I just wanted to take a second to point out that, while we’re in the middle of a recession mind you, a stock broker I spoke to was ‘bragging’ that his fund returned approximately 9%, (he didn’t remove the fees, so it’s more like 7.5%).  I was looking at returns for a life insurance policy and it was -8.9%!  As of this moment, my portfolio is up 59%.  Mind you, I barely trade, I don’t have any super secret decoder ring, I don’t pay some service $500 a year to tell me what to buy and I don’t pay fees to some goomba. 

You can beat the stock market too.  Just use common sense.  Pick a handful of companies that will never go out of business and buy them when they are low and then hold onto them.  That simple. 

Right now my account has stocks like Apple (AAPL), Activision (ATVI) (which I bought the day they announced their merger with Blizzard), Best Buy, Barnes and Noble (BKS), Chesapeake Energy (CHK), Costco (COST), Disney (DIS), Hershey (HSY), Microsoft (MSFT), Target (TGT), Tim Hortons (THI), Wendy’s (WEN) (which was just bought by Arby’s) and World Wrestling Entertainment (WWE).

As you can see, it’s not like I picked some obscure stock from left field that ran like crazy.  All of these are well known companies that anyone could have bought.  I also have some of my investments in SPY, which is the S&P 500 ETF and MDY which is the Midcap ETF.  Those are my ’safety’ funds with lower risk.

You can manage your own money my friends, 4 simple steps:

1) Pick 20-50 name monopoly stocks and only watch those.  (a name monopoly is a company that you think of when you think of a specific product or service.)
2) Buy those only when they are below their 50 and 200 day moving averages.
3) Wait til they go up and take chunks of profit off from time to time.  IE: If the stock you bought for $1000 is now up to $1500, figure out how many shares = $500, sell only that many shares and you have $1000 in stock still and $500 in cash to buy something else or buy more of this on a dip.
4) Don’t watch the market when it’s open.  Take a look every Friday night and see how you’re doing, place your orders on Sunday so you can think about them all weekend and they will be triggered Monday morning.  No quick decisions!

That’s how I’ve done it for 5 years and I’ve done very well, you can too.  Make yourself a pretend portfolio and practice!

Invest in peace…

This is a story of how people are selling everything they have to pay bills, and how sad it is that people are selling cherished items on ebay. They have quotes from ebay and craigslist people stating how activity have gone up.  

Cool do sell the crap, but what we also get is people saying I don’t know what I am going to do if this keeps going….right WHAT ARE YOU GOING TO DO?

Instead of selling crap until better times happen, how about making better times right now?  Get that second job and really knock stuff out. Or, learn a new trade or find some residual income, reduce spending.  People are crying about selling stuff they love well what about asking yourself what is causing the problem and getting rid of that!! House , Car? credit cards? lazyness? believing you can not do anything because you are on disability but yet you can sit at home and watch tv all day…..hmmmm a job where you sit all day ? like a call center? geez people.

Tags: Jason

Well, the Fed is at it again, another 1/4 point drop on the interest rates.  Of course, this little short term fix isn’t going to last long and they are going to run out of points to drop eventually.  It did raise the stock market today, but that is just a short term jump.

Ultimately, we’re heading toward higher gas prices, higher food prices and less income from investments at the rate they are going.  Probably not the best idea.

What they should be doing is raising interest rates, getting people to invest more so they have more money and when they have more money they will spend it.  The complete opposite of what they are doing now.

I guess we’ll just wait and see where things go.  In good news, I sold a few shares of Chesapeake Energy (CHK) today, so boo ya to me.

Invest in peace…

Tags: stocks

Ugh, and now they give more bad advice…

“If you buy every month, sometimes you’ll buy when it’s $10 and sometimes you’ll be buying when it’s $2, so it’ll even out and over time you’ll make money.”

Why would you do that? Do you go to the market and go, “Holy crap, bread is $10 I’ll buy $100 worth today.” Then 2 weeks later you go back and go, “Bread is only $2 today, I’ll buy $100 worth again.” And then 2 weeks later it’s $10 again and you buy $100 worth again?! Why?! Why wouldn’t you want to spend $300 on bread when it’s $2? You would have 150 loaves of bread when if you had used their strategy you’d have 70 loaves of bread! That’s stupid!

Don’t dollar cost average, it’s a stupid, stupid strategy. Dollar cost save instead. Save the same amount every month and hold that cash until there is a stock you can buy when it’s down and then buy as many shares as you can. In the short term, sure you lose some gain, but in the long-term if bread goes to $20 it’s a huge difference:

150 loaves = $3000

70 loaves - $1400

Both sets were a $300 investment. Which payout would you rather have? Over double the profit by simply waiting until the stock dropped before you bought it.

Invest in peace…

Ok, so I’m listening to a podcast about investing right now, and it just bugs me to no end that people who no clue are giving advice on investing on the Internet.  Let’s get some things straight:

1) The advice of ‘hire a financial planner’ isn’t good advice.  You don’t need to pay some schmuck to invest your money for you.  You totally lose control of what your money is doing, it’s out of your reach if you need to make a quick move and you’re already losing money by paying this yahoo.

2) Buying mutual funds is NOT a safe investment and it doesn’t necessarily make you diversified, not to mention that you pay more fees (usually) for the mutual fund, as well as taxes on it yearly, even if you don’t sell it.  Mutual Funds suck and they are not the answer to investing.  I believe the last statistic I saw said 80% of mutual funds perform worse than just buying the S&P 500 ETF.

The advice these people should be giving is educate YOURSELF.  Learn about stocks.  I keep hearing how trading individual stocks is so hard and difficult and you can’t do it, you need to be a professional and you have to spend hours and hours on it every day and my reply to that is BULLSHIT.  These people have no fucking clue.

Take your money, Disney, Coca Cola, Proctor and Gamble, Pepsi, McDonalds, Harley Davidson, Walmart.  Spread your money out across multiple stocks in companies that won’t go out of business.  Buy them when they are low and hold them til they are high.  Sell 25% of it and hold that cash til they go low again, rinse and repeat.  Put 25% of your money into SPY which is the S&P 500 ETF, put 25% of your money into MDY which is a Midcap ETF and let those sit.  Add money to them when they go down.  That’s your ’safety.’  The 50% in stocks is your ‘risk’.  It’s that simple.

Don’t buy CD’s, don’t buy mutual funds, don’t buy telephone companies, cell phone companies, airlines, banks, new companies, yadda yadda.  Buy companies that have been in business forever and that won’t go out of business.  Especially if you’re young.  4% return sucks and will make you poor.  You need to take risk to make money.  Don’t panic when things go down, you have decades to make it back.

Don’t listen to the people who just repeat what they’ve been told that you can’t invest in stocks, that you aren’t smart enough, yadda yadda.  It’s all bullshit.  Anyone can do it.  Just keep it simple, limit yourself to 20-40 name monopoly stocks that you watch and ignore everything else.

Invest in peace…

So, I’m reading through my normal news sites when I come to a Q&A over on Fortune Small Business that was posted at money.cnn.com.  Here is the incredible quote I read:

Dear FSB: I own three rental properties, and am trying to hang on to them as the real estate market is bad here. Each month I have to pay out of pocket to cover the mortgage. Can I claim this loss on my taxes - and is there a limit?

Excuse me?  “I have to pay out of pocket, can I claim THE MORTGAGE ON HOMES I BOUGHT AS A LOSS?”  WHAT THE HELL?!  So, you’re telling me, that PAYING FOR SOMETHING YOU BOUGHT and OWN is a LOSS?   What is the world coming to?  It’s not a freakin loss on your taxes!  They’re trying not to lose their rental properties because the rental market is bad, boo fucking hoo!  Whaaaaaa!

Here’s a thought, here’s a plan, here’s an idea too….wait for it…..wait for it…..

DON’T BUY SHIT YOU CAN’T AFFORD!  I’m so sick of people saying, “I’m going to buy a house and the renter is going to pay for it for me and I’ll be rich and it’ll cost me nothing!  I’ll just get a mortgage that’s $2000 a month and rent it out for $2100 and I’ll make a hundred dollars and get my rental house for FREE!”  It doesn’t work that way dumb-ass.

What happens when you can’t rent it out?  What happens when the taxes come?  The insurance?  The roof needs to be replaced?  The tree roots crack the driveway?  Water leaks and damages the floor?  What happens when the neighbors go all trailer park on you and no one wants to live in that neighborhood now?

Never, ever buy a home based upon someone else paying for it for you.  Ever.  That is stupid.  You better have 6 months of payments for that house set aside before you even think of purchasing it or you’re going to be in a world of hurt.  Put as much down on the house as you can to lower the monthly payment so if your renters do move out, you are able to pay the mortgage without it affecting your own bills and home.

People just have no clue.  Buying on leverage isn’t a game and it’s not the way to become rich, especially if you have no clue what the rules are in the game or even how to play!  The way to becoming rich is to save up enough to where when you enter the game, a game you have read about and learned about and asked questions about, you’re using money you can afford to lose and buying an asset you can either re-sell or take the loss on and it doesn’t greatly affect you.

Thank god for the housing bubble because there are just wayyyy too many people in real estate who have no clue and shouldn’t be there.

Invest in peace…

Good ol’ reader Jay-Dawg wrote in today with an article talking about how people are all, “whaaaa banks won’t give me money” and “Whaaaaa I can’t get a loan, so I’m going to lose my house.”  Well, whaaaa don’t buy what you can’t afford, but lets move on from that and talk about Emergency Funds.

Dave Ramsey tells you to save up $1000 for your baby emergency fund and then after you pay off your debts have 3-6 months of expenses saved up.  Now, not many people do this, but why?  You pay for home insurance, you pay for car insurance in case something happens with one of those.  Why don’t you have insurance in case you lose your job?

Of course, you’re all going to say, “Oh, I’ll never lose my job!”  Ugh.  Disney’s animation division thought that too.  Disney will NEVER get rid of animation, but they did.  You need to have job insurance and the only way to have that is to save it yourself!

Imagine how much more secure you’ll feel if you know you’re ok if you go to work today and find out your job is no longer there.  This should be priority one for most everyone.  Save up that emergency fund!

Invest in peace…

I did post over at Investorgeeks.com last week, so you can go read that over there.  I even made it a link for you lazy people.

What’s in the news?  Well, the Fed is bailing out Wall Street and America is getting deeper in the ‘oh shit we’re fucked’ category as we speak.  Do you know what they’re using for credit?  Mortgages and foreclosed homes.  Yeah, not a good idea.

Btw, with all the talk of current foreclosed homes and people defaulting on their mortgages, do you know what the next huge brick to fall is going to be?  HELOCs.  Home Equity Lines of Credit.  These were also given out at sub-prime rates and guess what you use to get those lines of credits?  Usually your house as collateral.  Oops.  Hope those new cabinets in your kitchen were worth losing your house.  Watch for these loans to start defaulting like crazy sooner than later.

The stock market is still in all sorts of crazy roller-coasterness.  Up and down more than a Kangaroo on a pogo stick.  This is a good time to hop in and out though.  Grab 1 or 2% gains over and over real quick.  It adds up.

Newspapers are toast.  I don’t know why they are fighting it.  Why would I pay to get yesterdays news when I can get NOW’s news free?  And I usually don’t have to skip 18 pages of ads to find what I’m looking for on the net either.

Counting Crows were on Howard Stern yesterday and they made a good point.  The way the music business SHOULD be working is they give away the bands singles for FREE on the Internet.  Not only do they give them away free, but they actively seek out fans and send them the songs.  And websites and blogs and anyone else who would be interested in it.  And then those people post all over the net, “This song is cool!”  and then guess what?  They go to iTunes and buy the CD.  Duh.  It’s not hard.  People that pirate the songs wouldn’t have paid for them in the first place.

Microsoft is currently programming stuff for the iPhone.  How ironic is that?

Invest in peace…

Pres Bush came out yesterday and said we’re not headed for a recession.

Well, if you look at the stock market today, seems a majority of investors disagree with him. The Fed also came out yesterday and all but guarenteed a 1/2 point cut to the interest rates again. That’s not a good sign for an economy. Not to mention almost every earnings report you see these days are down, down, down. Dell’s sucked. That’s good, I don’t like Dell at all.

In any event, it all doesn’t matter unless you need your cash NOW. If you don’t, not much to worry about.   It’ll go back up in the future. You can look and try to find some stocks that are beaten down and could be good buys now. Some that are on my possible buy list are:

The S&P 500 ETF (SPY), Apple (AAPL), Microsoft (MSFT), Dow Jones Industrial ETF (DIA), Nasdaq 100 ETF (QQQQ), Costco (COST), Starbucks (SBUX), Johnson and Johnson (JNJ), and Coca Cola (KO) - the weirdest choice for a symbol ever)

Take a look at some of those and see if any of them float your boat, or stay in cash and wait and see if there’s a larger drop.

Invest in peace…

Well, as everyone knows, the economy is in the shitter, but we do have a chance for a turn around that doesn’t involve money or economics or anything.  I think the current administration has fucked things up so bad that people just feel down about everything.  The war isn’t going well (or at least not as planned) people hate the U.S., the economy is sliding down, belief in congress and the president is at an all time low.  What the country needs is a pick-me-up.

Unfortunately, being a Republican, I think McCain would just bring more of the same.  I think we need a change that the people can rally behind to get peoples hopes up.  It could be good for the country to have Obama as president.  Now, I don’t like his politics and I don’t think he’s qualified, but does it matter?  Like Weas said, you want a great public speaker.  Obama is one of the best, right behind the Rock and Mick Foley, so why not put him in there?  Let’s get him talking about things are changing, America is changing and get a positive spin on things going again.   He can’t screw up more than  Bush did, so why not?  I’d rather have Ron Paul, but…can’t win em all.

The market is down again today.  I’m not even sure why and I think the general public isn’t even sure why.  It’s just an irrational panic really.  Housing is dropping like a rock because people can’t afford houses!  They’re completely over-priced.  Some of the stocks are that way, but not to the point where things drop like they are.  It’s just silly at this point.

In any event, the country needs some good news to hang it’s hat on.  Maybe the official word that Hillary lost is what the country needs and then a little bit of change with a positive attitude can set it back on the right course.  Or perhaps people shutting up about the recession would help.

Invest in peace…