Monday, April 26, 2010

Portfolio Update, Better Late Than Never - 4/26/10

Before reading, please see the disclaimer in the 'About Me' section.
The Wilshire 5000 closed at 12,693.00, up from
12,451.40 since my post on 4/16/10. The Wilshire 5000 is now 13.22% above it's 200-day moving average.

The Investor's Intelligence Survey was released on Thursday night. This week's reading was 53.3% BULLS, and 17.4% BEARS, for a spread of 35.9%. This is in comparison to a reading of 51.1% BULLS, and 18.9% BEARS, for a spread of 32.2% on April 13th.

The Volatility Index closed today at 17.47, down from 18.36
back on April 16th.

Now for the portfolio...
1) Verizon at $28.94, down 10.62% for the year, inclusive of dividends.  


2) AT&T closed at $26.50, up .91% for the year, inclusive of dividends. 

3) GE closed at $19.30, up by 28.36% for the year, inclusive of dividends.

4) TBT, the doubleshort U.S. Treasury ETF closed at $47.31, down by 5.15% since my buy.

5) FXP, the doubleshort China ETF, closed at $38.77, down by 10.82% since my buy, and after a 1:5 reverse split which occurred a few weeks back.

6) GOOD closed at $17.23, up by 27.46% since my buy, including the reinvestment of a dividends. 


7) NLY closed at $16.96, down by 1.34% since my buy, inclusive of a reinvested dividends


8) AAPL closed at $269.50, up by 39.10% since my buy.

Overall, the portfolio is up by 12.36% (6.13% for the DOW Dogs), versus 10.40% for the Wilshire 5000. The current basket of eight stocks that I am currently invested in, including dividends, is up 8.42% year-to-date. The spread between my performance and the overall market (Wilshire 5000) has decreased to 1.96%.

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Friday, April 16, 2010

The Value Added Tax

Many of you who watch the news have been bombarded with the speculation/rumors that the current administration is thinking about adding a value added tax in order to help recoup some of our current and future deficit.  For those of you who don't know, the value added tax, or VAT is basically a federal sales tax, tacked on top of the state sales tax, which is on top of any federal income or wage taxes you may pay.  This has been a popular idea in the past, but usually the idea was to replace the federal tax system with the VAT.  Here is a link to a great article on another blog that I follow.  Please read it, as it is very informative.

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Portfolio Update 4/16/10

Before reading, please see the disclaimer in the 'About Me' section.
The Wilshire 5000 closed at 12,451.40, down from
12,486.80 since my post on 4/13/10. The Wilshire 5000 is now 12.13% above it's 200-day moving average, and hit a level of 14.16% above on 4/14/10.

The Investor's Intelligence Survey was released on Thursday night. This week's reading was 51.1% BULLS, and 18.9% BEARS, for a spread of 32.2%. This is in comparison to a reading of 48.9% BULLS, and 18.9% BEARS, for a spread of 30.0% on April 6th.

The Volatility Index closed today at 18.36, up from 16.20
back on April 13th.

Now for the portfolio...
1) Verizon at $29.58, down 8.84% for the year, inclusive of dividends.  


2) AT&T closed at $26.35, up .34% for the year, inclusive of dividends. 

3) GE closed at $18.97, up by 26.17% for the year, inclusive of dividends.

4) TBT, the doubleshort U.S. Treasury ETF closed at $47.70, down by 4.37% since my buy.

5) FXP, the doubleshort China ETF, closed at $38.47, down by 11.51% since my buy, and after a 1:5 reverse split which occurred this week.

6) GOOD closed at $16.19, up by 19.98% since my buy, including the reinvestment of a dividends.  This price appreciation, coupled with the fat dividend should contribute a large gain to this portfolio this year.


7) NLY closed at $16.97, down by 1.28% since my buy, inclusive of a reinvested dividends


8) AAPL closed at $247.40, up by 27.69% since my buy.

Overall, the portfolio is up by 10.38% (5.87% for the DOW Dogs), versus 8.30% for the Wilshire 5000. The current basket of eight stocks that I am currently invested in, including dividends, is up 5.97% year-to-date. The spread between my performance and the overall market (Wilshire 5000) has increased to 2.08%.

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Tuesday, April 13, 2010

Portfolio Update 4/13/10

Before reading, please see the disclaimer in the 'About Me' section.
The Wilshire 5000 closed at 12,486.80, up from
12,250.70 since my post on 4/2/10. The Wilshire 5000 is now 12.93% above it's 200-day moving average, up from 12.05% almost two weeks ago. 

The Investor's Intelligence Survey was released on Thursday night. This week's reading was 48.9% BULLS, and 18.9% BEARS, for a spread of 30.0%. This is in comparison to a reading of 48.3% BULLS, and 19.1% BEARS, for a spread of 29.2% on March 30th.

The Volatility Index closed today at 16.20, down from 17.47
back on April 2nd.

Now for the portfolio...
1) Verizon at $30.07, down 7.33% for the year, inclusive of dividends.  Verizon paid a dividend on 4/7/10, which I reinvested as previously stated. 

2) AT&T closed at $26.20, down .23% for the year, inclusive of dividends.  AT&T also paid a dividend on 4/7/10 which I reinvested.

3) GE closed at $18.95, up by 26.03% for the year, inclusive of dividends.

4) TBT, the doubleshort U.S. Treasury ETF closed at $47.85, down by 4.07% since my buy.

5) FXP, the doubleshort China ETF, closed at $7.21, down by 16.36% since my buy.

6) GOOD closed at $15.36, up by 13.83% since my buy, including the reinvestment of a dividend which was received on the 19th of March

7) NLY closed at $17.38, up by 1.10% since my buy, inclusive of a reinvested dividend received on March 30th.


8) AAPL closed at $242.43, up by 25.13% since my buy.

Overall, the portfolio is up by 9.28% (6.15% for the DOW Dogs, the total DOW has returned 5.67% without dividends), versus 8.61% for the Wilshire 5000. The current basket of eight stocks that I am currently invested in, including dividends, is up 4.70% year-to-date. The spread between my performance and the overall market (Wilshire 5000) has decreased to .67%.

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Friday, April 2, 2010

Portfolio Update Week Ending 4/2/10

Before reading, please see the disclaimer in the 'About Me' section.
The Wilshire 5000 closed at 12,250.70, up from
12,133.00 since my post on 3/27/10. The Wilshire 5000 is now 12.05% above it's 200-day moving average, up from 11.36% last week. 

The Investor's Intelligence Survey was released on Thursday night. This week's reading was 48.3% BULLS, and 19.1% BEARS, for a spread of 29.2%. This is in comparison to a reading of 46.1% 48.9% BULLS, and 20.5% BEARS, for a spread of 28.4% on March 23rd.

The Volatility Index closed today at 17.47, down from
17.77 last week. The VIX continues to trade below the 20 mark, and has done so for at least four weeks now.


Now for the portfolio...
1) Verizon at $31.28, down 5.10% for the year.  As I have been talking about all year, there was some clamoring this week regarding the iPhone coming to Verizon this year.  This would certainly be great news for both Apple and Verizon, and I am excited about the prospects going forward for both stocks.

2) AT&T closed at $26.34, down 1.31% for the year.

3) GE closed at $18.33, up by 21.91% for the year, including the reinvestment of a dividend in February.

4) TBT, the doubleshort U.S. Treasury ETF closed at $48.91, down by 1.94% since my buy.

5) FXP, the doubleshort China ETF, closed at $7.43, down by 13.81% since my buy.

6) GOOD closed at $14.43, up by 6.93% since my buy, including the reinvestment of a dividend which was received on the 19th.

7) NLY closed at $17.34, up by .06% since my buy.


8) AAPL closed at $235.97, up by 21.79% since my buy.

Overall, the portfolio is up by 8.33% (5.17% for the DOW Dogs, the total DOW has returned 3.24% without dividends), versus 6.55% for the Wilshire 5000. The current basket of eight stocks that I am currently invested in, including dividends, is up 3.51% year-to-date. The spread between my performance and the overall market (Wilshire 5000) has decreased to 1.68%, from 3.87% last week.

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Thursday, April 1, 2010

"How Do I Pick Stocks?" Here's a list of what to look for...

This is one of the most fundamental questions any novice investor will have.  The basic idea of equities investing is to be able to identify which stocks are presently undervalued, purchase those equities, and have those equities appreciate in price.  Hopefully, this blog will give you some ideas on what to look for.  The purpose of this post is to help with the fundamental analysis of equities, that is, analyzing the financial condition and value of a share of stock.  While it is also helpful to have at least a cursory knowledge of technical analysis as well, it is not as important to have such an understanding when performing long-term investing.

1) What is the purpose of the investment?  Are you building your portfolio or diversifying?  If you're building your portfolio, you need to pick equities in a wide range of industries to mitigate risk.  If you're diversifying, pick an industry, or industries, which you do not currently own.

2) Stock screens are the easiest way to weed through data, do yourself a favor and learn to use one. 

3) Analyze a company's price to cash-flow (most important), price-to-sales (less important), and price to earnings ratios.  When you buy a stock, you are buying a stock based on the expected future earnings of that equity.  Not all earnings are created equal.  Ideally, you want companies that have lower price to cash-flow ratios.  The cash flow statement is almost impossible to pad, and this ratio will tell you exactly how much cash the company is generating from it's primary business activity.  If you're a true beginner, I recommend "Financial Statements for Dummies" to learn more about how to read financial statements.

4) Does the company pay a dividend?  The higher the dividend yield, the better the indication the stock is undervalued.  Given a constant dividend, a higher price results in a lower yield, and vice versa.  However, be advised that not all dividends are sustainable.  Analyze the company's financials and dividend history in order to gain a better sense of whether or not the company will maintain or grow the dividend.  Quarterly conference calls are a good place to get this kind of information.

5) Look at multi-year earnings growth.  This is a fairly common metric that can be found on most websites.  Look at the earnings growth of at least 5-10 companies within the industry that the company in question operates.  What kind of price to sales multiple are companies with similar earnings growth generating?  As another form of analysis, use a stock screen to sort for 100 stocks with price to sales multiples near that of the organization under analysis.  Setup the screen so that it returns those companies, their multi-year earnings growth rates, and their price to sales ratios.  Then, take an average price to sales multiple for those stocks.  IF the company in question has a lower multiple than the average, the price of the stock is undervalued.

The above-mentioned steps are all criteria to value a stock.  Here are some things to look at to try to put the rest of the picture together:

6) Read the annual reports, and listen to at least the most recent conference call.  This will give you a lot of insight into where the business has been, and where management thinks it is going.

7) Formulate an opinion of the business.  I remember the first time I walked into an Apple store.  I was absolutely amazed.  Try to get a feel for the product the company sells, and whether or not the business plan makes sense to you.

8) Read all the latest news articles, and continue to read the news as it comes available.

In conclusion, if after you have performed a fundamental analysis of the company using some or all of the metrics above, as well as performed a "smell test" of the business the organization operates in and everything checks out, odds are it is a good investment.  Investing in undervalued equities that have a good "story" behind them are as close to a sure thing as you will most likely get.  However, identifying those stocks is the trick.  Good luck in your analysis, and happy investing!

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About Me

DISCLAIMER: I started this blog as a way for people to exchange ideas relating to investing and finance, primarily. I am in no way a professional in these areas, merely a student of the financial world. The thoughts expressed on these pages have no connection to my employer in any way. Anybody reading this blog should do so with caution, exercise their own judgment, and do their own due diligence on any financial undertaking. About Me: I reside in New Jersey with my wife and my two dogs. I have a B.S. degree in Accounting with a minor in Finance, as well as an MBA in Accounting. Currently, I am employed as a forensic accountant, and am pursuing my CPA designation. I love the stock market, and picking stocks. I spend a great deal of time analyzing market data, as well as individual names.

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