Neville's Digital Surrogate Brain
I generally don’t like large-cap stocks, but with my new long-term portfolio in the creation I am taking a peak. Look at the 10 year chart for General Electric (GE) and it’s steady growth over the last two years.
After a major correction, I believe GE will continue to follow its regular growth path…and let’s not forget about the dividend. Tell me what you think.
I found this article about Mario Gabelli interesting. One quote I particularly liked was:
Gabelli made it clear that his firm only hired PhDs – and by that he means
“poor, hungry and driven.”
I love it!
All of these are seperate checking and savings accounts I have:
General Account – When any money comes in or out, it goes through the general account. There is always at least a $400 cushion in the general account for a rainy day.
Spending Account – This is the money I have available to spend on any frivolous thing I want. 20% of my paychecks go here and 20% of money generated. $40 per month is also automatically deposited. By 11.17.2006 I plan to use this account (with the same percentage rate) to pay for all general living costs.
Spending Account 2 – This account was created for larger purchases related to spending such as Christmas gifts, vacations, birthday gifts etc.. I have started putting about $20 per week into this account through automatic transfer. This account should most likely build year-round until big events come along.
Investment Account – I keep a minimum of $500 here at all times. I put a mandatory $240 every month and 30% of other income. When the amount tops $1K, I generally infuse the money into my stock portfolio. Any purchases that make me money are charged to this account also.
Bill Account – I’ ve got bills to pay, and this is where I pay them from. There is approx. $10 per week being automatically transfered to this account.
Permanent Savings – This is the ultra-secure savings account which will not be exposed to risk. I put a mandatory $160 in here every month plus 30% of other income. I will never touch this money until I am over the hill.
Charity Account – This account slowly builds money all for the purpose of giving it away to charitable causes. Making money feels great, but giving it away feels better!
Stock Portfolio – My current brokerage account value. This can vary wildly as stock prices rise or fall.
ROTH IRA – My ROTH IRA account which I buy stock, bonds, index funds etc. I will never touch this money till retirement.
Emigrant Direct Account – This is another permanent savings account, but not hosted with Bank of America. I keep this account aside because it gives decent returns and no risk.
Credit Card Balance – This will always be zero or negative because I pay off my credit cards before charges are even made.
Business Holding – This is the amount of money I OWE to the company that fulfils all my online business orders. Since bills usually come 2-3 months later, I sometimes leverage this money for play in the stock market. This money CAN be used, but I generally do not.
Credit cards. Ughh.
I’ve been using my own check card since I was a senior in high school, and I love it. Transactions are immediately posted online and you can only spend what you have. I’ve only recently got a credit card to help build my credit, but I’ve barely used it.
Since I have to use it, I fight the tactics CC companies use to make you overspend and borrow their money. Two of my tactics:
1.) Pay before you buy. I will pay off my credit card before any charges are posted. I will have a negative balance, and work my way up to a $0.00 balance as I charge items.
2.) Counteraction. Everytime I make a charge, I go home and immediately transfer the funds into an account I have for paying off the credit card. When the charge finally posts to my account, I always have the funds to pay it off.
I still believe credit should be used for buying assets only, not a new Gucci wallet.
Today I cancelled a $5,000 CD account I started over a year ago. To date, I earned only $39 from interest. The interest varied every month between .5% and .75% annual interest. With rates that low, I feel some of the money would be better off in a different investment vehicle.
For the time being, I put the money in my permanent savings. I will leave half of it there, and start my 2nd brokerage account with the other half. My 2nd brokerage account will be my longterm account. The stocks or funds I buy for this account will be held for 2+ years at least, if not 30+ years.
Current Asset Structure:
General Account – $ 1,259
Business Balance – $ 1,683
Spending Account – $ 243
Investment Account – $ 873
Permanent Savings – $ 8,080
Stock Portfolio Value – $ 5,100
Credit Card Balance – $ 0
Today when golfing with friends I realized how much I like golf just for the business aspect of it. The comfortable, open and semi-formal aura of the golf course makes it an ideal spot for personal and business talk.
On another note,
Everytime I view NevBlog, I feel it emulates The Kirk Report more and more. This is not a bad thing since I greatly respect his dedication to the market and desire to help the little guy.
Tommorrow (Sunday) I am going for an 18 hole round of golf, then Monday I finish my 2nd to last semester of college. After Monday I need to focus on:
Here is my Financial Update for 12-11-2004:
General Account – $963
Business Balance – $1,683
Spending Account – $431
Investment Account – $873
Permanent Savings – $3,040
CD Savings – $5,039
Stock Portfolio Value -$5,104
Credit Card Balance – $0
To make extra money I’ve always designed websites. Now that I’m done with final exams for the week, I can concentrate on Resumite Personal Websites (I have set a goal to launch in on December 15th).
I try to start small businesses all the time. Since I’m a full time student, I look for businesses with low/no overhead, low entry costs, flexible hours and good returns for my time. My first real business from high school still brings in more money than my job, and I spend less than 20 minutes a day on it. For Resumite, I decided to do a different take on standard website design because it is a very saturated field. Resumite will be a simple business to start, and 100% profit (especially since I already own a dedicated server for hosting). All I need to do is market around campus and online.
-About Resumite-
-Personal Resume Websites (Resume + Website = Resumite)
-Users can have their own yourname.com website to put on their resumes and business cards.
-Price: $50 for basic package. Includes 1 year hosting, domain registration and a choice of sample sites.
–Check it out – It is still in the construction phase.
Syntel (SYNT) and Dynegy (DYN) are both down substantially (several hundred dollar losses in each). The surprising thing is that Superconductor Tech (SCON) is still going up, the one stock I didn’t have high expectations for.
Feel free to drop me comments on trading strategies etc, but keep in mind I generally hold shares for 3 months to 2 years. I have had stocks in the past that dropped dramatically, but holding on to them for 6 months reversed those losses into big gains. If you are not careful though, those losses can turn into even bigger losses.
The reason behind this post is to show myself that no matter how confident you are about a stock, it can still play games with you. Fortunately I have longterm faith in Dynegy and Syntel. Dynegy will be a several year hold, and Syntel will be held for approximately 6 more months (based on current situations).
After coming back from a final exam, I checked my Dynegy (DYN) stock as I knew they were making a big announcement soon. I saw the big red numbers that read – %10 and immediately went rummaging through the news.
Deciding to keep my investment or run for the hills with what I still have (I actually bought the stock lower than what it fell to, so I am not in a loss as yet) I noticed why it had dropped. Turns out they are paying off debt (good), and the bottom line for yearly earnnings will now take a big hit (bad) because of it.
I evaluated my stance on this position: Longterm investment with a minimum holding period of two years. I have confidence Dyngy will get back on its feet when the initial hit clears. It may take a few years, but this one is for the longterm portfolio.
The lesson learned here is how fast your luck can change. Just 12 days ago I wrote an entry bragging about how well DYN was performing!