So one week in and I still like my Indian friend

So the S&P500 has increased 1.2% since I got into TTM and GOOG. So how are they doing? GOOG is up 3.3% and TTM is up 4.1%. Not bad for a week...

I am really contemplating selling the rest of my IBM position...at $106 I can't see it doing much from here...hmmmm

Say hello to my new Indian friend

Today I put our money back into action. I made two purchases...TTM and GOOG. Here is the lowdown:

• TTM: Tata Motors based in India, a maker of commercial vehicles. My thinking: India is under construction and these guys are the local suppliers for that buildup. Comparing it to my rules: 43% difference in current price and 1 year target, 18% EPS growth forecasted for next year, 1.6% dividend, 7B market cap, PEG of 0.66, solid financial books. The only minus is that it has only been publicly traded for about 2 years but it has been in business since 1945. All good.
• GOOG: The Google. Now this one seems expensive but its forward looking financials makes it "cheaper" than YHOO and AMZN (PEG of 1.04 vs. 2.87). So to answer Flogger...yeah, I looked at this vs. AMZN and opted for the more solid company. Comparing this one to my rules: 21% difference in current price and 1 year, 27% EPS growth forecasted for next year, 150B market cap, PEG of 1.04 and A++ financials ($18.5B in assets, $1.4B in debt and $3.5B cash flow!!). The only drawback is the fact that there is no dividend but this one is a cash cow. Their EPS is $15 and as you have probably seen...they are putting that money back into buying up little things like YouTube and Doubleclick. Eventually I think that they will start giving some of that money back to the investors...so in the end you win either way as they appear to know how to spend their money unlike other companies.

Of course TNE went up today...that stock is hard to keep down ;-)

One last thing, way to go Northfield...their stock has dropped from $15 to $1.5...good thing ChaCha left a while back ;-)

Say goodbye to my Brazilian friend

Today my trailing stop triggered the sale of TNE. I set it at -5% and over the past two days it has gone down more than that. So this morning it sold it at $18.55...locking in a 41% gain. Closer to 40.5% after factoring in the $15 dividend and the commissions. Overall, not a bad trade. I am sure that the stock will probably continue to climb eventually but since I am out...I will wait for this one to take a breather.

Now we have another issue...where to put all that money...we can't just leave it there in the bank after all ;-) Ones that I am currently looking at: GOOG, YHOO, TTM and GLS.

Making time for making money...

Sorry that this blog has kind of dried up recently...unfortunately life is consuming us lately and I have not had any time to devote to financial fitness...thank goodness that the stock market has been pretty well behaved. I have occasionally checked in on the GenX investments made to date and been pleased with the progress...up 23% in 2 months. Now I just need to get those 401K and IRAs into better shape...maybe next week when things start to settle down a little...

Invetment Idea...Har

So I was just scanning through a few small companies (read penny stocks) and I ran across this one. What do you think...a good investment ;-) ??

Stonebridge Resources Explorations Ltd. (SBRX.PK) BUSINESS SUMMARY

Stonebridge Resources Explorations, Ltd., a research exploration company, engages in the acquisition, development, exploration, and production of crude oil and natural gas in continental North America. Stonebridge Resources Explorations was incorporated in 2001. It was formerly known as Mr. Dude, Inc. and changed its name to Stonebridge Resources Explorations, Ltd. in 2004. The company is based in Toronto, Canada.

I am almost tempted to put just a few dollars into Mr. Dude...apparently he at least has a sense of humor.

All I want is the GAZOLINE! Just walk away....

Thanks to Lord Humungus for his brilliant quotation! But that brings me to my recent trip to CA where I was able to firsthand experience the cheap gasoline at $3.50...yowzers! Then I read this in IBD:

May gasoline shot up 7.37 cents, or 3.3%, to $2.2826 a gallon, its highest close since Aug. 7. Stockpiles fell 2.79 mil barrels last week, a much bigger drawdown than expected. At 194.2 mil, those supplies are 7.2% below their 5-year average and at their lowest since Oct. '05, when Hurricane Katrina ravaged Gulf Coast facilities. June crude rose $1.26 to $65.84 a barrel.

Kind of makes you think that maybe, just maybe, someone is going to make some money this summer ;-)

Has the market reached a top?

So a few posts ago Flogger asked the following in a follow-up comment:

Do you think it is time to start selling at these lofty levels again so that we have some cash on the sidelines?

The short answer... No. Use stop orders to protect those gains.

The long answer... There are several market factors currently at play which are worth noting:

• Positive Factors: Interest rates have stabilized, higher oil prices are already factored into the market, many good earnings reports this quarter (many due to international growth), the dollar is weak which makes US companies more competitive, the housing mess is slowly deflating (that sub-prime concern did not tank the market), China growth may be slowing but is still strong and Iraq is already factored into the market.
  

• Negative Factors: Inflation could re-emerge due to higher energy costs --> driving higher interest rates. ("On Wednesday, crude oil futures settled up $1.26 to $65.64 per barrel and gasoline futures rose to 8 1/2 month highs on the New York Mercantile Exchange, after the Energy Department reported a decline in U.S. gasoline inventories.")
  

So all in all, the market seems positive to me at this time barring the potential for some higher interest rates on the horizon. Using the analysis above this helps me to formulate my investing strategy:

1. Own oil and oil drillers right now. It serves as a balance against the negative exposure of oil prices continuing to increase.
   
2. Own higher dividend paying companies. It provides a little insurance against any downward movement...and everyone loves dividend stocks right now.
3. Have overseas exposure. Most of the growth being shown by the current earnings reports are being sourced internationally.
   

I am sticking with this market until something really starts falling apart. And using any dips (like the one back in March due to the sub-prime and China scares) to buy some of the stocks on my watch list.

Cancel your memberships and get $$

The going rate for an annual Sam's club membership is $40 in the greater Fort Collins Area. Since we are moving to a country with no Sam's club, we decided to see if we could cancel our membership and get a pro-rated refund. Well, much to our surprise the membership policy at Sam's is a 100% guarantee. As such, we simply stated that we wanted to cancel our membership and they refunded all $40 even though we have been using this years membership for about 7 months. That was a nice surprise...

Do something yourself ... #2

A few months ago my Mr. Coffee coffee grinder suddenly stopped working mid-grind. So I says..."crap!", cause you never really want to run out of coffee. As I sit there staring at the darned thing...and banging it a few times...the wife immediately chimes in and suggests that we go buy another one...seeing as they are only like $25. So I think about it and immediately say...nah, I can fix this.

So I whip out the screwdriver and start taking it apart. It only takes a minute to get the cover off and the thing is darned hot. Hmmm, this is probably why it stopped. So I look around for anything that resembles a fuse...aha, there it is, on the wire lead located just before the motor. That's gotta be it. So I get the soldering iron out and cut the fuse off and solder the wire back together...put the case back on and voila! 15 mins start to finish...which turns out to be roughly $100 per hour savings...not even factoring in the saved trip to the store to buy a new one.

Logic: it's already broken...what more harm could I do but waste a few minutes of my life with a soldering iron...which by the way is NEVER a waste of time ;-)

10 Percent

As I was sitting in Barnes & Noble last night reading an exceedingly boring book about high yield investing strategies, I sat back and thought about the golden 10% assumption. I always use it..and why not...historically it is been proven to be reasonably accurate over the long haul. But when taken a bit further, if you deconstruct that into monthly gains required...amazingly it is only a paltry 0.8% per month return! Honestly that stuck me as a pretty low bar to try and cross every month. I think that we can do better ;-)


Now I know that we won't always pick stocks that go up...but geez...on any given day the price of a stock can go up or down a percentage point or two. Even the 3 GenX holdings are already up about 1% from the last update post I gave...just 4 trading days ago.

Having said this...I have absolutely no desire to become a day trader, seeing as the commissions tend to eat you alive and make profits exceedingly difficult. BUT... it does stress the point that if you can pick some good quality stocks which are cheap, and be selective in your holding of positions...you will likely see them rise. And when they do, you need to be willing to cash in and sit on the sidelines for another great opportunity to present itself. If this is the case...then it would appear to be reasonable to assume that we could beat that 10% assumption in any type of market.