Magazine Review: Kiplinger

February 28, 2008

Kiplinger Personal Finance Magazine is my most highly recommended magazine for those investors looking to get a taste of everything from retirement, stock investing, saving money, business news, and a minimal amount of advertising.

Their magazine is organized in simple sections:

– Ahead
This section features columns from regular Kiplinger writers and a general outlook of the economy. This section may give quick recommendations for stock picks and will generally have less detailed stories compared to what you will find in the investing section.

– Investing
For savvy investors, this section will cover a comprehension (yet simple to understand) look into various investment options. The February 2008 issue had a really good 3 page analysis of sin stocks encompassing casinos, alcohol, and tobacco companies. Then about a year and a half ago, there was another really informative bullish article about “black gold” (aka coal industry), and due to that article, I went on to profit very nicely from Peabody Energy Company (BTU). You’ll also find other great articles on mutual funds, money funds, and bonds.

– Money
This section is exactly what it’s title states, it’s about your money. Whether you want to get the bottom line on housing prices, social security, loans, retirement, interest rates, or college tuitions, this is the section that will spark your interest. Everyone wants to make more money through investments, but if you don’t enough money to put into the stock market or mutual funds, you want to be able to retain as much as you earnings as possible.

– Living/Rewards
This section is like the poor man’s Consumer Reports where they’ll sometimes give comparisons of different products (ie HDTVs, smart phones, cars, rewards plans). You can also expect to see articles on best ways to remodel a home, what to keep in mind when shopping around for a house, or FAQ about the do not call lists. The average working American should be able to get some value or general insight through the living/rewards section.

Cost: $12 for 1 year of issues from their website
Investor Audience: everyone
Distribution: monthly
Overall Grade: A

Bottom line: At only $12, this magazine could end up making or saving you a whole lot more money than what it costs to subscribe. That is a good enough investment to justify supporting Kiplinger Personal Finance Magazine. If you are still too cheap enough to fork over $12, then you can go browse through past issues for free (although not 100% of magazine content is posted online).

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1st Year Stock Portfolio

September 28, 2007

It has been just over a year since I’ve been investing seriously in stocks; and I’d like to recap how the market has treated me and what I’ve learned over the last year.

1) Know When to Take a Loss
Every informed investor should be aware of the overwhelming problem in the subprime mortgage market that has tumbled over into the prime mortgage sector, homebuilders, and consumer spending. For a little over 2-months, I owned Accredited Home Lenders Holding Company (LEND). LEND melted down to a low around $6/share but is currently still far from their 52-week high of $36.95. Luckily I saw the negative signs early and took a minor 10% loss. If I had held until today, I would have realized a 60% loss. Some people will not want to write down a loss, but sometimes you have to figure out why a stock is down and understand if it has the fundamentals to rebound or not. In the case of Accredited Home Lenders, I didn’t see any kind of foreseeable stabilization in the housing market and I got out.

2) Ride Momentum For Big Gains
In my Las Vegas Sands investment, I got a 72% gain in just under three months and I rode the stock to new yearly highs. Instead of pulling out with a 10-20% gain, I saw the positive signs of their Venetian Macau opening, Singapore hotel casino in the works, and other investment options. Of course, I would have been up 90% if I had held it, but another thing you have to do to be a good investor is be happy with your gains, and don’t let it affect other investments. Even when LVS dropped 20 points in mid August, I knew they had good fundamentals and global growth opportunities and I wasn’t in any rush to sell.

3) It’s Hard to go Wrong With Oil/Energy
I made a lot of trades with oil and coal companies, and those companies would have provided me with even better overall gains if I had held them longer. With oil at an all time high and staying in the $80/barrel range, it is only time that is standing in the way of $100/barrel oil. Unlike technology that can get outdated, oil is not being replaced soon by any other commodity.

4) Diversity is Difficult
I truly believe that it’s extremely difficult to have a completely diversified portfolio of stocks unless you have at least $30,000 to invest. That way, you can invest in $3,000 blocks and have no more than 10% of your portfolio in any one stock. If you only have $2,000, that can buy you 2 shares of Google and 7 shares of Apple. On top of that, each stock represents 50% of your investments. Never put all your eggs in one basket so even if you have less than $30,000, at least try to invest in different sectors. As you can see in my stock investments below, I had investments in oil, coal, retail, housing, casinos, ethanol, and technology.

5) Just Make Money
For young investors, go ahead and take those short-term capital gains. Don’t worry about saving taxes by holding your stocks for more than a year because who knows if you’ll even have a positive return later. If you make a 10-20% gain in a few months, I would take those gains so you have a cushion before dipping into another investment. It is also a very good psychological boost to know that you are making profit.

My investments dating back to as far as September 2006 are shown below. I have provided information on the short term capital gain or loss that I incurred. I also included the current gain or loss I would have if I had held the stock until today.

Company Ticker Symbol Actual Gain/Loss Current Gain/Loss
Hot Topic HOTT 04.23% -25.15%
Sandisk SNDK 02.10% -07.17%
Peabody Energy Corporation BTU 03.93% 35.80%
Peabody Energy Corporation BTU 09.05% 42.48%
Statoil STO 08.34% 41.66%
Statoil STO 14.75% 50.05%
Peabody Energy Corporation BTU 09.19% 38.91%
Qualcomm QCOM 00.89% 13.61%
SAIC SAI 03.20% 02.77%
Halliburton HAL 08.37% 32.91%
BJ Services Company BJS 00.55% -10.48%
Qualcomm QCOM 00.89% 13.61%
Finisar FNSR 06.27% -22.89%
Accredited Home Lenders LEND -10.17% -60.34%
BJ Services Company BJS 12.13% 00.90%
Las Vegas Sands LVS 71.81% 90.07%
Archer Daniel Midlands ADM 03.79% 03.79%