July 2005

Investment Club & Other Business

Just a quick note to say that I've been working on the logistics of the Investment Club and should have some info out to the paid Advisory subscribers later this week.

Obviously the returns that have been generated over the past year plus are not an accurate prediction of the future returns we will generate, but we've done very well so far and I aim to keep it that way.


Soon I'll have some comments regarding the yield curve which continues to flatten, even though rates have risen since the Chinese Yuan revaluation, and the Yuan which is an even bigger enigma now that the Chinese have revalued, albeit by a very modest amount.

I've been fairly quiet, because I've been reading up on some interesting theories in hopes that I can have a more coherent point of view when I finally do write something.


Lastly, I'd like to mention that I've been given an opportunity to be a part of a San Antonio technology company before it becomes a major force in online marketing. While this doesn't affect Investing With Mom in any way, except to possibly ease the process whereby the Investment Club will operate, I would like to make a general offer.

The founder of the company has given me the opportunity to "benefactor" a limited number of people of my choosing into their online marketing program. What this means is that you will have a free technology package ($199 value) from the company, and be given the opportunity to market it yourself, before they launch their major marketing push later on in August and September.

By being in ahead of the crowd, you will not only receive the free, $199 value, business package from this San Antonio company, you will also receive your own dot.com filled with products to market and the powerful marketing backing this company will provide you.

I can't say anymore here, but if you want to earn some money online, so that you can benefit from my investing recommendations, here's a way to do so with no money out of pocket. It's kind of like buying a free option on the future success of this company, if it hits the jackpot, so do you and if it doesn't, well you didn't even have to pay commision on this free option.

I'd call that the no-brainer investment deal of the week, but you need to hurry, because the offer won't be around for long. In fact, you need to let me know that you are interested as rapidly as possible, as only the first 50 to respond will benefit.

I have already notified over 100 of my closest friends and associates, but you can still take advantage of this once in a very long time opportunity if you e-mail me, by clicking on my name at the bottom of this post, and write "Benefactor Voucher" in the Subject of the e-mail.

Currently, about 20 have responded and so I don't expect this offer to be around at the end of this week.

Latest Issue and Thoughts Regarding Our Track Record

Hopefully by now you have received and read the latest issue of Investing With Mom, if not here's your link.

Now that you have joined us here on the blog, let me add a few thoughts that didn't quite make it into today's issue, but have been uppermost in my mind while I've been updating the portfolio for the review.

Earlier in today's issue, I stated that 14 out of the 20 stocks currently in the portfolio are profitable, as well as 5 out of the 7 sell orders placed in the last 13 months.

The reason I pointed this out was because I want you to know that not every recommendation I make will be a winner.

As Steve Sjuggerud said in yesterday's issue of Investment U, "even trading strategies that promise a batting average of .900 can still cause you to go broke."

Let me repeat that, you can get 9 out of 10 trades right and still lose money!

I don't know about you, but I want to make money and as long as my mom and I are making money, I don't care how many stocks are losers.

Therefore, as long as we continue to cut our losers short and let our winners run, we will continue to make money no matter how many trades go against us.

And that's the whole idea!

To date, we've had 1 stock double our money and another return over 56% in less than a year.

Of the positions that are still open, one is currently up 75%, another is up over 48%, still another pair are up over 35% and three more are up over 25%. Obviously, that more than balances out the 4 stocks that are down at least 40% apiece.

However, if our batting average were to slip, we would have to compensate as rapidly as possible by being less forgiving of those stocks that drop.

The easiest way to achieve that result would be to automatically implement and enforce a tighter trailing stop policy for all investments, no matter how speculative. In the meanwhile, whenever it is prudent to do so I continue to recommend lowering our cost basis in any position that is not going as originally planned.

This is done in order that we might achieve Bill Miller's investment mantra: He who has the lowest average cost, wins.

Hopefuly, this has provided some additional insight into my investment thought process.

Until next time, I'll be searching for investments good for my mom and you!

27.9% since June 11th, 2004

It's as simple as that.

No gimmicks, no numbers being massaged, just the simple truth: 27.9% from June 11th, 2004 through July 10th, 2005.

If you want that on an annualized basis, it comes to 26.1% per year! At that rate, you double your money every 3 years. Period!

Now, just so you don't think I started up only 13 months ago, if you review my mom's portfolio going back to when I first started investing her money, Oct. 1, 2003, you will find that we're up 46% over the last 21 months.

Even that comes to 25.9% per year, when annualized!

All the info will be included in tomorrow's comprehensive portfolio review. In the meanwhile, I highly recommend taking a quick peak at last week's oil article.

You would have received it in your e-mail inbox, except for a technical glitch that I didn't discover until it was too late. However, I decided not to resend it due to the fact that I needed to complete my review of my mom's portfolio in order to publish this week's issue.

Finally, once you do get a chance to study the latest portfolio review that I'm publishing, I think you'll agree that joining the Investing With Mom Investment Club could be one of the smartest long-term investment decisions you'll ever make!

Remember, in order to participate in the Investment Club, you will need to be an active subscriber to the Advisory Newsletter.