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
http://www.cnbc.com/id/27205368
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.
Thursday, October 16, 2008
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."
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: http://www.freedom.ws/bgnjcmo3
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.
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: http://www.freedom.ws/bgnjcmo3
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.
Sunday, August 10, 2008
Should You Be Buying Gold?
I just finished reading an article on one of the major news media sites talking about the recent decline in oil prices and the rise in the value of the dollar. Both of which I predicted back in October of last year. Overall, it was a very good and positive article, but of course they couldn't stop at that. They had guest commentary from an "economic expert" who said that high oil prices should not be the only consideration when addressing inflation. O.K., I agree with that, it should not be the only consideration. However, he then talked about the high food prices around the world and rising unemployment, both valid subjects for consideration in addressing inflation, but he somehow managed to segue that in to a justification for buying gold as an investment and hedge against inflation. What?
I'm no expert, but common sense would tell you that high oil prices and the low value of the dollar drive prices higher in food and gold. If oil and gas prices are dropping so are the costs of producing and transporting food. If the value of the dollar is rising, it makes our agricultural products more expensive to foreign buyers, leading to demand destruction in exports of our food products. Add to that the increasing unemployment in the U.S., which further reduces demand for high priced food items and the simple rule of supply and demand kicks in. Which all adds up to falling or stagnant food prices. All these things should lead to a halt to the inflationary spiral we've been in for the first 7 months of this year.
So, should it make any sense to anyone to be buying gold right now? Not as far as I'm concerned. When inflation begins to ebb, gold prices drop, as they have been doing recently. If you are considering any investment in precious metals, silver is a more likely candidate. Most of the gold that has been mined throughout human history is still in existence to this day. However, silver is being consumed at an ever increasing rate and as a non-renewable resource, this would present a much better investment opportunity than gold. Gold would have been a good investment when it was selling between $300 and $400 per ounce, that is, as long as you were selling when the price was over $900 an ounce. But now, I don't think so.
I'm no expert, but common sense would tell you that high oil prices and the low value of the dollar drive prices higher in food and gold. If oil and gas prices are dropping so are the costs of producing and transporting food. If the value of the dollar is rising, it makes our agricultural products more expensive to foreign buyers, leading to demand destruction in exports of our food products. Add to that the increasing unemployment in the U.S., which further reduces demand for high priced food items and the simple rule of supply and demand kicks in. Which all adds up to falling or stagnant food prices. All these things should lead to a halt to the inflationary spiral we've been in for the first 7 months of this year.
So, should it make any sense to anyone to be buying gold right now? Not as far as I'm concerned. When inflation begins to ebb, gold prices drop, as they have been doing recently. If you are considering any investment in precious metals, silver is a more likely candidate. Most of the gold that has been mined throughout human history is still in existence to this day. However, silver is being consumed at an ever increasing rate and as a non-renewable resource, this would present a much better investment opportunity than gold. Gold would have been a good investment when it was selling between $300 and $400 per ounce, that is, as long as you were selling when the price was over $900 an ounce. But now, I don't think so.
Update on My Latest Business Venture
I recently wrote about a new business I have gotten involved in. It basically involves network marketing and yeah I know all the negative attitudes people have towards these type of businesses. However, I had recently read some positive comments about network marketing in Robert Kyosaki's book, "Retire Young, Retire Rich." He pointed out how building a network type business in your spare time not only taught you the invaluable lessons of how to build and run a business, but they can go a long way towards building a steady stream of income and making you far wealthier than a regular 9 to 5 job. In another of his books he says, "Rich people look for and build networks, poor people look for a job." So I came across this opportunity and dived right in.
I've been in Amway, I've done the Ebay auctions and Ebay store and Google Adsense, but I have never had such a tremendous and immediate response as I've had with this new business! I'm getting a great deal of traffic on my new website, which has never happened with any of my other sites and several hits on my referral codes. All this with very little effort to date! I'm excited! If I've gotten all this response, imagine how much it's going to take off once I start putting some real effort in to it!
At any rate, I'll keep the readers updated on how things are going and if you'd like to check it out for yourself, you can go to: http://www.movie.ws/bgnjcmo3
I've been in Amway, I've done the Ebay auctions and Ebay store and Google Adsense, but I have never had such a tremendous and immediate response as I've had with this new business! I'm getting a great deal of traffic on my new website, which has never happened with any of my other sites and several hits on my referral codes. All this with very little effort to date! I'm excited! If I've gotten all this response, imagine how much it's going to take off once I start putting some real effort in to it!
At any rate, I'll keep the readers updated on how things are going and if you'd like to check it out for yourself, you can go to: http://www.movie.ws/bgnjcmo3
Friday, August 8, 2008
Enough With The Wining!
I just sat through another mind numbing "news" program about the problems with the U.S. economy and the inability of our political system to address the issues. Yeah, O.K. we all know what the problems are. Is it really helpful to anyone to carry on these endless debates in the news media about how it is just impossible to solve all our country's problems? Does this really accomplish anything? They always say they are, "addressing the issues." I think they are confusing "addressing the issues" with giving an address about the issues. If all the people who proclaim to be so concerned about the problems facing our nation, are truly concerned, wouldn't it be more productive to concentrate on proposing real workable answers to the problems, instead of endlessly wining about how we're faced with insurmountable dilemmas?
The show I was watching was about the millions of poor people in the U.S. and how companies are targeting these people for their collective wealth, estimated to be around $650 billion. Speaking as someone who comes from this group, I don't want any one's pity, I don't want any one's handouts, all I've ever wanted was the knowledge to rise above my humble beginnings. Has anyone ever seriously considered educating the poor to deal with their own problems? I do know of a few people who advocate financial education, but it has never, to my knowledge, been proposed as a solution to the generations of poverty stricken families here in our country. It is no big secret. Anyone in this country can rise above poverty if they have the desire to do so. They may not know how, but there is a simple solution to this problem as well. I personally believe that the book, "The Richest Man in Babylon" should be required reading in all our public schools. ANYONE who follows the advice set out in this simple, easy to understand book, will do well in life. And if we truly want to address economic issues in this country, then we need to start a grass roots campaign to end financial ignorance and illiteracy. In one of the parables in the above mentioned book, the King of Babylon desires that his city should become the wealthiest city in the world. So he sends for the "richest man in Babylon" and asks that he teach others his secrets to acquiring wealth and building an estate. As this wise old man in the book states, "Anything that one man knows, can be taught to another." So, if we truly desire to end poverty in this country, if we truly desire to lift the financial burdens from the poor, then welfare and social programs should only be temporary and for the poorest of the poor. Financial education should be the cornerstone of any true campaign to eliminate poverty in this country.
The show I was watching was about the millions of poor people in the U.S. and how companies are targeting these people for their collective wealth, estimated to be around $650 billion. Speaking as someone who comes from this group, I don't want any one's pity, I don't want any one's handouts, all I've ever wanted was the knowledge to rise above my humble beginnings. Has anyone ever seriously considered educating the poor to deal with their own problems? I do know of a few people who advocate financial education, but it has never, to my knowledge, been proposed as a solution to the generations of poverty stricken families here in our country. It is no big secret. Anyone in this country can rise above poverty if they have the desire to do so. They may not know how, but there is a simple solution to this problem as well. I personally believe that the book, "The Richest Man in Babylon" should be required reading in all our public schools. ANYONE who follows the advice set out in this simple, easy to understand book, will do well in life. And if we truly want to address economic issues in this country, then we need to start a grass roots campaign to end financial ignorance and illiteracy. In one of the parables in the above mentioned book, the King of Babylon desires that his city should become the wealthiest city in the world. So he sends for the "richest man in Babylon" and asks that he teach others his secrets to acquiring wealth and building an estate. As this wise old man in the book states, "Anything that one man knows, can be taught to another." So, if we truly desire to end poverty in this country, if we truly desire to lift the financial burdens from the poor, then welfare and social programs should only be temporary and for the poorest of the poor. Financial education should be the cornerstone of any true campaign to eliminate poverty in this country.
Saturday, August 2, 2008
Recommended Reading
I just read an interesting article on one of my favorite blogs, "In The Know" by Michael E. Brisky about the 15 things investors should look for in selecting a common stock and the 5 thing you shouldn't do. I recommend everyone interested or involved in stock investments read this article:
http://briskycapital.blogspot.com/2008/07/phillip-fishers-15-points-to-look-for.html
I've always tried to follow these rules when making a new stock selection, but sometimes it's nice to be reminded.
http://briskycapital.blogspot.com/2008/07/phillip-fishers-15-points-to-look-for.html
I've always tried to follow these rules when making a new stock selection, but sometimes it's nice to be reminded.
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