Issue 20

12/21/04

Complete Investing Due Diligence

Issue #20 - Complete Investing Due Diligence

1. Complete Investing Due Diligence
2. Last Minute Christmas Gifts

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Dear Friends,

Well after 33 hours of attempting to sort out my blog and
actually get something published. We're finally online!

My webmaster and I are doing some final testing, but by the
time you read this, you will be able to read the blog, too.
So, without any further ado, check out:
http://www.investingwithmom.com/iwm/blog/blog.html

This will be a way to generate a little more instant
feedback from you and hopefully allow me to focus on
Investing With Mom, rather than updating my e-mail mailing
list each day. Not that it's not fun to see how many new
subscribers I have each day, it's just that it slows me down
to the point where I just don't get to write this newsletter
as quickly as I would like to.

(Actually, as I was finishing up this issue and preparing it,
the 2000th subscriber to the Investing With Mom newsletter
subscribed.)

I will be maintaining this e-mail listing of course, and you
will continue to receive your weekly newsletter, the blog
will just provide a little more instantaneous way for me to
get my thoughts out to you on a day to day basis. I'm also
hoping that this will help me to crystalize my thought
process a little better and thus compress the process of
deciding what to discuss in each week's edition of Investing
With Mom.

If you'd like a reminder on how to get the blog on your
desktop, without surfing the site every few hours. Just go
back and re-read Issue #19 and click through to the
SiteSell.com explanation.

Once you have an RSS reader downloaded, all you need to do
is surf on over to the brand new Investing With Mom blog
page and click the link that says "Syndicate this site
(XML)". It will automatically update your RSS blog reader
and you'll be instantly updated whenever I publish a new
post to my blog, all without even visiting my website.

Now isn't that just a piece of cake? I mean, how much easier
can I make it for you?

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Complete Investing Due Diligence

Now let's turn our attention to an issue that's just a
little more sticky than what we normally discuss. How to
pick an honest and decent money manager/broker/advisor.

Because I come from a small investor standpoint, I would
normally not want to pay for a broker, nor would I have
enough capital to hire a money manager. Which means that in
the past, and to a lesser extent it continues today, I pay
more than I probably should to read as many advisors as I
possibly can.

When you decide to invest with a broker or money manager, if
your not 100% crystal clear as to what their advice is
regarding your portfolio, run away.

Why do I say that, because if you don't know exactly how
they plan on treating your money, then you will never be
happy with the results.

Period.

End of story.

With my mom's money, I am completely open with my mom. I
have to be, so that my mom can be completely comfortable
with the decisions I'm making regarding her investments.

Before I invest any of my mom's money, or even comment on a
stock in my newsletter, I sit down for a few minutes and
explain as completely as I can 2 things. First, what exactly
does this company do to generate revenue.

If it's something that fits in with what my mom and I are
willing to support, in other words Playboy and Donald
Trump's Hotels and Casinos don't cut it, then we move on to
the second phase.

Second, can I rationally and coherently explain to my mom
exactly why I believe the company is primed to increase? If
it doesn't make sense, then of course she asks a few
questions, before we make a decision one way or the other.

After we've decided whether or not to invest, I then make a
recommendation as to how much of my mom's portfolio should
be invested in the company, assuming of course there is cash
available to work with. If there isn't, then my mom informs
me as to how much she has available to send off to be
invested in the account.

I am an advisor too now, thanks to the publication of this
newsletter and the entire Investing With Mom website. This
means that once I've consulted with my mom and we've decided
exactly where we're going with her money, then I write up an
issue of the Advisory newsletter informing my paid
subscribers.

Because of the way I choose to run Investing With Mom, I
always inform my subscribers before I make a trade with my
mom's money. This allows my subscribers approximately 24
hours to decide what it is that they wish to do with the
recommendation.

Hopefully, this also gives my subscribers an opportunity to
purchase shares in each recommendation at a slightly lower
cost basis than my mom and I get. This way everybody is
happy with the returns, assuming of course that the returns
are positive.

Some advisors have technical analysis they perform, some
look for specific fundamentals. They all have their schtick.

If they are successful, then they attract a large following,
if not then they whither off and die.

Fortunately, for all of us the marketplace is extremely
uncompromising when it comes to the success and failure of
advisors who are subject to the market. However, that is not
necessarily the case with a broker or a money manager, and
that is why you absolutely have to do just as much due
diligence on your broker as you do on any stock you might
invest in.

Ask questions, demand answers, if you don't get them, don't
hesitate to move your money. I've made the mistake of not
asking enough questions twice in the last 2 years and while
I haven't lost as much as some people have, I'm still trying
to establish whether we can retrieve any of our money from
the first instance, nearly 2 years ago.

The second time around however, was just recently and while
my mom and I didn't necessarily lose any money, it is
costing both of us in terms of opportunity costs.

The money that I thought would be available to launch a
second portfolio, will not be, and that means that the money
that my mom and I would have invested in the new portfolio
will have to be added to the existing Investing With Mom
portfolio.

Not a bad deal, when you consider how well the current
portfolio has done over the last 15 months, but still an
opportunity missed in terms of being able to try some
different things.

Oh well, as they say live and learn.

I can't say that I'm the perfect investment advisor for you
and your money, but I'll always give you the same
information I provide my own mom. If it's not enough for
you, don't hesitate to contact me and ask me more questions.
I answer all e-mail from subscribers and return any phone
calls as well.

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Last Minute Christmas Gifts

Well, this coming Saturday being Christmas, I'm still not
convinced of whether or not I will write an issue of the
newsletter, but if I do, you can get an up to the minute
decision by checking out the Investing With Mom blog, as
I'll keep everybody informed that way for sure.

As for the following weekend, I'm definitely going to be
putting together an end of year summary, combined with some
thoughts as to what the new year might provide. The full
version of which will only be available to paid subscribers
of the Advisory newsletter service.

With all the extras, like free airline tickets to anywhere
in the world, it's like getting the Advisory for free. You
can check out a complete listing of everything you get with
your paid subscription on our features page. Just click the
Benefits link on the left hand side of your screen.

Since I may not get the chance to say so again before the
big day itself, I do want to wish you and your family a very
Merry Christmas.

Some of you may have recently gone through some upheaval in
your family, especially the kind that you didn't necessarily
desire or ask for. For you, I would like to remind you that
if you are open to hearing from someone who has been through
it all and still knows the real reason for the season, then
I recommend you send my mom an e-mail at pollyprior@juno.com
and ask to be placed on her e-mail list.

You probably can't get a copy of her book in time for
Christmas, unless of course you live in the North Texas
area. But I know my mom would gladly send you a copy anyways
if you ask when you subscribe to her newsletter.

The Diasozo Dispatch that my mom writes is free to all, and
the book only costs $14.95. If you're not sure what
investments may be right for you going into the new year,
then maybe it's time to look at the most important
investment you could possibly make, by taking a look through
my mom's book and allowing it help you do the due diligence
necessary.

"Who's Wife Are You?" isn't just for the ladies, either. A
lot of us guys, definitely need to read through it and study
what my mom was inspired to write.

If you think I'm biased, because she's my mom, you're right!

But then again, I can also say that I've seen the process my
mom had to undergo in order to write and then self-publish
this book and so I know that you'll benefit from reading it.

If you ask really nicely, I know she'd even autograph the
copy she sends you. Or, you can ask when she's doing her
next book signing at the Family Christian Book Store in
Lincoln Square, here in Arlington and then get her to sign
it in person for you.

Once again, Merry Christmas and may many blessings come your
way in the new year, as you remember that all I offer are...

Investments good for my mom and you,
Andy Prior