Selling my Bristol Tickets

Because it looks like we won't be able to go to Bristol Motor Speedway next year, it looks like I will be selling my tickets on Fleabay or Stubhub. Given the popularity of the event, I should be able to break even on the tickets. Since I wanted to stay on the season tickets list, it was worth the risk of a small loss to renew the tickets.

Retirement House Fund – Redneck Bank

While enjoying our vacation, the wife and I got to talking about retirement/lake houses. Since we will not borrow more money to purchase one, we decided to start saving for one. With an initial deposit of $100, we have a long way to go.

We are planning to contribute $10 per week with annual increases until we end up saving $200 per month. With a little luck and 4% annual interest, we should have $23,000 set aside within 10 years.

Best of all, if we do not buy a retirement home/lakehouse at that time, the fund will be a nice addition to our savings.

Treat your Coworkers Well

Because of layoffs in our industry, some former coworkers at my former employer are looking for jobs. Two of them ended up looking at positions at my company.

1. Bob: A few years ago, I worked with Bob. Although we will never become "best friends," Bob was competent and professional. Furthermore, he was friendly and did things to make my job easier to accomplish.
   
2. Paul: Although I did not work much with Paul, I understood him to be competent in his job. Unfortunately, Paul was a "player" who only did things that helped him. When I needed him to do something that would help me do my job, he refused to help me out.
   

When Bob contacted me about job openings at my company, I quickly and happily reached out to my contacts in an attempt to help him out. I found an open position that he may be qualified for. For what it is worth, I gave him a great recommendation. Hopefully, the people who make the hiring decisions like him.

About a month ago, I noticed my boss interviewing a guy in a conference room. During the interview, my boss realized Paul must have worked with another coworker and me. When both of us gave him negative recommendations (for similar reasons), Paul did not get hired. Neither of us wanted him working on our team.

Bottom Line: When times are bad, you need to have the support of as many former coworkers when you are looking for a job.

 

Vacation Spending Report

Looking over the Quicken reports from our trip, it looks like our vacation ended up costing between $2,000 and $3,000. Next year, we are going to do the same trip.

1. Rental Car : $200
   
2. Gasoline: Approximately $300 (they gave us a gas guzzling SUV)
   
3. Hotel Bill: $400 - we used Starpoints for two nights.
   
4. Meals: Approximately $500-600
   
5. Souvenirs: $300
   
6. Clothing Purchases: $100
   
7. Nascar Tickets: $300
   
8. Golf: $300

I am rolling out of stocks to ETF

With the rapid run-up in many of my individual stocks, I have decided to sell many of my winners and transfer the money into low-cost ETF's. Why? Investing in an individual stock means I believe that stock will outperform the market. With my winners, I am not confident they will continue to outperform so I am trimming my positions. In addition, I do not have any good "ideas" on new stocks.

BUT – I am not totally bearish on the market. Using ETF's allows me to "buy" the entire market at a very low cost.

Car Trip – Why Renting is a good idea!

The vacation is over and it is time to add up the costs. Instead of flying and renting a car, we just rented a car from Hertz for the long car trip (2,200 miles total in 1 week). For $200, it was money well spent.

1. In terms of wear/tear, we easily saved money at a cost below 10 cents per miles.
   
2. We were a good 14 hours from our home during most of the trip. Had something happened with our car, we would have had to deal with getting it fixed, arranging alternative transportation, and possibly paying for extra hotel accommodations. With a rental car, a mechanical breakdown means calling Hertz and having them deal with it.

My Active Investments Performance - YTD

The vast majority of my retirement portfolio is invested in mutual funds (my 401k) and ETFs (my IRA) with a roughly 80/20 allocation favoring equities. Nevertheless, I do actively manage some of the money by picking stocks and by investing in targeted ETFs. Below, I have outlined most of my actively managed stock picks (I did not include my employer's stock).

 

Description	Change Since Purchase (%)	% of Portfolio
Berkshire Hathaway B	8.58	2.15%
Goldman Sachs	4.12	2.10%
Ford Motor Company	43.15	2.02%
Monsanto	-5.62	1.57%
Microsoft	2.88	1.53%
Cisco Systems	15.17	1.51%
IBM	11.72	1.15%
Bucyrus	5.67	1.05%
Coal ETF (KOL)	42.6	0.94%
Google	31.24	0.89%
Exxon Mobile	-4.33	0.88%
Alcoa	38.09	0.86%
REIT EFT	22.58	0.74%
Honda Motor Cars	20.74	0.73%
Procter & Gamble	-0.3	0.51%
Financials ETF	42.52	0.46%
Target Corporation	3.42	0.41%
Sonic	-0.09	0.18%
CIT Group	-93.62	0.00%
% of Total Portfolio		19.68%

 

 

Comments:

1. Asset Allocation: I will not invest more than 2% of my portfolio in any individual stock. If a stock reaches 4% of my portfolio, I generally will "bank" my gains.
   
2. The Honda gain is a fluke. I bought it for long-term potential and it immediately spiked up. Pure Luck.
   
3. My Ford investments was a speculative bet. All my shares were bought below $5 per share. I have a sell order in a $10 for half the position.
   
4. The CIT shares are worth less than $10. If I sell them, the commission will exceed the value of the stock sale. Will hold them indefinitely.
   
5. Note the EFT positions (Coal, Financials and the REIT). The Coal and Financials performed very well for me. I "took" some of the profit and reduced my positions recently. Bulls make Money, Bears make Money, Pigs get slaughtered.
   
6. Sonic is my favorite fast food restaurant. I have a small position, but it is a speculative bet.
   

Time for Defense – Stagnant Market

Thanks to no small amount of luck and some very good stock/ETF choices (Ford, KOL, Financials) my 401k and IRA have finally recovered to break even levels. To do that, certain investments I made are up 40% in less than one year.

1. That kind of performance is an aberration. It is not sustainable.
   
2. In the coming months, I think the stock market will be stagnant to slightly down.
   

 

My Strategy:

1. With the IRA, to which I cannot add money, I will remain defensive. I have sold some of my big winners. Since I don't have any good "new" stock ideas right now, I am gradually buying total market ETFs. In addition, I am going to buy $5,000 in the next auction of 5 year TIPS.
   
2. With the 401k, I am going to continue to buy equities. Through the power of dollar cost averaging, I will benefit from any market pullbacks (provided they are short term) in the long run.

Budgeting by Courts – Cali Style

Just when we thought California had come up with a budget deal, we learn that people/entities/groups that believe the cuts were wrong have gone to court to block budget cuts. Now, California is going to be forced to spend what little money it has on attorneys. Why have a legislature and governor if the courts are going to tell them what to spend?

http://www.upi.com/Top_News/2009/08/10/Budget-cuts-bring-many-Calif-lawsuits/UPI-92151249925371/

Save the Budget – Release the Convicts

WTF – To balance the budget and deal with overcrowding, California is going to release 40,000 criminals. While it might save some money in the short run, having criminal justice system based upon "Catch and Release."

401K - Performance

Because of the timing of a job change, my 401k has been exposed completely to the downturn in the stock market. As a result, it went down pretty significantly. Nevertheless, I am happy to report that the stock market surge has erased most of my losses. Overall, the account is down 1.6% from what I (and my employer) contributed. Because of the benefit of the company match (I am lucky to have it), it is worth substantially more than what I have actually contributed.

Moral to the story – the company match, if you have the opportunity, is a godsend.

Saved $100 with Amazon

With the GPS on the fritz and a trip coming up in 2 weeks, my search for the best price led me to Amazon.com where I purchased a new unit for $188.00 including free shipping. The local Best Buy wanted over $300 and the best price I could find on fleabay was $275.

Bottom Line – if you know what your want and it is easily shipped, you can save money by searching the internet for the best deals.

Up 20% in 3 Weeks

Sometimes we get lucky with our investments. On July 15, I bought Honda shares (HMC) hoping it would be a good long-term investment. Since they are the best (IMHO) auto maker in the world, I figured they would benefit from a rebounding economy and weaker American competitors.

Three weeks later, my investment is up 20%. While I would love to claim clairvoyance, I simply got lucky. To be honest, I am not sure why it went up so much. As a result, I am considering selling out and banking my profits.

Losing Positions Analyzed

Thanks to the recent upturn in the stock market, most of my remaining positions in my IRA have positive returns. Below, I will analyze the remaining losers:

1. CIT:    At a negative 96% return, it would be my biggest loser but for the fact I only owned 5 shares. Total loss is $106.00 on current shares. Although I believe these shares will eventually go to zero, the transaction cost to sell them would exceed their value. Thankfully, I sold most of my shares before the loss.
   

   
    

2. Monsanto:    I built this position in the last 6 months. At 2.3% of my portfolio, it is a significant position and the 2.5% loss is not appreciated. Nevertheless, I am going to hold onto this stock as a long-term investment.
   

   
    

3. Sonic:    Proving that a good product is not necessarily a good investment, I lost a few hundred dollars on this investment before closing out most of it. My remaining 15 shares are down 5.81%. Because the remaining position is small, I am going to keep the shares and see what happens.
   

   
    

4. Exxon:    Like Monsanto, this is a large position that I built during 2009. The 1.1% loss is the result of an 11% loss on the shares I purchased in June. Shares bought in March and May are performing better. Because I believe some exposure to energy is a risk, I plan on keeping the investment. I expect this position to be "even" by the end of 2009.

Vacation Coming

Well, the parents are coming to town. Hopefully, the weekend in Vermont won't break the bank.

Obamascam – Health Care Idiocy

While the devil is always in the details, the devil can be anywhere. In the case of Obamacare, the premise of the program is fundamentally flawed and un-American. At its basic level, the program is designed to provide health care for a large number of people paid for by a small number of people.

If we want to have socialized medicine, a fair plan would require everyone pay their fair share of the cost.

Buy stock tomorrow?

Today, the market was up big. As a result, stock portfolios should be at/near 1-2 year highs. Unfortunately, tomorrow is going to be a rough day. After hours, Microsoft, American Express and Amazon reported "bad" numbers and a pullback is likely.

For frequent traders, I don't know what to tell you. For people looking to add to their positions with a long term timeframe, tomorrow should give us a decent buying opportunity. Essentially, we will be able to buy stocks at 2-4% less than we could have bought today. Bottom line, start looking towards using the correction to buy. Whatever you do, don't buy on "up" days.

BUT -

Ebay Saved me $150

Thanks to eBay, I was able to save $150 on my wife's first set of golf clubs. For the price of cheapo "Walmart" clubs, I was able to get a new hybrid/iron combo set from Adams Golf. If you know what you want to buy and search hard, eBay can really give you some bargains.

Comcast – Continues to Screw Up

After thinking I had worked things out with Comcast, I found a bill in my mail today from a company often called the Worst Company in America. After waiting on hold to speak to the CSR in their billing department, I received an honest comment: "I have no idea what is happening on your bill." Of course, that is the reason I wrote a letter to the CEO and my state attorney general's office two months ago.

Basically, Comcast's strategy seems to be. If we bill them, they will pay. If they challenge a charge, we will keep our internal billing records incomplete and incoherent so they will give up and send us the money. As I sit right now, I am holding for a "supervisor" in hopes he/she will fix the problem. Would anyone like to take odds on them getting it correct?

Wells Fargo Sues Itself

Having dealt with Wells Fargo Home Mortgage, I have a healthy respect for their ineptitude. Nevertheless, I would never had imagined they would sue themselves. They even managed to hire one set of lawyers to defend themselves from their own lawyers.

Incredible!!

Link: http://www.foxbusiness.com/story/markets/al-lewis-wells-fargo-bank-sues/