Issue 15

11/08/04

Get The Advisory For Free

Issue #15 - Get The Advisory For Free

1. Get The Advisory For Free
2. Analysis Of A Portfolio
3. Election Recap

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Dear Friends,

I've received a couple of questions regarding both this free
newsletter and the Advisory service and so I felt that this
issue would be an excellent opportunity to answer these
questions.

Before I get into it though, let me just tell the Advisory
subscribers that your next issue will be online within a
couple of days. I will be including the charts and updated
numbers on a couple stocks mentioned briefly in last month's
mid-month update and I will be highlighting a couple issues
raised in today's free Investing With Mom newsletter.

Additionally, the transition to the new email server has not
been as smooth as I would have liked, so I'm sticking with
the current format for now. I will keep you all informed as
things proceed, but please be understand that I am working
to get you every issue when you should, even though that
process will not be as smooth as I may like it to be.

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Get The Advisory For Free

I had originally planned on highlighting the number of
stocks in the Advisory's portfolio that are currently
hitting multi-month, multi-year or all-time highs, but
instead I'm going to focus on one stock in particular.

While 3 of the stocks in our portfolio are setting all-time
highs, this stock isn't one of them. In fact, this stock
only just recently came off its low point of the year. I
obviously can't predict how it's going to trade in the
future, instead let me just say that this stock is
undervalued by at least 20% and maybe as much as 21 times
its current value.

Other advisors have previously recommended this stock, when
it was more speculative, but on Friday I received an
invitation from a big-time advisor, with over 70,000
subscribers worldwide, who's making this stock his latest
pick!

Normally, you would think that I shouldn't promote a
competitor's service, because then people would purchase his
service instead of mine. Instead I'm going to show you how
to use this stock pick to get the Investing With Mom
Advisory for free, and if you want you'll even be able to
get this other advisor's service for free too!

Normally this advisor's service is $199/annually as compared
to the Investing With Mom Advisory which normally runs
goes for $79/annually. However, it just so happens that he
is currently offering his service at a discount, just like
I did last week, so while you could pay him $99 for his
service, you can get the Advisory for just $64!

While some might point out that I haven't discounted the
Advisory as much as he, I will show you how you can use this
stock we're both recommending to get the Investing With Mom
Advisory for free when it is time to renew. Since we are
both making this recommendation, you can get its name,
ticker symbol and other pertinent information from either of
us.

Now in his estimation, this stock will triple by April and
then from there the sky is the limit, he even goes so far
as to estimate that it could reach 21 times its current
value. For the record, I believe this stock will be worth 6
times its current valuation by the middle of 2006, so he's
got a shorter initial frame of reference than I do.

If you were to get this stock from my Advisory, you'd get a
free pair of airline tickets, good anywhere in the world,
and you'd save $35 over the other service in just the first
year.

Let's say that in addition to your normal investment in this
recommended stock, you also invest that additional $35
in savings, too. Then lets say it triples by April, just as
he predicts. Which means that your additional investment
is now worth $105.

At this point, you could sell your shares and reinvest
elsewhere, or after selling your initial investment, you
could let the rest increase for free. Since we're only
dealing with your $35 investment for the purposes of this
illustration, you'd be left with $70 still in this stock
after selling your initial investment.

Now let's say that the stock gets bought out for double its
April valuation, during the fall. This means that we can
sell for my projected valuation in a much shorter time
frame. This also means that your remaining $70 turns into
$140+.

Thus allowing you to renew your Investing With Mom Advisory
subscription at $64, and still have $76 leftover to
reinvest!

While that's a small example, let's compare our regular
subscription prices instead. If you were to invest the $120
difference, by April your investment would be $360! At this
point you could sell $200 worth of shares, pay for the
other service, and let the remaining $160 double by fall.

Which would allow you to renew your Investing With Mom
Advisory subscription and still have over $250 left to
reinvest, more than 3 times the amount in the first example!

Just a thought for those thinking they can't afford the
Investing With Mom Advisory service.

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Analysis Of A Portfolio

Normally, I stick with market analysis, but today I'd like
to extend our discussion of recommended stocks by reviewing
a fictional portfolio.

While Sandra is a reader of this newsletter, I have changed
her name to protect her privacy. I have also adjusted some
of the figures in her portfolio, so that it doesn't seem
like I'm giving her or anyone specific individualized
portfolio advice.

Although Sandra is 64, same age as my Mom, she has no
intentions of retiring anytime soon. While she doesn't have
many expenses, she currently lives on about $10,000/per
year, she can't earn much either because of her Social
Security cap.

Her portfolio is also small, at around $20K, and she knows
she needs to radically adjust it because she expects to live
past 95, just like her mom. How does she do it?

Well first lets consider where her portfolio is currently
invested and then discuss possible solutions. Currently the
portfolio is evenly divided between a 401K, some funds at a
half decent mutual fund company, stock in an East Coast
utility and stock in a major retailer, Wal Mart. The stock
in Wal Mart comes thru profit sharing, because she has a
part-time job there.

While I'm not an expert on 401Ks, just for arguments sake
lets say that after speaking to a professional, Sandra is
able to roll it over into a trading account. Additionally,
since I'm not a fan of mutual funds, they tend to
underperform thanks to a laundry list of hidden fees, I
would hope that the same professional would be able to
convert the funds into the same trading account as the 401K.

With regards to Wal Mart, my suggestion to Sandra would be
to reduce her exposure to a minimum. Wal Mart is no longer
a growth or a value stock, and she will be acquiring more
through her employment there anyways. I would also consider
it wise to reduce exposure to the utility, as its expenses
will continue to rise with increasing fuel costs. It would
be smarter to own the energy company supplying the utility!

Let's assume that not all of these steps are possible and
Sandra is left with just $5500 of the full $20K portfolio to
work with, because everything else is still tied up. Here's
what I would do with the $5500.

First transfer it to BuyandHold.com, or a similar ultra low
cost option, for now we'll use BuyandHold as our model.

Doing so, would allow Sandra to opt for the unlimited
trading account at $14.99/month, and during the first month
she would divide her account between the 12 currently
recommended stocks in the Investing With Mom Advisory's
portfolio.

Sandra would be sure to place $250 in the stock mentioned
earlier in this issue, $100 in each of the risk stocks and
divide $3000 between the high yield and high value stocks.
This would leave Sandra with approximately $2000 in cash
that she can invest over time.

Each month, or at a minimum once a quarter, Sandra should
also see if she can lower her cost basis by purchasing
additional shares in any of her holdings. She would also
accomplish this by making regular deposits in her BuyandHold
account of at least $45/monthly.

With our Advisory's stated goal of 20% annual returns,
Sandra would be able to increase her $5500 portfolio to
$43,732 by the end of 2014, just 10 years from now. For all
the skeptics out there, the monthly $45 contributions would
add an additional $5400 over the 10 years.

For the purposes of this illustration, I also subtracted
$180/annually because that's the extent of BuyandHold's
fees, thanks to the unlimited trading plan!

In addition, it should be noted that we didn't touch the
balance of Sandra's portfolio, nearly $15K, but if we had
included that in the equation, we would rapidly approach a
total portfolio of over $130K by the end of 2014.

At this point, aged 74, Sandra could switch to an all income
portfolio and the dividends earned would more than replace
her part-time income from Wal Mart. She could even keep a
tiny 5% of her portfolio in risk opportunity stocks to try
and continue the growth in her portfolio.

My hope is that you can see through Sandra's example how the
high yield, high value stocks that currently dominate the
Investing With Mom Advisory's portfolio can generate the
high returns necessary to rejuvenate your retirement
portfolio.

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Election Recap

Whenever I'm not really an expert, I should definitely give
credit where credit is due, especially when I make an
extraordinarily accurate prediction, as I did with regards
to this past Tuesday's Presidential election.

In this particular case I have a couple of sources to thank
for helping me collect my thoughts and make my predictions.
To The Point News and Election Projection provided the
conservative viewpoint, while Electoral-Vote provided the
liberal point of view.

That said, I did have to dijest the data provided and come
up with my own predictions. With that in mind, lets recap
those predictions and their accuracy.

As predicted, Bush won Ohio and Florida, but lost
Pennsylvania. Bush also won Iowa, Colorado, and Nevada, to
reach the predicted 281 electoral votes, then Bush got
greedy and added New Mexico to push his total to 286. Bush
also wins the popular vote 51% to Kerry's 48%.

Thus I called 6 out of the 7 states correctly, missed on my
electoral votes prediction, by understating it, and nailed
the popular vote, as of the most recent numbers I've seen.

In the Senate I understated the gains the Republicans would
make, only giving them 54 seats instead of 55. However,
the Republicans swept every state I said they would,
including South Dakota, South Carolina and Florida, all 3 of
which I said were nail biters.

In fact, Alaska was the only seat I called incorrectly, thus
giving me an accuracy of 8 Senate seats out of 9.

Finally, I missed on the margin of victory for Bush in Ohio,
saying he'd win "by a fairly wide margin." Part of that
was due to the gay marriage ban passing by less than the 70%
I predicted. However, you could say that Ohio did vote for
Bush "by a fairly wide margin", when you consider that in
2000 Bush's margin of victory in 7 states combined for less
than his margin of victory in Ohio this time around!

All in all, not bad accuracy, 15 for 20, especially when
compared with the blatantly skewed exit polls, wouldn't you
agree? If you count the Ohio margin of victory as correctly
predicted then it goes to 16 for 20, or an .800 batting
average.

I think the Texas Rangers would love to have that at the top
of the order next year, don't you?

Investments good for my mom and you,
Andy Prior