Friday, October 17, 2008

Now Is The Time to BUY!

As a follow up on my post for October 15th, Crisis or Opportunity of a Lifetime, I thought readers might like to check out the post on CNBC titled:

Warren Buffett: Why I'm Buying U. S. Stocks Now.

In the article, Mr. Buffett makes many of the same arguments I made in my article. I like the way he puts it when he says, "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors."

Read the entire article at:

It's always nice to know that someone who has done so well in the stock market shares my opinion.

Thursday, October 16, 2008

Buying Stock For the Dividends

As anyone who has read my previous posts can attest, I've always promoted buying stocks based on dividend payouts and the companies' ability to continue paying the dividends. It is interesting to note that the "experts" are starting to give this same advice. Check out this article on CNBC:

Cramer: Buy Dividends on This Dow Drop

While Cramer makes some good points about dividends being a cushion in the market downturn and yields rising as prices fall, I have always advocated buying investments that provide current income, i.e. dividends, as well as having strong possibility of future capital gains. All of the stocks recommended in Cramer's article are good stocks, but with a little effort it's possible to find much better yields than mentioned here.

Crisis Or Opportunity of A Lifetime?

With all the negative news on the economy, the stock market crash and the chaotic actions of our national leaders, one has to wonder when or if this "crisis" will ever end. I may be viewed as the perennial bull for saying this, but what I see right now is the opportunity of a lifetime! Stock prices have plunged, everybody is bailing out and parking their money in low interest cash accounts. I think now is the time to make the real money in the stock market. We may or may not be at the bottom of the market cycle, but I haven't seen such bargains in the stock market in years!

My personal stock account has suffered along with everyone else's, however, instead of panic selling, I've been on a personal buying spree. My biggest fear at this point is that the "crisis" will end before I'm able to accumulate all of the shares I'd like to own. You might think I'm crazy for taking this point of view, but just look at what is really going on. Warren Buffett, undeniably one of the most brilliant investors of all time, is investing billions of dollars. Is he trying to prop up the U.S. stock market single handed? I doubt it. I think he recognises the situation as an opportunity for building his tremendous wealth even further. Gas and oil prices are plummeting, leaving more discretionary income in the hands of consumers. What do consumers usually do when they have more discretionary income? They spend it on goods and services. When they spend, business begin to grow earnings, which in turn leads to more jobs and a healthier economy. This may sound a little simplistic, but that is the way a market economy operates. How soon will all these things come about? Your guess is as good as mine, but I don't think it will take as long as all the experts seem to think.

I'm not a believer in bailouts, I think they are mostly a political ploy and will only lead to job destroying higher taxes. But I am a firm believer in the power of the free market economy to overcome tremendous adversity. I can't help but think that a few years down the road a lot of people are going to be saying, "We had nothing to fear but fear itself."

Saturday, October 4, 2008

Quarterly Update

Sorry for not keeping up with the posting, it has been an extremely busy month for me. The general manager at my new job quit and I have taken over as the new GM and am working hard to turn things around on the job. Things are going well there, but it has taken a lot of time away from my personal pursuits.

Everyone is well aware of the turmoil in the stock and financial markets, but we must all remember that with every problem comes opportunity. While problems abound, opportunities are all around us. If you've read some of my previous articles, you will see that the things I predicted are starting to unfold. Oil is down, gas prices are down, people are switching to more energy efficient means of transportation. There has been a big drop in the stock market with a lot of people running for the exits, doing exactly what they should not do, selling low! We all know you are supposed to buy low and sell high, the problem is none of us tend to do this.

So how is my plan progressing? Like everyone else, my stock portfolio has dropped in value. However, as I mentioned in earlier posts, my plan for the year included building cash positions through better cash flow management. This has gone quite well for me. I have reduced my debt considerably, built up my cash accounts and am in position to take advantage of some of the best bargain pricing on stocks that I have ever seen in my lifetime. I have also reduced investment costs, buying larger blocks of shares at a time and reducing commission costs. I have been actively searching out new dividend stocks and adding to my portfolio, thus increasing my monthly dividend income. With larger cash holdings, my interest income has increased as well. I still have some small debts to pay off and will then be able to concentrate all of my cash flow towards wealth building.

My small businesses have done well. Income from my rental property maintenance company has increased and I have added new clients to keep the money coming in. My online business has started generating commissions and should be profitable within the next year. I am excited about this business, because it takes so little time and effort on my part, yet the returns can be staggering. You can check it out at:

My advice at this point is to stay calm. Yes there are a lot of problems with the economy and the stock market, but remember, with every problem there is an opportunity.