I've been saying, for some time now, that it's a buyer's market as far as stocks are concerned. Courageous investors who are not afraid to ride out the turmoil in the current market can pick up fantastic bargains on U.S. stocks. I've been diverting as much cash as possible into stocks while the prices are down. Recently we've had a few run ups in prices, as investors question where the market is headed. Since it is impossible to know when the market will make a substantial recovery, the most prudent course of action would be to buy at, or near the bottom and wait it out. We may not have seen the bottom to date, however, it's my guess that we're getting pretty close. I can't help but recall the economic downturn of the late 80's, when the housing market was down, people were losing their homes, the savings and loans were collapsing from bad mortgages, the U.S. dollar was beaten down and there were advertisements running everywhere telling people to put their money in to gold, even though it was at an all time high. All these things occurred near the bottom of the stock market. We are seeing the exact same things going on now. When will the market turn? Your guess is as good as mine. All I really know is that we are presented with one of those really great opportunities to pick up stocks on the cheap and position ourselves to make a pile of money when the recovery does come. I personally invest for income and growth. I look for companies that pay good dividends and have the earnings to support those payouts, but also have prospects for growth. They are out there, you just have to look for them.
If you don't want to take my word for it, see what millionaire investor and best selling author Robert Kiyosaki has to say about stocks in his RichDad blog article entitled: Wednesday, April 30, 2008
When the Squeeze Is On, Bargains Abound
If I'd had any questions about my current investment plan, they were all put to rest when I read this article. Like I said in my last post, don't be afraid to admit that some people are just smarter than you are. Listen to what they have to say and figure out how you can use that to your advantage.
Wednesday, April 30, 2008
Monday, April 28, 2008
Don't Be Afraid of Listening to People Who Are Smarter Than You.
"Dependent people need others to get what they want. Independent people can get what they want through their own efforts. Interdependent people combine their own efforts with the efforts of others to achieve their greatest success." - Stephen Covey
Even though I haven't had the benefit of an extensive secular education, I still consider myself as pretty intelligent. However, one thing I have learned is, there is always someone smarter. When it comes to investing, no matter how much I learn, I know there are people who are more in the know than I am. A very important part of intelligent investing is to take advantage of advice from people who are smarter than you.
I recently came across this blog by Michael E. Brisky:
http://briskycapital.blogspot.com/
I didn't have to read too many postings before realizing this guy knows way more about investing than I do. So you better believe I'm going to be keeping up with his postings. While I might not take advantage of every piece of advice he gives, I think this guy definitely knows what he's talking about. Thanks Michael, keep up the good work!
Even though I haven't had the benefit of an extensive secular education, I still consider myself as pretty intelligent. However, one thing I have learned is, there is always someone smarter. When it comes to investing, no matter how much I learn, I know there are people who are more in the know than I am. A very important part of intelligent investing is to take advantage of advice from people who are smarter than you.
I recently came across this blog by Michael E. Brisky:
http://briskycapital.blogspot.com/
I didn't have to read too many postings before realizing this guy knows way more about investing than I do. So you better believe I'm going to be keeping up with his postings. While I might not take advantage of every piece of advice he gives, I think this guy definitely knows what he's talking about. Thanks Michael, keep up the good work!
Sunday, April 27, 2008
Motivational Reading
Everyone needs a little extra motivation from time to time. I recently discovered this fantastic blog site containing motivational quotes. I think my favorite one I've read so far is:
"The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success." - Brian Tracy
I think this accurately describes my life right now. Delaying some of my wants in the short term to enjoy more in the long run. If you'd like to check out this site, the web address is:
http://aus-everest.blogspot.com/2008_04_01_archive.html
"The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success." - Brian Tracy
I think this accurately describes my life right now. Delaying some of my wants in the short term to enjoy more in the long run. If you'd like to check out this site, the web address is:
http://aus-everest.blogspot.com/2008_04_01_archive.html
Saturday, April 26, 2008
The Commodities Bubble
There seems to be a lot of people in the news media questioning whether or not there is a bubble in the commodities market and whether we're facing a collapse in the record high prices of late. From what I'm seeing I believe that the commodities market is headed for a major collapse. With inflation in gasoline prices and the troubled housing market, consumers are cutting back on spending. Retailers are already complaining that the high food and gasoline prices have cut store sales as shoppers are left with less discretionary income. Since the high demand for oil and metals are basically driven by developing countries, whose economies are driven by consumer spending to purchase their products, when shoppers cut back on buying their products, how long will their demand for commodities continue. Eventually they will have to cut back on their consumption when there is decreasing demand for their products. If you factor in the commodities traders who are artificially inflating the prices of oil and precious metals by bidding up prices in an attempt to hedge against losses in the stock market, when demand drops and the prices start to slip, these people are going to flee the commodities market and prices will collapse.
Once again, it's just basic economics. Supply and demand, when the demand decreases, the prices will fall. I believe we are very near or even at the point when the commodities bubble will burst. I also believe that investors in commodities futures will lose a fortune. As far as I'm concerned, it is much wiser to invest in stock in well run companies, who have steady earnings and pay dividends. CNBC, just this morning, was talking about the casino atmosphere in the trading of commodities futures and they were discussing possible government regulation to help minimize the affect of trading on the price of oil. If the government steps in to regulate futures trading, then it's a sure bet the prices are going to be affected. When will commodities prices start to collapse? Your guess is as good as mine, but I'd be willing to bet it will be very soon.
Once again, it's just basic economics. Supply and demand, when the demand decreases, the prices will fall. I believe we are very near or even at the point when the commodities bubble will burst. I also believe that investors in commodities futures will lose a fortune. As far as I'm concerned, it is much wiser to invest in stock in well run companies, who have steady earnings and pay dividends. CNBC, just this morning, was talking about the casino atmosphere in the trading of commodities futures and they were discussing possible government regulation to help minimize the affect of trading on the price of oil. If the government steps in to regulate futures trading, then it's a sure bet the prices are going to be affected. When will commodities prices start to collapse? Your guess is as good as mine, but I'd be willing to bet it will be very soon.
Friday, April 25, 2008
Recommended Reading
I recently discovered this blog through comments posted to my blog, you might want to check it out:
http://cashquest.blogspot.com/
http://cashquest.blogspot.com/
Thursday, April 24, 2008
A Time For Intelligence and Self Reliance
"Everyone thinks of changing the world, but no one thinks of changing himself." - Leo Tolstoy
Starting next week, taxpayers will begin receiving refunds from the government's economic stimulus program. As I stated in an earlier posting, I'm all for the government returning money to taxpayers, however I think it's important that we keep in mind that these handouts simply cannot continue. The cold hard facts are that the government is running out of money and it's time for every responsible person to start using their heads and become more self sufficient. Our civil and religious leaders can only do so much. We all need to start taking more action on our own behalf. If you haven't educated yourself on money management and investments, now is the time to do so. I recall reading an article over 10 years ago on this very subject. One thing that really stood out to me from this article was when they said, "the rich will continue to get richer and the poor, poorer." At the time I remember thinking to myself, I need to find out how to become rich. While I had already done a lot of studying on finance and investments, I renewed my commitment to educate myself and stop waiting for handouts or "my lucky day." To quote from one of my favorite books, The Richest Man In Babylon, "good luck favors men of action." So if you haven't started working towards financial independence, take action now. Educate yourself in business and investing and you will be in position to benefit from tough times ahead by being able to see the opportunities. The opportunities will be there and there will be people making money through the turbulent times, just make sure you're one of them.
Billions and billions of dollars have been thrown in to solving this nations problems and we haven't made much progress. Money does not solve problems, intelligence solves problems. We, as a nation, have dug ourselves in to a hole and it's time we stop digging. It's time for all of us to step back and take a second look at the way we do things in our own lives. Are we using all of our hard earned money wisely? Have we planned for our own futures, taking in to account that social security, government health care, private sector pensions may not exist? The world is undergoing rapid change. Now is not the time to be asleep at the wheel. John F. Kennedy once said, "Ask not what your country can do for you, but what you can do for your country." Imagine how much better off we would all be if everyone were taught from an early age to work towards financial independence. It is easy to get out of debt and build income producing assets to care for ourselves now and for years to come. We simply have to decide to do it, set some goals, make a plan and follow through.
Starting next week, taxpayers will begin receiving refunds from the government's economic stimulus program. As I stated in an earlier posting, I'm all for the government returning money to taxpayers, however I think it's important that we keep in mind that these handouts simply cannot continue. The cold hard facts are that the government is running out of money and it's time for every responsible person to start using their heads and become more self sufficient. Our civil and religious leaders can only do so much. We all need to start taking more action on our own behalf. If you haven't educated yourself on money management and investments, now is the time to do so. I recall reading an article over 10 years ago on this very subject. One thing that really stood out to me from this article was when they said, "the rich will continue to get richer and the poor, poorer." At the time I remember thinking to myself, I need to find out how to become rich. While I had already done a lot of studying on finance and investments, I renewed my commitment to educate myself and stop waiting for handouts or "my lucky day." To quote from one of my favorite books, The Richest Man In Babylon, "good luck favors men of action." So if you haven't started working towards financial independence, take action now. Educate yourself in business and investing and you will be in position to benefit from tough times ahead by being able to see the opportunities. The opportunities will be there and there will be people making money through the turbulent times, just make sure you're one of them.
Billions and billions of dollars have been thrown in to solving this nations problems and we haven't made much progress. Money does not solve problems, intelligence solves problems. We, as a nation, have dug ourselves in to a hole and it's time we stop digging. It's time for all of us to step back and take a second look at the way we do things in our own lives. Are we using all of our hard earned money wisely? Have we planned for our own futures, taking in to account that social security, government health care, private sector pensions may not exist? The world is undergoing rapid change. Now is not the time to be asleep at the wheel. John F. Kennedy once said, "Ask not what your country can do for you, but what you can do for your country." Imagine how much better off we would all be if everyone were taught from an early age to work towards financial independence. It is easy to get out of debt and build income producing assets to care for ourselves now and for years to come. We simply have to decide to do it, set some goals, make a plan and follow through.
"A slave is one who waits for someone to come and free him." - Ezra Pound
The Rich Dad Blog
I am excited that one of my favorite authors has started a blog! The author of one of the best books I've ever read on making money, Rich Dad, Poor Dad, now shares his current views on our economic situation and continues to educate people on making money.
If you want to check it out, you can find the RichDad blog at:
http://richdadblog.blogspot.com/
Definitely recommended reading!
If you want to check it out, you can find the RichDad blog at:
http://richdadblog.blogspot.com/
Definitely recommended reading!
Wednesday, April 23, 2008
The Blue Collar Investor: The High Price of Oil
I first wrote about the high price oil back on January 4th of this year in
The Blue Collar Investor: The High Price of Oil
When I wrote about what was driving the market, I discussed commodities traders as being behind a lot of the rise in prices. If you found this article interesting, you might like to read the article on CNBC.com
http://www.cnbc.com/id/24032497
It too, talks about the price of oil being bid up as investors have fled to commodities as a hedge against inflation. Frankly, I believe that they are in for a big let down. Once again, it's supply and demand and the market will find a price where the demand will begin to drop. I think we are near that price. We'll have to wait and see.
The Blue Collar Investor: The High Price of Oil
When I wrote about what was driving the market, I discussed commodities traders as being behind a lot of the rise in prices. If you found this article interesting, you might like to read the article on CNBC.com
http://www.cnbc.com/id/24032497
It too, talks about the price of oil being bid up as investors have fled to commodities as a hedge against inflation. Frankly, I believe that they are in for a big let down. Once again, it's supply and demand and the market will find a price where the demand will begin to drop. I think we are near that price. We'll have to wait and see.
The Blue Collar Investor: Don't Be Totally Dependent on Your Job
Just in case my article on my new job leads the readers to think that I've forgotten that I wrote about not being totally dependent on your job,
The Blue Collar Investor: Don't Be Totally Dependent on Your Job
I wanted to add a few things. While I am enjoying my new job, I have also been very busy building my own small business part time. I am doing quite a lot of contract jobs on my own, mostly service type work. Since I started building my own business a few years back, I'm finding it easier to pick up extra work and add additional income to put towards building my asset column. All money I make outside my regular job goes toward building my investments in one way or another. So even though I'm very happy about the new job, I am still working towards my goal of not needing a job at all.
The Blue Collar Investor: Don't Be Totally Dependent on Your Job
I wanted to add a few things. While I am enjoying my new job, I have also been very busy building my own small business part time. I am doing quite a lot of contract jobs on my own, mostly service type work. Since I started building my own business a few years back, I'm finding it easier to pick up extra work and add additional income to put towards building my asset column. All money I make outside my regular job goes toward building my investments in one way or another. So even though I'm very happy about the new job, I am still working towards my goal of not needing a job at all.
Tuesday, April 22, 2008
The Blue Collar Investor: My Investment In AT&T
If you read my post on April 3rd of this year about my investment in AT&T
The Blue Collar Investor: My Investment In AT&T
you might find this article on CNBC.com of interest.
http://www.cnbc.com/id/24251334
It's nice to see that some of the stocks that I've chosen for my core holdings are doing well. Makes me feel like I'm on the right track. It seems, the more I learn about stock analysis, the easier it is to pick stocks with consistent earnings and ones that are able to support increasing dividend payouts.
The Blue Collar Investor: My Investment In AT&T
you might find this article on CNBC.com of interest.
http://www.cnbc.com/id/24251334
It's nice to see that some of the stocks that I've chosen for my core holdings are doing well. Makes me feel like I'm on the right track. It seems, the more I learn about stock analysis, the easier it is to pick stocks with consistent earnings and ones that are able to support increasing dividend payouts.
Sunday, April 20, 2008
My New Job!
One of my goals for 2008 was to get a new job. I'd been at my old job for almost 9 years and it was pretty much a go no where situation. I felt the need for a change and I realized that if I wanted to accomplish my goal of building personal wealth, I would have to move on. I'm happy to report that I have a new job!
I'm still working in the restaurant business, but I started as an assistant manager on the new job. I've been there for 3 weeks now and things are going great! I'm enjoying going to work again. I feel like I've got a lot more opportunity with this company than with my old job. The franchise owners are growth oriented, with plans for expansion to several locations throughout the state. The corporation itself has plans for expansion nationwide, so I feel like I'm on the ground floor with a lot of opportunities ahead of me. I can see this move as the start of something great as far as my professional life, but it will also benefit my plans for building residual income from my investment portfolio. What's really exciting about this situation is that I've done it once before with fantastic results. When I lived in Georgia, I went to work for a struggling restaurant operation as an assistant manager and helped turn the place around. We went from last place in sales in a franchise chain of 12 restaurants, to second place, only behind the training store. I was in a position then to take over as general manager, but decided to move back to Missouri before I was promoted. Now I'm basically in the same position. If things work out the way the owners want them to, our general manager will move on to open the next restaurant, being promoted to district manager and I will take over as general manager with a nice boost in pay! Only 3 weeks on the job, we've already boosted sales and are well on the way to a profitable operation. So I'm thinking that opportunity sometimes does knock twice. This time I intend to see it through.
As my income from the new job increases, the additional money will go straight in to my investment accounts. If everything works out, I would only need to work another 5 to 10 years and I would be free to retire. However, I'm enjoying the new job so much I could see working longer. The bottom line is that I've accomplished one more goal on my action plan for 2008. Just got to keep working the plan and reaching the goals, then I'll set new ones and go from there.
I'm still working in the restaurant business, but I started as an assistant manager on the new job. I've been there for 3 weeks now and things are going great! I'm enjoying going to work again. I feel like I've got a lot more opportunity with this company than with my old job. The franchise owners are growth oriented, with plans for expansion to several locations throughout the state. The corporation itself has plans for expansion nationwide, so I feel like I'm on the ground floor with a lot of opportunities ahead of me. I can see this move as the start of something great as far as my professional life, but it will also benefit my plans for building residual income from my investment portfolio. What's really exciting about this situation is that I've done it once before with fantastic results. When I lived in Georgia, I went to work for a struggling restaurant operation as an assistant manager and helped turn the place around. We went from last place in sales in a franchise chain of 12 restaurants, to second place, only behind the training store. I was in a position then to take over as general manager, but decided to move back to Missouri before I was promoted. Now I'm basically in the same position. If things work out the way the owners want them to, our general manager will move on to open the next restaurant, being promoted to district manager and I will take over as general manager with a nice boost in pay! Only 3 weeks on the job, we've already boosted sales and are well on the way to a profitable operation. So I'm thinking that opportunity sometimes does knock twice. This time I intend to see it through.
As my income from the new job increases, the additional money will go straight in to my investment accounts. If everything works out, I would only need to work another 5 to 10 years and I would be free to retire. However, I'm enjoying the new job so much I could see working longer. The bottom line is that I've accomplished one more goal on my action plan for 2008. Just got to keep working the plan and reaching the goals, then I'll set new ones and go from there.
Sunday, April 13, 2008
My Latest Stock Find, New Zealand Telecom!
New Zealand Telecom (NZT on the NYSE) provides a full range of telecommunications products and services in New Zealand including local, national, international and value-added telephone services, cellular and other mobile services, data and internet services, equipment sales and installation. They are also the third largest telecom in Australia. I came across NZT while running a stock screening for high dividend stocks on CNBC's website. Only 4 stocks met my search criteria, with NZT being the best of the four.
Their recent share price of $14.31 is well below the 52 week high of $22.07 and they currently have a price to earnings of 2.2 with a return on equity of 47.80%. Their price to book is only 1.77 and they currently have $3.18 per share in cash. The dividend per share is $1.05, which represents a 7.4% dividend yield. They have very little debt, so when you consider all these things together, their dividend should be quite sustainable with room for increases in the near future. The also retain sufficient earnings to provide for future expansion of business. So while I found this stock while searching for a dividend play, it also fits in well as a growth stock.
To fund my purchase of NZT I sold my shares in Sara Lee (SLE) and Merchants Bank of Vermont (MBVT). While I still consider both of those companies as good long term investments, I think investing in NZT will better fit my current investment goals as far as increasing dividend income and building my cash reserves in my money market account. I also feel that NZT has a much better chance of increasing share price, providing for future capital gains. I've already placed the order to buy NZT when the market opens Monday morning. I think they will make a wonderful addition to my portfolio.
Their recent share price of $14.31 is well below the 52 week high of $22.07 and they currently have a price to earnings of 2.2 with a return on equity of 47.80%. Their price to book is only 1.77 and they currently have $3.18 per share in cash. The dividend per share is $1.05, which represents a 7.4% dividend yield. They have very little debt, so when you consider all these things together, their dividend should be quite sustainable with room for increases in the near future. The also retain sufficient earnings to provide for future expansion of business. So while I found this stock while searching for a dividend play, it also fits in well as a growth stock.
To fund my purchase of NZT I sold my shares in Sara Lee (SLE) and Merchants Bank of Vermont (MBVT). While I still consider both of those companies as good long term investments, I think investing in NZT will better fit my current investment goals as far as increasing dividend income and building my cash reserves in my money market account. I also feel that NZT has a much better chance of increasing share price, providing for future capital gains. I've already placed the order to buy NZT when the market opens Monday morning. I think they will make a wonderful addition to my portfolio.
Thursday, April 3, 2008
My Investment In AT&T
I've held shares of AT&T stock in my portfolio off and on for the past 3 years. Early last year I sold all shares, which I had purchased when the price was down, at around a 25% profit. I had already gotten paid several quarters worth of dividends and got an additional cash and stock payout when my shares in the original AT&T were bought out by SBC communications. I thought SBC had the right idea to change their name to AT&T when the buyout was complete. After all, if you wanted a franchise type name and a name with some great history behind it, you couldn't ask for a much better than AT&T.
At any rate, I sold my shares out to take the profit on the increased stock price, figuring that I could buy back in on a price drop and make the company one of my core holdings. Sure enough the price did go down and I was able to buy back more shares than I owned originally. Barring any unforeseen occurrences I think the company will do well for several years to come. They currently pay $1.60 per share in dividends, which represents a 4.1% yield on their recent price of $38.72 per share. Their earnings per share of $1.94 should be more than adequate to maintain the dividend and fund operations. In addition the company has very little debt, a great management team and an exclusive contract with Apple for the iPhone, so I'm thinking things are looking pretty good for future profits. While the share price is down some from the 52 week high of $42.97, I've found that it has added some stability to my portfolio during the current drop in the overall stock market.
What makes this investment even more appealing for me personally is the fact that I have been a customer of AT&T for the past 2 years. All my personal phone service is through them and I've been extremely happy with their service. I got a great deal for my cell phone package over the Internet which included a free Motorola Razor V3. So every month when I go online to pay my bill I really don't mind so much, because I know I'm going to get some of that money back in the form of dividends each quarter. What could be better than that?
At any rate, I sold my shares out to take the profit on the increased stock price, figuring that I could buy back in on a price drop and make the company one of my core holdings. Sure enough the price did go down and I was able to buy back more shares than I owned originally. Barring any unforeseen occurrences I think the company will do well for several years to come. They currently pay $1.60 per share in dividends, which represents a 4.1% yield on their recent price of $38.72 per share. Their earnings per share of $1.94 should be more than adequate to maintain the dividend and fund operations. In addition the company has very little debt, a great management team and an exclusive contract with Apple for the iPhone, so I'm thinking things are looking pretty good for future profits. While the share price is down some from the 52 week high of $42.97, I've found that it has added some stability to my portfolio during the current drop in the overall stock market.
What makes this investment even more appealing for me personally is the fact that I have been a customer of AT&T for the past 2 years. All my personal phone service is through them and I've been extremely happy with their service. I got a great deal for my cell phone package over the Internet which included a free Motorola Razor V3. So every month when I go online to pay my bill I really don't mind so much, because I know I'm going to get some of that money back in the form of dividends each quarter. What could be better than that?
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