is for you to read and digest, it is for me to tell and tell it all.
I am an immigrant. Life can be very hard in a country with a totally crazy economic system like America. Life can be deeply confusing in the jungle of free market capitalism. The words are Free for madness, Market for Confusion and capitalism for greed. But I get you. You just want to make some money. Then you need to pay those bills- no one makes money just paying bills! Get into the market. You got to be hungry and I am here to feed you appetite.
Mine is an opinion. Ours is a cause. A cause for a richer more deepening bloging experience with the market pundit who happens to be an immigrant. You like the look on my face...then you gotta love this!
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