prancingbull.com

I logged into my Optionshouse.com account today and was pleasantly surprised to find that they have changed their pricing structure. Here is how the new pricing looks:

• $14.95 for flat rate spreads up to 4 legs
• $9.95 flat options trade
• $2.95 for stock orders

Options pricing remains the same, but stock trading dropped from $4.95/trade down to $2.95/trade. Now that the prices have changed, I think I will find myself trading with Optionshouse a little more now. 

Financial Institutions, Stocks options, optionshouse, pricing, Stocks, trading

After taking a little bit of a break, I have decided to get back to doing stock reviews again. As you can see, a few post prior to this one I did a review of Netflix (NFLX). One thing that I have been trying to do is place the review in a .pdf file, rather than just a really long post on the blog. I think that the long post on the blog sort of takes away from the whole blog concept because it is makes it more tedious to get to other posts, especially if you don’t feel like reading the review.

So basically what I am going to do from now on is just have a short Cliff’s Notes version of the review with a link the full report. This way if the user wants to see they whole report they can just click on the link. Otherwise they can just pass it on by and go to the next post.

Random Reviews, Stocks

Yesterday I stumbled across this website somehow or another. I’m not totally sure. Anyway, what I found was a very useful and informative site. Ever wonder what mutual fund companies own your particular stock. Better yet, what stocks does a particular mutual fund hold? At MFFAIS you can find that all out from their wealth of information.

Here is how it works:

You search the name or symbol of any stock or mutual fund that you want to look at. It doesn’t seem like this search option has been perfected yet, because I had some troubles finding a stock using the search tool. The best way to find what you are looking for is by starting letter. If you are looking at a stock, it will show you all the mutual funds that are currently invested or recently sold out. It also shows the number of shares that they own and what those shares are worth. You could also click on a mutual fund and it would show you all of the funds current holdings and recent sells. It then shows the number of shares in each company that fund holds.

You can also find out some interesting information on the site’s home page. For example, the top mutual fund class right now is the Global small/mid cap growth class. It also shows that Philip Morris was recently added to 230 different funds.

While I wouldn’t base my trading decisions on what this site says, it is interesting to see what the professionals are doing. If picking stocks is what they do every day for a living, I would think that their choices would likely be a bit better than mine. Just a guess. Although it is nice to see that some funds are doing worse than me this year. According to the site, the worst performing fund is Fursa Alternative Strategies LLC.

Financial Institutions, Stocks investments, mutual fund, Stocks

About a month ago, I wrote a post about the best dividend paying stocks in the market at the time. The date for that post was June 16th, 2008. Since then, it can be seen that all of these stocks performed poorly during a period where the DJIA only dropped 5.9%. While that is a fairly large drop, most of these high dividend paying stocks have fallen by much more over this time period.

Take a look at the spreadsheet below to see how these companies have fared over the last month. Use the -5.9% to benchmark against the market.

In this spreadsheet, you will notice that GLS (Genesis Lease Limited) has been the only one with a price increase during this period, but this is only due to a recent run up in price over the past few days. Otherwise, this stock has been in decline ever since its high of $28.35 in June of 2007. The only other company to beat the Dow was CMO (Capstead Mortgage Company).

One other interesting thing of note is that the dividend yield increased on all companies except for the ones that cut them completely. The reason for this is because of the decrease in price. As the price drops, the project dividend yield increases as the price drops. It is easy to see that the dividend has risen on the majority of these stocks, but at the cost of the stock price

Financial Markets, Stock Recommendations dividend, price, Stocks, yield

After 5 years of having an account with RBC Dain Rauscher, I have finally closed it out. I realized that at this point in time having a full service broker wasn’t right for me. I first opened the account when I was 18 because I wanted to invest in some stock. The first and only stock transaction I did with them was purchase 20 shares of Microsoft. I was pretty excited when I made the trade, but that soon changed when I found out what the trading commission for it was. It cost about $65 to make the trade. When you factor that out, you find that the stock will have to rise $6-$7 before you make any money. That made me pretty upset, but I didn’t sell because then I would have eaten $130. So I hung onto it ever since.

I got really excited when they paid their one-time $3 dividend. I was mostly excited because the dividend ($3 x 20 = $60) was almost enough to cover my commission to purchase the stock. I never really paid a whole lot of attention to the account because there was just one stock in it. A year or so later I was looking at a statement that came in the mail. When I looked at it I noticed that there was nothing in the cash account. I knew that there should have been at least $60 in there plus a smattering of small dividends plus a bit of interest from the cash account. This was a bit upsetting to say the least. The next day I called in to talk to “my broker.” Of course the broker was not available, so I end up getting passed around from secretary to secretary and finally end up with someone who sounded like they hadn’t worked there too long. I told her what happened and she said that she would look into it and give me a call back.

After about three days of playing phone tag during my lunch I finally found out what had happened. Apparently if you do not have over $100,000 in your account you are charged a $100 annual maintenance fee. When you have only ~$500 in your account that comes out to be a 20% deduction. She did seem excited to tell me though that since I only had ~$70 in cash assets in the account they only charged me that and wrote off the rest. How nice of them.

After this incident I decided to close out my account and transfer it to Fidelity. For some reason I got charged $112.98 for the transfer. I guess that is the closing fees associated with closing out an account. That seems kind of ridiculous for transferring 20 shares of stock. Between the $65 purchase price, the $112.98 close out fee and the $20 sale price, I am going to have to sell Microsoft for $9.90 more than what I bought it for to break even.

I guess there are a few lessons to be learned from this:

1. High priced full service brokers only make sense if you have a ton of money
2. If you are doing all the research to buy and sell stocks, you shouldn’t be paying a premium to do it.
3. Know the fee structure of a full service broker before you get into one. Otherwise the fees will eat you alive.

Overall I think it was a decent learning experience. Buying that first 20 shares is what really got me interested in trading. I don’t think that I would be as active into my trading today if I hadn’t started out this way. Although it may look like a wasted $270, but in the end I learned a lot about how these companies work. If you have a lot of money and just want someone to do all the work for you, a full service broker may be right for you. If you are just starting out and don’t mind doing a bit of research, then a low priced broker like Fidelity, Scottrade or Schwab would likely be the better option.

Financial Institutions, Personal Finance, Stocks broker, fees, fidelity, microsoft, Stocks, trading

This post is going to look at some of the highest dividend paying stocks at this point in time. There are a few reasons that I have decided to look into this. First of all, my dad always suggests stocks to me because of the dividends that they pay. “You should get WXYY. They have a 4% dividend, which is much higher than you can get in a CD.” Of course just because a stock pays a dividend doesn’t mean that it is going to rise. Second, father was on the WAMU bandwagon, especially when they were paying 10%+. Look at that company now.

There is a big reason that I am skeptical of companies with high dividends. Back in 2006 I bought a little bit of stock in a company called Fieldstone Investment Corporation. They were one of those REIT companies that ended up collapsing. Anyway I initially got into the company in 2006 thinking that it might make a good play, especially with such a high dividend. At the time I think it was paying at least 15%.

As you can see from the image above, my experience with them did not go entirely according to plans. All in all I spend $1177.40 on the stock, and ended up selling for $610.03 over a course of less than a year. This was coming from a company with a 15% dividend. Who would have thought? All in all I made $98.70 in dividends from them. That makes my sell price look a bit better, but definitely a far cry from perfect.

When choosing companies to look at, I am not going to look at the companies that pay the most out per share, but I am actually going to look for the companies that have the highest dividend yield. By clicking on the thumbnail, you can see the companies with the highest dividend rates that traded for at least $10.

I did another chart where I looked at companies that were trading for at least $25 and were paying at least 10%. Here are the top 15. Click the thumbnail to see who made the cut.

So the goal for this experiment is to see whether or not these stocks beat the market, and maintain their dividend yield. My prediction is that either the dividends will be cut, or the price of each stock will drop. I think the reason that these rates are so high is that the stock has dropped quite a bit since the last dividend was paid. Since we have no idea what the next dividend will be, we have to go by what the most recent one said. I think that this produced abnormal yields.

Personal Finance, Uncategorized dividend, return, Stocks, yield

I checked a book out from the library a few weeks ago called “Green Investing” by Jack Uldrich. When checking out this book I was hoping to find some ideas on companies that were in the business of producing environmentally friendly products and services. This book was full of good information on that subject.

The book was divided into nine different chapters. Each chapter discussed different companies within a certain part of the “green industries.” To better make my point, the following is a list of chapters in the book:

1. Green Investing: A Long-Term Trend
2. Due Diligence: Do Your Homework
3. The Big Dogs: The Fortune 500 Companies
4. Biofuels: Fuel of the Future?
5. Solar: Heating up or Flaming Out?
6. Wind Power: The Sky is the Limit
7. “Alternative” Alternative Energies: Geothermal, Fuel Cells, Wave Power, & Clean Coal
8. The Cleanest form of Energy: Energy Conservation
9. Tracking Cleantech and Building Your Own Cleantech Mutual Fund.

In each of the main chapters, Uldrich gives an extensive list of the companies that are poised to excel in this field. He gives the trading symbol and market (if applicable) for each company. He also gives a website as well. Each company also receives a short description, reasons to be bullish, reasons to be bearish, what to watch for, and a conclusion.

It is nice that Uldrich has done all the hard work for you. He has weeded out the bad companies so that you can focus more of your time on the good ones. This book was published in 2008, so it is very up to date.

One thing that I did not like about the book was that there were a decent amount of companies that were either private companies, or could only be traded in foreign markets. To me, it would be hard to invest in either a private company or one that only traded on a foreign market. I guess if you have the money to invest you can probably find a way though.

In conclusion, I think this book is an excellent primer to the world of green investing. Uldrich has done most of the hard work for you. Now, the investor only needs to find a company that they like and decide if it is worth investing in.

Personal Finance, Reviews, Stocks green investing, investing, Stocks, trading

A few weeks ago I mentioned that I had checked out a few finance books from the library. Well my checkout period is over now, and since I will be returning my book tomorrow I thought that I would take the time to write a brief review of the book.

I checked out two books, but I only ended up reading one of them. The one I chose to read was called “How Technical Analysis Works” by Bruce M. Kamich. I will admit that i didn’t make it through the whole thing, but I did make it through all of the topics that I was interested in.

In this book, Kamich does an excellent job putting the mysterious world of technical analysis into easy to understand terms that can be useful to both beginning and experienced traders. An experienced trader may want to read something a bit more advanced though.

Coming into this book I knew a little bit about technical analysis like moving averages and certain volume indicators. The book introduced me to a few new strategies that I have already started to use when analyzing different companies. The three strategies that I found most useful were trendlines, triangles, and areas of resistance and support. A few weeks ago I wrote an article about trendlines from what I had read in this book.

One great thing about this book is that Kamich does not simply tell you what a strategy means, but he also tells you how he uses them to trade. I found that to be very useful, because knowing what certain indicators are will only get you so far. Knowing when, where and why to trade is where your success will come from.

For me I found this book very helpful for the advancement of my trading strategies. The important thing to realize is that technical analysis is not the golden ticket to investment success, but is just one of many tools to use when analyzing a company.

Overall, I would highly recommend this book to someone who wants to know more about using technical analysis as an additional trading strategy.

Reviews investing, kamich, Stocks, technical analysis, trading

I learned most of my basic investment knowledge from my dad. I remember when I was about five years old having him tell me why my credit union decided to give me a free $.05 on my $10 in deposits. It really didn’t make a lot of sense to me at the time, but I thought it was pretty cool nonetheless. As I got older, I started to realize that he invested in stocks, bonds and mutual funds. He was telling me about some Donald Trump bonds that he had in the 80s that defaulted. I couldn’t believe that you could lend you money to someone like that and then just have them take it away and give you nothing in return (I still have not invested in a bond).

Anyway, he was above and beyond my knowledge on these types of investments so I always went to him with my questions. When I turned 18 I decided to start investing in stocks myself. Let’s just say that trying my hand at investing at such an early age was a very shall we say “educational” experience. I invested in a lot of different companies that didn’t turn out as expected. When I was trying to turn around my portfolio from my earlier losses I thought about investing in Google (GOOG) right after its IPO. I had always used them as a search engine and really liked the products that they offered. I asked father what he thought about it and he said that the market had grossly overpriced the stock and it would be a mistake to buy into it. At that point in time it sat right around $100. Today it is at $646.73 and has been as high as $747.24. Not a bad return if you ask me.

Here is another quality pick from dear old dad. About 6 months ago he was raving about Washington Mutual (WM), which was then trading in the mid-40s with a decent dividend as well. Every time it went down a few bucks he would rave about how now the dividend yield is even higher! It’s time to buy in. I think the yield reached about 20% at some point, and then the financials came out. After examining them, it could easily be seen that Wamu was going to pay more in dividends than they had in earnings. Not a good business model. Not surprisingly, Wamu cut their dividend for the first time to a much lower payout. Now the stock is trading in the mid-teens with only a $.15 dividend. That’s pretty low considering the previous quarter they paid out $.56 per share.

So there are two pretty bad picks that dad has made. If I would have bought Google and shorted Wamu I would be looking pretty good right now. Oh well, there is always next time.

So you are probably wondering what the stock picking genius is suggesting right now. Well here is the short list:

Buffalo Wild Wings (BWLD)
Allied Irish Banks (AIB)
American Eagle Outfitters (AEO)

Buy those at your own risk!

On a lighter note, picking stocks is not an easy task. It takes a lot of research and patience to do well. The best advice is to take other people’s opinions with a grain of salt. Take them for what they are worth and then do your own due diligence. This way if you are wrong the only person you have to blame for it is yourself. Remember, this is your money. You get to choose what you want to do with it!

PS: At the time of the writing of this article, the author does not own shares of Google, Washington Mutual, Buffalo Wild Wings, Allied Irish Banks, or American Eagle.

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