Apple (AAPL) Reports tomorrow. Always a solid earnings report. If they beat earnings I expect a nice pop in after hours. Can the Monster of the stock market continue on? We will find out tomorrow after the market closes.
Weatherford International (WFT) reports tomorrow. Obviously, this stock hasn't had a very good run. The oil service giant SLB and BHI did fairly well because of international strength. The oil service companies usually trade together so I expect a good number from WFT.
Caterpillar (CAT) The Peoria Powerhouse! Cat reports on Wednesday 07/25/12. This one is a toss up. Cat hit a high of $116.95 on February 24th and is trading at a huge bargain. I still have confidence that CAT will prevail. Their earnings may disappoint with the downward pressure from the international markets, but I believe this news is already baked into the stock price. CAT is at rock bottom prices. That's all I'm going to say!
As usual I will be picking apart all three of these companies and will have a full report over the next few weeks on my take for the future of these companies.
Have a great night!
Clay-
Full Disclosure: I personally own CAT
Monday, July 23, 2012
Wednesday, June 20, 2012
The Big Picture Of Investing
Over the past few weeks I've been thinking about investing as a whole. Why do people invest? Why don't people invest? What's the best way to invest? What's the best company to invest in? And the list goes on with all the questions that ran through my mind. I'm going to tell you what I think.
Investing in stocks is a way to leverage profits generated from great companies over many years in hopes for a nice return on your investment. Investing is a tool to reach your particular financial goal. Goals that may include saving for your children's college, supplemental income, funding for charity/programs and retirement. Of course I hear people say investing in stocks is risky! Those are usually the people that think investing in CD's and savings accounts is a good idea. Or they have no money because they own one of everything. That my friends is keeping up with the Joneses! I can address both of these issues and suggest a way to have your money working for you.
I don't mean to offend anyone that may own CD's or have a substantial amount of money in their savings account, but I believe investing in stocks is a better alternative.
I would never invest in CD's aka Certificate of Deposit. Never! Never! Never! Here's why.
Current Example: 10 yr CD Rate vs. stock that pays the same dividend yield
$10,000 investment
10 yr CD Rate 2.23% $10,000 would roughly turn into $12,467.62 That's about $246.76 a year.
Now you may say well if the rates are the same it should return the same amount of money. This is true, but stocks offer dividend reinvestment, appreciation in the stock price, and increased dividend payout. That's the game changer!
A stock that raises its dividend distribution 10% annually for 10 yrs would turn into $14,840.08 That's $2,372.46 more than the same amount of money invested. Almost double the money! Obviously doing this for 30-40 yrs would be substantial to your portfolio.
At 30 yrs $10,000 invested in a CD with a rate of 2.23% would turn into $19,379.87
30 yrs with a stock that pays a 2.23% dividend yield and raises dividend distribution 10% annually (Remember dividends are reinvested) turns into a whopping $433,637.11 Over 30 yrs annualized return with dividends reinvested equates to 13.39% return on your money.
Obviously, this is purely an example and is very realistic for a company to increase dividends at a rate of 10%. That means the CD investors are missing out on a lot of money! $400,000 of cold hard cash. Even if I'm off by a bit the return on dividend paying companies that increase their dividend payout consistently overtime will destroy a CD!!!!! The risk is well worth the reward...
CD rates will go up over the next 30 years, but you get the point!
The example above shows that $10,000 of your money has the potential to turn into something great! Using stocks as a vehicle to generate the money for you. Imagine trying to save $400,000 on your own. Let's say you made $50,000 a year and saved roughly 10% or $5000 per year. Without the help of an investment vehicle compounding over time it would take 80 years to save that kind of money. That means at my current age of 30 I would be able to save $400,000 by the time I'm 110. No thanks man!
Now as for a savings account the interest is much worse and I don't consider this an investment. A savings account is meant for emergencies and short term liquidity. Having 3-6 months of expenses in a savings account is the most anyone should have tied up in something that isn't keeping up with inflation. Once your savings is built I would put the rest of your money to work for you. Consider each dollar you save as an employee. Invest in assets not liabilities, whether it be equities, real estate, commodities etc etc.... Overtime your money will grow aka your employees and you will have a nice chunk of change generating income every year. Eventually, your money will create enough income to replace your earnings you bring in as an employee, which in turn leads to retirement! Retirement or a choice to do anything your heart desires... It's always great to have choices.
Lastly, the part of about keeping up with the Joneses is by far the biggest wealth destroyer. It's sad to see people deeply in debt because they want to impress their friends. Continually buying stuff that you can't afford over your lifetime will put you in the poor house. The only person you are making rich are the banks and credit card companies. The next time you buy something think to yourself do I really need this crap? Most of the time its a want and not a need. Buying toys overtime is good in moderation. Just think! Eventually your investments will generate enough income that you can go buy anything that you would like. Buying stuff you can't afford early on in life will dramatically slow down your opportunity to create tremendous wealth. I promise you that! I was that guy in college. I was so broke I couldn't even think straight! I have learned from my mistakes early on in my life and I'm grateful for that.
This is the reason why I'm so passionate about teaching others to invest for their future. The winning equation is to buy more assets than liabilities throughout our lives. That's it! Plain and simple.
Have a great night!
Clay
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Investing in stocks is a way to leverage profits generated from great companies over many years in hopes for a nice return on your investment. Investing is a tool to reach your particular financial goal. Goals that may include saving for your children's college, supplemental income, funding for charity/programs and retirement. Of course I hear people say investing in stocks is risky! Those are usually the people that think investing in CD's and savings accounts is a good idea. Or they have no money because they own one of everything. That my friends is keeping up with the Joneses! I can address both of these issues and suggest a way to have your money working for you.
I don't mean to offend anyone that may own CD's or have a substantial amount of money in their savings account, but I believe investing in stocks is a better alternative.
I would never invest in CD's aka Certificate of Deposit. Never! Never! Never! Here's why.
Current Example: 10 yr CD Rate vs. stock that pays the same dividend yield
$10,000 investment
10 yr CD Rate 2.23% $10,000 would roughly turn into $12,467.62 That's about $246.76 a year.
Now you may say well if the rates are the same it should return the same amount of money. This is true, but stocks offer dividend reinvestment, appreciation in the stock price, and increased dividend payout. That's the game changer!
A stock that raises its dividend distribution 10% annually for 10 yrs would turn into $14,840.08 That's $2,372.46 more than the same amount of money invested. Almost double the money! Obviously doing this for 30-40 yrs would be substantial to your portfolio.
At 30 yrs $10,000 invested in a CD with a rate of 2.23% would turn into $19,379.87
30 yrs with a stock that pays a 2.23% dividend yield and raises dividend distribution 10% annually (Remember dividends are reinvested) turns into a whopping $433,637.11 Over 30 yrs annualized return with dividends reinvested equates to 13.39% return on your money.
Obviously, this is purely an example and is very realistic for a company to increase dividends at a rate of 10%. That means the CD investors are missing out on a lot of money! $400,000 of cold hard cash. Even if I'm off by a bit the return on dividend paying companies that increase their dividend payout consistently overtime will destroy a CD!!!!! The risk is well worth the reward...
CD rates will go up over the next 30 years, but you get the point!
The example above shows that $10,000 of your money has the potential to turn into something great! Using stocks as a vehicle to generate the money for you. Imagine trying to save $400,000 on your own. Let's say you made $50,000 a year and saved roughly 10% or $5000 per year. Without the help of an investment vehicle compounding over time it would take 80 years to save that kind of money. That means at my current age of 30 I would be able to save $400,000 by the time I'm 110. No thanks man!
Now as for a savings account the interest is much worse and I don't consider this an investment. A savings account is meant for emergencies and short term liquidity. Having 3-6 months of expenses in a savings account is the most anyone should have tied up in something that isn't keeping up with inflation. Once your savings is built I would put the rest of your money to work for you. Consider each dollar you save as an employee. Invest in assets not liabilities, whether it be equities, real estate, commodities etc etc.... Overtime your money will grow aka your employees and you will have a nice chunk of change generating income every year. Eventually, your money will create enough income to replace your earnings you bring in as an employee, which in turn leads to retirement! Retirement or a choice to do anything your heart desires... It's always great to have choices.
Lastly, the part of about keeping up with the Joneses is by far the biggest wealth destroyer. It's sad to see people deeply in debt because they want to impress their friends. Continually buying stuff that you can't afford over your lifetime will put you in the poor house. The only person you are making rich are the banks and credit card companies. The next time you buy something think to yourself do I really need this crap? Most of the time its a want and not a need. Buying toys overtime is good in moderation. Just think! Eventually your investments will generate enough income that you can go buy anything that you would like. Buying stuff you can't afford early on in life will dramatically slow down your opportunity to create tremendous wealth. I promise you that! I was that guy in college. I was so broke I couldn't even think straight! I have learned from my mistakes early on in my life and I'm grateful for that.
This is the reason why I'm so passionate about teaching others to invest for their future. The winning equation is to buy more assets than liabilities throughout our lives. That's it! Plain and simple.
Have a great night!
Clay
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Wednesday, May 30, 2012
Brutal!!!
The stock market has been brutal! There is no place to hide lately. All I can tell you is to ride it out. Keep current with all the news on your current stock holdings. If everything is sound with your investments pay no attention to the outside noise. Europe is the biggest drag on the market and all stocks good or bad have been taken down. The only strategy that will help you lose less money is to shift your holdings into good dividend paying stocks. I on the other hand will continue to hold my high flyers. When the smoke clears the growth stocks will snap back the quickest. Until Europe gets it's act together the pain continues....
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Wednesday, May 23, 2012
Westport Innovations +12.41% today
All I'm going to say is Westport Innovations (WPRT) up +30.70% in 4 days. Looks like some big money is flowing back into this growth machine. Keep a close eye on this fast mover.
Have a great night!
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Have a great night!
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
Thursday, May 10, 2012
Quick post... The pitfalls of growth stocks
So I made a big bet on Westport (WPRT) and thus far I have been wrong. LOL! That's the risk you take when investing. I moved in hard in the low 30's and have been punished by the short sellers. Westport's earnings call for Q1 2012 on Tuesday was actually quite good in terms of progress. I know they lost more money than they did vs. last year's quarter, but they are increasing sales quite nicely. I think this stock has been taken down beyond what is right. I know the nay sayers would argue that this company hasn't turned a profit in years, but you have to fuel the growth some how! You need cash.. And enough cash is what they have. If their wasn't progress than I would say the heck with this stock. I believe Westport will surprise everyone especially the short sellers in the coming weeks. I'm looking for a short squeeze in the near term. There needs to be a catalyst to change the aggressive downward trend. I'm confident WPRT's management will have some good news to get the big fish investors back on board. Plus a change needs to be made because I'm sick of losing money!
I'm still a big Westport Innovations fan even if I lose a little cash in the short term. I didn't expect this high growth engine to get cut in half in the past few months, but it happens to the best of them. The thing with growth stocks is as followed...
When any negative news poses a threat to the growth of a fast growing company investors do not hesitate to turn on a once loved company. The money will flow out like a huge hole in a boat and the short sellers will step in to accelerate the downturn. When this happens the momentum takes over and stocks go down until the sellers are exhausted. This is what happened to Westport. Other growth companies have gone through the same thing. Here are just a few stocks that had similar rapid downfalls.
Starbucks (SBUX)
Hansen Natural (MNST) AKA Monster Energy Drinks
NetFlix (NFLX)
Taser (TASR)
A few of the companies have rebounded nicely from when they plummeted, but rapid growth can't continue forever and neither can straight up stock prices. It hurts to see your money slip through your hands from time to time, but the excitement of catching the next big trend is always worth the risk in my eyes.
Stay positive with WPRT. Loyal shareholders will prevail.
Have a great night!
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
I'm still a big Westport Innovations fan even if I lose a little cash in the short term. I didn't expect this high growth engine to get cut in half in the past few months, but it happens to the best of them. The thing with growth stocks is as followed...
When any negative news poses a threat to the growth of a fast growing company investors do not hesitate to turn on a once loved company. The money will flow out like a huge hole in a boat and the short sellers will step in to accelerate the downturn. When this happens the momentum takes over and stocks go down until the sellers are exhausted. This is what happened to Westport. Other growth companies have gone through the same thing. Here are just a few stocks that had similar rapid downfalls.
Starbucks (SBUX)
Hansen Natural (MNST) AKA Monster Energy Drinks
NetFlix (NFLX)
Taser (TASR)
A few of the companies have rebounded nicely from when they plummeted, but rapid growth can't continue forever and neither can straight up stock prices. It hurts to see your money slip through your hands from time to time, but the excitement of catching the next big trend is always worth the risk in my eyes.
Stay positive with WPRT. Loyal shareholders will prevail.
Have a great night!
Clay-
Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)
I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!
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