September 23rd, 2009


Thank You, Recession

I have been getting phone calls from my brokerage asking for me to call them to talk to one of their representatives. I have been blowing them off because I know they just want me to start trading again. The more I trade, the more they make in commissions. Well, since I make only a couple of trades a year, they certainly won't be making a lot of money off of me. Finally the representative caught me at work. Since it was a slow day, I decided to talk with him. It was actually a really good conversation.

His 1st question was, "What is your investment strategy?" My answer was something like, "DUH! Make shitloads of money!" Of course the REAL question is "How do you PLAN on making shitloads of money?" That question is a little harder to answer. Do you want safety and low rewards or greater risks with greater rewards? Do you want to invest in individual companies, mutual funds, or ETF's? Bonds? Bond funds? Cash? etc etc etc. It was a lesson I learned at a seminar over a year ago. Set yourself some sort of goal for both good times and bad. If a stock starts to tank, when will you bail? When the stock goes up, when do you take your chips off the table? I have been lax in this department. I'm a buy-and-hold kinda guy. The money I invest is nothing I will need until retirement. I invest to get a better return than the 1-2% I might get at a bank.

So I started looking at my portfolio. There are some turkeys I really need to unload that I have held on for years. On the other paw, I bought a few stocks in the depths of the recession. One was Caterpillar. If the stimulus would cause a boom in construction, that would be a good bet. The stock was at record lows. I just noticed that the stock was now 20% higher. While I still believe in the company, I just could not ignore a 20% gain in less than a year. The other winner was Southern Copper. I made a tidy sum off of this company last year as I rode the commodity bubble and sold before it popped. So I re-bought at a lower price than I did the 1st time. Lo and behold, the commodity market oversold. I saw that I had doubled my money in less than a year. Time to bail again!

I guess I am a bit gunshy that the market is heading for a bubble again. Then again I was told that the greatest growth usually occurs right after a recession. Probably the best advice I heard was that you don't have to hit the very bottom or the very top to make nice sums of money. I think I'll start being a little more proactive in my investing. I was shown many tools available to me that I didn't realize I had. Analysis is becoming more and more accessible to us regular Joes without MBAs. It's time to start doing more and more research and expand my knowledge base. This stuff is pretty fascinating. On the one paw it IS a lot like gambling, but here you don't have to rely totally on luck. You can get information that put the odds in your favor as opposed to the house having the edge.


This meme was just too good to pass up. This desktop has started many a conversation at meetings. A few months ago I had every server at an airport bar come over to take a look at it. It also used to be my work computer wallpaper until they did a bureau-wide re-format. I have never bothered to see if I could get it back.

BTW, I think this was FC '08. It might have been '07.