Market rises

The Dow was up 61. Nasdaq up 33. S&P 500 up 10. Today has been one of the better days on record for us. Our portfolio was up $1,182. Some solid gains, partially due to the additional Google shares I add Friday and Monday. But the highest gains we saw came from tech and financial stocks.

I really look forward to a solid finish to the week. And, of course, still await more strength from Google as March 31 draws near.

American Sucker

Almost finished reading "American Sucker" by David Denby, a film critic for The New Yorker. The books relates Denby's tale of getting in on the tech market on the tail end and painfully enduring the doomed crash. Essentially he was trying to raise a million to buy his wife out of their Manhatten apartment after their divorice. Well, he didn't quite make it there. Far from it, as it turns out. From early 2000 to the end of 2002 his net losses stood at $900k.

This hasn't been the most exciting book to read. In fact, at times Denby strays away from the topic of investing. But then again, he never claimed himself a professional investor. He was just a common man on a mission but started it too late.

I wasn't in the market during that time. But I wonder what it would have been like to endure such a bear market. I don't think I would have liked it one bit. But I suppose I just need to learn to short.

Google

Well, last week it was announced that Google would be added to the SP 500 On March 31st. Many, many people, including myself, looked forward to this event. When announced, Goog went up 7% Friday. Today it went up another 1%. Although I sold half my shares early last week, between Friday and this morning I bought those back and some more.

I truly expect Goog to show some sure footed frenzy when fund managers start buying on the 31rst. I already locked in a tidy profit last week and hope to add more. Or course, lots of people hope Goog hits an all time high. Well, that'd be great. But even if it doesn't I'd like to see some modest gains in the weeks to come. And can't imagine why I won't.

Your Latte Factor

Well, you’ve been told before: stop buying those lattes! You might listen. It’s good advice. The idea of the latte factor has been around for years. But many of us don’t always keep tabs on ‘our’ latte factor. Looking back over the years I can see that I’ve had many different latte factors; at times movies, belgium ale, video games, and most recently, wine.

My wife and I were surprised when we saw we were spending over $100 a month on wine for the house. Needless to say, we’re drinking a lot less wine this month.

It’s one thing to look at the latte factor as a means to limit an expense and be more frugal. But this is the Carnival of Investing not Frugality so I say take it one step further. Instead of not buying that smoothie, don’t buy it but earmark that $4 and invest it. Like any regular investing, over the years it can add up in a big way.

See for yourself, there’s a simple latte factor calculator on Oprah’s website.

House valuation

Our neighbor put their house up for sale. The asking price was $30k higher than we paid for ours a few months ago. All things considered our houses are quite similar. Their house is 98 sq feet bigger. Our yard is 1742 sq feet bigger. We have a gas fireplace. They don't. We have skylights. They have none. Zillow.com lists our house worth $3k more than theirs. Needless to say, we'll be looking forward to their open house to see inside. And ultimately to see what the house sells for. Zillow shows our house gaining about $7k in value last month. We'd feel quite fortunate if their house sells near the asking range. We could safely match the value of our house to that value and see our net assets be well above the $200k mark and closing in on the quarter millionaire mark.

Stock moves

Made some moves with our stocks. Took two stocks out of the natural gas sector (since winter is all but over and natural gas stocks tend to soften when the weather warms). One at 28% long term gain of $298. One at 15% short term loss of $96.

Also sold a good portion of Google at a profit, since I'm not positive it's a sure thing for Google to race towards $500 again, or even $400.

Put the net proceeds into financial, aerospace, alternative energy, and pharmaceutical sectors.

We've been heavy into energy stocks and it felt good to take some profits from the table and diverisfy our holdings.

(almost) Free Treo Phone

Saw that Ameritrade is giving away free Treo 650 Smart Phones. As long as you open a new account with $25,000. Otherwise you get 15 free trades with $2000.

ShareBuilder is offering $25 bonus for new accounts and still has the lowest commision of $4. But you can only trade once a week at that rate. Not too bad for long term trades. Otherwise, realtime trades are $16.

ETrade offer free trades with new accounts, but the small print is too confusing to see what's what. Apparently you can get up to 100 free trades. They use a floating fee schedule of $7-10 depending on how many trades a quarter.


Fidelity has a simliar schedule of fees. And reminds me why ...


I trade with Scottrade. When I started actively trading I choose Scottrade because I liked that they had offices in all major cities. It's nice to go talk to a broker, yet not have to pay high comission fees. It's also nice that they dropped their limit order trades to the same rate of market orders.

Although, I think I may open a Sharebuilder account because I am interested in the super low cost fees for long, long term trades.

Money Market Switchings

Currently in process of opening HSBC money market. Then we will transfer bulk of Ing funds over. It seems Ing will never better the rates that HSBS and Emigrant keep upping. Even, Paypal has a better rate than Ing. So, it was clear that we had to pick one of the two. After reading a number of reviews, HSBC sounded like the better new home for our money. They should be confirming our linked bank account this week. Than it's a matter of transfering fund from Ing to bank to HSBC. It'll suck to lose about six days of interest. But the higher rate will more than make up the difference in the long run, of course. It'll be great getting above 4% on our funds.

Upromise

Just created a Upromise account. (You can get $5 with code BN5.) If you don't know about Upromise.com, well it's a savings plan for college. There's tons of online and your local retailers that will donate a small precent of your purchases into your account. Then you can use your Upromise account to fund a 529 college savings plan (think 401k for college). No kids? Not a problem. You can designate any child at a later date.

I remember looking Upromise a few years ago, but at the time they didn't offer many businesses that I used. Well, that's changed. There are tons and tons of businesses that work with Upromise. In the end, it free money.

Money Market incentives

Haven't seen many bonus incentives for starting new accounts. But I haven't been thorough in my research. Netbank still looks like the best value with the free $75.

Wednesday Market

Up again. Today we saw our portfolio gain $215, about 0.6%. Just a little better than the Dow, which was 0.52%. Our IRA accounts were up $85, about 0.7% All and all the week has been positive. Let's close out the final two days with a solid showing.

Tuesday Market

The market performed rather well today. And our portfolio reflects that. We saw a gain of $655, almost 1.9%. That makes me happy. Getting back to some solid numbers. A nice part of today's pie was Goog, gaining 4.2%. It's a long, long way back to the 52 week high but every bit counts.

Monday Market

After a dismal last week we started off this week nicely. With the Dow flat and the Nasdaq up only 5 point our account was up $421 about 1.2%. Those are number I like to see. If the Dow gains strength through the week I hope to make some gains back from last week.

Shopping for weed wacker

My mom has needed to clear some brush on her property for a few years. The closest she got to doing it was getting a $500 quote from her neighborhood lawn mowing service. She wasn't at all interested in paying $500 just to remove brush. One of the many benefits of moving back west was being near my family and helping them out when I could.

I told my mom I would do it for free as long as she would buy the gas powered weed/brush wacker. After checking a few of the local stores I found prices for these machine run about $135-200. Which still seems like a lot of money for something that'll likely get used once a year to clear brush.

This weekend I saw a lawn mower repair service that also sells used equipment. This week I'll check out the pawnshops and see what they're charging. My experience is pawnshops always have high prices. Plus I figure the mower repair shop will tune-up all equipment they sell and stand by it if it breaks after ten minutes of use. Hopefully I can find something for $100 or less.

Groceries

After looking into last month's purchases I saw that we spent almost $400 on groceries. Quite a lot more than I thought we spent for just the two of us. Although, I know the amount is higher than average because we hosted two dinner parties. But it was still higher than we thought it should be.

We'd like to spend $60 a week. One of the easiest costs to cut is wine. We both have enjoyed drinking more wine in recent months. And had gone from $4-5 bottles to $6-10 bottles of wine. If we both had wine with dinner every night we'd go through four bottles a week. Which would be about $128 a month averaged out. Quite an extravagent indulgence I think. So now we plan on just having wine on the weekends and should use only one bottle a week for about $32 a month. Almost $100 savings.

Goog

Stocks are looking brighter this morning after a positive jobs report from the Labor Department. But there's one stubborn stock in my stable: Google. It's easy to see why there has been so much profit taking on Google recently. Although not an easy thing for me to see. But a lot of us small investors are awaiting for, what we think is inevitable, the inclusion of Google into the SP 500. When and if the announcement is made, the price of Google will surge first on the news, and again when added to the SP as institutional investors and index fund managers start buying shares. So for now I can turn my back on a small profit on Google for what hopefully turns to a less modest gain. And more importantly, a long term gain.

New account freebies

Looking at setting up some new money market and CD accounts. Netbank.com is offering $75 bonus for opening a new money market account at 3.46% with a minimum of $1,500. That's not a great rate but the $75 is deposited after only 30 days.

$75 Netbank offer

There's always seems to be plenty of similar deals. I'll have to research over the weekend and see what other freebie and bonus offers are out there.

Buying land

Look's like we better get on the ball about buying some recreational land:

Rural land values

Stocks we use

As an investor I always feel better buying products from companies that we're shareholders in. But that doesn't give reason alone to over-buy. We own Starbucks stock but don't go there daily. I know that I alone can't affect same store sales in any way. But if I'm out and in need of a coffee (which doesn't happen much since I can't stand paying more than $1 for coffee without refills) I'd probably choose Starbucks.

And I try to buy my gas at 76 since we own ConocoPhillips. Back east it was easier to fuel up since we also own Amerada Hess and Valero but I haven't seen either of those out west. Last summer it was hard paying over $3 a gallon but at least our oil stock appreciated enough to offset our fuel costs.

Now that we're in a new house we've been frequenting Home Depot and Lowes quite a bit. It makes me think about buying some shares of one of those companies, since I see never ending trips to one of the two well into the future.

Net worth update

$198,851. This is the figure I came up with. Luckily for us we don't carry any credit card debt. Other than our mortgage we don't have any balances to carry each month. (Both my wife and I are lucky to never have had credit card debt and owe our current finiancial situation in large part to this.)

We expect to break the $200k barrier either this month or next depending on how the stock market goes.

Zillow

According to Zillow our house appreciated $2,493 in February. Which is a good thing because it's brings the Zillow value of our house closer to what be paid for it, which was below the Zillow high range though. After looking through the Zestimate factors I noticed there are certain factors that Zillow can't account for.

For example, our place was renovated before we bought. Items updated included new Pergo flooring, paint, chair rail, kitchen appliances, septic repairs, skylights, gas fireplace, gas water heater, master bathroom, and some landscaping. I also refinished the kitchen cabinets shortly after moving in.

So I think the true value of our house isn't necessarily reflected in the Zillow price. We were one of three bids on the house after being on the MLS for 12 days. Our realtor told us we won because our financing was the best of the three. Given a higher asking price and a few more weeks on the market I'm sure the selling price would have been a bit higher, reflecting my suspicions that we got a great deal mainly because of timing, not unlike when we sold our condo.

Lazy coffee

Last week I had an idea of reusing my coffee grounds. Not to save money, or filters, or time or anything. More because I get tired of emptying out the coffee grounds into our compost jar. Since we are on septic I can't just wash the grounds down the sink. Often when drinking tea I have made 3-4 cups from the same tea bag so I couldn't see there being any difference with coffee.

So I thought I'd try this little experiment. Typically I make 2 pots of coffee a day. There is some benefit of cutting waste but that is secondary.

I can't tell any difference in quality of coffee. And I drink coffee black so there is no milk or sugar to mask any unpleasant taste. When I brew the reused grounds I add half as much new grounds. This seems to work best.

In the end, as long as the coffee tastes good that's what matter. Saving dollars on coffee grounds, wasting less paper filters, and not always dumping the grounds into compost are all nice too.

Another wood project

This morning I put together a simple coat rack shelf for our front entry way. Since moving out of a condo and getting a house with space, I've been learning the craft of woodworking. Aside from something to do, it allows us to get quality furniture for the house at little cost. So far I've done three projects: coffee table, book shelf, and the coat rack. Each item has been a learning process. Other items in the works: potting table for the garden, a few more bookshelves, storage trunk, armoire, end table, and another coffee table. Once I feel comfortable I hope to try and sell some items on the side.

Net worth

This week I'm trying to get a real value on our net worth. And once determined redistribute some of our investments. It looks like it's time to leave ING and move over to Emigrant or HSBC since ING is always behind the other in rates. We'll likely also put some money into CDs which should get us a little higher rate.

Gas on the increase

Gas prices near me have been creeping up little by little since the start of the year. With summer months off I wonder what prices will be like this time around. This is one of the reasons I would like to replace one of our cars with a more fuel efficient models. Currently our Subaru and Honda get about 27mpg and 36 mpg on the hightway, respectively. I can't see getting rid of our wagon, so that leaves us with the task of finding a car that gets MPG in the 40s. Another option I see is getting an old fuel wizard and parking the Subaru most of the time. Options that come to mind are the early Geo Metro and Subaru Justy. Both cars use tiny, three cylinder engines to get their mpg results. Neither are easy to find in decent shape. Another option is the Honda CRX. But these are even harder to find in stock condition since they are such popular tuner cars.

In any case, something's got to give since gas prices are likely to hit $3 a gallon or more soon enough. Part of this is because the phase out of MTBE into gas. This will reduce the amount of gas available. One of the stocks we own is Valero Energy, an oil refiner. Valero will discontinue making MTBE this spring and has stated that this will reduce its gasoline output by 6 percent.

Here's a Reuters story that talks about the issue:
http://www.planetark.com/dailynewsstory.cfm/newsid/35263/story.htm

Our strategy is as follows:
I'll ride my bike to work three days a week - 6 miles each way.
My wife will ride the commuter bus during day light savings time.
A new, used 40+ mpg car for weekend driving.

Month to Month charts

I've never been good about keeping track of monthly exspenses. Seems like when I've tried to keep of track every penny I couldn't do it for much more than six weeks. Of course I know how important it is to get onto of money in and money out. Know that we're settled nicely into our new house and should have all of our regular bills going now, it seems like another time to try. Hopefully for the next few weeks I can keep a track of it all.

Extra money

Today I finished a project I was doing for a company in which I fabricated and welded four carts. The company will use the carts to load and unload inventory. If they find the carts efficient for their needs then they will contract me to make another 6 or 16. Hopefully they want more carts since I enjoyed building them. If they do, then I would make about $2500 altogether for building 20 carts. Money that I'd like to put into some Treasury notes or such.

Housing slowdown

I've always read with interest any piece regarding the housing market. For much of 2003-04 the focus of stories was about the insanity of being a buyer. The tone turned in 2005 about the inevitable crash that loomed ahead. For the first part of 2006 it has been about not a crash but a housing slowdown. Which is good and bad. Good because a crash is bad. Bad because many of us had just learned about appreciation in a big way.

At the beggining of this timeframe I was working in Hawaii making more money than I have every made. Which allowed me to pay off some medical debt from knee surgery and save a chuck off money to put into the stock market. My wife (not at that time though) was on the east coast and just getting to the end of her lease on her apartment. Luckily she thought she should look into the condo market before signing another lease and in the end made the plunge and put herself into a $175k mortgage at under 5 percent. At the time paying $185k for a 550 sq ft one bedroom condo must have seemed crazy. (I briefly looked into getting a condo in Hawaii but the timing wasn't right for me. Too bad for us.) After my job was finished in Hawaii I joined her back east and we lived in that tiny condo together for one and a half years. Well, at some point we both realized the east coast had done as much for us as it was going to and that we couldn't afford the life we wanted to there. So we sold the condo and both moved back west.

I think we just missed the peak of the market where the high water mark for a condo like ours was about $330k. We sold ours for $315k last October. Over all a tidy little profit for two years. Last month, units like ours sold for $280. In hindsight we got out perfectly. But the best timing was my wife buying when she did.

And once we got out west we shopped for houses in the $275k range. And found a nice little renovated three bedroom for $285k. Where we have over three times the space, plenty of parking, a big yard, and lots of room to grow.

And now with the current housing slowdown we'll be happy with five percent appreciation. That'll still allow us to walk away in a few years from the sale with something to show for it. Of course neither of us expect to make the type of gains we did on the condo.

Goals: 2006

A few of the bigger goals for 2006:

-Start grad school this fall.

-Buy recreational property as a longterm investment.

-Grow non-IRA stock account to over $50k.

-Start small business to run on the side.

-Create bountiful garden to put some fresh veggies on the table this summer.

-Replace one of our two cars with a more fuel efficient vehicle.

-Get one piece of writing published.

-Brew some beer.

-Learn more spanish.

Stocks missing

Stocks aren't doing so well today. Our accounts are down almost $1,000 today. Whenever this happens I usually forget about the market and go worry about other things. Looks like market is selling while interest moves to Tresury market. I consider myself a serious, amateur investor. By this I mean I don't really have a strong grasp of all investing vehicles. Mainly I've been trying to learn long equity trades. Next, though I think I want to work on the Treasury market. I need to move some funds from the money market accounts into bills and bonds. But with the current high flying yields on internet money market (ie, Emigrant Direct, ING, HSBC Direct) accounts, I haven't felt compelled to get into the Treasury game. Further down the line I'll turn to short equity trades, options, currency, etc, if I still have the time and money.

Small values in real estate

I noticed the other evening that from our property we have a small, very small view of some of the snowcapped peaks that surrond the Pacific NW. Somehow seeing that snow put a smile on my face; to think that I have mountain views from my very own backyard. Now of course this can't add real value to the house. But it adds value to me. I wonder if I can determine a value for this small view. Considering the value of houses these days, a small almost nonexistant value could be worth tens of dollars. Or even a few hundred to the right person. I suppose when we sell this place in the future I might just have fun with this marketing aspect.

REI Dividend

In the mail today I found my REI Co-op Dividend in the amount of $103 and change. The bulk of this came from the one percent I get back from using my REI Visa. In years past I would hold onto it until July and cash it in since I usually couldn't think of anything I needed to buy, However, this year I'm in need of a bike repair stand. And as such, I will use the coupon to get 20 percent of any one item with the dividend. I shouldn't expect dividends of this amount in the future since I've switched to the Chase Rewards Visa, mainly to get the five percent back on purchases made at gas stations, and drug and grocery stores. In any case, this final triple digit REI Dividend shall kindly secure me a quality bike repair stand that'll last for years to come.

death to analog

My analog collection took a serious blow this week. Without much fanfare I sold my 35mm Nikon FM2 on ebay. It sure will be sad packing it up and shipping it off. But the used Canon G2 I am replacing it with arrived this week and will fit nicely between my Kodak easyshare pointer/clicker and Nikon D70 for my digital photo needs. And I imagine it'll be a number of decades before the price of a FM2 no longer depreciates and begins to gain in value.