To boost some of my credibility I feel like now is the time to disclose my hypothetical investments which I have monitored closely.
I invested a hypothetical, rough $50,000 in a number of stocks over a staggered time period in order to capitalize on each stock/company's best opportunity for investment.
I purchased 40 shares of AAPL (Apple) on September 14, 2011 after a recommendation from several analysts and a number of positive news articles about their coming quarters. The price I purchased at was $392.96 (total--$15,800), or roughly 1/3 of my total investment.
I purchased 100 shares of IBM (IBM) on September 22, 2011 after following the stock for a long enough period of time to observe when it was experiencing a temporary pullback tied to the broader market, but knew it was waiting for a pullaway. I paid $169.34 share (total--$16,934).
I purchased 100 shares of McDonald's (MCD) on September 8, 2011 on the day of their highest activity level in months, knowing that McDonald's was due for a breakout to new all-time highs. I paid 85.03 per share (total--$8,503)
I purchased 200 shares of Dunkin Donuts Brands (DNKN) on July 31, 2011 shortly after their IPO for $29 even. Dunkin, as I have consistently said, will take a while to get off the ground and has definitely bee lost in a lot of the other IPOS their year and last year, but is a business model which CANNOT fail. Dunkin is expanding into nearly every corner of America at a rapid (some would say alarming) rate. If you look back through movie and television clips from the past 10 years, and some from even before then, you will see Dunkin Donuts containers. It's amazing that they haven't gone public before this year, but better late than never. (Total--$5,800)
I purchased 75 shares of Walt Disney (DIS) on September 8, 2011 at $31.04 per share after news of their commitment to more feature length animated and CGI films came out, as well as their promise to revitalize and improve specific portions of their theme parks while simultaneously lowering ticket prices for specific dates and for families who stay at their hotels. (Total--$2,328)
While some would say this very short list is quite non-diversified and is subject to very small gains over a long period of time, especially when considering the small amount of profit initially invested, I'm using this instead as a perfect template for amassing a large portfolio beginning with just a small initial investment and sticking with a few well-researched stock picks.
Today, February 23rd, at the stock market open I have a hypothetical stock portfolio of $20,572 for APPL, $19,396 for IBM, $10,064 for MCD, $5,816 on DNKN, and $3,091 for DIS for a grand total of: $58,939.
I've gained roughly 1/5 of my investment over the past 6 month period of time.
While $10,000 certainly isn't anything to quit your day job over, the fact that if one were to exponentially increase their initial investment (while keeping with the same investment formula and percentages) they would be looking at a large amount of money. A $1,000,000 investment for an investor would have returned $200,000 in 6 months, and a $10,000,000 by a hedge fund would have resulted in a $2 million profit. Now, if the amount invested into each stock were changed or updated for a higher investment, my percentage rate of return is much higher if, for example, one were to put a higher percentage into a stock like AAPL which is very expensive for an investor with a smaller portfolio.
The broader market during this same period of time rose roughly 1,500 points on the DOW or around 10%.
My plan is to hold these for an extended period of time and, when I feel the market is topping out, I will dump my positions in certain stocks and enter into others. One of the ones I'm looking forward to is the Facebook IPO. I plan on using my profits only for my new investments so that I have a portfolio comprised entirely of profits so that there is little to nothing to lose from the investments.
More to come later on.
Thursday, February 23, 2012
Sears
Through the wire this morning: Sears Holding Companies (SHLD)
Sears posted another quarterly and year-over-year loss, and now the group that owns both Sears and KMart is selling off several stores to a liquidity group, and has plans to lay off another undisclosed yet significant amount of employees in order to boost revenue and possibly post a profit for the first time since the two companies were merged back in 2005.
I have always been a fan of Sears and its products, while its cheaper, less desirable company portion (KMart) seems to be holding it back from significant profits, I can see Sears coming out of this very successfully. Yes, there have been talks that Sears will enter into bankruptcy protection, but I don't see the company going the way of Borders, Circuit City or other enormous Big Box chains as a result of the recession. The landscape and concepts for Sears' sales hasn't changed, nor has the demand; their appeal has been lost and sales, which traditionally would have been theirs in earlier times, have been displaced onto competitors such as Wal-Mart (WMT), Home Depot (HD) and Lowe's (LOW)s.
I'm a buyer of Sears IF they post a profit within any of the next 3 quarters. This time next year, look to see where Sears is. If their share price is above $60, I'm a long-term buyer. I think this is a very telling quarter for them and whether they emerge victorious or not is very contingent upon what the next few emerging-from-recession quarters look like for them. Sears products were once the staple of American do-it-yourselfers and weekend warriors and Craftsman is still a household name when it comes to tools, but the fact that they no longer offer a lifetime guarantee on their tools, I think, detracts from their appeal and makes competitors much cheaper and thus cheaply made tools seem more appealing.
Sears needs to reinstate their previous guarantees from bygone generations, needs to cut away some more of their non-profitable stores and needs to find a way to retake their business from the territories that were stolen from them by competitors.
Sears posted another quarterly and year-over-year loss, and now the group that owns both Sears and KMart is selling off several stores to a liquidity group, and has plans to lay off another undisclosed yet significant amount of employees in order to boost revenue and possibly post a profit for the first time since the two companies were merged back in 2005.
I have always been a fan of Sears and its products, while its cheaper, less desirable company portion (KMart) seems to be holding it back from significant profits, I can see Sears coming out of this very successfully. Yes, there have been talks that Sears will enter into bankruptcy protection, but I don't see the company going the way of Borders, Circuit City or other enormous Big Box chains as a result of the recession. The landscape and concepts for Sears' sales hasn't changed, nor has the demand; their appeal has been lost and sales, which traditionally would have been theirs in earlier times, have been displaced onto competitors such as Wal-Mart (WMT), Home Depot (HD) and Lowe's (LOW)s.
I'm a buyer of Sears IF they post a profit within any of the next 3 quarters. This time next year, look to see where Sears is. If their share price is above $60, I'm a long-term buyer. I think this is a very telling quarter for them and whether they emerge victorious or not is very contingent upon what the next few emerging-from-recession quarters look like for them. Sears products were once the staple of American do-it-yourselfers and weekend warriors and Craftsman is still a household name when it comes to tools, but the fact that they no longer offer a lifetime guarantee on their tools, I think, detracts from their appeal and makes competitors much cheaper and thus cheaply made tools seem more appealing.
Sears needs to reinstate their previous guarantees from bygone generations, needs to cut away some more of their non-profitable stores and needs to find a way to retake their business from the territories that were stolen from them by competitors.
Tuesday, February 21, 2012
Wal-Mart Misses While Hitting
The Wal-Mart headline this morning masks the good news with the bad news.
The article below echoes the sentiments of others featured on business news websites this morning, all of which detail how Wal-Mart has missed their quarterly margins and now, as a result, their share price is sinking to the tune of 3% as I write this.
In reality, the company is actually up $.17 billion ($170,000,000) in net profits from this same time last quarter despite having lowered prices on many items across the country, opening at least a dozen new stores in the United States alone, hiring more employees and paying many higher salaries as a result of raises, and wooing many shoppers back from the dollar and thrift stores that so many ran to at the start of the recession. Whew! Seems like they've actually done quite a lot this past year, and traditionally, they seem to lose a little bit during that final Q4 of 2011 when many shoppers turn to Toys R' Us, Home Depot/Lowers, and specialized retailers for gifts, decorations, etc.
I interpret this the opposite way; a huge win for a giant company whose stranglehold on the market might be a loosening a bit, but all for the better. I see no negativity in this news, and see them only expanding and improving again quarter over quarter and year over year. Invest here for long-term payouts, NOT short-term. I'm calling a $65.00 price by June 2012, possibly $70 by December of this year, especially if a Republican comes into office in November and promises lower corporate tax rates, etc., which would be great for a company like WMT.
I have no stake in the stock nor any conflicts.
http://www.cnbc.com/id/46433307
The article below echoes the sentiments of others featured on business news websites this morning, all of which detail how Wal-Mart has missed their quarterly margins and now, as a result, their share price is sinking to the tune of 3% as I write this.
In reality, the company is actually up $.17 billion ($170,000,000) in net profits from this same time last quarter despite having lowered prices on many items across the country, opening at least a dozen new stores in the United States alone, hiring more employees and paying many higher salaries as a result of raises, and wooing many shoppers back from the dollar and thrift stores that so many ran to at the start of the recession. Whew! Seems like they've actually done quite a lot this past year, and traditionally, they seem to lose a little bit during that final Q4 of 2011 when many shoppers turn to Toys R' Us, Home Depot/Lowers, and specialized retailers for gifts, decorations, etc.
I interpret this the opposite way; a huge win for a giant company whose stranglehold on the market might be a loosening a bit, but all for the better. I see no negativity in this news, and see them only expanding and improving again quarter over quarter and year over year. Invest here for long-term payouts, NOT short-term. I'm calling a $65.00 price by June 2012, possibly $70 by December of this year, especially if a Republican comes into office in November and promises lower corporate tax rates, etc., which would be great for a company like WMT.
I have no stake in the stock nor any conflicts.
http://www.cnbc.com/id/46433307
Wednesday, February 15, 2012
I'll Trade You A Nickle For A Dime...
In my recent travels, I came across an interesting story about the cost of pennies and nickles.
On Mish's Global Economic Trend Analysis (http://globaleconomicanalysis.blogspot.com/) , he points out that the true valuation and cost of a penny and nickel is not $.01 and $.05 respectively, but that in reality it costs "2.4 cents to make one penny in 2011 and about 11.2 cents for each nickel."
To put it another way, the United States is essentially wasting money for each undervalued currency coin we create.
As Mish points out "Given the number of coins that the mint produces -- 4.3 billion pennies and 914 million nickels last year alone, those costs add up pretty quickly: a little more than $100 million for each coin."
This immediately reminded me of those old schoolyard tricks in which you would find the most gullible classmate and convince them that since you had a larger coin that it was worth a greater amount of money. I hate to admit that on the first or second occasion I fell for this swindle.
But Mish raises a great point. Why do we continue to forge coins of such a small denomination when they're rarely, if ever, used anymore in this age of debit and credit cards? Especially if it costs so much more than their finished value. We'd be better off scrapping the idea of coins under $.25 and adjust our pricing gauges.
What better time than now to do this either? We're in the midst of a killer recession and our government is creatively trying to reverse the catastrophes that compound almost daily; why not create a program or fiat that changes our currency format into something consistent with our technological age? Why not eliminate what doesn't work and invent something new and better?
Obama, at least according to his rhetoric and the statements within these articles, is in favor of this sort of empirical change.
Full article here: http://globaleconomicanalysis.blogspot.com/2012/02/obama-wants-cheaper-pennies-and-nickels.html
With source material from here:
http://finance.yahoo.com/news/obama-wants-cheaper-pennies-nickels-101600840.html?l=1
On Mish's Global Economic Trend Analysis (http://globaleconomicanalysis.blogspot.com/) , he points out that the true valuation and cost of a penny and nickel is not $.01 and $.05 respectively, but that in reality it costs "2.4 cents to make one penny in 2011 and about 11.2 cents for each nickel."
To put it another way, the United States is essentially wasting money for each undervalued currency coin we create.
As Mish points out "Given the number of coins that the mint produces -- 4.3 billion pennies and 914 million nickels last year alone, those costs add up pretty quickly: a little more than $100 million for each coin."
This immediately reminded me of those old schoolyard tricks in which you would find the most gullible classmate and convince them that since you had a larger coin that it was worth a greater amount of money. I hate to admit that on the first or second occasion I fell for this swindle.
But Mish raises a great point. Why do we continue to forge coins of such a small denomination when they're rarely, if ever, used anymore in this age of debit and credit cards? Especially if it costs so much more than their finished value. We'd be better off scrapping the idea of coins under $.25 and adjust our pricing gauges.
What better time than now to do this either? We're in the midst of a killer recession and our government is creatively trying to reverse the catastrophes that compound almost daily; why not create a program or fiat that changes our currency format into something consistent with our technological age? Why not eliminate what doesn't work and invent something new and better?
Obama, at least according to his rhetoric and the statements within these articles, is in favor of this sort of empirical change.
Full article here: http://globaleconomicanalysis.blogspot.com/2012/02/obama-wants-cheaper-pennies-and-nickels.html
With source material from here:
http://finance.yahoo.com/news/obama-wants-cheaper-pennies-nickels-101600840.html?l=1
Thursday, February 9, 2012
Better Late Than Never
Since its inception I have been obsessed with the great recession of the late 2000s.
Even before I, as many in America, experienced and then became jaded and desensitized to the mounting job losses, foreclosure crisis, and credit crunch, I recognized that this phenomenon would be a defining time in America's history; and furthermore, our response to and fallout from it would come to be synonymous with our era (think Japan's lost decade).
When it became apparent that the bad bank loans and credit insouciance of the previous 5-10 year period were reaching cataclysm, the world seemed to inexplicably shrug it off. There was a prevailing attitude that we were untouchable; our economy too rigid and interdependent that there couldn't possibly be any weak spots. As it became evident that what we mistakenly thought was a solid footing was actually a series of artificial supports, the world stumbled, choked on its hubris, and nearly ground to a halt.
But you, reader, already know the story: the job losses mounted, the hiring stopped, homes were being abandoned and foreclosed upon at an alarming rate, home prices plummeted daily, entire neighborhoods were becoming ghost towns, and a genuine concern began to permeate the masses--would we be OK?
It has been nearly four years since the recession began picking up steam and there's no sign that we have returned to "normal"; in fact, the new buzz phrase 'round the water-cooler is "new normal." Exactly what is the "new normal" is a moot point and, of course, depends upon the person you're speaking to and their political tendencies and monetary position. In these four short years I have experienced a lifetime of economically related emotions, and I have acquired a breadth of knowledge pertaining to the subject matter which allows me to better prepare myself and inform others about what has happened, how to prevent it, and what to do if it occurs again.
Particularly, I have gained great insight into financial markets, the cyclical nature of economies, and have done my best to weed out the bias, political intentions, and peel away the capitalistic covers in favor of a more balanced, objective and unbiased look at financials. I don't bet against companies, try to cash in on job losses, recommend trying to profit off of stock prices dropping, and certainly don't try to exploit or mislead.
This blog's intentions are to advise, alert, investigate and offer knowledge and wisdom related to The Great Recession and financial markets.
You can call me the freelance financial guru; the amateur analyst turned sage; or the free financial reporter, in every sense of the word.
Even before I, as many in America, experienced and then became jaded and desensitized to the mounting job losses, foreclosure crisis, and credit crunch, I recognized that this phenomenon would be a defining time in America's history; and furthermore, our response to and fallout from it would come to be synonymous with our era (think Japan's lost decade).
When it became apparent that the bad bank loans and credit insouciance of the previous 5-10 year period were reaching cataclysm, the world seemed to inexplicably shrug it off. There was a prevailing attitude that we were untouchable; our economy too rigid and interdependent that there couldn't possibly be any weak spots. As it became evident that what we mistakenly thought was a solid footing was actually a series of artificial supports, the world stumbled, choked on its hubris, and nearly ground to a halt.
But you, reader, already know the story: the job losses mounted, the hiring stopped, homes were being abandoned and foreclosed upon at an alarming rate, home prices plummeted daily, entire neighborhoods were becoming ghost towns, and a genuine concern began to permeate the masses--would we be OK?
It has been nearly four years since the recession began picking up steam and there's no sign that we have returned to "normal"; in fact, the new buzz phrase 'round the water-cooler is "new normal." Exactly what is the "new normal" is a moot point and, of course, depends upon the person you're speaking to and their political tendencies and monetary position. In these four short years I have experienced a lifetime of economically related emotions, and I have acquired a breadth of knowledge pertaining to the subject matter which allows me to better prepare myself and inform others about what has happened, how to prevent it, and what to do if it occurs again.
Particularly, I have gained great insight into financial markets, the cyclical nature of economies, and have done my best to weed out the bias, political intentions, and peel away the capitalistic covers in favor of a more balanced, objective and unbiased look at financials. I don't bet against companies, try to cash in on job losses, recommend trying to profit off of stock prices dropping, and certainly don't try to exploit or mislead.
This blog's intentions are to advise, alert, investigate and offer knowledge and wisdom related to The Great Recession and financial markets.
You can call me the freelance financial guru; the amateur analyst turned sage; or the free financial reporter, in every sense of the word.
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