Kirby on Finance

The Carnival of Investing!

This week’s Carnival of Investing is rather light, but full of really informative articles. Each are well worth the read! If you have an article that you would like to see included - feel free to send it to me by using the contact form on the side of this page. Enjoy the carnival!

2million presents, “Taking Assessment of My Portfolio Returns” in which he reviews his net worth returns for 2005 and offers what steps he will take to see better returns in 2006.

Cajun Finances presents, “Identity Theft: CSBs? (and Life is a Carnival)” where he asks, When you invest in a Canadian government backed bond, you assume that your identity information would be safe, or would you?

JLP of All Financial Matters presents, “Monte Carlo Your Finances” which offers a great primer on using Monte Carlo analysis with your portfolio.

ML of Investing the Middle Way presents, “Uranium: The Big Picture” offering a great primer on uranium investing.

Trip of Musing Money presents, “Quantitative Funds All the Rage – from Vanguard” which offers a great overview of quantitative funds.

Jon Swift presents, “Due Compensation at Exxon” where he argues that Exxon CEO Lee Raymond’s $400 million retirement packaged may have left him grossly underpaid.

Frugal of My 1st Million at 33 presents, “My Hunting Trip for a Money Manager” where he chronicles his search for a money manager. I hate to offer my opinion on this carnival, but this is a really fantastic overview of the “hunting” process.

Investing Guide presents, “Too Poor to Write Covered Calls” where he shares his frustration at, you guessed it – being too poor to write covered calls.

Moneywise of The Real Returns presents, “Secular Bear Market?” where he helps you determine whether or not your portfolio is in a bear market.

George of Fat Pitch Financials presents, “AutoNation Inc Cash Received” where he shows us the successful conclusion of his experiment in odd-lot tender offers.

****New Additions****

MBH of Mighty Bargain Hunter presents, “Hi-ho Silver!” - with silver and gold rising to amazingly high levels, MBH offers us some tips in investing in physical precious metals.

I hope you all enjoyed the Carnival this week! Next week’s Carnival of Investing will be hosted by Canadian Capitalist.

Submit to the Carnival of Investig!

It’s not too late to get your submissions into this week’s Carnival of Investing. To those of you have already submitted some great investing related articles, thanks! I know that there’s been some trouble with the carnival submission forms that many of you use out there, but don’t worry - I’ll take submissions all night.

Look for next week’s edition to debut either later tonight or early tomorrow morning!

I’m hosting the Carnival of Investing

I’m pleased to announce that I will be hosting this weeks Carnival of Investing! Blueprint for Financial Prosperity hosted this week’s edition, which is well worth the read. Also, it appears that you guys may have some trouble getting articles to me due to a little snafu with getting my e-mail address to the blog submission sites. You can still try them if you’d like, but feel free to use my “Contact Me” link on the right side of this page, or you may e-mail me (wkirby (@) gmail.com). Either way, I can’t wait to read your submissions!

Tax Deadline: April 17th?

Just a note as tax day is looming on most of our minds. Since April 15th is on a Saturday this year – most people will actually have their deadline “extended” until April 17th to file.

Investing your way to “cheaper” gas!

This weekend I saw an article in the Wall-Street Journal that put down in paper and idea I’ve been mulling over for quite some time now. Since it seems that the price of oil will continue to rise in the foreseeable future, I think the idea’s worth sharing with you.

Wouldn’t it be great if you could buy an insurance policy that would protect you against rising gas prices? Maybe you could pay a little extra on your gas prices today so if it rises later you won’t face the full brunt of the increase. Sound good, you betcha! The problem is that isn’t being offered right now.

What you can do, is get your hand in the rising prices game. A new ETF, called U.S. Oil Fund LP, aims to help you balance the rising costs of crude-oil by an ETF that roughly tracks the prices as well. So in theory, if crude oil rises $5 a barrel, the ETF should rise as well. Ideally, your investment gains from purchasing the ETF will help balance out the increased cost at the pump.

Do I own the fund? No, not yet – but I’m giving it some serious thought and you should too. I’d like to see how the fund performs in relation to gas prices for a while and if it tracks gas prices fairly well, I might go in big on this one.

Creating Teachable Investing Moments

I’ve mentioned in a few earlier posts that I’m obsessed with the stock market. I’m “that guy” who seems to always work it into the conversation. Thankfully, most of my friends seem to enjoy it and those who don’t just find a way to put up with it. I’m always amazed at how many of my friends don’t have a single dollar working for them. They’re much more content keeping it in a checking count and letting the money work for someone else. Usually I encourage them to pick a mutual fund, or an ETF if they’re willing to actually take the time to care about their money.

The common thread among all of my friends is that we’re poor (grad school thins everyone’s wallet), and need good investment vehicles for the money we do have. Thankfully, I’ve been “at it” for a few years now and took a paltry sum of money and made it well . . . less paltry.

What’s my secret? Rest assured, it involved a tremendous amount of mistakes that probably should have convinced me to hand my money over to some fund manager. Those mistakes turned out to be the best investing education I’ve ever received.

Here’s a quick example of a lesson that cost me a little over a hundred dollars, but honestly has made me a lot more in return. I won’t name the company, but a few years ago I got the bright idea that I should try and time my investments to quarterly reports that I thought would be favorable. It worked for me once before and I thought I should go big on a particular company after listening to previous quarterly calls, reading news articles, talking to a few people that I thought had a good read on the company.

Well, I went in big and guess what? I got it “right”. The company had a great quarter, but for some reason they seemed rather ambivalent about the upcoming quarter in their call – so people panicked and sold the sucker. The stock dropped 3% the next day and in my own panic, I sold the stock. Two weeks later, it had not only grabbed the 3% back, but also rose another 5%.

This taught me two big lessons. First, if I’m just going to play the trade, use a tight limit order so panicking isn’t an issue and the loss is less than 3% (This also works on an upswing as well). Lesson two, which I hint at above – panicking rarely works. I knew why the company was solid and the previous quarter gave no real hint of future problems. So, why even sell the sucker? At lest put in a limit at 4-5% and see what happens right? Who knows what the best move was, but the truth was that I didn’t make a correct decision rationally by panicking.

For people just starting out, I don’t really advocate the speculative timing method I mentioned above. I do advocate a willingness to take a reasonable chance knowing that you can afford to lose the money you’ve invested if you fail. That’s the real hurdle I see in my friends. They’re afraid they’ll invest in the next Enron or WorldCom. Truth be told – I’ll probably invest in the next Enron, but I’ll make it a teachable moment and learn from it.

Don’t confuse what I’m saying to mean that you should be stupid and reckless with your investing. Remember that company I mentioned above? I can honestly say I spent about 10 hours reading up on the company the week before I purchased the stock. That doesn’t even factor in the time I spent while it was on my radar. You don’t have to spend anywhere near that time if you’re not being a speculative as I was. Just an hour or two can leave you with a rather informed idea of whether or not a stock your investment dollar.

I may write more on this in the future. I’m sure a few of your will enjoy the stock talk, only to be matched by an even larger number who will absolutely hate it – but I think it’s important. I know most of you will agree - personal finance is about so much more than just saving money and keeping up a budget, it’s about unlocking the power of every dollar with which you come into contact.