Growing Money

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2007-01-11T22:55:00.000-05:00

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2005 Investment Goal Results

2007-01-09T10:00:00.000-05:00

Back in June 2005, I made a daring investment goal of making $20,000 profit in stocks over a year period. I went back to my records today and saw that on June 1, 2006, I have made a gain of $11,000. I've only accomplished 55% of my goal. Note, I've added a total of $50 in my investment account during that one year period. But nevertheless, it was a good attempt.

Dow Dogs May Be Barking Up The Right Tree

2007-01-08T10:00:00.000-05:00

An investment strategy that has been derided by some money managers and academics as overly simplistic, once again, proved to be best in show last year. The Dogs of the Dow strategy produced a capital gain of 26.59% in 2006 plus a dividend kick of 4.77%, handsomely beating the Dow Jones Industrials gain of 16.3% and yield of around 2.2%. The strategy, popularized by Michael O’Higgins in his 1991 book “Beating the Dow,” consists of simply buying the 10 highest-yielding dividend payers in the Dow Jones Industrials, holding them for a year, and then buying the new crop of dogs. Proponents call it an easy way to handsomely outperform the average fund manager most years with an easy, do-it-yourself strategy. Critics call it an overly simplistic approach with hidden costs and risks that has outperformed only because of “data mining” - searching for statistical anomalies and then assuming they will work in the future. “The starched shirt and suspender crowd in New York are pretty savvy, and it’ll take a bit more to beat them than this,” said finance Professor Grant McQueen of Brigham Young University’s Marriott School of Management. “It’s a competitive world, and to think you’ll get rewards without doing homework is naive.” Source: Scottrade News, Jan 3, 2007

Quote of the Day

2007-01-06T10:00:00.000-05:00

Being rich is having money; being wealthy is having time. - Stephen Swid

EverBank Icelandic krona 13.10% APY 3-Month CD

2007-01-05T14:06:00.000-05:00

Empty Spaces Inc. said...

have you looked into everbank.com's icelandic CD? it pay ~10%

EverBank offers a 13.10% APY 3-Month Icelandic krona CD. The yield looks very attractive so I did some research on this CD. The CD is FDIC-insured. And the reason why the yield is so high is because Iceland is combating inflation and the banks are offering high-yield CDs to combat inflation. So what's the big catch on this CD? I found out that you can lose on principal in the CD, because the krona currency fluctuates. Also, there's a exchange rate fee. The conversion fee is three quarters of a percent (0.0075%) for CDs less than $100,000. The way it works is that your US Dollars get converted to Icelandic kronas and then at maturity if you decide to withdraw, the kronas will be converted back to US Dollars. The exchange rate then could be different from the start of the CD. Does any one has experience with Icelandic CDs? Do you think it is low risk? Are they are other catches I am missing?

Stocks Trading vs Real Estate Investment

2007-01-05T10:00:00.000-05:00

Empty Spaces Inc. said...

just curious, if you're good at making money in the stock market why not stick to it?& why would you try RE investing after its already been appreciating for several years and may be peaking in most areas?

The stock market is unpredictable. No matter how good you are or how well you have done, there's no guaranteed of future results. Granted, I have done well in the stock market since I have officially started investing and I'm confident I'll continue to do well, I cannot depend on that to make me rich. Also, my earnings in the stock market is not steady. There are some months I go into the negative zone, and those months are hard to bare even though I have very high tolerance. It's not good to be constantly picking stocks in the long term. It's very time-consuming; I've spent a lot of time reading up on companies and financial news. Also, studies show that you'll likely be beaten by the index in the long run. Even if I can match or slightly beat the index in ten years, I would lose in time and opportunity because I'd have spent thousands of hours. An investor in the index would have done nothing but did not sacrifice as much time as I did. Unless I can beat the index by a huge margin year over year for many years, it's not worth spending hundreds of hours a year. I admit my view has changed slightly. I'm not against investing in individual stocks, but I advise caution, because many people go in without really understanding the risk. Play with money you can afford to lose. Real Estate investing is an alternative to stocks trading and in many people's eyes, it's less risky. I agree, because real estate property is tangible and with the increasing population, real estate demand is bound to go up. My rental property is in Philly, which is not a hot area like NYC or San Diego. Even though the property value is not skyrocketing, I still have rental income to fall back on. The rental income covers my mortgage and property expenses. Basically, the tenant is paying for my house. Eventually, the mortgage will be paid off and I will own the property. It is a long term investment and property value will go up. So far, my real estate investment has been less stressful than my stocks investment. I get a check every month and my tenants never bothered me. Hopefully, I can be this lucky for every investment property.

VLO and Oil

2007-01-03T18:47:00.000-05:00

VLO and oil in general are taking a hit right now because of the warm winter (see article below), but I think VLO and oil will do well in the long term. There are many variables in the price of oil, and warm weather is only one of them. The winter is not over yet, there's still a chance colder weather will appear. The middle east conflicts also affects oil prices. If there is a shortage in supply, oil prices will go up. Odds are, the the prices of oil will go up in the long term. I'll hold on my shares of VLO. Verdict: HOLD on VLO ----------------------------------------- Source: Scottrade News 1/2/2007 Oil Prices Face Warm Weather, High Stocks The new year began with a whimper, weatherwise, in the world’s biggest heating oil market. In New York City, temperatures on the first day of 2007 hit a peak of 54 degrees - 45% above normal and 10 degrees warmer than the first day of spring 2006. The current spring-like weather - in line with forecasts - looks likely to put strong pressure on heating oil and crude oil futures prices when trading resumes on the New York Mercantile Exchange on Wednesday. But there’s more afoot that can rile the market than just the warmest December on record in Boston, in the heart of New England, where heating oil inventories stand at their highest level since 1998. Latest revised data from the U.S. Energy Information Administration show oil demand in October in the U.S. - the world’s largest oil consumer - was 2.7% lower than expected, though still 2.5% above a year ago. The new figures put demand at 20.757 million barrels a day in October - some 567,000 barrels a day below earlier indications - as demand figures for heating oil, gasoline and jet fuel were reduced. EIA’s preliminary data would have put October demand at 21.324 million barrels a day, the highest level since December 2005. The weakness at the start of the fourth quarter calls into question whether U.S. demand will manage to post even the modest year-to-year gain of 1.25% to 21.05 million barrels a day, which EIA forecasts would make it the strongest quarter of 2006.

Closed HSBC Business Checking Account

2007-01-03T13:32:00.000-05:00

I went to my HSBC branch and closed my Business Checking Account on December 30, right before the start of the new year. I've moved my Business money over to Fidelity Investment since I was not earning any interest in my HSBC account. Fidelity Investment was offering interest and check writing on my business account. While I was closing my account, my HSBC account manager told me the things that were going on in her department. She said HSBC will be implementing a Point System for staff members. Supposedly, the staff will receive points for opening new customer accounts, CDs, etc.

She told me there's no points for closing accounts, and that's why no other staff members were willing to handle the close of my account. She was a little disgruntle and frustrated at how picky (lazy) the staff members were. She also hinted how the Point System is going to cause more tension among the staff.

HSBC has excellent customer service. I hope they can maintain that.

Penfed 6.25% CD Strategy

2007-01-02T11:14:00.000-05:00

Penfed is currently offering 6.25% APY CDs for their 3 to 7 year terms. The rate is very attractive for an investment with virtually no risk. This rate is among the highest, if not the highest insured-rate in the nation. With interest rates expected to decrease in the future, it would be a good idea to lock in these rates. I want to maximize the benefits of these CDs. I have 100K to invest and I've come up with a few scenarios.

Scenario #1: Lock 100K in a 7-year 6.25% APY CD and have the interest paid out by check monthly. The idea is to have a recurring income.

Pros: Lock in high interest rate for the maximum CD term. Protected from future interest rate decreases. Income delivered my savings account every month. Principal is protected.

Cons: Sacrifice of compounded interest. Principal amount will be lock in for a long period, money is not accessible immediately and may result in loss of future investment opportunities if they arise.

Scenario #2: Lock 100K in a 3-year 6.25% APY CD and have the interest reinvested. Cash out CD at maturity.

Pros: Short term

Cons: If interest rates decrease a lot, I would lose the opportunity for high insured-interest-rates.

Scenario #3: Lock 25K each in a 3-year CD, 4-year CD, 5-year CD, and a 7-year CD, and compound interest.

Pros: Duration of CDs are spread out.

Cons: May not maximize interest earnings.

My idea in Scenario #1 is to create a streaming income investment vehicle by putting 100K in a CD and collecting interest each month. The downside is locking up 100K of cash. Early withdrawal is a steep 365 days of interest for the 7-year CD. I can put the whole 100K in a 3-year CD (Scenario #2), which would give me more liquidity but if interest rates come down in the future, I would lose the high inerest rate opportunity. The third option (Scenario #3) is a CD ladder and would give me better liquidity. Still, locking up 100K for at least 3 years without seeing any income from that investment is a tough decision. That brings me back to the idea of receiving a monthly check for interest and locking in the CD for the longest term, the 7-year CD.

Locking in 100K in a 7-year 6.25% APY CD and compounding interest would yield the highest interest, but that would made the 100K inaccessible for a long period of time and I can't afford that. There's always good investment opportunities out there and I don't want to be caught with money tied up. Also, I'm looking forward to buying an investment property in the near future, so I may need to tap into the money. What do you think is the best option for me?

Happy New Year

2007-01-01T01:00:00.000-05:00

Happy New Year to all!

Interview with Kas

2006-12-29T15:51:00.000-05:00

I was talking to my coworker, Kas a few days ago and she told me she made $18,000 in the past two months. I asked her what she was doing. She said that she had this side business in addition to her day job. I learned that she was selling Christmas ornaments in the mall. It was her friend's business, but because she had been working with her friend for a while, her friend trusted her with the merchandise and gave her 20% profit-sharing. If her share was $18K net, imagine what her friend's was. According to my calculations, her friend made $72,000 in two months.

The business was selling Christmas ornaments at a small area in a mall. They rented one of those cart spaces. The rent was $25,000 a month, it was a special deal because Kas' friend knows the owner. They hire a few helpers on an hourly base. They sold Christmas ornaments with personalized name labels on them. It was a perfect time because everyone was shopping for Christmas ornaments, and the lines were very long.

I believe they made a gross profit of 100K+ in two months. The ornaments are from a distribution in Hawaii. I was told that you would need connections to get to the supplier. Kas' friend has connections to the supplier and the mall. She rents the mall spot for only two months and has the spot reserved for her every year. Kas' friend has been doing it for years, and she will continue to do it indefinitely. It's a no-brainer. Kas' friend owns many business, including gas stations.

I was really impressed that Kas made $18,000 in two months. She did say it was hard work, it was very busy during the holiday season. But I think it paid off well. She seems to be very good at making money. She told me it's easy for her to make money. If you're willing to do some work, you can make money easily. I'm going to talk to her again and see what ideas she has in mind.

Be Careful on Giving Unsolicited Advice

2006-12-28T17:55:00.000-05:00

I love reading up on financial news and learning more about personal finance. And I like helping people as well. Sometimes, I give advice to my family and friends. Although they would listen for the most part, they almost never act on what I tell them to do. It's interesting that despite my honest advice to help them, they would push away everything I say. They would always have some kind of doubt or excuse. Recently my friend is running low on money. He's a real estate agent and he hasn't closed any deals lately. Since I know a few extra bucks would help him, I told him about signing up for credit cards or bank accounts with cash bonus. Or he can play the 0% balance transfer. He thinks it's too much hassle.

I have spoken to several friends in the past two years about contributing to retirement accounts, such as 401k and IRA accounts. They give me the usual answer, "I have no money." I tell them the importance of saving up for retirement. Moreover, I provide them with important financial messages - pay off debt, have emergency money, save up for retirement, invest, etc. They don't seem interested and don't listen. Yet they like to complain about not having money.

Sometimes I feel that they don't want financial advice -- they want MONEY. What they want me to do is not to teach them how to make money, but to hand them cash. Everybody wants to be a millionaire but nobody wants to work for it anymore. It's all about get rich quick.

They tell me they don't have time, and it's not worth making a few extra hundred bucks. If you have a lot of money, I would understand, but if you need money and have the opportunity to do it, why not?

It's hard to teach family as well. They don't seem interested in learning. I tell them to start ROTH IRAs because it really helps if you have low income, the government even give you tax benefits if you qualify. But they say they rather have the money now.

While I'm no certified professional, I know my advice can help my friends and family. They just don't see it. Perhaps they need to learn their own way. I just thought maybe I can give them a shortcut, but sometimes people need to learn the hard way.

I figure I'll save my energy on going out of my way to help people. People just don't appreciate. Instead, I'll focus on those who wants my help. It's a lose-lose situation if they don't appreciate your advice. Because if they miss the opportunity, they would blame you. If they execute your advice improperly and the results come out bad, they would blame you. The moral of the story is never give unsolicited advice.

New Year's Resolution

2006-12-27T10:35:00.000-05:00

My Plans for 2007: Move GrowingMoney blog to my own domain. This will give me more flexibility in the web design and I will also have my own web space to host files (photos, PDFs, etc.). Feel free to provide help for those with your own domain. Contribute to my SEP-IRA. I have open a SEP-IRA with Fidelity and I will make a contribute in the beginning of the year after my accoutant decides what the amount should be. Reallocate 401k Funds. I plan to shift more towards large-cap growth funds. Qualify for IPO trading.

Year-end Coming

2006-12-26T01:12:00.000-05:00

As the end of this year is approaching, what are your new plans for the new year?

Merry Christmas

2006-12-25T10:10:00.000-05:00

Merry Christmas to all.

Word of the Day: Options

2006-12-19T16:08:00.000-05:00

Options A contract giving an investor a right to buy (call) or sell (put) a fixed amount of shares (usually 100 shares) of a given stock (or indexes and commodities) at a specified price within a limited time period (usually three, six, or nine months). The purchaser hopes that the stock's price will go up (if he bought a call) or down (if he bought a put) by an amount sufficient to provide a profit when he sells the option. Source: www.environmentalinvestors.com

SAI Is a BUY

2006-12-14T21:00:00.000-05:00

SAI has been dropping for a few days and closed at 17.96 today. At under $18, it's a screaming buy, and at under $19, it's a good buy. Upside SAIC Report 8% Increase in Profits SAIC Stock buyback up to 40 million shares Still new to the market, large potential increase in institutional holdings. Low P/E. A good defense/homeland security play. Winning lots of new contracts from government. Downside Options expiring soon (shares selling off). $1.6 billion dividend to insiders. Low guidance. SAI looks like it's going to hit rough waves in the near future, but after smoothing all those problems, it should sail smoothly higher in the long term. Its price is currently at a two-month low and seems to have support at high 17's. At under $18, it would make a very good long term position.

Heelys IPO

2006-12-07T21:22:00.000-05:00

I spent 30 minutes watching the roadmap of Heelys and did some research on the company. My summary: Good short term play because of the hype, but its long term prospect is questionable because the wheel-in-a-shoe may become a fad. Heelys IPO gets rolling Heelys looks to stay on a roll with IPO Cramer's 'Mad Money' Recap: Heelys Worth a Roll "Looking at the comps, Cramer said Heelys should be worth $26 a share eventually and it could even go to the mid-$30s. The bottom line: buy Heelys in the low $20s and sell it as soon as it crosses the $30 line."

Status Update

2006-12-07T21:03:00.000-05:00

I have been very busy lately with work and personal stuff but I am still very active in the stock market. I have made many short term trades but just haven't had the time to post. I hope to do a post about my stock performance later on this month. I'm considering a tablet laptop where I can do some scrap work to depict my investment plans and strategies. I would like some feedbacks on tablet PCs. I know Neville uses a tablet PC, and it looks useful. Another thing I had been wanting to do is move my blog to my own domain, because I want to be able to configure everything and host files, but I thought the move and maintanence would be time-consuming so I didn't do it. Future Posts Philly House Lease Renewal and Rent Increase Annual Stock Performance Review Student Loan Wipeout 2007 Financial Plans My "Safe" Short Trading Strategy

Bye-bye Student Loans

2006-11-22T11:30:00.000-05:00

I have about $3,200 in my student loan balance and about $112,000 in my mortgage loan balance. My student loan interest rate is at 3.875% and my mortgage loan rate is at 5.75%. I have $5K cash that I can use to repay my loans. It seems to make more sense to use the extra money to pay off my mortgage loan first. But I've decided with the help of my accountant to just pay off my student loans totally. That way, at least I clear out one debt account. According to my accountant, it would not be much of a tax savings for me even if I put the money in the mortgage loan.

I went online and sent a payment online to my student loan provider for the payoff amount (which is different from the balance). Now I am finally freed of my student loans.

SAIC Is Soaring

2006-10-31T00:06:00.000-05:00

SAIC went public a few weeks ago, and I purchsed the stock at $18. Last week the stock jumped to almost $20. I sold a majority of my holding at $19.50. I made $1.50 per share, which is about 8.33%. Not too shabby for a two-week investment. My gains allowed me to buy a new digi-camera, the SD700 IS. Today, SAI broke the $21 mark before dropping back to $20.33 for the close. I'm still thinking if I should short-term trade it. Over the long run, I believe SAI is a good investment.

Business Money Market with Checking

2006-10-31T00:02:00.000-05:00

I'm looking for an all-in-one account for my business, where it has high-yielding money-market rate and allows a few check writing with free ACH withdrawals. I currently have a HSBC Free Business Checking account, but it earns no interest. With interest rates so high these days, I'm losing out on quite some money. I would like some input from self-employed people out there, as well hearing suggestions for taking advantage of tax savings for me.

Opened a 6% 13-Month CD

2006-10-30T23:58:00.000-05:00

I opened a 6% 13-month CD with Washington Mutual on 8/31/06. It seems to be one of the highest yielding CDs out there, even 'til today.

Q&A: What To Do With 20K Bonus?

2006-10-30T23:55:00.000-05:00

A question from "What to do with 1K, 5K, or 10K of savings and in your twenties?" Anonymous asked: So i've got 20k from a recent bonus, and won't need to touch it for about 10 months. After that I might use it for a down payment on an apartment. My money is currently sitting in a 5% savings account, but thinking about putting some of it in an higher yielding closed end bond fund. Any other suggestions for increasing my yield while not risking too much of my principal? Smarty said: If you could tolerate some risk, you may consider putting them in low-beta high-yielding dividend stocks. Do some research, you should be able to find a few companies that are expected to do well over the next 10 months. Otherwise, hunt for the highest yielding CDs. I recently opened a 6.00% 13-month CD with WaMu.

Blogger Update

2006-10-30T23:39:00.000-05:00

I haven't updated much recently because I've been busy with work and closely monitoring the stock market. I have done a lot of short-term trading lately, and I've been making some nice profits. I still hold some long-term investments, but I want to spice up my portfolio so I mixed it with some short term trades. I'll try to post some updates on my trading, but it's time-consuming. I hope I haven't lost too many readers. I'd like people to post their trades and investment strategies as well. I've also created a private investment group. If you would like to join, just put "Growing Money" in the comments and I'll sign you in. Initially, I created a Google group, but because I had a few complaints, I switched over to Yahoo group. Here's the Yahoo group link: http://finance.groups.yahoo.com/group/StockPickersElite/

Is Sony (SNE) a buy?

2006-10-23T22:43:00.000-04:00

I read an article in BusinessWeek on Sony. Sony is banking most of its money on its Blu-Ray technology. Their main competitor is Toshiba's HD-DVD. Blu-Ray can hold 25GB on a single layer and 50GB on a dual-layer disc. Music and film industries are pushing for Blu-Ray technology, because Blu-Ray DVDs have larger storage capacity and will enforce copyright laws to prevent privacy. Blu-Ray DVD technology players will only play original Blu-Ray DVDs. With all the backings by major companies, it looks like Sony will win the war on high-def DVD standard format. Also, the Sony PS3 will come with a Blu-Ray player but the XBox has not incorporate such technology yet. It looks like they will also recapture a large percentage of the gaming industry. Now, the question is, "Is Sony a buy?" The stock closed at 40.35 today. Looking at the fundmentals, it's good in some areas and not good in others. The forward P/E of 19.78 looks attractive, while the PEG ratio of 1.52 suggests that its earnings is not growing fast enough over it's P/E. The margins are very low. The debt level is very unappetizing to me. However, the next year growth rate is at 104%. That certainly looks like it would change things if it meets 2008's expected earnings. Also, if Sony wins the high-def DVD war, it will be bring a lot of attention to the company and investors' interest. Trailing P/E (ttm, intraday): 31.52 Forward P/E (fye 31-Mar-08) 1: 19.78 PEG Ratio (5 yr expected): 1.52 Profit Margin (ttm): 2.13% Operating Margin (ttm): 4.66% Total Debt (mrq): 9.55B Next Year Growth: 104.0%

Is Yahoo a Buy?

2006-10-18T22:53:00.000-04:00

Yahoo is hitting not just a 52 week low, but a 104 week low. http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=m&q=l&c= The fundamental looks great at this point. Profit Margin (ttm): 21.11% Return on Equity (ttm): 15.40% Revenue (ttm): 5.97B Revenue Per Share (ttm): 4.233 Total Cash (mrq): 2.69B Total Cash Per Share (mrq): 1.947 % Held by Insiders: 10.25% The insides have a 10% stake in the company, which is a very large size for a company this huge. Looking at the chart, Yahoo has been dropping for some time. The biggest question is, "Has Yahoo's stock bottom out yet?"

SAIC Goes Public

2006-10-16T14:57:00.000-04:00

My company went public recently and started trading in the secondary market on Friday, October 13. I purchased shares at $18. The IPO was for $15, but was traded up to $17 in the primary market. The stock opened at $17 in the market on Friday morning and closed at $18.18. SAIC provides scientific, engineering and technical services to the U.S. military and government agencies. Science Applications International Jumps 20% On Debut SAIC: A Company Built to Last

TD Ameritrade's Terrible Customer Service

2006-10-12T23:56:00.000-04:00

I am interested in purchasing an IPO and I went to sign up for the IPO service with TD Ameritrade. There are many pages detailing the risk involved. I went through all of them and was prompted by three questions. Basically the questions asked to prove that I'm not a restricted person holding a beneficial interest.

You hereby certify that: Yes No This account is eligible to purchase new issues because no restricted person (which includes an account that meets a general exemption and, by definition, is not a restricted person) holds a beneficial interest in the account. Yes No You are a conduit (such as a bank, foreign bank, broker/dealer, or investment adviser) and all purchases of new issues are, and will be, in compliance with the Rule. Yes No This account is a restricted person and is not eligible to purchase new issues.

I picked 'yes' for the first question and 'no' for the other two. It seems right to me.

Error: Thank you for your interest in IPOs through TD AMERITRADE. Based on the information received from your IPO Registration Form, you are currently not approved for IPO trading. We apologize for the inconvenience. For further assistance, please call our Electronic Brokerage Customer Service Department at 1-800-934-4448.

But then it gave me an error message. I called the number stated in the message, waited about 15 minutes and finally someone answered me. I told the Customer Service Representative that I was trying to sign up for IPO but I received an error message. At first, he try to direct me away by telling me that I should be talking to Technical Support. Then I told him it was an error message saying I was denied of IPO service. He was terribly rude. He had a rough tone (as if someone gave him a hard time today) and he did not try to be accomodating. He just told me that if that's what the system says, that's what it means and there's nothing he can do about it. I told him I want to know "why" I was denied. All he says is, "It's a hit or miss." I told him that I should qualify for it. Then, he tells me, "it's all based on the web." And if I think the web made a mistake I should talk to technical support. Why would I talk to technical support for this? The CSR was not helpful at all. I called because I wanted to know why I wasn't approved for IPO service. He not only repeated what the web says, but tried to direct me to another department that would only direct me back to his department. I'm highly disappointed with TD Ameritrade's Customer Service.

I don't think I asked him an unreasonable question. Shouldn't a customer know why he's denied for something? Was it because I didn't have enough money or experience? Their requirement for IPO service asks for a minimum of $50,000 in the account and I have exceeded that requirement by a huge margin. And I chose the maximum years of experience on their list. Do they not want to keep a customer happy? I could move all that money away from their account.

Additionally, I went back to the IPO service sign up page and chose different combinations for the questionaire form. I was still denied.

TD Ameritrade's Customer Service Rating: F

How to Buy Low and Sell High

2006-09-21T11:27:00.000-04:00

How to Buy Low and Sell High By Chuck Saletta September 9, 2006 We all invest for the same reason: to make money. And to make money in investing, we need to know two key things: when to buy and when to sell. If you can buy something for $1 and turn around and sell it for $2, then you've made money. If, on the other hand, you buy something for a buck and can't find someone willing to take it off your hands for more than $0.50, you've lost money. Clearly, to make money at investing, the goal is to buy low and sell high. More than half a century ago, Benjamin Graham, the pioneer of value investing, came up with a simple way to do just that -- a concept known as the "margin of safety." By deploying this technique, investors greatly decrease the chance that they'll lose their hats and increase the likelihood that they'll trounce other investors. Following in Graham's footsteps, Bill Miller, who runs Legg Mason Value Trust (FUND: LMVTX), has beaten the market for 15 consecutive years -- something that is practically unheard of in the mutual fund industry. And Miller's long-run performance pales in comparison with that of Warren Buffett, a former pupil of Graham's and current head of Berkshire Hathaway. What's more, Graham's margin of safety is something we put to good use here at the Motley Fool Inside Value investing service. Know a company's true worthThe key to success is a clear understanding of a company's true worth. With that knowledge in hand, buying low and selling high becomes a simple matter of waiting to buy a stock only when it falls below the company's true worth by a tempting margin. Once you own it, you need to keep tracking the company's value. When the stock rises to an uncomfortably high premium to its true worth, sell it. The central lesson: All buying and selling decisions should be guided by comparing a company's stock price with its true worth, not by some vague notion of what the hot stock of the moment is. Philip has beaten the market without help from the likes of Internet search titan Google (Nasdaq: GOOG) and its outrageous return since its initial public offering in 2004. Instead, Philip has relied on stalwarts such as Lloyds TSB (NYSE: LYG), a leading British bank with a better than 6% dividend yield. Philip recommended Lloyds when it traded for $31.79, but he figured it was worth more. Sure, Lloyds hasn't rocketed skyward like Google has, but it has beaten the market by approximately 16 percentage points since being picked. Plus, Lloyds' investors can sleep soundly at night, knowing that at current valuations, they get paid back nearly as much in dividends per dollar invested as Google takes in as revenues per dollar invested. Buying low with the margin of safetyEvery company has what Graham calls an "intrinsic value," a measure of what a company is really worth. Finding that value is part art and part analysis. One of the most powerful tools in a value investor's toolkit is a discounted cash flow calculator, into which you put your estimate of how much cash the company will generate in the ensuing years. The calculator then tells you how much the company is worth today. Inside Value has just such a calculator available to subscribers. If you're already a subscriber, you have access to it. If not, you can by taking a free 30-day trial to the newsletter. Then you can play with the calculator to your heart's content. Once you've figured out what the company is worth, you can use that information to determine whether it has enough of Graham's margin of safety to be worth buying. For example, in August 2004, I told Inside Value subscribers on a members-only message board that homebuilder Lennar (NYSE: LEN)(NYSE: LENb) looked undervalued. Its class A shares traded at the time at $42.77. That same stock recently traded hands at $42.75 and has handed its owners about $1.19 in dividends in the interim. That may not seem like a tremendous return, but it does show the protective power you get when you buy a stock that is objectively cheap. After all, right now, we're in the midst of a panic sale of homebuilder stocks during a cooling housing market. Lennar itself even warned just yesterday that it'd miss its earnings for the quarter. Even so, investors who bought when the stock looked cheap in 2004 have still made money! It's a great illustration of how you can put into practice Warren Buffett's famous Rule No. 1: "Never Lose Money." Selling high with the margin of safetyLogically, if a company trading below its intrinsic value is worth buying, then a company trading at or above its intrinsic value just might be a candidate for selling. For instance, back in March of this year, I calculated that telecom equipment provider Lucent Technologies (NYSE: LU) appeared to be overpriced. Consolidation among its wireless customers diminished the need for so much overlapping equipment. At the same time, its wireline services seemed to be shifting to digital solutions that rivals provided. In all, there looked to be little chance for further recovery. Without continued improvement, I no longer wanted to hold my shares. Using what is known as a covered call strategy, I offered to let someone else buy my shares for a total of $3.10 each. Thanks to the surprise announcement that Alcatel (NYSE: ALA) would be buying out Lucent, Lucent's shares briefly jumped high enough to make it worth it for that someone to take me up on my offer. As a result, I cashed in $3.10 each for shares that recently traded hands at $2.25, some 27% lower. Following the formulaOnce you've figured out what a company is really worth, its margin of safety will tell you when it's time to buy and when it's time to sell. The lower a company's price with respect to that intrinsic value, the stronger the margin of safety, and the better the chance that buying that company will lead to a profitable investment. The higher a company's price with respect to that intrinsic value, the more that margin of safety has been reversed, and the better the chance that it's time to sell your position and take the extra profits from your bargain-hunting trip.

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The above is an article from Fool.com.

Click Commerce (CKCM) is being acquired by Illinois Tool Works

2006-09-08T10:08:00.000-04:00

Illinois Tool Works Buying Click Commerce ITW is paying CKCM shareholders $22.75 per share in cash. I'm currently a shareholder and planning to hold my shares until the payout. Unfortunately, my average cost per share is a little higher than $22.75, but at least I recoup most of my money.

Quote of the Day

2006-09-05T11:49:00.000-04:00

Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you'd better bind yourself to a style you can live with. - Ralph Wanger

Slow and Steady Wins the Race

2006-08-28T18:23:00.000-04:00

Everyone wants to get rich over night. It's human nature to be greedy, and that's why get-rich-quick-schemes are always making money. The idea of making tons of money over a short period of time is so appealing that it can corrupt a person's logic. Get-rich-quick schemes get the most out of people by taking advantage of people's psychological weakness -- impatience. However, if get-rich-quick-schemes work for everyone, then nobody will be poor. Think about it. Here's an article I think everyone should read. There's really nothing exciting about saving up a dollar a day, but over the course of a lifetime and with the power of compounded interest/smart investment, the daily savings can amount to a sizable amount. A Lottery You Always Win

6-percent CDs: Lock them up

2006-08-22T13:23:00.000-04:00

Here's a great article on locking in on high yielding CDs: http://biz.yahoo.com/brn/060811/19585.html

Quote of the Day

2006-08-21T10:15:00.000-04:00

The definition of a great company is one that will be great for 25or 30 years. - Warren Buffett

Ameritrade vs TD Waterhouse

2006-08-17T12:23:00.000-04:00

Ameritrade and TD Waterhouse merged, but they still maintain the same interfaces from before. I have access to both interfaces and I don't like the TD Waterhouse interface. I find it slow and hard to read. Every time I click on a link, for example, cost basis, it takes a while for the numbers to load up, whereas in Ameritrade, the numbers come up instantly. If anyone has to choose which interface to see their account, I would suggest the Ameritrade version. If you would like to sign up for an Ameritrade, send me an email and I'll send you a referral, or leave a comment with your name and email.

Quote of the Day

2006-08-16T11:30:00.000-04:00

If the job has been correctly done when a common stock is purchased, the time to sell it is -- almost never. - Philip A. Fisher --------------------- My goal is to find a growing company with excellent management.

The Secret to Wealth Creation

2006-08-15T21:00:00.000-04:00

Here's a good article from Fool.com about creating wealth. The answer may not be what you would like to hear but has been tested and proven over time. Yes, it does take a lot of careful planning and patience. You can see that I don't like to talk about get-quick rich schemes, because it doesn't work. Slow and steady wins the race. I plan to use this blog to show people how I create my wealth over time.

Ameritrade Izone

2006-08-14T09:00:00.000-04:00

I have my Ameritrade Izone account for a while and I love it. Trades are only $5 each. Ameritrade has decent research tools. If you want to open an Ameritrade account, please send me an email and I'll refer you.

Internet Stocks

2006-08-11T10:00:00.000-04:00

I just received my latest issue of Smart Money, and there's an article on Internet stocks. We all know Internet stocks can make or break your portfolio performance, but Smart Money picks three high potential Internet stocks that shall beat the market. Here are the three picks. Adobe Systems (ADBE) Price $28.01 (as of 7/14/06) P/E: 23 Market Value: 16.2B Akamai Tech (AKAM) Price $32.54 (as of 7/14/06) P/E: 44 Market Value: 5.0B InterActiveCorp (IACI) Price $24.38 (as of 7/14/06) P/E: 17 Market Value: 7.7B I'm not very familiar with the latter two stocks, but I think Adobe is a good bet. Their software is becoming a mainstream tool.

Watching People Spend Money

2006-08-08T09:00:00.000-04:00

When I hang out with people, I can't help but take notice of how they spend their money. One time, I went to a Yankee's store with my friend, who's a big Yankee's fan. She blew almost 100 bucks on Yankee items. I would certainly not do that, but since she's a Yankee's fan, she felt it was worth it. Another time, I was in an eye-glasses store with my coworker and she dropped 600 dollars on three pairs of brand-name sunglasses. She bought two pairs for herself and one pair for her husband (to justify the spending, I guess). It's very interesting watching how people spend money. Sometimes you will be surprised. People may be frugal and stingy on some things but could dump half of their savings on something else you don't feel it's right. But, I was not there to judge, because it's their hard-earned money, so they have every right to spend it the way they want. Ultimately, we all want to make money to make oursevles live better, and sometimes that can mean blowing a lot of money on the things we like. Some people even spend money for pleasure. That's why they say you can tell a lot about a person based on how he/she spends money.

Comparing Customer Service: HSBC vs. Bank Of America

2006-08-07T09:00:00.000-04:00

Two months ago, I had to close my bank account with Bank of America and it took me more than two hours. I spent much of the time waiting. I had to speak to three different representatives before I could get the word to withdraw my money. Then the bank teller still needs authorization and I had to wait again until the manager confirms it ok. I went around in circles many times. Also, the lines in Bank of America are very long and move very slowly (at least in my branch).

My experience with HSBC has been the complete opposite. When I went to deposit checks in HSBC, I had little waiting time and the bank tellers were very friendly. Sometimes I forget to fill out a deposit slip and they would do it for me. I don't need to wait long to speak to someone, and they have a lot of managers around.

I know the Bank of America (BAC) stock has been doing well, but I hesistate to make a long term investment knowing how terrible their customer service is. Instead, I want to invest in HSBC's stock (HBC) for long term. Recently, HSBC release an article reporting 15% increase in profit for the first half of 2006.

HSBC Business Checking

2006-08-04T11:11:00.000-04:00

I opened a business checking account with HSBC to keep my buiness accounts seperate from my personal ones. I signed up in a branch for a promotion for free business checking. The sign up process took about an hour, but it was fairly easy. I just had to bring in some documents for my company and fill out a few forms. I have to say, my experience with HSBC has been excellent. Their service is superb. (Let me leave that to another post) I received my check book about two weeks later. I also signed up for online business banking. They sent me a security device that generates a different numeric code based on real time sequence and I need that to log in along with my password. The reason for the added security is because you can do more with the business account, such was wiring money out.

Grand Idea

2006-08-03T20:34:00.000-04:00

I just thought of a very great idea. I was thinking of setting up a networking event for all the financial bloggers. This gives everyone a chance to meet and discuss ideas. It's possible some may get together for business or a big project. I haven't thought of the details yet. Since I live in NYC, I'd like to host the event in NYC, but it will be expensive to host an event. To make it more realistic, we can do something like this. First, we'll run a pilot version. I or we (feel free to help out) will host a small event in NYC at some budget place for the first time and if it works, we'll make it bigger the second time. I haven't figure out how the cost part works. I imagine we'll all chip in for the event. Or, we can find sponsors like investors and companies and turn this into a huge marketing/networking event/opportunity. Companies may be looking for knowledgable people, but at the same time, we financial bloggers get a chance to discuss ideas. Thought: If I have a mansion, I can host the event there and invite all the financial bloggers. Feel free to give your suggestions.

Advanta Business Credit Card

2006-08-03T09:50:00.000-04:00

I have applied for an Advanta Business Credit Card for my business. This way , I can keep my business expenses seperate from my personal ones. This card offers one of the best cash back rewards. It pays 5% Cash Back on gasoline, office supplies, utilities, computer equipment, cell phones and Internet services, and 1% on all other purchases. The card categorizes all my expenses for me and I can download all the transactions to MS Money or to a spreadsheet for tax purposes.

Quote of the Day

2006-08-02T10:47:00.000-04:00

Every young man should have a hobby; learning how to handle money is the best one. - Jack Hurley Indeed, my hobby is to grow money.

Walk to Work

2006-07-31T22:07:00.000-04:00

Since I live pretty close to where I work, I decided to walk to work instead of taking public transportation. It takes me about 20 minutes to walk to work, but I think it's a good exercise. I work in the office and I sit for long hours, so walking for 20 minutes twice a day helps keep my blood circulating. On top of that, I save myself $4 a day from transportation fares. My primary reason was for the exercise. I did it a few times and liked it, so I walk at least three out of the five workdays.

Dividend Stocks

2006-07-31T15:54:00.000-04:00

I'm starting to like dividend stocks more, because they pay a nice stream of income and their prices are more steady. This bad market makes me realize dividend-paying stocks are very important. I'm still holding PFE, and I enjoy receiving dividends from them when my portfolio was down. Other good dividend-paying stocks include Altria Group (MO), Bank of America (BAC), Citigroup (C), and U.S. Bancorp (USB).

CKCM

2006-07-31T15:47:00.000-04:00

CKCM dropped from 17.00 to below 14.50 on Friday. Since CKCM was one of my major holdings, my portfolio took a big hit. I thought it hit rock bottom on Friday, so I daytraded five hundred shares and profited off the rebound. Today the price dropped a little. I bought five hundred shares again in the 14's, and plan to sell it at 15.

Trade with Low Commissions and Still Get Free Streamer

2006-07-28T23:52:00.000-04:00

I have an Ameritrade iZone account where they charge me only $5 a trade, however there is no streamer provided. Instead, I use the streamer from Scottrade. Normally, you would need to keep the minimum there ($500) to keep the account alive, but I found out that they don't close your account after you withdraw all your money. I withdrawn all my money from Scottrade but I am still able to access the account. Now, I have a free streamer and can continue to trade on iZone for some of the lowest fees in the market. What a great deal.

Bought Dyson Vacuum

2006-07-28T23:35:00.000-04:00

I have wall-to-wall carpets in my apartment and I have been looking for a good vacuum for the longest time. I want a vacuum that is easy to use and does a great job. I had a few vacuums but they were cumbersome to move around and they did a lousy job. I saw Dyson on commericals and read many online user reviews. According to the reviews, many say Dyson really does work. One of the reviewers called Dyson, "the Mercedes-Benz of vacuums." That is interesting, and I ike the idea of no suction power lost from obstructions. So I finally settled for the Dyson DC 14 All Floors Upright Bagless Vacuum, and to save a little bit of money, I bought the factory-reconditioned version. I received the Dyson this week and I tested it out yesterday. I can tell you that it really does what it says it gonna do. After one session, the dirt chamber was almost filled up. My carpet has not been that clean for a long time. Surprisingly, it was not that hard to use at all. I rolled it around with relative easy and it made me feel good after vacuuming. I would recommend it, because I feel the Dyson gives me an incentive to use it, as opposed to my previous vacuums. My carpet collects a lot of dust, and the Dyson picks up a lof of them, and I can feel the difference after one vacuum session. For $289.99, I say, it's well worth the money.

MS Money - Transactions for Email Delievery

2006-07-27T13:29:00.000-04:00

I use MS Money religiously and it has been a great way of keeping track of my dozens of accounts. One of my favor features is the online update feature on MS Money to download transactions from credit cards and brokerage accounts. This gives me a central place to view all my financial transactions and monitor my investment accounts. However I find all my banking institutions don't allow MS Money to automatically download transcations. Instead I have to log into the bank account and download the transactions manually. I understand it's a security issue and it would be okay for me if I had to only do downloads for one or two accounts, but now I have several accounts that I would have to do downloads manually. I think it would be nice if those financial institution offer a workaround feature. Perhaps they could offer an option to allow those transactions to be sent to an email address every day or other chosen time intervals. That way, I can download all the transcations from multiple institutions in one place and import them to MS Money. It would save me so much time.

Disappointing Market Peformance

2006-07-13T16:14:00.000-04:00

The market has been performing poorly this past several month. My portfolio is down a great chunk. It would have been better if those money were sitting in a high-yield savings account. I'm thinking of going more towards cash if the market continues to decline. What's your view on the market's performance over the next five months?

Company Registration

2006-07-03T23:45:00.000-04:00

I have my own LLC now. I paid $449 for legal fees to register the company. The most expensive part is the general liabilty and professional liability insurance. The total premium for both coverage is $1350. General Liability Coverage Amount - $1,000,000 General Liability per Occurrence $2,000,000 General Liability Annual Aggregate $1,000,000 Personal & Advertising Injury per Occurrence $2,000,000 Products Completed Operations Aggregate $300,000 Fire Damage Legal $10,000 Medical Professional Liability Coverage Amount - $1,000,000 Per Occurrence $1,000,000 Annual Aggregate I also signed up for a business bank account and business credit card. This will allow me to keep track of all my business income and expenses.

MSFT = Good Investment

2006-06-03T21:39:00.000-04:00

MSFT's stock has been crushed lately. At Friday's closed of 22.76, it's one of the lowest prices MSFT has seen in years. It looks like a good long term investment from here. If you have some money to invest and don't need to cash it out any time soon, MSFT would be a good buy at this point, and it being a blue chip, it also comes with very low risk.

Frugal Tip for Saved Pennies

2006-06-02T18:29:00.000-04:00

Some of you may have a lot of pennies or loose change saved up in a jar. The best use for them is to buy one-cent stamps since the stamp rate has gone up. Last week, I went to the post office and used my pennies to buy 12 one-cent stamps. It was a great way to get rid of the change and get something useful at the same time. (Rating 5 out of 5 stars!!) Another idea is to pay taxes for items that cost 99 cents or a dollar. That'll take away seven to eight pennies. (Rating: 4 out of 5 stars)

Business Checking Account

2006-05-31T08:27:00.000-04:00

I need to open a Business Checking Account. There are someone free ones: Wachovia, HSBC, Chase, and Bank of America. Does anyone has experience with these banks and which ones are good? I want a popular bank so I can have easy access.

Company Registration

2006-05-26T08:31:00.000-04:00

I just got news my company has been registered and I'm waiting for the package to be delivered to me. I have been so busy working at my new job I haven't had much chance to update. I'm a consultant now and working on some big projects. It's a good career move to get some exposure to business consulting. At least financially, it pays more than my last job.

Creating a Company

2006-04-24T16:46:00.000-04:00

I'm looking to create a company for my consultant job. I'm looking towards a sole proprietor if I don't liability protection. I need to find out more details before I can make a decision. Does anyone freelance here? Is it much better for tax deduction purposes?

New Job

2006-04-21T15:52:00.000-04:00

I have accepted a new job offer and will be leaving my current company where I have worked for more than six years, including internship. The new position will be Business Analyst working as a consultant. They're paying me almost 60% more money. I'm so excited about the new salary but at the same time prepping for the amount of work I will be given. I'll be working with clients and designing/implementing systems for them. We'll see how everything goes. I'm going to start on May 15th and have given leave notice to my current employer. I will take a short break before my new job. I'm still thinking of a nice place to go.

Sudden Money Is Tough For Advisors

2006-04-13T15:39:00.000-04:00

Getting rich quick can be such a burden. You’d think people who suddenly come by a windfall would be a gold mine for financial advisors, but they are often a headache. Advisors say these clients many times display erratic behavior, low follow-through, and are usually flooded with advice from friends and family. But it’s a key area for advisors to be thinking about. For one thing, windfalls are becoming more commonplace, generated by events like the sale of a business, inheritance, divorce, insurance settlements, retirement, and of course, winning the lottery. Brokerages refer to the group as the “emerging affluent” - people with between $500,000 and $10 million in investable assets. It’s a group that is sitting on about $14 trillion in assets, according to some estimates, but one that is so diverse that financial advisory firms are struggling to formulate a strategy. “Windfalls can be disorienting for people no matter what their walk of life,” says Susan Bradley, the founder of the Sudden Money Institute, a resource center for recipients of new money and their advisors in Palm Beach Gardens, Fla. Bradley, who considers herself unflappable with money matters, has drawn on that trait when dealing with clients who’ve become suddenly rich. Like the day an accountant told her about a client who had deposited $47 million into a moneymarket savings account, a low-interest account designed mainly for day-to-day use. This wasn’t a lottery winner frozen in the financial headlights, but an experienced businessman who had sold his firm. Source: Scottrade News

Introduction To Investing Basics

2006-04-10T14:04:00.000-04:00

Introduction To Investing Basics

NVDA Skyrocketing

2006-04-04T11:21:00.000-04:00

NVDA has been climbing up since I purchased it on March 22 at $48.50. I sold my shares on March 28 at $54.32 and made a decent 12% return. Since my sale, the stock has not stop climbing. It's currently at $59.30 and continues to trend strong. Look at the most recent 5 days.

Getting Things Done

2006-04-04T10:19:00.000-04:00

I ordered a new book from Amazon, Getting Things Done : The Art of Stress-Free Productivity. I received the book this weekend and have just started reading. This book is #1 on the top ten books in BusinessWeek. It should be informative and useful. I'll let you know as I go through the book. Another book I really like and have read from the top ten books in BusinessWeek is Blink.

Study Says Women Are More Realistic Investors

2006-03-28T10:35:00.000-05:00

Article from DowJones When it comes to investing, men and women hold to traditional stereotypes, according to a recent study. Male investors are more confident, while women are more realistic and risk averse, according to the 2006 ShareBuilder Women & Investing Survey, which polled 965 women and 1,066 men over the age of 18. The study, surveyed clients of ShareBuilder, an online brokerage geared for self-directed investors, had a margin of error of plus or minus three percentage points. Young men, not surprisingly, are the most assured investors: About 33% of men under 35 are very confident they will meet their investment objectives versus 18% of women. However, about 50% of women under 35 are “somewhat confident” they’ll meet their objectives, versus 45% of men, says ShareBuilder, of Bellevue, Wash., where 60% of new accounts are opened by investors under 35. “Women are more realistic about the progress they are making,” says Jeff Seely, ShareBuilder’s chairman and chief executive. “They are clearly more concerned about saving for the future. Men investors are a little more self-assured, but not necessarily with good reason.”

NVDA

2006-03-27T11:34:00.000-05:00

I recently bought some shares of NVDA last week after it tumbled on last Wednesday at $48.50. Since then the stock has been heading upwards. It's now at $52.80, or an unrealzed gain of about 8.8%. NVDA is a great company. It has strong fundamentals - $5.5 cash per share, no debt, 20% 5-year growth rate, and a foward P/E of 20. Nvidia makes great graphics cards, the new nForce4 SLI series are the fastest in the market. The 5-day chart looks strong and there's a lot of potential in this stock. The stock just broke 52-week high today and reached 53.07.

Quote of the Day

2006-03-17T08:52:00.000-05:00

A man who gives his children habits of industry provides for them better than by giving them a fortune. - Richard Whately

Blogger Maintenance

2006-03-16T12:07:00.000-05:00

Blogger is down for maintenance. There seems to be a lot of down times recently. Maybe it's time to switch to my own hosting.

RSS for my Site

2006-03-15T11:31:00.000-05:00

How many of you use RSS Readers? My feed URL is: http://feeds.feedburner.com/GrowingMoney There's this other tool called FeedBlitz. I wonder if it's useful. Would you prefer to receive updates via RSS or emails?

Note Taking (2)

2006-03-15T10:57:00.000-05:00

OQO Model 01+ I was thinking of a handy and digital way to jot down notes and I saw the OQO Model 01+ on a PC magazine. This thing is about the size of a PDA but has the power of a small notebook computer. The 01 model aslo comes in a tablet PC version as well. That's convenient for scribbling ideas and thoughts on the bus or subway. But the price is very steep, the tablet version costs $2100. Specs from the website:

The OQO model 01+ ultra personal computer (uPC) is a fully-featured Windows XP computer. The OQO has a 1GHz processor, a 30GB hard drive, 512MB of RAM, a color transflective display, and integrated wireless, as well as FireWire and USB ports. Just 4.9 inches long, 3.4 inches wide, 0.9 inches thin, and weighing only 14 ounces, the model 01+ can fit in a pocket or purse and go with you anywhere. For easy typing and cursor control it has a complete thumb keyboard with TrackStik and mouse buttons as well as digital pen and thumbwheel.

Does anyone own or has any experience with this ultra portable computer?

Link Swaps

2006-03-15T09:48:00.000-05:00

I notice there are a lot new PF blogs lately. If I don't have your link or vice versa, let's do an update. Just post a comment and let me know.

Question to Financial Bloggers

2006-03-14T14:20:00.000-05:00

Does your friends know about your blog?

Stocks Are Good Long-Term Investments

2006-03-14T13:52:00.000-05:00

Stocks: The Asset of Choice for the Long Run

Web Hosting

2006-03-14T11:42:00.000-05:00

I'm thinking of getting a new domain and server to host my blog. I'm currently on Blogger. Everything is pretty much set up for me. I know some of you financial bloggers host on your own domains. I wonder how many of you do that, and what are the expenses for web hosting? What hosting packages did you get? Where do you get your templates and how do you set up your blog. Also, how much do you make in ads? Is it enough to cover the hosting expenses?

The Top Part-Time Business Schools

2006-03-14T10:05:00.000-05:00

I was reading The Top Part-Time Business Schools article in the Forbes magazines and I was considering the MBA program. The only problem would be that I have to pay everything out of pockets. I thought of the expenses and they're just too high. The 5 year part-time MBA program in my school of choice, NYU (Stern) is $166,000. That's a lot of money. I ran some numbers on the Business School Calculator and the payback period comes out fives years and the 5-year MBA gain as a % of expenses. That doesn't look very appealing at this point.

Note Taking

2006-03-12T16:00:00.000-05:00

I always have a lot of thoughts when I'm out on the streets or on the bus or train, but I usually don't have paper or pen near me. I keep my thoughts in the back of my mind, but I tend to forget them after I get to my computer. Now, I try to carry a pen on me, but even that is not efficient enough. There should be a mind recorder that can record all my thoughts. Wouldn't that be cool? How do you keep tabs of your thoughts?

Need to Time Manage

2006-03-11T15:38:00.000-05:00

Spring is coming. Today is sunny and the streets were packed with people. People were coming from all directions and every corner was loaded with humans. I haven't seen that many people on the streets for a long time. It reminded me of how busy NYC can get. Then I started to think of all the things I need to do. I usually put them in the back of my mind, but I really have to start taking notes. I have to find a way to organize all the notes and thoughts in my head and form a list that can I update and reference at all times. Time management is very important. There are always tons of things that need to be done, but I need to plan ahead and set priorities. How do you manage your time and stay organized?

Positive Employment Results from DOL for Feb

2006-03-10T09:03:00.000-05:00

Employers Boost Payrolls by 243,000 in February The job data report looks very nice. This is a bullish sign for the market and the stocks should be doing well for today.

401(k) Is An Account

2006-03-08T21:27:00.000-05:00

After speaking to several people about their retirement savings, I've realized that some people still don't understand what 401(k) is. 401(k) is a defined contribution plan in which the employee can elect a portion of his or her pay check on a pre-tax basis towards his or her retirement savings. The name 401(k) is derived from the section the plan falls under the Internal Revenue Code. Many people confused 401(k) as an investment and often say that his/her 401k is doing well. Some people ask me what are the returns for a 401(k). First, I give them the confused look. Then, I explain it to them. 401(k) is a tax-sheltered account (as well as an IRA), and in that account, you can designate the investment(s) of your choice (usually mutual funds available by your provider). So, the returns for your 401(k) depend on which funds you pick to invest inside the tax-sheltered account. In layman's terms, a 401(k) is a shell, and it is what you pick inside the shell that grows. For example, I have a 401(k) with my employer. Inside my 401(k) account, I have two mutual funds -- the S&P 500 index fund and a bonds fund. So when my funds do well, I say, "My 401(k) funds (or my 401(k) portfolio) have returned 10% over the past two months." I hope this gives you a better understanding of what 401(k) is, and next time when someone tells you his/her 401(k) is doing great, you can point out to him/her, "It's the funds in your 401(k) account that are doing well."

The Turtle Wins The Race

2006-03-08T17:28:00.000-05:00

Everyone wants to get rich quick, because it's easy and everyone likes shortcuts. But in reality, how many legitimate get-rich-instantly stories are there? Maybe once in a while someone hits the jackpot in lottery. Or someone receives a generous inheritance from a distance uncle whom he didn't know existed. Or someone discovers a pile of gold in his backyard. So, there are a few stories like these, but chances are... that person in the story is not you. In real life, getting rich or attaining a sizeable amount for retirement is a slow and dedicated process. The book, The Millionaire Next Door shows that most of the rich folks attained their wealth by saving up over decades. You must constantly remind yourself, the turtle is the one who's going to win the race. Saving up and investing wisely is a huge part of working towards financial independence. And you want to protect your base. It's better to have your wealth grow slowly and steadily than have it grow fast and disappear.

Seagate Launched Perpendicular Recording Technology Hard Drives

2006-03-08T09:22:00.000-05:00

http://www.efytimes.com/fullnews.asp?edid=10585 An excerpt:

“Seagate is helping system builders meet growing demand for notebook PCs with desktop capabilities by delivering 2.5-inch disc drives that provide some of the industry’s highest levels of power efficiency, ruggedness, performance and capacity,” said Rajesh Khurana, country manager, Seagate India and SAARC. “Our transition to perpendicular technology increases our ability to meet the needs of our growing customer base.”

Quote of the Day

2006-03-08T09:11:00.000-05:00

The surest way to establish your credit is to work yourself into the position of not needing any. - Maurice Switzer

Tough Day for Storage Sector

2006-03-07T15:49:00.000-05:00

It’s a tough day for the storage sector. Seagate (STX), Western Digital (WDC), and Maxtor (MXO) all were down in anticipation of a price war. Seagate is down 5.7%, Western Digital is down 7.9%, and Maxtor is down 5.9% as of writing of this post. According to the article, It's a Hard Day for Hard-Drive Makers, it looks like Seagate is in a good fighting position and Western Digital is on the edge. Seagate is efficient in their productions and with the completion of the merger, they’ll be able to expand their market exposure.

Looking at one-day graph of Seagate, it looks like STX has bottomed out from the news and money is pouring back in. The hard drive sector definitely has a lot of room for growth and buying Seagate (STX) is a great way to capture some of the returns.

Hard Drive Sector Down

2006-03-07T13:57:00.000-05:00

Seagate's (STX) price dropped to the mid 25's. Seagate is not alone, the whole hard drive sector is down as a whole after a downgrade in Western Digital. It looks like Western Digital is cutting off margins because of higher component costs but Seagate will not be affected. Seagate has the most advanced technology in the hard drive industry, however, Seagate may be hurt by the integration of Maxtor.

Still, over the long-term prospect, I think Seagate will do very well, and the stock price shall reflect that. This short-term price drop makes it a great opportunity to buy. I loaded up at $26.

Protect Your Base - with high-yielding savings accounts

2006-03-06T09:48:00.000-05:00

In reponse to protect your base, here are some guaranteed investments. They are savings accounts that are high-yielding and liquid. EmigrantDirect 4.25% GMAC 4.60% Virtual Bank eMoney Market 4.60% IngDirect 4.75% HSBC Bank 4.80% Surprisingly, EmigrantDirect is the lowest of the bunch. HSBS has become really competitive these days.

Getting Rich - The Solid Way

2006-03-04T21:35:00.000-05:00

I spoke to my boss, who was an investment banker for many years, and asked him, “What is the fastest way to get rich?” He answered “Pay yourself first.” It’s a historical and proven method that is written in many books and websites. Paying yourself first means setting aside a portion of your paycheck and save it up. He also said, “Protect your base.” Protect the principal investment. You want to protect yourself from losing the principal; losing your principal makes it more difficult to catch up. So, you must guard your base. After you generate enough interest from your principal you could use that extra money to take more risk. If you lose the principal, you would not be able to take much risk. Therefore, protecting your base is crucial. Once you have guarded your base you’ll be on your way to getting rich.

Found a Tax Accountant

2006-03-03T23:29:00.000-05:00

I usually file my own taxes because it's pretty simple. I just take my W-2 and 1099-INTs and entered them in tax software and submit my 1040 electronically. However, in 2005, I purchased an investment property and I believe it's better to have a professional handle my tax return this year. I've been asking around for a referral to a good tax account that can not just help me file but one that can also answer questions and help me plan out taxes for the year. I got a referral from one of my friends who told me about his accountant. His accountant seems to handle his tax return very well so I contacted his accountant. I got a quote for $250. I thought it was a little high even for my kind of tax return. It may be an investment property but it's relatively easy. But my friend said he's worth the price, so I'm planning to go with his accountant. How much do you pay to file your taxes? If any of you have an accountant that you want to refer in the NYC area, please let me know soon.

401k Portfolio Update and Re-Allocation

2006-03-01T22:57:00.000-05:00

I have only three funds in the account: a S&P500 Index fund, an Utilities fund, and an Emerging Markets fund. My returns for year to date is 8.6%, and for the past twelve months is 27%. Those numbers are pretty impressive. Zooming in to the one-month performance, the emerging markets and utilities fund returns is negative. Both of the funds has had a stellar 12-month run. The utilities fund had a 18% return and the emerging market fund had a whopping 41% return. I'm afraid this year, both of the funds may slow down or even turn around. To protect my profits, I'm going to reallocate my portfolio. After going through a list of funds and their fund facts I've found two new funds I like. They are the Fidelity Advisor High Income Advantage and the T. Rowe Price Growth Stock Fund. I like the story of the T. Rowe Price Growth Stock Fund and I'm going to move all of my S&P 500 Index fund money to it. The Growth fund long term track record is better than the S&P 500's. Also, I'm betting that the large cap growth companies are going to do well in the near future. The Fidelity Advisor High Income Advantage is a very nice bonds fund and should be a good protection against down markets. This how my 401k portfolio will look: Current Allocation Emerging Markets 53% Utilities 38% S&P 500 9% New Allocation Emerging Markets 35% Utilities 35% Growth 21% High Yield Bonds 9%

Cisco and Seagate

2006-03-01T15:36:00.000-05:00

The market is doing well today. It looks like spending is back up according to Yahoo News, Consumer Spending Gives Economy a Lift.

Cisco (CSCO) is having a great day. It's at $21 as I'm writing this. It has paid well for those shareholders who have been patient. Sometimes it takes time for a company to be discovered by big institutions or time to recover from a crisis.

Apparently, Seagate (STX) is also having a great day. It's up 70 cents to $27.27. Seagate is getting much more notice now and they should. They are the top hard drive manufacturer and have great storage technology. Their new perpendicular drive technology is being covered in PC magazines and will receive more attention. The stock price is highly underpriced at a P/E of 12.8. There should be plenty of room for stock growth.

Sleep Early

2006-02-27T11:29:00.000-05:00

I usually don't get enough sleep and I can definitely see the downfall in that. When I hear that alarm in the morning, I just want to silence it and fall back in bed. The lack of sleep gets to me at work. There are times of the day when I just want to put my head down and doze off.

One of the reasons why I don't get enough sleep is that I sleep very late. I'm one of those that never want the day to end and believe that I can squeeze in more work by postponing my sleep. That is dangerous thinking. Of course, it's not true that the day extends when I stay wake at night.

So, what I should do is, break down my goals to small tasks. Complete each task in a day, plan ahead for the next day, and get some rest. Then I can wake up the next morning rejuvenated and tackle my next task. By accomplishing small steps one at a time, I can travel great distances.

Update

2006-02-26T22:46:00.000-05:00

I have been very busy lately so I haven't gotten much of a chance to update. I'm still working two jobs, but I'm going to quit one, the part-time financial job. I just don't have the time for it anymore. Things has been really busy at my full-time job and the company is expanding, which means more work for me at the same paid. I'm still following the market and so far the stocks I've been watching closely are doing pretty well. PFE is back in the 26 zone. STX came back up on Friday. And Cisco is holding up pretty well in the upper 19's. There seems to be many concerns in the markets right now and that's why it's ever so volatile - interest rates, oil, unemployment, etc. Energy stocks are a defensive play these days. Pick a few good ones and hold them for the long term. Or go with a mutal fund or an ETF if you're more comfortable betting on the whole sector instead of one or two companies. Aside from rising energy costs, oversea companies are benefiting from super-fast developments. Latin America funds have been seeing stellar returns. It may still be a good time to get into the action but allocate a limited amount of your portfolio for the emerging markets, 'cause when the fun is over, I know you'll wish you had that undo button. =) Play smart.

Cheap Is Relative

2006-02-16T18:42:00.000-05:00

My friend asked me to tell him which is a good stock to buy for the long term. One of the companies I had in mind was Johnson & Johnson (JNJ). My friend said the stock price was too expensive, and asked for a cheaper suggestion. Too expensive?? I asked, "What about JDSU?" And he thought that JDSU is cheaper. But that's dangerous thinking. What is cheap? Cheap is relative. Would you pay $10 for an ordinary pencil and say it's cheap? I'm sure you can still buy a lot of them. If you could buy the latest 42-inch LCD wall-mountable display for $500, would you say it's expensive? I think comparing different companies and their stock prices is like comparing apples and oranges. You may be paying under $3 a share for JDSU but you're paying for a company that is losing money!! The forward P/E is 59, which means you're paying 59 times as much for each buck the company earns. For JNJ, you're paying $59 a share, or less than 15 times the forward P/E. In addition, JNJ pays out a dividend of $1.32 a share, or a yield of 2.30%. It is clear that JNJ is cheap, considering what you're getting in return. It is true that you can double your investments with JDSU, much like you can buy the $10 pencil and flip it for $20, but it is not without risk. You can make money as long as there are dumber people than you. As long as there's a buyer willing to pay for it, you can flip the pencil up to as high $160. (In 1999, shell companies with no operations were trading for hundreds of dollars a share.) However, the efficient market theory states that the pencil will return to its true value over time, which is probably $1.50. This reminds you a lot about the crash of 2000, doesn't it? I don't know about you, but if I were to invest for the long term, I would rather have my savings in a solid and stable company like JNJ yielding 2.30% a year plus the upside of capital appreciation. The company has $15 billion in cash, or about $5 a share and has profit margins of 20%. (Forbes sees JNJ as attractively priced.) It's not hard to see how cheap JNJ is; you're getting a great bargain here. I can leave my money in JNJ and sleep well at night, while you would worry about JDSU's price volatility and wake up early every morning to make sure your money is still there. Next time when you see a stock for under $3, look at the valuations of the company and see if it is worth it. Remember, cheap is relative to what you're getting in return.

Seagate Update

2006-02-14T23:08:00.000-05:00

Seagate Technology (STX) rallied on Monday and close on 25.96. Today, the stock rose higher on the news, Seagate, Maxtor U.S. antitrust review time expires. The stock pulled back a little towards the end of the day and closed at 26.04 (after hours trading closed the stock at 26.00). I think the past two days action is a good indicator the stock will continue going to do well. I'm very bullish on this company. Let's recap the positives: Seagate is the leader in the hard drive industry Current P/E12.35 (very low compared to tech sector) Forward P/E 11.52 Expected Growth of 12.5% per year for the next 5 years 12.5% Profit Margin 8.54B in Revenue 1.75B cash on hand $3.6 cash per share Low debt Pays Dividend (Not many tech companies pay dividends) Vertical Storage Technology - allows HD size over 100 gigabits per square inch, eventually 1-TeraByte HD on a single 3-inch disc Hard drive demand growing due to popularity of mp3 players, cameras and pda devices I created a position of 500 shares at 25.00 last week. Today's closed of 26.04 gives me an unrealized profit of $1.04 a share. I think there is a lot of upside to this stock, and even the one-year target of $30 is an understimated value. The demand for harddrives is increasing as more people are using digital recorders and high mega-pixel cameras. Also, the fact that we are becoming a more data-driven society makes backing up data on harddrives more cruical. The increase demand in harddrives is imminent and Seagate, being the leader in hard drive technogloy, will be your best bet to capture some of this market exposure. I think Seagate is a high-growth investment that will surely pay off in the long term.

Visual Basic

2006-02-11T15:45:00.000-05:00

Does anyone know Visual Basic well, particularly for MS Excel? I need some help. Please email me at growingmoney (at) gmail.com.

What A Day For The Market

2006-02-08T17:37:00.000-05:00

PFE 26.37 up 1.43 (5.73%) STX 24.89 up 0.54 (2.22%) CSCO 19.40 up 1.31 (7.24%) XXIA 12.81 up 0.81 (6.75%) All are great companies and are worth looking into.

Stocks and Real Estate

2006-02-02T12:50:00.000-05:00

I recently found another great financial blog about real estate and the stock market, Smart Capitalist Investment Blog by Tyler. I've communicated with him several times over email and he seems to have a great site going. I'd like to post an article from him.

For more insight into real estate and stock markets, please visit his blog: Smart Capitalist Investment Blog.

--------------------------------------------------------------------------------------------- Many people that read this blog have probably thought about the differences between stocks and real estate, and where they should put their money. There are many factors that go into determining the different avenues of investing, and I think that if done well, both will be profitable. Since they will both be profitable you will probably want to distribute your cash between real estate, stock, and savings. What makes real estate a good investment? Leverage. You can use someone else’s money to build your wealth from both amortization and positive cash flows. Not only that, but your tenants are the ones that absorb interest from the loan. There is also the possibility to create capital by simple improvements. Another big advantage of real estate is that a lot of the times you make money or income on a monthly basis from your property. What makes stock a good investment? Liquidity. If you do not want the liability of owning a piece of income property, then stocks are a good alternative. With a stock, you can have your money out by the end of the week if you decide you need it for another investment or something. Just like real estate, there are many additional benefits. Now real estate and stocks are just two investment mediums, and there are many to be looking at. Things to keep in mind when looking at investments such as real estate, stocks, and others is how much money it will put in your pocket every month, and how much capital appreciation you expect in 5, 10, 15, and 30 years. After you start to figure this out, you can start to balance various investments in your portfolio.

Links

2006-02-01T14:24:00.000-05:00

Growing Money http://growingmoney.blogspot.com Growing money through investments, savings, money management, and business ideas. http://feeds.feedburner.com/GrowingMoney Smart Capitalist Investment Blog http://www.smartcapitalist.com/ Discussion of mostly investment and real estate topics that come up. A place where I put my ideas on what could drive the market and ways to tie it into your own analysis. feed://www.smartcapitalist.com/syndicate/index.xml Ask Uncle Bill askunclebill.typepad.com "Clueless, totally clueless." My daughter's description of her friends knowledge of finance, credit cards, debt, careers, investments--the financial world in general. "Write a book, Dad." So I wrote a book proposal, got an agent (New York, no less) and realized that college students and people just starting out don't have any money to buy books AND they get all their information off the internet. Forget the book. So here is the site for money questions and how to get rich. If you don't see what you need just ASK UNCLE BILL. Rich Twin, Poor Twin http://www.richtwinpoortwin.com/ Rich Twin, Poor Twin. This website is dedicated to motivating and providing information on how to reach your goals - to be rich mentally, physically, emotionally, and spiritually. http://richtwinpoortwin.com/blog/feed/ FIRE... by 2018 http://fire2018.blogspot.com/ my quest to become financially independent / retired early by 2018, when i turn 41. Money And Investing http://www.MoneyAndInvesting.net I want to share with you my views on how to accumulate networth, and everything related to making, saving, spending, and investing money. I provide no guarantees regarding the advice and finantial instruments suggested on this website. I take no responsibility for the results they may provide. You are responsible for researching any finantial instruments or advice I suggest on this website. http://feeds.feedburner.com/MoneyAndInvesting If you would like to add you link here, please email me your information.

Seagate and Hard Drive Sector

2006-01-27T01:19:00.000-05:00

Check out Seagate's (STX) 3-month graph. It's so nice and beautiful, similar to Apple's last year. STX up 57 cents today, and went up another 40 cents after-markets. Look at Maxtor's (MXO) 3-month graph. Two months ago it was sub-$4. Today, it's up 250%. But the biggest surprise is Western Digital (WDC). They're up 85 cents today and another $1.86 after-markets. They beat earnings by 9 cents -- meaning they did 24% better than the expected 38 cents. Two months ago I said the hard drive industry is going to make a major come-back soon and Seagate is a good bet. Looking at the graph, $30 looks like the next stop. I'm going to accept $20 is gone and have to buy at these prices before these prices go away too. Here are some notes based on my research. Seagate (STX) Forward P/E 12 (very low compared to tech sector) Expected Growth: 12.5% per year for the next 5 years 12.5% Profit Margin 8.54B in Revenue 1.75B cash on hand $3.6 cash per share Low debt Pays Dividend (Not many tech companies pay dividends) Top Brand Recognition Vertical Storage Technology - allows HD size over 100 gigabits per square inch, eventually 1-TeraByte HD on a single 3-inch disc Super high demand in the storage sector now as shown in STX, MXO and WDC in this past month.

Blue Chips for Cheap

2006-01-24T16:21:00.000-05:00

Intel 21.28 BMY 21.33 BAC 44.24 C 46.01 IBM 80.85 YHOO 34.87 *Price as of closing on 1/24/2006

Links Exchange

2006-01-20T23:32:00.000-05:00

Please fill in your info so I can post up your links. *Required Fields Blog/Website Name: Blog/Website URL: Blog/Website Author: Blog/Website Email: Blog/Website RSS Feed: Blog/Website Category: (Investment, Credit/Debt, Money Management, Savings, etc.) Brief Summary of Blog/Website: -Personal Fields (optional, but try to provide as much as possible) Real Name: Age: Location: Education: Occupation: Income Level: Net Worth: Link Reciprocal: Yes/No (Do you have my blog linked? This is useful for my future network check/analysis.) The Required Fields will be published on this blog, but the Personal Fields will not be posted and strictly confidential unless otherwise instructed. You may fill in the information by leaving a comment (but all your Personal Fields will be public) or you may email me at GrowingMoney (at) gmail.com (if you don't want to show your personal information). Please add my blog to your links (don't delay). Let me start off the database with my information. Blog/Website Name: Growing Money Blog/Website URL: http://growingmoney.blogspot.com Blog/Website Author: Smarty Blog/Website Email: GrowingMoney (at) gmail.com Blog/Website Category: Investment (also savings, money management, and business ideas) Blog/Website RSS Feed: http://feeds.feedburner.com/GrowingMoney Brief Summary of Blog/Website: Growing money through investments, savings, money management, and business ideas. Real Name: (private) Age: 25 Location: NY Education: Bachelor's Degree, majored in Computer Science Occupation: Tech Analyst Income Level: 45K Net Worth: Negative Link Reciprocal: Yes (Of course)