August 2005

A Continuing Theme

To continue our theme from yesterday and discuss additional Investing With Mom recommendations that have generated significant returns, allow me to update you regarding our alternative energy plays from May.

3 months later and the pair of stocks are up 71% and 39%, not bad if you ask me.

Both of these stocks are obviously benefitting from Hurricane Katrina, as are most energy stocks, but one of the 2 announced a 3-for-1 split that takes effect this coming weekend.

The translation from Wall Streetese to English means that if you do not already own this Canadian alternative energy company by the close of the market TODAY, you won't get the benefit of receiving the extra shares in your account. You'll just have the opportunity to buy them at the newly adjusted price.

The other company, up 71% over the last 3 months, just recently admitted that while their experimental alternative energy developments are not yet finished with development, they already have orders for this amazing new power source. They just can't give us any details yet, because their clients are also still in development.

You can bet your bottom dollar that we will be up even more as Wall St. anticipates who these partners/clients are.

In the meanwhile, you can still pick up either stock and profit handsomely from them. If you're not a subscriber yet, but you go ahead and subscribe today, you can get the name and complete info on the first stock, the one that's splitting, by going to the recently archived e-mail notification that I originally sent to all the paid subscribers exactly 3 months ago.


Finally, I'd like to mention that the San Antonio technology company, that I first mentioned a month ago, has been rapidly expanding and has extended the offer I mentioned to a significant extent.

Due to my connections within the company, I'm being allowed to continue offering the same opportunity to anyone who wants to take me up on the offer. However, due to my personal time constraints I am limited to a certain number of partners.

While, I have not yet reached that limit, I expect to achieve that point in the very near future, so don't put off this decision for very long. Because I can pull the offer any time I choose.

Remember, all you have to do to take advantage of this once in a very long time opportunity is to 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.

Total Loss of Control

The last sign of the total loss of any remaining vestige of control over the oil markets by OPEC was published this past weekend. I've said this before, and I'm not the only one to say this either, but OPEC hasn't been in control of the price of oil for several years now.

As a little aside, any of you who still think that Bush's decision to re-invade Iraq and finally finish the original war with Saddam has anything at all to do with the price of oil, then you've missed the same signs that OPEC has missed.

When the following is published online for the whole world to see, you finally get a glimpse of exactly how little control OPEC has anymore. If you still need me to give you an exact number, here it is - ZERO Control!

"Energy prices refused to soften despite bearish commentary from OPEC overnight. Wire reports quoted the cartel's current chief, Shaikh Ahmad al-Fahd al-Sabah of Kuwait, expressing concern Monday about the refusal of oil prices to decline from recent high levels. "We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," he said. "OPEC will be exploring various options for the September meeting which will hopefully contribute to moderate prices."

My answer to the dear Shaikh is, "Good luck and God speed." Because he may as well have stood in New Orleans and told Hurricane Katrina to turn around and head back to the Atlantic, as that's about as much control of oil prices as he and the rest of OPEC have anymore!

It's no secret that a little over a year ago we recommended Chesapeake Energy (CHK - NYSE) right here on Investing With Mom, and it has done very well for us, up 112% including dividends. That means Chesapeake is just the 2nd stock to more than double since being included in my mom's portfolio. I just wish I'd put of her money in it.

Well all that's about to be remedied as I've been doing additional research over the past few weeks and I have some new information to pass on to my paid subscribers.

To sign up up, and keep from missing any more recommendations like Chesapeake, just click here

A True Basket

Finally finding more information regarding the Yuan's trading basket of currencies.

It's interesting to look down the list of currencies and see how many of them are already rising against the dollar. As the Daily Pfennig pointed out yesterday, that trend will continue as the Chinese will have to purchase more reserves in each of these currencies as there is no way that they already had enough when compared with the volume of US dollars they had in their reserves.

Another common thread that holds several of these currencies together is the fact that they are commodities based economies. Both of these factors bode well for the Investing With Mom portfolio, even if we don't currently have any Chinese stocks.

Great blog discovery

I just came across a great blog that I wish I'd known about earlier, the Dr. John Rutledge Blog.

His comparison of Wall St.'s analysts to Eeyore is priceless, but its the comments regarding the Fed's decision to raise interest rates 1/4% on Tuesday that made me click through and read the rest of his posts.

The man is hilariously on the money.

Gas Price Hell

It seems almost daily that my mom asks me why gas prices are so high, but spare a thought for those who live elsewhere around the world and due to various reasons pay significantly more than we who are fortunate enough to live in the US of A.

Obviously this particular location is priced a little high according to the local authorities, but when you convert the cost into dollars per gallon it gets downright outrageous.

$6.68/gallon for gas! I may not like it here in D/FW with prices hovering around $2.30/gallon, but I can purchase nearly 3 gallons for the same amount of money.

No wonder the dollar has been rebounding all year against the Euro, prices are way too far out of wack.

39% since December

Advisory subscribers received the latest portfolio changes via e-mail earlier this evening.

Changes included 2 sells, 2 new buys and 3 dollar cost averaging purchases, where we are lowering our cost basis by purchasing more shares at current, lower prices.

We've finally sold long-time holding Annaly Mortgage (NLY - NYSE), because although it "has had a great run over the last several years, serving up outstanding capital gains and a double digit dividend to boot.

"I unfortunately saw the writing on the wall several months ago and chose to press on anyways, choosing to believe that the dividend would save us.

"In the end, all it did was provide a false level of security.

"NLY has an outstanding management team and provided they stay together over the next few years, NLY will be a great company again in the future. NLY will thrive again when the yield curve returns to a steep angle, in the meanwhile the stock is still overpriced for a flat or negative yield curve environment.

"Which is why I say that NLY is a busted stock that cannot provide enough of a dividend to protect against the downdraft the stock is currently experiencing."

Unlike others, I am willing to admit when I'm wrong and move on, however the flip side of that is when I'm right, I'm right!

The other stock we sold is up 39% from when we bought it back in December! That's 58% on an annualized basis and you can't beat that with a stick.

Fortunately for my mom and her portfolio, this one stock represented the largest portion of her portfolio. By only selling part of it, we have rebalanced my mom's portfolio significantly thus reducing our risk and exposure to the continuing pressure on interest rates.

This stock will probably continue to wend its way up the charts for a number of months, but we have now reduced our cost basis to such a ridiculously low level that we can't help but make more money going forward.

In fact, our cost basis is now just $3.48/share for a stock we originally paid over $14 for. The vast majority of the money we still have in the stock is the profit we've made in the last 8 months.

In other words, we're now playing with the house's money and doing exactly what I ought to have done with NLY about 2 months ago.

Maybe I ought to change the Investing With Mom slogan to "Live, Learn, Make Money!"

If you want to know more about the Investing With Mom portfolio and any changes we have recently made, just click here to subscribe now. Becoming a subscriber will also make you eligible for pre-launch information regarding the Investment club that should be launched sometime this fall.