Just a quick note as I was busy yesterday and did not post as I said I would. While I have mentioned Bill at NoDooDahs and Geoff at Gannon On Investing,
if you are new at investing a great website that gives a great overview on a lot of different areas of investing is Billcara.com.
The website is from a guy who is more of a trader than a value investor, but it is also a great website to learn about the different types of investing. He has different sections explaining different ways of investing: TA, Fundamental, quantitative, Macroeconomics, FOREX, Bonds, commodities, Sectors, ETF's, Mutual Funds, U.S. and Int'l equities.
Essential the website provides a way for a new investor to understand how macro issues may affect your short or long term investing decisions. I think especially helpful is the discussion on ETF's and sectors (GICS or global Industry Classification Standard (GICS). It also will give you a great overview of ways to invest other than what is known as value investing. It helps to explain the cyclical nature of all markets.
Bill Cara also has a daily blog where he talks about current issues in the market. The best thing about the blog is that Bill Cara does a week in review on the weekend where he goes through the 10 sectors and provides discussion and charts on how each sector and the stocks within them performed the past week. He also does an over view of the Dow 30 with charts as well. So far it is one of the best week in reviews I have seen with respect to summarizing what has happened and why and what might be happening in the short term.
I would it visit billcara.com and then play around at seasonalcharts.com to get an idea on how just because a company you like now is overpriced does not mean if you are patient it wont be under-priced one day. Seasonal Charts is a website which shows how all different kinds of investigated have ups and down through each year.
Well that's my Monday review (one day late). I have finished this book
and hope to discuss it tomorrow from my new investor point of view.
Tuesday, March 21, 2006
Just a quick note as I was busy yesterday and did not post as I said I would. While I have mentioned Bill at NoDooDahs and Geoff at Gannon On Investing,
Posted by Steven at 3/21/2006 04:35:00 PM
Sunday, March 19, 2006
After having this blog now for a little over two months I have realized that I need to have a little bit better organization to it, not only to use my time better, but for those of you who read my blog regularly I wanted to provide a format where you can come to expect posts.
To that end I hope to, for now, post three times a week. Monday, Wednesday, and Friday. I think that is best for me right now.
As far as content, I brought up a thought earlier about what I will write about. There are four categories of information I am learning from...Other blogs...Websites that are not blogs...Offline print materials...And my own thoughts ideas on the above three....
In order to provide some coherence to my posts I am plan on using Monday's to talk about some of the blogs/websites that I link to on the right or new blogs I have run across that I thought might be interesting to new investors and why...
On Wednesday I plan on talking about some offline things I have read...
on Fridays I will talk about what I feel I am learning from the things I am reading and how I see my philosophy on investing developing..Essentially what my thought process is as a new investor.
AS always feel free to comment or emal me with any quesitons...especially if you go to a link on the right and are not sure of why it has value...maybe I can save you some time and tel you what I liked about it or discovered after a few hours of reading.
Posted by Steven at 3/19/2006 12:06:00 PM
Tuesday, March 14, 2006
As I indicated on the right a rescues website that I feel is helpful is http://www.oid.com/.
This is the website for "Outstanding Investor Digest." There are some free parts of the site that has good material, the best parts though are subscriber only. Now I must say that I subscribed to OID last month. The beauty of an OID subscription is that it does not run on time (i.e. 12 issues a year or whatever) but on pages.
A subscription to OID gives you ten 32 page issues or 5 64 double issues or any combination. There is no set timeline for publication as the publisher only sends out an issue when there is enough relevant information to fill an issue. But you can read about that at the site.
Now OID has been around for about 20 years. Initially, the true value of OID came when material was not as easy to get in the age of the internet. Accessing shareholder letters and reports from various fund managers or investors was not as easy as it is now. So the publisher would go to the meetings..Take notes...And report on it. Now today I won’t deny that if you look long enough some of the material can be found for free on the net...But obviously that has a cost of its own.
But here is why I feel that OID is priceless..,if you were to go to the local bookstore and go to the investing section...Take down the books on investing and separate them into categories, i.e. TA, short-term trading, and long term investing (using Graham and Fisher principals of growth and value) you would probably see that there is like a 10 to one ratio of short term trading books to long term (if not greater) I think that is probably because human beings want the instant gratification over delayed but anyway... the point is...20 years ago "value" investors like Buffett et. al. Were not the rock stars they are today. While I was only 15 back then I am pretty sure they were probably pretty much ignored in the mainstream of the public conscious.
Now along comes this guy, the publisher of OID, who wants to actually interview these relatively ignored individuals about how they invest and why. So since he is the only one doing it they talk to him. And over the last 20 years OID has built up a level of trust and access that few others can offer when it comes to the experts on long term, value investing.
So even though currently you can get some of the material in OID off the web for free (other than your time to find it) you can’t get the in depth interviews and discussions that OID's access gives them. To me that is worth the price of admission.
So I recommend OID..Go to their website check them out...Order the free sample..And if you subscribe realize you are not paying for stock picks but for ideas..
now here is the commercial part...If you decide to sign up..If you tell them it was because of me I will get 4 issues added to my subscription...So if you do sign up email me before and I will give you my full name to put down on the subscription form... now on to the comment...
So I was reading the Bonus collection OID sent me when I signed up (when you sign up they send you a nice book of about 250 pages with 11 articles form previous editions as well as the last issue for free, so if you cant the last issue with the 10 you buy you are actually getting 11 issues) and I am reading a article about a talk that Jeremy Grantham gave (just Google him and you can do background) and Mr. Grantham quotes John Maynard Keynes as saying in part that (I will take the quotes bit by bit for my own purposes of clarity and point making)
"it makes a vast difference to an investment market whether or not the [long term value managers] predominate in the influence over the game players."
As a new investor I asked myself why it makes a difference. And then I remembered what Buffett had to say in his most recent letter to shareholders (find it here http://www.berkshirehathaway.com/ the investment market doe snot want long term game players because the market makes money only when there are buys and sells...
Think about what would happen if everyone would buy and hold for at least a year? It is in the markets interest to get people to embrace short term trading regardless of whether it is better or not...It is the action they need..
Grantham goes on: "Investment based on genuine long-term expectation is so difficult as to be scarcely practicable. He who attempts it must surely lead much more laborious days and run greater risks than he who tries to guess better than the crowd how the crowd will behave...Moreover life is not long enough; human nature desires quick results. There is a peculiars zest in making money quickly..."
To me it makes sense...If you are going to make one investment and hold it for 10 years you are going to work REAL hard before you pull that trigger...because you only got one life to get it right.... on the other hand...For short term traders there is always tomorrow....
it reminds me of when I was a kid and I would read all these WWII and Vietnam true life army stories about the best shots or snipers in the service. They were always these backwoods kids who grew up poor and having to hunt form a young age to put food on their mamma's table for their younger siblings...And they were so poor... The story goes...That they would be able to afford very few bullets for their weapon...Essentially they had one shot a day to bring down their prey...Shoot and hit the family eats..miss and you go hungry..miss enough you die...
well such a situation brought out extraordinary focus and concentration in unique human beings... and I think that is what Keynes as quoted is saying that for those of us who want to invest for the long term...Because we are committed in most cases to a 2-5 year time line for holding our stocks...We need to get it right the first time because are lives are not infinite...And in the short term we have to trust are decision making process enough to have faith that are purchase which looks bad today and maybe for the next 6 months will turn out okay in several years. Thats why it is harder to be long term than short term.
Now the next part really got my attention:
"it is the long-term investor, he who promotes the public interest, who will in practice come in for the most criticism, wherever investment funds are managed by committees or boards or banks. For it is in the essence of his behavior that he should be eccentric, unconventional and rash in the eyes of average opinion. If he is successful, that will confirm the general belief in his rashness; and if in the short run he is unsuccessful, which is very likely, he will not receive much mercy."
So Keynes says this... what 60-70 years ago...
Now this blog is not to promote the ideas of Buffett to the exclusion of other ideas...But because he is known as the greatest of long term investors...lets look at what is being said today about Buffett... read the following:
from Shai at grahamian value http://www.businessedge.ca/index.cfm/edtn/3.cfm
I found this on my own http://moneycentral.msn.com/content/P145831.asp
so here is a guy 70 years ago talking about how the investment community will always have something to say about a long term investor... the first to discount his success and the first to triumph on the perceived faluire ....why?
Because the market, those who write about, and everyone else has a vested interest in you and me trading more often...cuz the more you trade the more you pay your broker...or your newsource for more information...etc...
now again I am not saying that there are not a lot of people who make a lot of money trading in the short term...and for a lot of people that works for them and great more power to them...And that even Buffett has done so from time to time... but i dont knock them so why do they knock my style..
for me I am just saying that it seems that all the "noise" that is put has more of an interest in seeing people churn their account than they do watching them sit and do nothing...
So that’s my thought for the day....when every one says you should go one way...they maybe right...
But at least stop and think...why??.
And if the reason is not good enough for you...
don’t be afraid to stay put and let the crowd move on...
because our mom's were pretty smart when they would tell us "if Jimmy jumps off a bridge are you gonna do it too?" in response to us answering "i dunno, cuz Jimmy did it" when she wanted to know why we did something stupid...
so why are you gonna buy a stock just because everyone else is?
so your mom's advice when your a kid still holds...have a reason for everything you do...and if you can't trust your mom for advice who are you gonna trust....????
Thanks for reading...
Posted by Steven at 3/14/2006 01:17:00 PM
I see that I now have 4 confirmend readers who link to the RSS feed. Welcome!
For you or anyone else who finds this site I recommend you start reading from the begining. The simple reason is that this blog is a mix of sorts. As I grow my knowledge base and make discooveries I will try and share them, but I wont be going back to information already discussed. Once I learn how to walk I wont again describe learning how to crawl. (which doe snot mean I wont answer any comment or quesiton, just that there wont be a future post absent a comment).
In a sense my posts are sequential in nature as I detail what I find, how I use it, and what I am thinking.
I have two really good posts coming up in my mind. One deals with a quote I read this morning. The other are some thoughts on my developing philsophy of how exactly I am going to invest.
As a reminder, my site is geared to someone like myself, new to investing or taking control back from mutual fund managers. My intent is to offer my own persoanl thoughts on the information I find and any success or failure I have in hopes of saving others money or most important time.
I do not ever plan on offering stock picks or rejects. That is because if stock A is the best for me right now does not mean it is for you.
I will from time to time eventually talk about why I made certain decisions as they relate to specific investments as a backdrop to my analysis. Or if someone asks me about a stock I might offer my perspective, but never a recommendaiton.
And for the time I wont be offering any in depth analysis of what may or may not be good stocks, because I am still figuring out myself how to value a stock. And because other websites that I linked to can do that better.
Eventually I hope to come up with a schedule of posts...something like Monday I will talk about new blogs/websites I have come across in the last week and why I like them.
Wednesday I might talk about books or articles I have read in the last week and what I got out of them.
Friday I might eventually talk about stocks that I am watching and why they caught my eye.
I encourge anyone who reads to feel free to comment or offer sugestions. Like I have said before I hope to accomplish two things with this blog...learn more about why and how I am investing by writing it all down...and two hopefully help others out there who might have the same challanges as I have. Comments from you will help me focus on what you want to read about. i cant guarantee I will know the answer, but I will promise to think about it together.
Anway thanks for reading,
Posted by Steven at 3/14/2006 11:37:00 AM
Sunday, March 12, 2006
I do hate to admit it but I made a mistake so far in investing. As you may know from reading this blog I got started with investing around Thanksgiving 2005. See my first post to get an idea of how I started.
Anyway, about the same time that I figured out that I did not want to go the mutual fund route (mid-December) but before I had figured out what of investors I wanted to be (aka before I read Grahams Intelligent investor) I signed up for a newsletter that is a pure TA strategy.
At the time I was thinking that I would do a little value using screens and a little TA using this newsletters picks.
Now this newsletter is put out by a reputable guy. He has written books, has is own regular article on one of the leading investing websites, and I mainly bought it because I had followed his writings off and on. It has been published since September 03 and his picks have returned 25-30 percent in 04 and 05.
I took a trial of the newsletter, liked it, and laid out a couple of hundred bucks for a year subscription (I know I know if I had know then what I know now I would have just sent my money to Bill, Geoff, Shai, or any of the other blogs that I have learned from). This was in late December.
Anyway about a week after I signed up I found out that the newsletter was changing from a small inhouse operation to being run buy one of those big websites that pushes all kinds of investment strategies. Anyway the cost of a years subscription was going to go way up and so out of fear/greed, and thinking I was going to use the system... I signed up for another year before the price went up...yup another couple of hundred bucks..I know I know don't say it...And don't tell my wife either...
Anyway by mid January I had read Graham's book..And like Buffett said about the first time he read it the light just came on. While Greenblatt's book (little blue book see my earlier post) laid out a general idea of value investing, reading Graham's book made me understand the difference between investing and speculating. And I realized I was not a speculator. That's why I recommend you read Graham. Because I think that if you truly are wired to be a "value" investor it will crystallize your approach to thinking about how to go about it.
Anyway the newsletters system is pretty simple..The guy has a system that picks ten stocks a month..You buy on the last trading day of the month...Sell one month later and buy the next ten...He also throws in a few picks here and there that are not pure system plays but his own picks based on certain criteria...
now like I said...So far the system does work...This year it is up a little over 5%....But it is just not for me and i am not using it...For a lot of different reasons...Mainly i am not going to do some thing I don't feel comfortable just in hope of making my money back.
But that does not mean it is not right for you. This post is not a knock on the newsletter..It is a knock on me.
My moral to this story is simply that before you go out and buy this or that to help you invest...Figure out first what kind of investor you are going to be...If you are a value, growth, TA, or whatever it does not matter...But do some serious thinking about your investing philosophy before you start paying for anything...
And you can do that for free by reading blogs...Books (before you buy check your local library)...Magazines...
my mistake was not taking the time to figure out what style suited me best before I jumped...I hope you don't make the same mistake.
Moreover, it was a desire to make things easy that also lost me money. I mean who would not want to make 25% a year just buying and selling when told to without having to think...I mean I musta broke every rule in the book on this one...
Anyway it is pretty hard to stand up in public and tell you how big of a dope I was to waste my money...But I started this blog in hopes of helping other new investors like myself and I felt that it is important to not only to talk about the good but the bad and ugly as well.
Most importantly we need to remember that making the mistake is not the bad thing...Repeating it is...And believe me when I tell you that I think about my mistake everyday...Wasting the money hurts...
but thinking about the opportunity cost (meaning thinking about all the other things I could have use the money on like actual stock purchases) hurts a hell of a lot more.
So in the words of Sgt. Phil Esterhaus "let's be careful out there."
Posted by Steven at 3/12/2006 10:47:00 PM
As I have mentioned before I just purchased my first shares of stock not to long ago, 2/16 to be exact.
Anyway, as a new investor I read about keeping costs down. So I went with what I felt was the best deal for me which was foliofn.com
Now the good thing about folio is that it only charges $4 to buy/sell a stock and also they let you buy partial shares. For someone who is just starting out with a smaller account and not much experiance being able to buy partial shares is great because if you are investing say 1,000 over ten different stocks you can weight them 10% each to avoid overexposure (ia mnot saying you should diversify, just that unti a new investor can come up with a good reaosn to buy more of one and less of others than equal balance of your shares may be the best).
The way foliofn works is that they take your order and fill it at 11 and 2 EST with all other orders for the stock, thats how they can give you paritial shares. They call it a window trade. But you can read more about it on the website and if you have any quesitons just let me know.
Now the thing i dont like about foliofn is that not every stock is avaliable for the $4 window trade, so if you want some obsucre stock or one not listed on the major boards you have to pay $14.95 for a market order.
But if you are just starting out they cover just about every stock you might want to buy for $4.
another thing though is that foliofn does not allow shorting or options, but again if you are just starting out that may not be the best thing for us anyway.
But two other low cost brokers I have found are firsttrade.com and tradeking.com, they both trade obscure stocks and options.
Firsttrade charges $6.95 for a market order and tradeking charges $4.95
They essentially seem to offer about the same service except for two differences.
Firsttrade does not charge any fee for a purchase of a no-load mutual fund. Tradeking charges $14.95.
But Tradeking looks like it has the better use of charts and research.
So if you have mutual funds or are plan on buying some Fristtrrade might work for you, but if not Tradeking is lower cost.
For me I plan on opening an account at Tradeking to see how I like and compare it to Foliofn, since I don't plan on buying mutual funds.
I encourage you to check them out and form your own opinion.
I do think Foliofn does offer the lowest trade cost $4 for those who want to trade most common stock and want to keep thier portfoilo evenly weighted by percent.
But if youthink that you might trade options or need to buy less well known securities than Tradeking offers a good alternative at $4.95 for a common stock trade.
Once I have a month or two with tradeking I wll let you know how it is going.
Please note my next post will be on some mistakes I have made in the few months I have been investing. I think sharing those with you will be as, if not more, important than talking about the good choices I have made. I actually have been workign up the nerve for this topic because i dont think anyone likes talkign about making stupid decisions.
Posted by Steven at 3/12/2006 04:33:00 PM
Friday, March 10, 2006
These are not blogs but I think they are great resources for new investors. I think you should check them out. Find link on right under "Non-Blog Resources"
Here is a good Blog too
Posted by Steven at 3/10/2006 04:29:00 PM
I just wanted to let my readers know that I do not receive anything in the way of compensaiton from the websites I talk about.
If I ever do receive anything of value I will tell you.
Also if you click on a book on my website that I recommend and end up buying it from Amazon I will receive 5% of the purchase price as a credit towards my own purchases at AMZN. Just wanted to let you know that. I dont expect to generate revenue for this site, mostly i just want to earn 5% of my own purchases at AMZN.
Posted by Steven at 3/10/2006 02:55:00 PM
The websites listed to the right in my links sections are those which I read on a day to day basis.
One of the sites that I have found most valuable is Gannononinvesting.com. Geoff Gannon does a good job of taking a new investor like me and explaining how to value a company using security analysis. I consider his website to be one of the best blogs out there and in the Major league as far as blogs go.
So I was quite excited to see that one of my comments became a post by Geoff (or "G" as I call him). Which, for those baseball and Bull Durham fans out there, is where I got the title of this post, having made it to the show for a cup of coffee.
I recommend new investors spend some time reading through G's blog as I think it is well worth the time.
I also recommend also going to Bill's nodoodahs.com blog listed on the right inmy links. Bill's posts on investing are as good as they come and he takes on a lot of different issues which can fairly be said are related to investing. Bill's blog is also one that is top notch in my new investor opinion.
Posted by Steven at 3/10/2006 02:40:00 PM
Wednesday, March 08, 2006
I have realized that reviewing every blog I come across is not an efficient use of my time. So instead what I will be doing is putting links on my blog to every blog that I read regular or have some interest in. By implication by putting the blog on my link list I am recommending it as useful to new value investors.
For those people who visit my blog and click on a link I will then be happy to respond to direct questions and provide comments on why I find those websites useful to me.
I will also start offering a running commentary on what I am doing as a new investor.
How new am I you ask?
Well I just made my first investment about three weeks ago so I guess I am pretty new.
To get an idea of my budding investing strategy please click on the gannononinvesitng.com link and nodoodahs.blogspot.com link.
For those who are absolutely new like me to investing you must read this book.
I believe it provides an essential primer on how to think and approach value investing.
Posted by Steven at 3/08/2006 05:02:00 PM