Category Archives: Financial

Quick Update

My stock portfolio has gone into the 5-digit range in the last few days. Here is my portfolio as of Wednesday, 6-8-2005. The main factor in this is Dynegy (DYN). It keeps going up about 3% per day. I went from a 25% loss to a 9% gain in a few days.

Also, Thursday morning I will be crashing an exclusive entrepreneurial convention. “Bob” tipped me off that some pretty important people will be attending and speaking. I’ve got my suit ready, a black portfolio, business cards and a fake name tag….lets see if I can pull this off!

This Weekend In Numbers

$22 - Tubing down river for 6 hours.

$13 - Food For Tubing.

$17.50 – CiCi’s Pizza.

$12 – Brunch at Moonshine’s with business associate.

$10 – Misc. Expenses.

22 – Miles I drove exploring East Austin. Just keeping my eyes opened to what’s around me.

2 – Amount of new business projects I worked on.

2 – Number of times cops have been called for excessive noise violations coming from my apartment this semester.

Bazillion – Number of motorcycles I saw at a bike rally this weekend in Austin.

14 – Number of new people met this weekend.

Weekend Update

I had some visitors stay over in Austin this weekend and I was really expecting to completely exhaust my spending account. Fortunately, I could not find a single boat to rent this weekend, and certain people refused to let me pay for meals/drinks etc.. I wasn’t complaining.

I came out alive with $54 in the Spending Account.

I felt smug having such a fun weekend and spending half of what I expected, see for yourself:

Still had tons of fun and went to all sorts of fancy places in Austin. However, if I didn’t previously save for this weekend, I would have exceeded my spending account limit.

Weekend Update

This weekend was for the most part nice and relaxing. I hate that.

I like lots of activity so I feel productive. I accomplished some things, but I am under obligation not to say anything. Too bad.

The weather was in the high 90’s all this weekend, PERFECT for selling bottled water. One problem, I couldn’t find Barry. Apparently the police have been giving tickets to all the homeless people near the Riverside/I-35 intersection, so he was nowhere to be found. This weather is what I need to make this bottled water venture profitable. This weather mkaes everyone thirsty and also brings everyone out, including this weird blimp I saw:

I’ve been saving money for next weekend, so I only spent $10 this entire weekend. It was all on food, particularly late-night Burger King. Other expenses were either free or previously purchased.

Financial Update:
General Account: $1,706
Spending Account: $143
Bills Account: $835
Investment Account: $1,239
Permanent Savings: $2,283
Roth IRA: $5,000
Stock Portfolio: $9,673
Total Assets: $20,879
Business Holding: $6,193
Total On Hand: $27,072

My Stock Portfolio

This chart shows the daily movement of my portfolio only.
I was asked about my stock portfolio several times lately. I enjoy having a long term portfolio which just sits there. I’ve tried active trading and it isn’t for me. I leave that up to Kirk.

Here are the current stocks I own and reasons I bought them:

Dynegy (DYN) - Got pummeled after the Enron scandal. I hold this as a long term turnaround stock. Dynegy deals mainly with natural gas. They keep paying off their debt which short term investors hate, but long term investors like. Has put me at 25% gains at times and at a 30% loss at times.

Syntel (SYNT) - An Indian outsourcing firm with relatively little media coverage. Healthy company with no debt and an ever-expanding operations. On days when the NASDAQ does well, Syntel does really well….but when NASDAQ performs poorly, Syntel performs very poorly. Who cares, I am in it for the long haul.

Fortune Brands (FO) - Conglomerate with a million different brands under their name. Company has balanced their portfolio of brands to survive in good or bad markets. I idolize this company and its great track history.

General Electric (GE) - Bought as a “rock” which moves neither up or down very fast. GE dabbles in jet engines, water treatment, appliances, television stations and much more.

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On another note, I’ve started preliminary research for my traffic experiment. I went to three different tall buildings adjacent to I-35 and got permission to take pictures of the rush hour traffic.

I’ll explain later.

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Even though the Fall semester is over with (I have one more summer to take and I should be done), I have been gallivanting across town trying to strike up some new business deals here and there.

I want to have a good amount of moola in reserve by the time I get out of college for good.

Ripe, Emerging Markets – Mexico

A lot of buzz is going on about China and their emerging economy. If it’s all over the press, it’s old news.

One emerging market I’ve been interested in (on the domestic and international level) is Mexico.

Some quick observations:

  • Hispanic Americans (wow, I’m so politically correct!) have the highest percentage level of disposable income in the United States. This means they are big spenders for their relative level of income. Appealing to this market will be big business.
  • The hispanic population is the fastest growing in America. In a few years, it is projected the majority of Texans will be Hispanic.
  • Strong trends that introduced new races into more mainstream culture are currently happening: Hispanic boxers, music artists, athletes, politicians etc. are rapidly on the rise.

States such as California, Texas and Florida can already see a very strong infusion of Hispanic culture. In fact, my favorite radio station in Houston is a Reggaetone station (Spanish Rap). That’s just on a domestic level. In Mexico itself things are starting to become more online, a great opportunity for anyone. So how do you profit from this?? EASY:

Take a look back at the United States and other developed countries before our full-blown internet age, and replicate the processes and new services offered.

One lucky lady who happens to be in the PERFECT position to take full advantage of this is Rebecca who runs a new blog called Trendy Tendencias. I have been reading her blog as she brings something fresh to the blogging world, and is identifying trends you can profit on. I’m keeping an eye on her as she brings all sorts of new trends in Mexico to my attention.

It would be wise to appeal to this market before the press jumps all over it.
-Nev

House Keeping

Few points of interest:

-Part 2 of the Bottled Water Experiment will be posted tomorrow. That’s right, I’ve got Barry the Bum selling 5 cases of bottled water this Tuesday. So far I’ve invested $42. Will he run away with my investment or outperform all expectations?

-My Alamo Apprentice team (Here and Here) beat the opposing team by 152% and set a new record for food/drink sales for a Wednesday night.

-I bought my first tailored suit. Thanks to “Bob” for the hookup.

-I bought another pair of shorts from Nordstrom. I still can’t believe how courteous and helpful their employees are. My own friends aren’t even that nice to me!

-PineCone Research sent me a $5 check for a 20 minute survey. Very painless process, and they sent the check in less than 5 days. Brought to my attention by Jim at Barganeering.

-I didn’t meet my 4-31-2005 goal of making $11,000. Son of a……. It was pretty much an arbitrary number that I selected, but I’m still very dissapointed I failed. I will continue to keep track of how much money I’ve made for another few months. I need to further analyze the wrong steps I took to miss the goals.

-I’ve added FORUMS to the site. It’s a work in progress, but fully ready for posting. Registration costs $150.00…..just kidding, it’s free and not even necessary (you owe me now!)

Piggy Banks Aren’t JUST for Children

Ahh, the famous piggy bank. Call it a piggy bank, money box, change jar….whatever. The point is to put spare change from time to into this container for savings.

I think the power of the piggy bank is very underestimated. Take a look at MY piggy bank (Actually it’s a 3-year old Snapple bottle).

I stash away spare change AND SPARE BILLS. If I have five $1 bills, I will (without thinking) stash away two of them in the change jar. I do this all the time. I even stash $10’s and $20’s in there at times.

If you use a lot of cash or change, make a subconcious habit of putting some of it away everyday. DO NOT USE THE CHANGE JAR FOR SPENDING. This defeats the whole purpose.

Once, you’ve got a nice amount built up:

  • Go to a CoinStar or similar machine that gives you cash for change (at local grocery).
  • Get your ca$h.
  • Count all cash.
  • Deposit all cash into bank.
  • Keep 10% or 20% of the money for spending purposes (this will “reward” you for stashing money away).

Since January I will have “made” over $100 from my change jar. Not bad considering it would have just been money wasted in other places.

Also make sure to pickup EVERY penny, nickle, dime and quarter you see laying around. It truly adds up. I was once walking with a multi-multi-MULTI-millionaire who caught sight of a penny from the corner of his eye. Without breaking his line of conversation, he stopped, turned around, walked to the penny, picked up the penny and continued walking with me. He proceeded to carry on the conversation like nothing happened.

I understand why….it’s FREE money. No matter what economic class you are in, you’ve gotta like free money.

This has got to be the simplest form of savings possible. Do it…….NOW.

The Cost of Going Out

Take a look at my current assets and glance at my Spending Account.

Balance: $.86 (That’s 86 CENTS)

So it looks like I will be living very frugally this weekend! I will stay away from 4th Street (Where I have been very often recently because of the Alamo Apprentice) and I will not spend on any frivolous expenses. I need to be careful of making it to Downtown this weekend:

The Downtown area of Austin has a few primary attractions:

  • 6th Street - Cheap drinks, lots of live music and tons of college students. Austin is the Live Music Capitol of the US. On weekdays regular drinks are generally in the $1 range, very cheap. Weekends the price goes up to at least $2.00 specials and an average of $3.50-$6.00 for anything else. 6th Street is blocked off at nights due to the mass amount of people that walk through (It’s like a mini Bourbon Street). Lots of small food vendors on 6th also. I DO NOT leave 6th without getting pizza first (and maybe a Bratwurst). It’s a strict rule.
  • 5th Street - A mixture of clubs, restaurants and nicer bars. Priced between 4th and 6th Streets, but leans more towards 4th Street prices.
  • 4th Street - Mainly the more affluent, 25+ crowd. The bars and clubs here are swankier and appropriate dress is required. Expect to pay $6.50 – $12.00 for a relatively common drink (Mohito, Martini etc). There are lots of very nice restaurants in this area. My record is a $150 bill for 2 people at a Hawaain Fusion restaurant. I tend to have a drooling problem on 4th because of the amazing cars.

Going Downtown with friends generally ends up being pretty expensive, especially when you pay for other people also…but it’s also terribly fun!

Luckily I am good about not exceeding my spending account (I still have $20 in cash for the weekend), but I must spend it wisely. I also need to keep at least a $50 cushion of money in the Spending Account.

I wish I was a non-drinking, anorexic vegetarian. Life would be so much cheaper :-)

Bubbles In History

There is all sorts of talk about why the “Tech Bubble” was created then burst so suddenly. It’s really no secret, especially when looking at it in hindsight.

Bubbles happen over and over in history because the chance to make a buck is generally too appealling for the public to resist.

Bubbles have happened all through history, in every country and in various sectors of these economies. Let’s take a quick stroll through a few major bubbles over the centuries:

Tulip-Bulb Bubble of 1634

  • A non-lethal strain of virus caused some tulips to devlop stripes.
  • Enthralled with these new flowers, tulips were in high demand.
  • As more and more people watched all their friends getting rich by selling tuplip bulbs, they too saw an opportunity to get rich quick.
  • People from every walk of life starting selling the bulbs, even selling their homes to buy them.
  • With such nice high prices, everyone started selling their bulbs to extract profit. Supply now far exceeded demand and the prices fell dramatically.
  • Many small investors were highly leveraged to buy tulip bulbs, and many loans were defaulted on.
  • The small investors ended up being hurt the most.

The South Sea Bubble:

  • In 1711 The South Sea Company was formed in England.
  • Public saw enormous potential in the South Sea Company and the soaring stock price showed their sentiment.
  • All sorts of new companies went public after seeing The South Sea Company’s success on the market. All these stocks enjoyed immediate stock inflation as the public poured in money.
  • The directors of the The South Seas Company saw their stock rise from 55 to 1,000 and knew it had no relationship whatsoever to the company earnings.
  • They sold all their stock at its highest price.
  • Directors then made the announcement that the stock was not being based upon actual earnings, but public speculation.
  • The stock plummeted as people began bailing out of the stock
  • The small investors ended up being hurt the most.

Florida Real Estate Craze of the 1920’s:

  • Land bought in Miami for around $800,000 in 1923 could be subdivided and sold in 1924 for twice the price.
  • The next year, that same land could be sold for $4,000,000. With real estate red hot, the public saw an opportunity and acted.
  • One third of the Miami population had become real estate agents by this time.
  • The bubble then collapsed as there was a lack of buyers and huge supply of sellers.
  • The small investors ended up being hurt the most.

Needless to remark on, the severe stock crash of 1929 was also just a giant bubble that burst.

What I’ve noticed is the remarkably similar situation we are currently experiencing with real estate. The popularity of books like “Rich Dad, Poor Dad” which promise riches from buying old properties and selling or renting them out has encouraged everyone and their dog to become involved in real estate and become an agent.

The small investors will invariably get hurt in the end.

You cannot predict the madness of the masses, so a better lesson to take out of this is how to profit from it: Get on board early and when the masses of people start entering the sector, get ready to bail.

Obviously this is easier said than done.