Investing With Mom

Technical Difficulties Complete

... and now we're back up and running.

Only a minor setback, since it took less than 4 days to get back up and running. Not bad, considering how much time since my last post.

Now that we are back up though, the updates will begin in earnest.

Sabbatical Over...

Or at least I am going to do my utmost to get back into the swing of things.

I've spent most of the last 6 months focused on a new job with a Fortune 500 company, in hopes of making enough money to pay the bills. Now that I'm finally settling in to my position, it's time to get back to publishing, before the Investment Club goes fully live.

Fortunately, my mom and I have been comfortable enough with our returns that we haven't felt the need for any major changes to the portfolio, but that is about to change as well.

With about 5 or 6 stocks on our watchlist and about 3 or 4 stocks ready to be removed from the portfolio, I fully expect to have some new recommendations published within a matter of a few days.

Well, it feels good to be back in the saddle again and I will post any additional updates, as they become necessary.

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.

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.

One Year

You know they say that marriages are basically still in the honeymoon period for the entire first year and that the real job of making the marriage work starts after the first anniversary.

While I'm not sure I entirely agree with that, today marks the one year anniversary of the launch of the Investing With Mom newsletter and this website.

A lot has happened in the last year, we started the day Reagan was burried, we proceeded through the election period and then watched as a tsunami swept across a pair of continents.

But this website and blog are not about politics, or current events, unless it's dealing with the way in which politicians handle our collective finances, usually with disastrous results, or people's current opinions of the various proposed solutions.

While the numbers have yet to be confirmed, we've grown from just 14 subscribers receiving the first issue of the newsletter to nearly 5000 subscribers in just 12 months. Hopefully tomorrow, I will also be able to update our returns for the last year, when I publish the next issue of Investing With Mom.


PS, I want to wish Carley a happy 30th birthday and hopefully our mutual friends Andrea, Melody, Miranda, as well as everyone else, are helping you to enjoy your evening.

Party On!

The Wisdom of Mark Cuban

Okay, so I totally disagree with Mark when it comes to Social Security.

But after reading his Memorial Day blog entry I felt it only fair to point out that I usually really respect his opinions and think he's a very smart guy.

In this particular case, I can completely identify with the whole counting the months thought process.

In fact, in 10 days, when we pass the one year anniversary for Investing With Mom, I will have outlasted all but 4 previous jobs or businesses.

The only other business I've ever owned that lasted more than a year was never as successful as Investing With Mom has become, and as my mom pointed out, the rest were just jobs.

Definitely nothing special! At least, not as far as jobs go.

Actually, one of those jobs, Eckerd Drug Store, only just lasted one year. I remember because I got an automatically triggered raise on my one year anniversary. But they didn't like the fact that I needed to take 2 weeks off to travel to Spain with my senior class as our class trip at the end of high school, so when I got back, they only asked me to come into work one more time, for just 2 1/2 hours.

They didn't want to fire me, because I'd done a good job for them, but they didn't want to let me work either. So they just never scheduled me again.

Oh well, their loss and our gain!