EveryDay Money

Dr.Pepper coming to Chicago Merc?

2009-12-14T19:10:00.002-05:00

Why there is not a pit in Chicago for Dr.Pepper is beyond my comprehension. I can guarantee there is money to be made. Ask anyone and they will tell you I suck down my fair share of Dr.Pepper daily. Been doing that since my late teens when I was working in restaurants. It is this addiction that puts me in constant contact with the schizophrenic pricing policies of my local bottler and the all mighty Dr. Pepper Snapple Group down in Plano Texas. Now here’s the thing; I live in a good size Midwestern market and the price swings here are enough to have an oil trader holding on with both hands.

On a “normal” day prices run $4.59 per 12 pack and $1.69 for a two liter. The bargains start (as in scoop up the store limit multiple days of the sale) when 12-packs hit $2.50 and two liters go for $1. For those doing the math in their heads let me help. A drop from $4.59 a twelve to $2.50 is a 46% drop. For the two liters it is a drop of 41%. Then there is the gray area, sales like 3 12-packs for $10 or 4 for $12. This is not a once a year price move. I am talking every couple of weeks if not weekly there will be a reversal in trend. Addictive consumption and consistent high percentage price swings, how is that not a recipe for money to be made on futures contracts? The oil boys seem to be making out ok.

Carbonated water, high fructose corn syrup, caramel color, phosphoric acid, natural and artificial flavors, sodium benzoate, caffeine (my personal favorite). Now someone please tell me which of these pieces cause prices to swing 50%?

So enough already, start a pit and let’s get a position on. I have watched prices and timed my purchases well enough to have a running stockpile of about 14 12-packs in the basement. Average price somewhere south of $2.90 per. I am highly confident I am ready for the big time. Been practicing my hand signals and screaming. Wake up Merc! Both of us are missing out on some money here.

So if you have some strings to pull with the Chicago Merc then start yankin’, send me an e-mail right after. I can be ready to start trading an account within 48 hours. Or if you can explain why prices swing 50% or more please post a comment. I am sure I am not alone in questioning the soda people’s pricing policies. Thanks and let me know.

There is no spoon

2009-12-08T19:13:00.002-05:00

What happens if it isn’t the greedy evil banks that are limiting credit to people? What happens if it is the people themselves? “There is no spoon” The financial world almost came to an end or so we have been told and yet now there seems to be a need to see things return to “normal”. It seems that there are plenty of people in government and on the money shows that know who is to blame and aren’t that shy at pointing them out. Yet no one it seems is putting forth the idea that the near miss with Armageddon has fundamentally changed the way people manage, spend, and save their money. “Free your mind” If people are pulling back their need for credit because they have decided that it is far more wise to unplug from the credit card matrix then the bank’s willingness to lend is taken out of the equation. It is us that are in control of ourselves now. “Were you listening to me, Neo? Or were you looking at the woman in the red dress?” It seems that all the solutions being put forth are designed to do little except blur our perceptions of reality and being us back to the old normal. Our perception is clouded even more as the sentinels of the information dictate what is news and what is to be believed. Shovel ready projects, TARP, bailouts, rates kept at zero, spending as if the money was real, and still believing that the consumer not only can but wants to make up 70% of GDP. Efforts made to calm out fears and get us spending like what… like we used to? As if it was even possible to return. “The answer is out there, Neo, and it's looking for you, and it will find you if you want it to” And if the past two years have unplugged the average American from our unsustainable behaviors forever, what then? In time the nation and the world adapts to a new level of consumption. One that is based off of our net worth instead of the size of credit lines. The great bubbles of tech and real estate get taught as part of history. The young adults of tomorrow look back and wonder how their parents could have stayed delusional for so long. Politicians slowly get voted out until members of government reflect the spending habits of the average person. New businesses spring up, compete, and adapt to the now normal. Dave Ramsey’s business stumbles then falls because there is no one left to teach how to be responsible with their money.

"You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to. You take the red pill, and stay in Wonderland, and I show you how deep the rabbit hole goes."

Buying JNK while trying to avoid junk

2009-08-16T16:48:00.002-04:00

I have been out of junk bonds ever since Milken went to jail. Back in February of this year I was “highly confident” that junk bonds were going to survive. At least I hoped, for I was finally ready to jump back in and wallow around in some junk. Since finding ETF religion I decided that was a good place to look first. I have to respect any company that just says it the way it is. When Barclay named its ETF JNK you just knew they weren’t going to try and BS anyone about the quality inside. Well you know what they say, one mans junk is another man’s tres… Well one can always hope right.

So back on February 10th I picked some up at $31.45 and then watched it continue to sag. (What was the name of this thing again?) On March 2nd I tried again at $27.50. Trying to break bad habits these two investments amounted to a little under 20% of my account. Contrast that to a few years ago when a good feeling, I know I have a winner position would have been over 60% and the whole account leveraged. Oh the good old days.

The investment rationale was that the divvy was so crazy high even if a bunch of the bonds defaulted the divvy would still be 10% plus. All we had to do was avoid the whole capitalism system from going under.

So far JNK has paid out roughly 40 cents per share per month since then. April and May were a tad higher. Did I mention that JNK pays out monthly? (I like that part. Monthly cash; dollars and change that you can believe in.)

Old mindsets are hard to counter. I look at the chart since Feb. and all I see is: I could have jumped in and out here and here and here and there. But alas I haven’t, I sit and wait for the beginning of the month. Until the divvy story changes this chunk of my account will be long and slow with JNK.

Here’s to getting a grip with jumping in and out, fast money, trading and to keeping an eye on your EveryDay Money.

Back into the light

2009-08-14T18:00:00.001-04:00

Is it safe to come out yet? Maybe I should begin with is it even safe to look yet? It certainly has been a long while since my last post. When the darkness comes and threatens the very foundation of capitalism I find it best to pull family close and hang on.

A brief recap: Couple of years ago had some CROX stock and a few others in an account that I thought was destined to be my early retirement. The gains were easy, fast, and large. The market cracked. I made one stupid mistake after another. The market broke. My bad trade decisions snowballed into insanity. Tried very hard to run the account to zero and almost succeeded. Ducked and covered for what has felt like decades. Found ETF religion. Am currently in the process of gluing the jagged and charred pieces of my account back together. Took a hesitant step back into the light. Finally back to writing.

Here’s to sunshine on your face, accounts that don’t read zero, and to keeping both eyes on your EveryDayMoney.

Kraft, Oreos, and Me

2007-03-14T19:38:00.000-04:00

Two questions come to mind as I wait and watch for MO to spin Kraft at the end of this month. 1) Can Kraft come up with any more flavors or combinations of Oreos than they have right this minute? 2) Is there any money to be made by holding Kraft after the spin?

There is some kind of a societal comment to be made when I have to hunt just to find some original Oreos among a sea of Mint, Double Stuff, Chocolate cream, Chocolate covered, Mini-bite size and on and on, I’m just not sure what that comment would be. I found some originals; I’ll work on the commentary while I’m snacking.

As far as making any money, I still think that there is money to be made. It just might not be made right this second. Reading the message boards it seems that most have written off KFT and most are certain that MO share price will raise quickly. Watching Kraft the past few days I can see why most might feel that way. Today we were down 2.36% on super big volume. That troubles me some, but not enough to be selling shares at $30 plus change. I have too much Kraft food in my refrigerator for the stock to go much under $30 for very long.

When I get my Kraft shares I’ll sit tight and wait. Not sure what price would get me thinking sell. I just need a little time after the spin to see what’s what. The nice dividend they pay will help me wait. Here’s a guy that says we should be buying at these levels not sitting and waiting. He may be right, but I am still good with waiting.

That’s it for today. Here’s to not forgetting that the Original Oreos still have it and to keeping an eye on your EveryDay Money.

Enron, New Century, and ADD moments

2007-03-12T18:12:00.000-04:00

As I read this story about New Century’s collapse I couldn’t help thinking back to Enron. During their heyday both sat close to the top of their respective fields; Enron with energy trading and New Century with its boatloads of sub-prime mortgage loans. And now both destined to be homework assignments for future MBAs. What ties both of them together for me is that at one time they both caught my investment eye and almost my investment dollars.

I would love to claim that I had the foresight and investment acumen to duck investing in either but the truth is much simpler. Avoiding sinking money into them boiled down to old fashion luck and a few well timed ADD moments. Days before I was to jump on the bandwagon and throw money at Enron I got distracted with Exxon. Then in an ADD blink my money was headed to XOM and their DRIP, with Enron forgotten about till they made the nightly news with their meltdown. A few years back New Century seemed to be making money hand over fist. They had popped up on a stock screen and with a money sense of déjà vu` another bandwagon was going by. Once again my ADD sidetracked me with General Growth Properties (GGP). General Growth had likewise popped up on a screen, they just didn’t seem… I don’t know… as sexy as NEW. Well some how GGP got the check and I got another DRIP.

Sometimes, I wonder if I would have had the presence of mind to jump off the Enron free falling elevator or if I would have had frozen up and crashed to zero with it. Looking back at NEW’s chart I wonder how many felt the end near when it dropped from $30 to $20 in a day and sold? How many bought at $16 thinking there would be a bounce? How many still sit with shares bought at $60 back in ‘05 wondering what just happened?

I don’t wish anyone bad luck in the market, we all have to eat. But… with that being said I am more than willing to learn from other’s mistakes. After all it is alot cheaper and one day the ADD may not be there to save me.

Have any good “near miss” stories? I would love to hear them. E-mail me or add a comment.

That’s it for today. Here’s to near misses, ADD moments, imploding companies, and to keeping an eye on your EveryDay Money.

CROX is trying to drown me

2007-03-11T15:48:00.000-04:00

Since earnings just a few weeks ago CROX has been caught in an undertow that has dragged the stock down over 20%. I can remember selling shares above $58; it is becoming a fuzzy memory as more and more down days get strung together. The shares that I do have left are totally underwater. It is starting to feel like I have been so far underwater for so long with Crocs that I should be growing gills. My average purchase price is just a touch over $51. The tiniest slivers of a silver lining are that I still have faith in the company and the stock. So for now I will wait and see if there is a run going into next earnings. Don’t get me wrong if we see $58 again before earnings then I just might call it a day. If I don’t sell the rest then at least I will throw in a stop, like I should have done the first time around.

With the way the whole market has been acting the past few weeks we all might have to work a little harder this year to make the returns that some of us have become accustomed to. For the past 2 or 3 years, I think, the market has made it too easy to make oversized returns. I have scaled back my use of margin, trying to get the account in a little more conservative posture going forward, just in case.

In light of the market’s behavior the past few weeks have you changed anything in regards to your trading?

That’s it for today. Here’s to understanding the market may actually go down. And to keeping an eye on your EveryDay Money.

A little extra Part 4

2007-03-02T18:30:00.000-05:00

So... just got back from dropping off the monthly ROTH contribution and the house payment at the post office. With the stock market reminding everyone, this past week, that “yes Virginia” there are risks to investing I found quiet, consistent, comfort in my mortgage and ROTH check writing.

Again this month we sent a good size check to the ROTH account. The plan is to have it maxed with the check next month. It feels nice to be so close to fully funding the ROTH this early in the year. After we have funded this year’s ROTH we are planning on continuing to set money aside in order to have a good start on fully funding next year’s ROTH, you never know when your budget will change and ROTH dollars become harder to come by.

Again this month the mortgage check was bigger than it had to be. We were able to send extra enough that the principal reduction should be a little bit bigger than the interest accrued. Focused banging until it is knocked down, is what keeps clanging around my head. Not sure if we can, but if we keep up this level of payment then the house will be OURS in about thirteen more years. (that sounds so far away)

If you are sending extra on the house or working to fund your IRA then I would love to hear about your successes and challenges.

That’s it for today. Here’s to working the plan and to keeping an eye on your EveryDay Money.

What an ugly day, but it was a buying one

2007-02-27T18:06:00.000-05:00

The Chinese market falls off the cliff and we jump after them. What kind of sense does that make? It still amazes me when EVERYTHING on my screen shows bright red numbers… BIG bright red numbers. Let’s all be honest here, it has been awhile since we have seen anything like this. Today was fascinating in a train wreck have to watch kind of way. The thing that kept going through my mind was that something, somewhere had to be selling at a good price.

Philip Morris, my old friend, closed at $82.67. I believed in them at $85.50 just a few days ago, so today seemed like a sale price. I picked up some shares at $82.47 in after hours. Either you believe in your picks and you push money into the pot or you don’t believe. But you can’t make any money unless you are in the pot. Well for me in Philip Morris I trust.

That’s it for today. Here’s to keeping you margin amounts small and your decisions solid. And to keeping an eye on your EveryDay Money.

Crocs stalls, Philip Morris treads water

2007-02-26T18:59:00.000-05:00

So… As I watch CROX drop some more I am thankful that I got out of the margin loan when I did. The pattern the last few days is a quick up at the open and then steady drop for the rest of the day. The shorts are all over this one. If the Yahoo board is any indication then EVERYONE is making money shorting Crocs. Well, everyone but me. Without the margin loan I have been non-pulsed the past few days with the drops in share price. It helps that even at today’s close of $52.06 CROX is still above my cost basis. So I’ll wait. I did try and sell some March 55s calls, but no one wanted to give me $1.10 for them today. Not sure if I will try and sell them tomorrow or not.

Big MO, I think, is stuck until the spin-off happens at the end of next month. Oh, it ticks up and down but hasn’t really went anywhere for days. If there is some kind of run going into the record date (March 16th) for the spin I might be inclined to sell, but it would have to be a run. I am thinking that it would have to be in that $95 - $100 range and I am just not seeing that happen, but who knows.

I am setting with plenty of margin ability and no place to put it. Would love to put it to work, just nothing I have come across looks too interesting. With the Dow having a rough time the past few days I am in no big hurry but don’t want to let a good trade go unnoticed either. Recently there seems to be more articles and talking experts opining that a correct is due. Is it that a correction is due or a case of group think or people just getting out in front with a little CYA in case something does happen or something else entirely? Perhaps a continuation of the “Big Guys” conspiracy to rip the shares from the “little individual investor” at rock bottom, panic induced prices right before “they” let the Dow return to its record setting ways? It couldn’t really be that…right?

That’s it for today. Here’s to not losing sight of the big picture and to keeping an eye on your EveryDay Money.

Linus has a blanket I have Philip Morris

2007-02-23T17:45:00.000-05:00

Off and on, over the years, I run back to Philip Morris and stick shares of them in my trade account. My shares of MO that have been running with the DRIP I have never touched or even really thought about selling. But the shares that occasionally show up in my trade account are just that, trading shares of MO. Like Linus’ blanket I tend to hold Philip Morris shares when I have cash and I am unsure what to invest it in. The comfort comes from having followed MO, through good and bad, for over 15 years. Well that and the nice dividend that seems to have the consistency of time itself.

So two days ago, after having cut half of my CROX loose, I went running back to Big MO. $85.50 seemed like an ok price to pay with the spin-off coming the end of next month. In the coming months I look for MO shares to gain relatively quick after the spin. Announcements of a big dividend raise, increase in share buyback or the international part being spun-off too could all help propel MO shares higher post split. At least I hope some of this stuff happens and the shares go up.

The shares of Kraft I get next month are the great unknown. They are in the middle of trying to right the ship and most anything is likely to happen post-spin. They could make headway in improving the businesses, sell some stuff, buy some stuff, who knows. So the plan as of right now is to wait and see. Unless something really bad happens or gets announced I look to hold the KFT shares for at least 3 months. Now if the shares run up 20% or more a month after the spin then all bets are off.

Another factor in how long I may hold either MO or KFT post-spin is how well my CROX are doing. CROX have had it a little rough since earnings release. I have them off margin so will sit with them a bit and see. I’ll let you know how it all works out.

Do you have a comfort stock that you keep running back to?

That’s it for today. Here’s to security blankets, consistent dividends and to keeping an eye on your EveryDay Money.

Sold half of CROX position

2007-02-21T17:32:00.000-05:00

Don’t get me wrong I would love to tell everyone that I knew today’s 3 plus percent drop was coming. But we would both know I was lying. The truth is that last night I didn’t have a strong feeling about what would happen when Crocs management started talking at 4:30 (Eastern). Not having a gut feeling makes me worry. I was fairly certain that Crocs was going to put up really big numbers (they did). My plan was to sell some when the shares spiked to $60. When the shares didn’t race to $60 before the start of the conference call I got spooked. The last thing I wanted was to see a chunk of my profits slip through my fingers. That has happened enough over the years that I could start a whole other blog just for those times. So I started to cash out. I sold 25% of my position early in after hours at $58.19, then left work. By the time I got home the price was in the $56s. With the price going the wrong way and $60 looking like a foolish daydream, I decided to sell another 25% at $56.58.

If I would have known that CROX would drop to $53.98 today I would have dumped it all last night. The good news is that the selling not only eliminated my margin loan but left me with some cash. (Average cost of shares was $47.15. Selling at $58.19 and $56.58 gave me a nice return. ) Not having a margin loan hanging around costing me money also gives me some options. The plan, right now, is to keep what shares I have for awhile. I still would like to see CROX at $70 plus. Without the margin loan I can afford to wait this one out, after all summer is right around the corner and that is when Crocs should haul in the money. I hope.

That’s it for today. Here’s to cashing profits when you can and to keeping an eye on your EveryDay Money.

Big MO finally saying bye to Kraft

2007-02-18T14:17:00.000-05:00

Philip Morris (excuse me Altria for those of you just joining us) bought Kraft in 1988 for 12.9 Billion dollars and now they are giving it away tax free. MO shareholders of record on the 16th of March will get about .7 shares of Kraft (KFT) on March 30th. I picked up my first MO shares back in ’89 and have had the DRIP running the whole time.

So on March 30th I will be handed a few shares of KFT and will have to decide what to do with them. Right now I am leaning toward just starting Kraft’s DRIP and letting it run for awhile. Recently, Kraft has faced some challenges and are in the middle of trying to get things squared away. Investors seem to be underwhelmed with Kraft's efforts. Since the IPO back in 2001 (Philip Morris kept over 80%) the stock has been erratic to say the least.

The good news is those ups and downs can and do work in a DRIP’s favor. Over the years MO’s DRIP has shined the brightest when they were facing bankrupting lawsuits and the stock price tanked. (Case in point: Back in the beginning of 2003 you could have picked up shares for under $40 (if you had the stones). Today MO is trading in the 80’s.) For the past 15+ years I have owned MO it seems we have continually either been on the brink of losing a catastrophic court case or recovering from one.

Is MO a buy or a sell right now? Will Kraft be a buy or a sell after the spin-off? I don’t know. For me MO is an investment not a trade. What either will do in the short term is best left to a coin flip. Now long term, with the DRIP running, I think both will be good investments. Remember I am investing MY money and making MY decisions based off of MY research with a little gut feeling thrown in. When investing YOUR money make YOUR decisions based off of YOUR research and whatever else you want to thrown in.

That’s it for today. Here’s to finding companies that are worth living with long term. And to keeping an eye on your EveryDay Money.

February Poll

2007-02-17T12:20:00.000-05:00

The February poll is now officially closed. Many thanks to everyone that took the time to vote. The question was how much do you have in your emergency fund? What the poll showed didn’t match up to what I have been reading about savings. Several articles I have read have said that people just aren’t doing a good job with savings. The “pros” suggest that you have three to six months of living expenses in liquid accounts to fall back on in case something goes wrong. From the tone of the articles they make it seem that most people don’t have a rainy day fund. But, from the way people voted not everyone is forgoing the emergency fund. (I would guess that people who spend time reading financial blogs are more likely to have an emergency fund in place or be actively funding one. But like I said it is just a guess). This (unscientific) poll showed a full 63% of voters had at least three months or more of readily available cash.

The Breakdown:
3% of voters clicked on “Am I supposed to have one?” Let me address that, “Umm…YES.” Only 18% reported that they have less than one month set aside. Another 12% of voters were in that one to two month category. 21% of people have at least three to four months on hand. 15% said they were in the five to six month group. A big fat 27% of people taking the time to vote said they were sitting with over six months of living expenses stacked up in piles. 3% reported that they consider their home equity line of credit a good substitute for a “traditional” emergency fund.

Do you think that readers of financial blogs are more likely to have an emergency fund or at least be actively working on it?

That’s it for today. Here’s to solid rainy day funds and to keeping an eye on your EveryDay Money.

Garmin trade ends on a positive note

2007-02-14T14:48:00.000-05:00

Not a bad Valentine’s present. This morning GRMN was going crazy in the pre-market, up over 10%. I put in a sell order at $60, but never got filled. I was a little worried that most of that upside would disappear at the opening but I was wrong. When the bell finally sounded my streaming quotes screen was hypnotizing. Numbers changed almost faster than I could see. After a few minutes of staring I shook myself into action. I put in a 1% trailing stop in order to try and capture a steady move up. No such luck, the bids and asks were just too wild. The stop moved up some then was triggered at $58.68. I could have done better with just a limit order at $59 but I figured it was worth the shot. It wouldn’t be one of my trades if some money was not left on the table. As I am writing this GRMN is around $56-$57 so jumping out at $58.68 doesn’t seem like too bad of a deal. (Looking back I am really happy that I called it quits on SNDK when I did. Freeing up that margin money and rolling it into Garmin has made the SNDK loss back and then some.)

Garmin reported that quarterly earnings doubled and the stock still dropped from today’s high. It seems counterintuitive for it to do so. We still have some time; it wouldn’t surprise me if GRMN got back to that $59 range by the end of the day. If it runs to over $60 tomorrow then I will feel a touch foolish…for a minute. I plan on keeping an eye on the stock. If down the road it drops low enough I will be happy to get back in.

The Numbers:
Garmin shares purchased on January 22nd for $49 per. All shares sold February 14th for $58.68. The difference gives a $9.68 profit per share (excluding commissions and margin interest.) $9.68 divided by $49 gives a 19.75% return for a 23 day holding period.

That’s it for today. Here’s to finding another quality trade and to keeping an eye on your EveryDay Money.

Batman, Superman, & Crocs

2007-02-13T19:51:00.000-05:00

Today was a busy day for Crocs watchers, at least on the reading front. For the classic tape watchers today may have ended as a “second guesser” type of day. The stock finished down 1.35% ($53.54) on above average volume.

A new Wall Street Journal article openly questions if Crocs can continue to expand at the current rate and if the stock can double again this year like it did last year. While the over all article didn’t slam Crocs it (for me) didn’t come across as hugely positive either. At any rate it didn’t have people rushing out buying the stock today.

On the bright side today brought us yet another licensing agreement. A deal announced with Warner Brothers will put the likes of Batman, Superman, and Wonder Woman on Crocs soon. Perhaps there has been so many licensing deal of late (NCAA, NHL, NFL, Nickelodeon) that the market no longer gets jazzed. (Looked that way today.)

Toward the end of the day a nice piece came out about the growth opportunities in Europe. It seems that Crocs is expanding nicely just across the pond. The Thomas Weisel firm sees the growth pattern in Europe mirroring that of the U.S. only running about 12-18 months behind as Crocs continues to ramp up their distribution channels. Their opinion is that Crocs may see 50% of revenues coming from international sales this year. (I would call that a good thing.)

Last but certainly not least Crocs picked February 20th as the official date to report numbers. They are scheduled to start at 4:30 Eastern. You can listen to the whole thing through a link on their web site (here).

Although it has hurt my eyes watching the stock fall the past few days I still think the company will have good things to say on the 20th. As the stock continues to have days where the chart is going almost straight up… or down it is not lost on me that Warner Brothers already has the Batman name on a rollercoaster along with a Superman coaster.

That’s it for today. Here’s to stocks that don't make us queasy and to keeping an eye on your EveryDay Money.

Eating lunch out would kill my budget

2007-02-11T18:58:00.000-05:00

$12.14 was the grand total and I was taken aback. My wife and I were at an all day seminar yesterday (Saturday) and we stopped in at Arby’s for lunch. Perhaps it was because we just don’t eat out often for lunch that the dollar amount got my full attention. We had a couple of sandwich deals that included sodas and those tasty curly fries. This was a treat, normally during the work week we both take our lunch to work. By the time we were in the middle of lunch the place was full.

The question: If that was a “normal” lunch cost for eating out ($6 a piece) how are people affording to eat lunch out everyday or even 3 times a week? Maybe I should stopping being such a cheap skate and allocate more of our budget to us eating out?

My lunch: I usually take a cold cut sandwich on white bread, some fruit (apples, oranges, grapes), chips, and some cookies that we bake at home. (Ok… my wife bakes at home every few days from store bought dough.) It is pretty much a variation of that everyday. A normal week with no coupons the week’s total cost less than $10.

The Math: If eating out is an average of $6 a day times five work days that equals out to $30 a week. Taking my lunch averages out to less than $10. That is a hypothetical savings of $20 a week. $20 a week amounts to $80 a month or about $1,000 a year in savings.

The point: If you are trying to stack money for an emergency fund or find additional dollars to put toward the credit cards or you are short on fully funding your ROTH then cutting back on eating out maybe a place to start. Take a look at how many of YOUR dollars are being spent on lunches during your week.

How much of your monthly budget do you allocate for eating out?

That’s it for today. Here’s a tip of the hat to all those “brown baggers” out there. Remember to keep an eye on your EveryDay Money.

Crocs, Garmin, and freaking Waiting

2007-02-08T19:42:00.000-05:00

Nothing exciting to update today and that is my problem. I spend all this time researching companies, looking at charts, planning my trade, and then finally pushing money into pot then there’s nothing to do but wait and see how the trade turns out. And that sucks. I know what “they” say about over trading your account and commissions eating away at you and all that other stuff that seems to, at times, zap every ounce of fun out of picking stocks and trading. Fine I’ll wait. But it still sucks and I still hate waiting.

Garmin found its way up almost 3% today. Good. About time. I thought we would get something going into earnings that is why I stabbed at it when it was $49. Today is closed at $53.15. The plan is (if) when it hits $54 I’ll throw in a stop and let it play out till earnings. I’m still leaning toward exiting before earnings with a gain. Knock on wood. Waiting.

Crocs took a pause today, slipping almost 2% to end at $56.49. Blame it on Cramer if you need to, it doesn’t matter. I am not too troubled by today’s action. Have you seen CROX’s chart for the past couple of weeks? Earnings will be out soon and I’m thinking that the growth continues at a torrid pace. If the numbers are bad and the stock tanks expect a post shortly after that is titled, “The stupidity of not using stops.” Waiting.

What I need is another company or three to start researching. Something to help pass the time while I’m waiting. The truth is I don’t have anything lined up to go after Garmin. Guess I should be working on that this weekend. Did I mention that I am not particularly fond of waiting?

Have an idea or three on a company I should take a look over let me know. What do you do while you’re waiting to see how your trades turn out?

That’s it for tonight. Here’s to twiddling thumbs and to keeping an eye on your EveryDay Money.

The Carnival of Personal Finance is up and running

2007-02-05T17:07:00.000-05:00

The new Carnival of Personal Finance is up at The Simple Dollar. Trent did a really nice job on this Carnival. All of his hard work shows in the quality of the finished production. Trent took a good look at each post submitted and then pulled a line out of that post and put it into the Carnival. So with this carnival you don’t just get a list of links you get a taste of how each article is written. Go take a look there are loads of good articles to help you be master of your money.

Crocs, Dora, and Ocean Minded

2007-02-04T15:44:00.000-05:00

Crocs has yet to announce an official date for telling us about earnings but Friday the stock acted like blow out numbers had just hit the wire. A big fat 5.85% rise had us sitting at $54.79 for the close. And once again had me Daydreaming about $100.

After half of my position got called away last month I kept feeling that it was a mistake to have let those shares go. So a little hastily I jumped back in on January 30th. I admit I was more interested in getting in than getting a good entry price. My order was filled at $52.50, which for that day looked like a mistake. As the price continued to drop the next day my next order was filled at $50.00 and the previous day’s $52.50 looked like a bigger oops. Those two orders replaced what I had called away only at a much higher price. (Could someone please tell me why Mr. Experience gives the lessons after the test instead of the other way around?)

Besides a new 52 week high last week also brought us interesting press releases. Crocs signed an agreement with Nickelodeon. The deal puts Dora the Explorer and SpongeBob SquarePants on Crocs shoes. From what I have read those will be available this summer in some markets. I think these will sell well to the kids and translate into bottom line dollars for Crocs.

The other big announcement was that Crocs is buying all of Ocean Minded LLC. Looking at Ocean Minded’s website I see they make flip flops. I am along way from an ocean and to tell the truth never heard of the company. I will use the distance excuse rather than admitting that perhaps they design for and target a less experienced (younger) market than myself. Anyway I am guessing that their flops are now going to be made with Croslite, maybe, I haven’t heard. Dora is going to make us some dollars, Ocean Minded I’m not sure about yet.

What is your take on the Nickelodeon and Ocean Minded deals? Can we see $100 by summer?

That’s it for today. Here’s to new 52 week highs and to keeping an eye on your EveryDay Money.

Garmin starting a move before earnings?

2007-02-02T17:47:00.000-05:00

Maybe. My tealeaves were slightly a skewed and my crystal ball a touch cloudy this morning so I am without a plausible, convincing guess, (the kind that would make it onto a CNBC sound bite), as to why the upside this day. But, if you pushed me (or paid me) for an answer then I could say this with absolute certainty; (you can quote me from here) “Something had GRMN taking forward steps today. After careful study of today’s action and upward trend of today’s chart “we” are comfortable in saying that it had something to do with the buyers. “We” would like to see this stock hold steady above $55 before “we” would be comfortable in saying that it can reach $53. Just keep in mind that we (you) could see some retracement at any time from this level.” With that now being tested and edited for sound bite quality we can get to the ending numbers. The close found us sitting at $51.15, that’s a nice gain just shy of 3% for the day. Not a bad day regardless of what got us there.

Ever since I bought GRMN back on January 22nd I have been trying to formulate a plan. Well now I have one, at least for today. 10% that’s my whole plan so far. If Garmin can see its way to $53.90 or more before earnings release on the 14th then I will let them go. I am not opposed to holding through earnings like I was with Sandisk. My thinking is simply I’m on margin and 10% in less than a month ain’t too bad. (Bird in the hand and all that…) Stay tuned I’ll let you know how it pans out.

That's it for today. Here's to figuring out why stocks go up. And to keep an eye on your EveryDay Money.

Be comfortable with your activities and investments

2007-01-31T19:22:00.000-05:00

I was at an airshow this summer and had the pleasure of watching the Army’s Golden Knights skydiving demo team. They teased and toyed with gravity and did things in the sky that made me shake my head in amazement. As I watched them step out of their plane that was WAY up there I couldn’t help but to think that a plane would have to be on fire, heavy fire, for me ever to want to jump out of it. Shortly after the Golden Knights finished an airshow pilot pealed his sleek aerobatic plane off the runway rolled it once and put it on an upline that had me craning my neck back in seconds. I stood and watched this guy roll, loop, and literally summersault this plane across the sky. As he landed all I could think was, “How do I get a ride in one of those?” Being upside down in a plane I am comfortable with, jump out of that plane I’m not.

Uncomfortable is pretty much my emotion when I read about people using money from zero interest credit card balance transfers to invest with. In short you pull money out with the balance transfers and usually push that money into an online savings account yielding 5% plus. Somewhere down that road you pay the money back and keep the interest. Is the plane on fire? Now don’t get me wrong. There are people that do this and make money consistently. Just ask 2Million. Over on his blog he has a great how-to about making money with balance transfers. More power to you if balance transfers work for you. For me it is too much like jumping out of the plane… blindfolded.

On the flip side of that I have no problem buying stocks on margin. With the margin buying I am still borrowing good size sums only now the interest is far from zero and the stocks a long way from FDIC insured. Can you make the plane go upside down again, please. Some would go as far as to say that buying on margin comes with greater risk than the balance transfers path. I would not disagree with that being said. For me margin buying is like snap rolling an Edge 540… exciting and fun. (Could one of these ideas be better than the other for you? Sure. Could they both be bad ideas for you? Yes! Could you be comfortable using both? Some people are.)

Many “professionals” say we should invest in things and companies that we know something about. Well hell I know a little bit about a lot of things, not all of them I would be comfortable sinking my money into. (I’ll take margin buying over balance transfers, stocks over rental property, aerobatics over skydiving, a mountain view over a city skyline…)

My point is this: Seek investments and activities that you are comfortable with. Don’t get me wrong I am not advocating NEVER doing things that take you out of your comfort zone, after all that is how we continue to grow. Just keep in mind as you read, listen, or watch different investment ideas being showcased that not everyone of those “great ideas” is great for you. There are no hard and fast rules as to how or what you ultimately should invest in. Don’t give it a second thought if your comfort level doesn’t match up with Dave Ramsey, David Bach, Robert Kiyosaki, Jean Chatzky, or even me. As long as you are making an effort in managing your money, preparing for your future, seeking enjoyable company and activities then that’s enough.
We all make far better decisions when we are comfortable with our current situation and investments as opposed to being mind numbingly stressed out. Repeatedly making better decisions not only increases the return on our investments but also the return on our life.

That’s it for today. Here’s to people, activities, and investments that make us smile. And to keeping an eye on our EveryDay Money.

Festival of Frugality #59 is up and running

2007-01-30T17:25:00.000-05:00

Over at Money, Matter, and More Musings the Festival of Frugality #59 is up. Golbguru did a really nice job with the layout of this Festival. Articles are broken down into categories that make it all too easy to find what you are looking for or merely to browse. EveryDay Money was happy to contribute Baby Gear to this week’s Festival. So if you are looking for some good reading about ways to save some dough then head on over to this week’s Festival

Sandisk sold in After Hours

2007-01-29T17:56:00.000-05:00

Good or bad is yet to be decided but today I finally gave up on SNDK. They report numbers tomorrow and today they dropped yet again. It was hard to give up on it and change the paper loss into the real thing. The loss was big enough to get my attention and make me feel like an idiot for picking this stock, but not so big as to take me out of the game. It could have been worse. But then again it could have gone far better than it did. A smack in the nose every now and then keeps me humble and reminds me to focus and pay attention.

What did I learn? I need to do a better job at not rushing in. I started with the idea of writing some nice covered calls. I did a quick once over and the numbers didn’t look too bad. Sandisk had already taken a hit after the last quarter’s numbers came out and I figured that they were about done falling. Oops. After I was knee deep in stock I got a crash course on flash technology. Depending on who you listen to there seems to be two basic arguments. This is a company facing declining margins and tougher competition than ever before. The 40s are just a pause in a share price on its way to the low 30s. Others argue that its cutting edge leadership, size, and efficiencies will allow it to overcome any NAND gluts, margin contractions, and on and on back to a stock price more in the neighborhood of 70s or 80s. Now here’s the problem. I am just not smart enough about this business or the flash industry to even be able to argue either side. And that my friends is a problem when you don’t even know where to stand. So I had to hang it up. There is just too much uncertainty going into tomorrow’s earnings call.

The numbers: Bought the shares on October 30th 2006 for $48.20 per share. Sold covered calls the same day (Nov. 50s) for $1.20. Since the stock wasn’t called away I sold Dec. 50s for $1.35 on November 20th 2006. Today sold all SNDK shares for $42.24. Final tally not counting commissions and margin interest about a 7.5% loss.

That’s it for today. Here’s to just moving on and to trying to keep an eye on your EveryDay Money.

A little extra Part 3

2007-01-27T17:06:00.000-05:00

Ok, I’ll admit I couldn’t do it. I know I said, back in Part 2, I was ready to strictly focus on fully funding the ROTHs this year before anything else… but. Today when I was writing out the bills I just “had” to send some extra to the mortgage. Last year I got into the habit and it just is hard to stop…inertia. Now don’t get me wrong I cut a nice size (at least for me) check to the ROTH. So all is not lost.

There are some legitimate reasons (at least I think of them as legitimate) behind my sticking with the extra payments. Let’s see, the last ten years of a thirty year mortgage the payments are mostly made up of principal. Since the payment is mostly principal then there will be less interest to deduct on the taxes. As the “experts” have said the tax deduction is a major reason that a mortgage is “good” debt. With so much less interest the last 10 years I guess it makes the last ten “less good” debt? Another reason I keep telling myself is that my wife and I already put about 15% or so of our pay away for retirement. If somewhere down the road we couldn’t put that percentage away then I would have to rethink the house extra. (No, really I would.) Also, if we didn’t have to pay a mortgage then we would need a fair amount less in income every month to maintain our lifestyle. Needing less income would give us both options in regards to job type and hours at work. With a baby coming in March those options might be worth lots down the road. In short I still equate a paid off house with freedom. Well maybe not freedom but at least choices.

I ran the numbers as best I could on a 30 year mortgage. If the amount that goes to principal is equal to the amount of interest each month then you can kill off a mortgage in about 15 years. So today I went back to my old, evil, money mismanagement ways and sent a check that matched principal reduction to interest accrued and took another full step closer to having more choices.

Are you sending extra to your mortgage even though you know investing that money “may” make better sense? Or do you still think that I have it wrong? Post a comment or drop me an e-mail. All feedback is appreciated.

That’s it for today. Here’s to finding a path that makes sense to you. And to keeping an eye on your EveryDay Money.

part 1

part 2

Garmin, Crocs, and Sandisk take a beating

2007-01-25T19:07:00.000-05:00

A beating is perhaps a shade strong. Today was not like an Enron “what the hell just happened” beating but today was enough that I almost titled this post: “The @*#$?! Sky is Falling”. By the end of the day Garmin, Crocs, and Sandisk were all showing red in my account. Crocs was the blue ribbon loser for me today, down 2.82%. Sandisk was a close second falling 2.05% and Garmin tried its best to suck today, down 1.49%. The small sliver of a silver lining was that Garmin stayed above where I bought them the other day. (That small positive note is courtesy of my wife, she always seems to see the bright side of things. With us going on three years of marriage I guess that sunny disposition has rubbed off on me some, probably when I wasn’t looking. )

After the beating today it will be interesting to see how they fair tomorrow. SNDK has earnings next week and CROX should be announcing shortly. What happens in the next few weeks will dictate what I end up doing with those two. Garmin doesn’t show its hand till February 14th. I still don’t know about them, a few of those GRMN shares may end up being carried as a long(er) term holding. It seems that GPS navigation is almost to the point of “have to have”. You know kind of like cable TV. (wink, wink)

Remember having to get UP and change the TV channel, getting letters in the mail from far away friends, and having to finally stop to ask directions when we were “almost” lost. My how cool companies have changed our world.

That’s it for today. Here’s to the market not punching too hard tomorrow and to keeping an eye on your EveryDay Money.

Will Garmin’s GPSs locate a pile of cash?

2007-01-22T20:13:00.000-05:00

I just can’t seem to leave the margin alone. It wasn’t but a couple of days ago that some of my CROX got called away and put my margin balance almost to zero. Now tonight I’m right back at it. Garmin (GRMN) bounced around this morning and I “had” to pick up some shares at $49.

Some of my thinking: Earnings are due out February 14th. S&P has a 5 star Strong Buy on the shares and a 12 mo. price target of $61. Back in December GRMN was at $55. The shares are now in the $50 range, that’s about a 10% correction. The February 50 calls are being priced at a nice premium. Garmin has cool toys! All of these ideas and a few others were racing around my head this morning at the same time my available margin was blowing trumpets like Churchill Downs calling me back to the action. I pulled the trigger at $49 and promptly watched it fall below $49. Ain’t that what happens to everyone?

The decision I need to make…soon is whether to sell February covered calls? I could probably get around $2.00 for the February 50s. Take the $2.00 add the $1.00 for the strike price difference, divide that by $49.00 and I end up with around 6% for a month holding time. Not bad and kind of conservative. Or I can wait it out till earnings are reported. If the numbers are good then we race back to $50 (maybe) or above $50 (double maybe with a cherry on top) and I make 10% plus in a month.

Tonight I just don’t know which way I want to hop. If you have a take on Garmin or an opinion on which way I should go then drop me an e-mail or post a comment. Thanks.

That’s it for today. Here’s to being ready to pull the trigger and to keeping an eye on your EveryDay Money.

84th Carnival of Personal Finance is up

2007-01-22T18:44:00.000-05:00

The new Personal Finance Carnival is up at Blueprint for Financial Prosperity. I have never hosted a Carnival so I can only imagine the amount of time Jim spent going over submissions and pulling everything together. There were dozens of articles submitted so there is something for you no matter what you are looking for. I submitted An Emergency Fund is like the Ark. I am happy to report that it made the Editor’s Choice list. So head on over and take a good look around. Don’t forget to drop Jim a comment letting him know his hard work is appreciated.

Crocs Covered Calls Called Certainly

2007-01-19T18:41:00.000-05:00

About a month ago I sold January $45 covered calls for $1.40 on half of my Crocs position. Today Crocs closed at $47.95, two days ago it was pushing $52. And there in lies the rub of covered calls. The upside potential is limited by the strike price you pick and the premium you accept. As you can see I clearly left some dollars on the table with this trade… and that happens. It still goes down in the books as a positive outcome. Since only half of my position is being called away it is a little easier to shrug my shoulders at the dollars left on the table. If I had had January $45s on the whole lot of them then tonight I would be more… reflective on my trading decisions. For the shares that I still own the plan is to hold. I still look for good expansion out of Crocs and more money to be made on CROX.

In the end: CROX shares were bought on November 20th and 21st, for an average price of $44.26. December $45 covered calls were sold on November 21st for $1.60. Since they were not called January $45 covered calls were sold on December 21st for $1.40 and were called January 19th.

The math: $45.00 - $44.26 = .74 per share
.74 + $1.60 (Dec) + $1.40 (Jan) = $3.74
$3.74 / $44.26 = 8.45% for right at two months of holding time. (Does not take into account commissions and margin interest paid.)

You can see how it all started (here).

That’s it for today. Here’s to trades with positive outcomes and to keeping an eye on your EveryDay Money.

An Emergency Fund is like the Ark

2007-01-17T18:07:00.000-05:00

When did Noah build the Ark? Before the rain, before the rain. That was where I was starting from when I sat down with a friend and his wife recently to talk about money. As I laid out the idea of having 3-6 months of living expenses set aside they both stared back at me and for a moment I felt my age. Their look said it all, “Hang on old man, we are young, have good jobs, and are both healthy. Three months seems a bit much.” My mind flashed back to when I was their age and remembered at that time in my life what I considered an emergency was missing Happy Hour. Funny how age changes your perceptions. They had asked my opinion on where they should start with their money and a good rainy day fund is usually tops on my list.

Before the rain, before the rain. I gave them the Noah analogy and some more “what ifs”. After some thought they settled on trying to establish a two month emergency fund. I encouraged them to pile up some dough as quickly as possible, push it into an online savings account and let the current 5% interest rate help them along. Then they could add a little every month to keep it growing towards the six months of expenses target. They agreed. If you are going to go then go full speed.

Noah didn’t just start the Ark he actually got it FINSHED before the rain. Their plan of attack is simple in its approach. Cut the cable movie channels, cut back on eating out, and start taking lunch to work more. They are also putting some shopping on hold (new houses need new things, but not all at the same time.) and he is picking up extra duties at work. (I think picking up extra hours or duties at work is a great idea. If that is not possible a second job for a few months is another possibility to help build quicker. A good garage sale, in warm weather, can pull in some cash also. ) The whole point I tried to make to them was get some cash on hand before something happens and you have to reach for the plastic.

If you stand outside in the country you can actually smell the rain coming. Now some of you may be thinking the same thing as my friends started out thinking, “I have plenty of room on my credit cards for almost any emergency.” “You don’t understand the bank has already set us up with a home equity line of credit in case something happens.” My response was and is this. Let’s say an emergency comes up so you throw it on the credit card and move on. You now have a NEW payment next month. Doubtful you can pay it in full next month because there’s not enough slack in the budget. If there were you would have used that slack instead of the credit cards. Now you are paying interest on an emergency. (The phrase kick him while he’s down ring any bells?) In a couple of months something else happens, car tires, refrigerator goes out, deductible for x-rays from rolling an ankle during a pickup game of basketball (no wait that last one was me). The point is now you have ANOTHER NEW PAYMENT. As you can imagine it doesn’t take but a few small emergencies before the budget is worthless and you are waist deep in water. Nervous1 summed it best on a thread over on the MSN Money boards, “Your $0 dollar emergency fund will be more than sufficient to cover any $0 dollar emergency you have.” Putting emergencies on credit (cards or home loan) would be like Noah building and someone coming right behind him pulling out every other nail. Get the rainy day fund finished and the emergencies will be more like rough seas then someone trying to drown you. Good luck with your building.

I see my friend all the time so I know how they are doing, drop me an
e-mail or post a comment and let me know how YOUR rainy day fund is coming along.

That’s it for today. Here’s to being prepared and to keeping an eye on your EveryDay Money.

Is BEST BUY a Buy?

2007-01-16T17:59:00.000-05:00

I bought some Best Buy stock back in August. Sold some September 50s calls and wouldn’t you know it, they got called away. (I made just a little over 5% not counting margin interest and commissions. Not bad for a month.) Since then I’ve kept an eye on it as it climbed to the upper-50s and thought oops. With it once again being back in the $49 range I am wondering if it is not time to take another poke at it. I have some margin that will be freeing up this weekend (January $45 calls of CROX being called away, I’m pretty sure.) Monday would be the first chance for me to buy some BBY. I kind of like that, forced time to think about it.

Best Buy reports earnings April 4th, they had a little trouble last time around. They have fallen from around $58 in October to below $49 today. S&P has a four star buy on them and a $63 one year target price. Since this buy would be on margin I am looking for a quick turn of 5% or so. Ideally I could turn it in less than a month, kind of like last time. The question I am still mulling over is whether to do covered calls again. Right now I am leaning toward playing this one straight up with no calls. There is probably more to be made here if I decided to hold longer but when it is on margin my thinking is, “just give me the money and I’ll get out of your way.” I’ll let you know next week. (This is me merely thinking out loud. Please do your own homework. Buy and sell what you think is best for your portfolio.)

Have an opinion on Best Buy or another stock I should be tracking? Drop me an e-mail or post a comment.

That’s it for today. Here’s to making a few dollars and to keeping an eye on your EveryDay Money.

The Carnival of Investing is up

2007-01-15T13:54:00.000-05:00

Two Carnivals on a Monday, now that’s the way to start a week. The Carnival of Investing is up at The Sun Financial Diary. There are several good articles. The layout of the Carnival is straight forward and will have you checking out informative post in no time. I was happy to submit an article about DRIPs. Drop by and take a look.

83rd Carnival of Personal Finance is up

2007-01-15T13:33:00.000-05:00

The 83rd Carnival of Personal Finance is up and running at Young and Broke. Amanda did a good job putting so many submissions together. She has them broken down into categories for easy searching. EveryDay Money chipped in with Online savings accounts, welcome to being old(er). There were over 70 articles submitted so drop by and take a look around.

Is your car costing you a future?

2007-01-13T13:59:00.000-05:00

Rolling your way into the car of your dreams:

The idea is simple in its premise if not a little challenging in its implementation. You save a few thousand dollars and pay cash for a car that simply gets you from here to there. Now this car may not turn the head of anyone in your neighborhood but does reliably get you from point A to point B. At the same time you start setting aside what would have been a car payment of $250 (or there abouts) each month in a online line savings account which earns you around 5% interest. At the end of three years you will have almost ten thousand dollars in that account. Take the ten grand and the car you’re driving roll them together. With the $10,000 and the trade in you should be able to trade up for “a little nicer” car. (Caution: Don’t let your ego overreach and roll the $10,000 + the trade in + a LOAN for this “little nicer” car.) Repeat the $250 a month set aside process. In another 3 years roll the new 10 grand with the “little nicer” car and upgrade again if you must. In short if you can save $250 a month then six years and two rolls later you can be driving a paid for automobile that turns the neighbor’s heads. OR

Roll your future not the car:

After you have rolled into a “little nicer” car then perhaps you realize that this type of ride isn’t so bad after all. The next three years you continue to save as planned but at the end you don’t roll into a different car. You decide, “screw the neighbors I’m going to be cash rich not car poor.” The $10,000 gets left in the online savings account earning interest and waiting until you NEED a different car. The $250 a month now gets pushed into a less than fully funded ROTH or a less than maxed out 401(k) or a nice dividend reinvestment program.

A look at what could be:

$250 a month invested that returns 9% gets you about $10,700 in three years. For five years of focus it grows to around $19,500. For those that are disciplined, in ten years you have just shy of $50,000. For those of you starting young, twenty years rolls to just under $170,000.

Bottom-line:

As I said the idea is simple: drive a paid for car and invest what would have been a car payment. It is the implementation of that idea that is the challenge. But, for the ones who rise to that challenge, master their car emotions there is indeed a rich reward for the disciplined and focused.

That’s it for today. Here’s to paid off cars, fully funded ROTHs, and to keeping an eye on your EveryDay Money.

January Poll Results

2007-01-11T18:18:00.000-05:00

Q: Your expected return for 2007?

As the New Year is getting into full swing I thought it would be good to find out what everyone thought the market would bring them this year. Now that the poll is closed I’ll share my thoughts. I have heard the market’s historical return of 10% idea so many times growing up that I think I am brainwashed. So my realistic answer, (the one I use with friends, coworkers, and such,) would be 10-20%. Now privately at home when it is just the wife and I, when I am running scenarios and the calculator on MoneyChimp ask for an interest rate… well then I invariably use something between 30-40%. Might as well shoot big, especially if no one is looking. Well enough about me, here is how you voted.

Above zero, I’ll be happy: four percent

Less than 10%: six percent

10-20%: forty three percent

20-30%: twenty three percent

30-40%: thirteen percent

40-50%: four percent

Above 50%, I’m that good: four percent

Thanks to everyone that voted. The February poll will be up in a couple of weeks.

That’s it for today. Here’s hoping the votes go your way. And don’t forget to keep an eye on your EveryDay Money.

Finding the next covered calls

2007-01-10T19:31:00.000-05:00

Man, Crocs management presented at the IRC Conference this morning at 8:10 am West Coast time. (Where’s the coffee?) For math people that’s about 11:10 am East Coast time and if you look at today’s chart that is about the time CROX took off running. In short management had nice things to say about margins and also announced licensing extensions with the NFL and the NHL. CROX finished the day with almost twice the 3 month average volume and a price of $47.68 (4.04% up).

With CROX up on good volume there is a really good chance that my January 45s covered calls will be called away at next week’s end. If that does happen then two things will come about: 1) Half of my CROX position goes away. 2) Pretty much all of my margin loan goes away. Not sure how excited I am about #1 but #2 let’s me go hunting for another stock. Since I will be on margin I don’t want anything too crazy. Ideally I will be able to find a stock that I can write some February calls against (take in a little money to off set the interest). 2.5% - 3.5% call premium is what I normally shoot for (again nothing too crazy) on a stock that I won’t mind sitting on if it doesn’t get called away come February. If things go well the stock moves up some, it gets called away in February and I make about 7-9% for the effort. All the while my CROX and SNDK continue to climb. (Well that’s the plan anyway.)

For the last few days Garmin (GRMN) has caught my eye. It has taken a few downgrades (Merrill Lynch and DA Davidson). The stock once over $56 a few days ago has backtracked to $52.30 today. The February 55s don’t look to bad. And if they get called away it is right in that 7-9% range for the month. I don’t know yet. First I have to get to next Friday’s option expiration and see what happens to my CROX.

If you have an idea on a good covered call play for next month drop me a comment or an e-mail. Thanks.

That’s it for today. Here’s to always finding somewhere to go next and to keeping an eye on your EveryDay Money.

Festival of Frugality #56

2007-01-09T17:08:00.000-05:00

The new Festival of Frugality is up at Savvy Steward. That’s number 56 for those of you keeping score at home. Savvy Steward did a nice job putting this Festival together based around a biblical commandments theme. I was happy to submit Coupon Time and to be a part of this Festival. Drop by and take a look around there are several links to good post that will help you make the most of your money.

That’s it for today. Enjoy the Festival and keep an eye on your EveryDay Money.

Blog Carnival of Personal Finance 82nd edition

2007-01-08T19:35:00.000-05:00

J.D. over at Get Rich Slowly has raised the bar with this latest Personal Finance Carnival. If you have never been to a blog carnival you owe it to yourself to go see this one. In short a carnival is where a host takes all these great links from all over and organize them so with one stop you can find dozens of quality post. This carnival is all about Personal Finance with J.D.’s own superhero twist. J.D. was nice enough to include a post I had written on getting discounts on car insurance. So drop in, say hi, and take in all the great link there at your finger tips.

That's it for today. May you always find interesting things to read and are able to keep an eye on your EveryDay Money.

Sandisk and Crocs come out swinging

2007-01-08T19:11:00.000-05:00

Today is the first day of CES and someone must have liked what they saw and heard from Sandisk. The stock went as high as $45.15 today and finished up nicely at $44.30. Sandisk introduced several new products that should help the bottom line this year. If you didn’t see any of the press announcements on the new products you can get caught up by visiting SNDK’s pressroom. After watching today’s action and hearing all about the new stuff I am glad I found a little more patience when I was ready to throw in the towel. I am not getting too excited right now and still have fingers crossed with earnings right around the corner.

Crocs had a good showing today also. They finished up 2.56% at $44.80. Someone must think they are going to say some really good thinks at the big investor conference that is starting on Wednesday. You have so many people talking fad and one trick pony with this stock. If their new line up of shoes starts doing well then I feel this stock could make me some real money. I am looking forward to what is said on Wednesday, although with earnings right around the corner I don’t feel they will be giving away any secrets.

All in all it does my mood good when both of these stocks start the week off strong.

technorati tags
stocks sandisk crocs

Online savings accounts, welcome to being old(er)

2007-01-07T17:10:00.000-05:00

Perhaps it is a sign of fleeting youth once you start reflecting on how much things have changed during your life. I remember needles skipping on albums, eight tracks not fast-forwarding right, and cassette tapes getting chewed up and stuck in car radios. Now I can download dozens of songs to my MP3 player and never ever really touch the music.

I remember a very nice blonde lady behind the counter that always had a root beer sucker for me when I went inside the bank with my Mom. I remember there being lines to use the new ATMs. (Some of you will remember those really long lines in the bank on pay day.) Now with online banking, debit cards, and payroll direct deposits the number of trips to the bank become less and less.

All these changes got me thinking when we started building our rainy day fund. (Everyone should have an emergency fund. The “pros” suggest 3-6 months of livings expenses.) What I didn’t want was our hard earned money being mothballed in some savings account grinding out 1% a year. Now it can be debated on where is the proper place for an emergency fund to be sitting and that is for each to decide. For me I want that money guaranteed safe and near at hand. So as our rainy dollars started to pile up I went in search for something better than the near zero percent offered by my local brick and mortar bank.

An online savings account was just what I was looking for. The ones listed below are all FDIC insured and pay north of 4%. There are others, but personally I would start researching these first. (Interest rates current as of 1-07-07)

Emigrant Direct (5.05%) HSBC Direct (5.05%) Citi Bank Direct (5.00%) ING Direct (4.50%)

I will admit I was worried about it not working or more to the point me not working it correctly. When I first started using our online savings account I felt much like I did when ATMs were just getting started. If I screwed it up then there isn’t anyone near by to fix it. (Oh how I miss the nice blonde behind the counter.) Well it has been over a year since we first opened ours and I am happy to report my fears were misplaced. The transfers into and out of the account have gone smoothly and the interest rate continues to be about five times as much as a “normal” savings account.

If you haven’t embraced MP3 players and online savings accounts then this may be a good year to start. The only question I have is, “where’s my damn root beer sucker?”

That’s it for today. Enjoy the benefits of getting old(er) and keep an eye on your EveryDay Money.

technorati tags
savings online banking

Piloting my ROTH (investing)

2007-01-05T19:11:00.000-05:00

For some time now I have thought of ROTHs and mutual funds in tandem. Mutual funds seem to have all the diversity the “professional management” that I equate with a nice safe retirement. So as my wife and I have pitched nickels and dimes into a ROTH the money has always landed in a mutual fund. That is until a short while ago.

Toward the beginning of November (2006) I pushed a hand full of nickels into a ROTH opened with my favorite online brokerage. Now with this money I have none of the diversity or “professional management” but all the fun and excitement that comes from flying the plane instead of merely being a passenger. My thinking was this; surely I could beat the averages since I was only running such a small amount of cash. The money so concentrated that any winner picked would have a dramatic impact on my returns. On the other hand if I stepped on an Enron… well let’s not focus too hard on that hand.

So this year, with spousal support, I will take a turn at piloting my own ROTH. I know full well the long term hazards if this should go against me. This idea of picking individual stocks to place in a ROTH is probably not for everyone. (By the end of 2007 it might not be for me) I’ll let you know.

Do you pick individual stocks for your ROTH or fly with the “pros”?

That’s it for today. Here’s to great returns and fully funded ROTHs. And to keeping a sharp eye on your EveryDay Money.

technorati tags
investing retirement roth

Push (trading)

2007-01-03T18:27:00.000-05:00

Let me wade right in here. At one point Crocs sprinted up almost 5%. Watching it, I was thinking $50 by Friday and $60 by month’s end. That may be overly optimistic but hey I can attach any number I want when I am daydreaming.

Well it didn’t take much to snap me back to reality. Sandisk is the antidaydreaming stock if there ever was one. At one point Sandisk was down almost 5%. What’s with the 5% stuff today? So my idea of a rise going into CES burst into flames and came crashing down around my head today. To my knowledge there hasn’t been a big press release about anything, so I have no idea what was the driving force today. My lack of understanding doesn't stop the speculation from flying on the boards. Sometimes a little comic relief in the middle of a melt down is healthy. For the record, I am voting against the drop today being the result of “the pros coming after the little guy conspiracy”. But let it drop like this again tomorrow and I might reconsider. What I do know is that it was Ugly today. And I am back to internally questioning my hold decision.

At the close CROX was sitting pretty with a 1.85% increase and Sandisk sat with a 3.04% loss hanging around its neck. Both stocks made their move with above average volume. After having my emotions run in two different directions, like my stocks, it was anticlimactic to have my account finish almost even for the day. Like a stupid push in blackjack today left me a touch unsatisfied.

How do you feel when you end flat neither showing a gain nor a loss for the day’s effort?

That’s it for today. Here’s to not ending flat too often and to keeping an eye on your EveryDay Money.

technorati tags
stocks

Happy New Year

2007-01-01T18:45:00.000-05:00

I hope you all have your resolutions in place and none of them have been broken on the first day. Good luck with them and I hope they last. Both Crocs and Sandisk finished the year on an up note, so my New Years may get started on a good note. Sandisk has CES starting on the 8th and both companies report numbers toward the end of the month. After having waited this long I will hold SNDK till earnings with my fingers crossed. With expanded distribution this winter I am looking for CROX to report big numbers. They need to or their P/E and stock price is liable to fall off the table. Guess we will see Wednesday when everyone comes back.

I didn’t do any resolutions this year. If I was pressed to come up with one it would be simply; make good decisions based on solid research. That sounds nice and easy enough, at least tonight with the market closed this whole day. When the market opens and the New Year kicks off it will be harder. When I am watching my money bounce up and down it becomes harder not to get emotional. At least I can say I am getting better. I make fewer trades based on emotions than I did when I was younger. The downside is that I had to get old(er) in order to get that experience. I wish you good luck with your money for this whole year and many after.

Did you make any resolutions?

That’s it for today. Here’s to making smart decisions this year and to keeping an eye on your EveryDay Money.

Stand up! (musings)

2006-12-30T13:58:00.000-05:00

Ok stay with me for a second. There are two guys both drowning in only three feet of water. Both screaming for help. A nice bystander on the beach sees what is happening and yells back, “Stand up!” One guy puts his feet down and stands up, saving his own life, changing his future. The other guy continues to thrash about and eventually drowns, still wondering why no one came and fixed his problem for him.

That, overly simplified, is how I see people most of the time. It is not about color, money, height, weight, looks, or nationality. No, for the most part there are only two types of people; those that act upon Life and those that make excuses and wait for Life to act upon them. From the outside you can’t tell but talk to someone a little, ask a few questions, listen to them complain about their job some or talk about their future plans, and you quickly find whether they are willing to stand up or not.

If you want some glowing examples take a look through some of the post on MSN money message boards. WOW, you quickly find examples of both. Some people post asking for advice on how to get out of a difficult situation. Tons of good people spend their good time replying to only have their advice dismissed out of hand. “I couldn’t possibly cut back on (take your pick), no a second job is impossible for me.” The excuses flow almost faster than the advice can be given. It drives me nuts. Why ask for advice if you aren’t willing to take any? “Help I’m drowning in 3 feet of water.” “Stand up!” but they won’t.

Then I come across this (post) today. It is about some 19 year old kid going to school, working two jobs, and already looking toward his future. On the surface this seems like the type of guy that acts upon his life. The way I see it if he keeps working to impact his life and future then one day (perhaps at my age) he will realize his life is good and just the way he designed it. Good for him making the effort to stand up.

What makes someone believe they can impact their lives and someone else content to offer excuses and take whatever live gives out?

That’s it for today. Encourage and help those willing to stand up and keep an eye on your EveryDay Money.

A little extra pt. 2 (budgeting)

2006-12-28T15:02:00.000-05:00

So here we are at the end of another month and the New Year rising fast to meet us. End of the month brings with it the ongoing cycle of bills. As I wrote in (part 1), several of my extra nickels and dimes get thrown as extra on my mortgage. It just rubs me to be in debt. Don’t get me wrong, I really like my house I just wish that ALL of it was my house. One day.

There was an interesting comment left on part 1. In short it wondered if I would not be better off to invest instead of paying extra on the house. Well I was pretty sure I knew the answer but after spending a morning with the calculator I found was wrong. It is far better, for me, to max out my ROTH than use that money as extra on the mortgage. The greatness comes in the tax free compounding. If I was putting that money somewhere that I had to pay taxes every year out of it then the benefits narrows.

It doesn’t really matter because I didn’t max out my ROTH this year. So here’s the bottom line starting in January I am shifting my primary focus to maxing my ROTH before sending extra to the house. (Mentally I am just going to have to adjust to seeing the mortgage drop slowly. I still hold out faith that I can get some extra on the house during the year. We’ll see.) I would like to take a minute and thank the person that left that comment. Your comment made me take a fresh look at the numbers; I appreciate your time in leaving the comment.

Do you max out your tax advantage accounts every year?

That’s it for today. Here’s to leaving interesting comments and to keeping an eye on your EveryDay Money.

part 1

part 3

CROX daydreaming (trading)

2006-12-26T17:12:00.000-05:00

CROX at $100 or something equally eye catching was the title of a thread on one of the boards I frequent. I couldn't resist and wrote back asking what made them think that Crocs could see a $100 by year's end? Awhile later someone put forth their idea, earnings of $2.50 per and a P/E of 40. That would indeed put CROX trading at $100 by year's end. Kind of fun just entertaining such a notion.

Just thinking about that possibility got me off the track of reality and daydreaming for a bit. At a $100 per share that would more than double my investment in a year. I'll take it…if you insist. Next thing I know I am calculating dollar amounts and already picking the next great stock to roll all of that money into. If I could double my money by December 2007 then again in 2008 (surely I can pick another winner… don't you think.) I would have a big O pile by this time come 2008. Perhaps not an eye popping amount for some, but at least an eye stretching sum.

With the market being closed yesterday my daydreams ran amuck for most of the day. CROX at $100 raced around and around the track in my mind. Around and around, compounding faster and faster, I only need one great pick every year that doubles. Then my money doubles EVERY year, seven years from now I could buy a NASCAR stock car. Or anything else that is equally worthy of my investment windfall.

Well the daydream came to a close at today's…um…close. CROX traded up a half percent to finish at the grand total of $42.33 (my investment is still underwater). A long way from $100, a long way from doubling my money every year for the next 7 years. But, the New Year hasn't even officially begun yet.

Have you ever caught yourself daydreaming about how a stock pick might turn out?

That's it for today. Focus on today, dream about tomorrow and keep an eye on your EveryDay Money.

technorati tags
crocs stocks trading

Patience with Sandisk (trading)

2006-12-23T18:48:00.000-05:00

I have no idea where my patience has gone. When I bought my first stock and enrolled in their DRIP I knew, deep down, I was in for the long haul. Now I get impatient if a stock pick drags on for more than a month or two. I have set this money aside to trade with and I want my picks to move. October 30th, that is when I first pushed money into Sandisk. Since then it has fallen steadily, mocking me and burning holes in my money and patience. I try to remember that 2 months isn’t all that long to wait. It is hard, at least for me. Just a few days ago I was ready to throw in the towel but have been dragging my feet since then.

With CES (Consumer Electronic Show) right around the corner and earnings release shortly after that I feel I should wait and see. It is just that being under water makes my mind and patience do crazy things. It isn’t the market makers or the institutions or even the shorts that I battle. No, for me the greatest battle is mostly with myself. The next few weeks should tell the tale. If we can’t get a move up going into and shortly after earnings then all this waiting will be in vain and I will have to admit the mistake by taking a realized lose.

How much patience do you have with stocks that are under water?

That’s it for today. May your blessings be many and your patience great during this holiday time. Speak kindly and keep an eye on your EveryDay Money.

Car insurance (budgeting)

2006-12-22T18:07:00.000-05:00

Received my auto insurance bill yesterday. Like clock work it shows every six months rain or shine. Thought maybe it would get held up in the snow at Denver’s airport. Nope. So I will fork over my money and hope that I get nothing in return for it. Over the years of driving I have gotten a small return on my money; three stolen radios and a crash that I walked away from. All of them covered. “Here take my money and I don’t want to talk to you for another six months.” We can only hope. That and watch for those freaking deer that always seem to want to play tag.

Anyway, the one thing that my company does that I like is it gives a discount for paying in full as opposed to making payments. I called them today and asked if there was a set percent that people saved by paying in full? After the customer service guy spoke with someone else I was told that the saving percent ranged form 8-13% depending on “factors”. I am happy to report that my “factors” put me on the 13% end. Of course that is not the only reason I went with this company, they also offered the best rates for us. Out of curiosity and because I was writing this today, I called a few other insurance companies this morning. Not one that I called offered a discount for paying in full. What they did have was a fee if you chose to make payments. The bottom line, for those of you following along at home is there is money to be saved if you pay the bill in full. So stick it on a line in your budget, stack it up over 6 months and save a little.

Doing the research this morning I also found out there are discounts that can lower the cost of auto insurance that I hadn’t thought of before. Edmunds has some information about how you might lower your insurance. Check (here) for the article. I also found the government no less has compiled 9 steps you can take to get better rates. At the end of the 9 steps they also provide a cool check list to have out when you are getting a quote. Government’s article (here).

With a little effort you may be able to save some real money. We did, when we switched companies and asked about every discount that we could think of. Don’t forget the money you save can go directly to paying down debt, fully funding a ROTH, or even the occasional dinner out with the wife. (Oh, that last one is just a little reminder to myself... sorry.)

What discounts does your insurance company give you?

That’s it for today. Always ask about the discounts and always keep an eye on your EveryDay Money.

Coupon time (budgeting)

2006-12-21T12:39:00.000-05:00

76%. That is the percent of the population that are using coupons according to Promotion Marketing Association (PMA). PMA has a great coupon info site (here). Sad to say I was not one of those 76% till I got married. Talk about wasting money… the coupons not the marriage. Now we use coupons as much as we can, mostly on food. Again PMA has a stat for the food coupons. They report that on average people save 11.5% on their grocery bill. We are close to that, we save about 8-10% each week on food. That 8-10% turns into real money by the end of the month.

To do even better my wife trades coupons with another lady at work. Trading this way we get extra coupons that we actually want without having to buy an extra Sunday paper.

What I really want to know is where do these people shop? I rarely see people with coupons at the checkout. I do see signs of them, an extra coupon left behind on a shelf for someone else to claim. The first time I saw my wife leave a coupon I was lost. We didn’t need it and it was close to expiration was the reason she gave me. At the time I thought it odd. Now I pay more attention to the shelves and every so often I see an extra coupon just sitting there on the shelf. No doubt left by one of those 76% people. If you aren’t doing coupons you should. There is money to be saved. So grab a Sunday paper, clip a couple and join the majority.

Do you leave extra coupons you don’t need on shelves?

That’s it for today. Whoever left that yogurt coupon last week, Thanks. Keep an eye on your EveryDay Money.

CROX update (trading)

2006-12-21T09:56:00.000-05:00

Just sold January $45 calls on half of my CROX stock. I saw the stock jump up this morning and felt like I need to do something. The Jan. $45 calls were sold for $1.40 per. Truth be told I am looking for them not to be called away come January. They expire January 19th and earnings release will be after that at the end of the month (I think). If they do get called away I figure I will make around 8% on that half of my position in two months. That is fine with me. Still think that the stock will move up after we get the new numbers. I just didn’t feel like sitting on it while it trades sideways for another month. The call premiums from today more than off sets the margin interest for the next month.

Do you use covered calls on any of your holdings?

More later

Paint drying (trading)

2006-12-20T18:47:00.000-05:00

Finally I got a whole day off during the week. I planned to watch the market all day. Call me a little money nerd, I’m fine with that. At work I don’t get to see the numbers much. There have been times I have gotten home to find a big move, up or down, and wonder what happened. Not today. This morning I got up about an hour before the market opened, flipped on the computer, got a big glass of Dr. Pepper and settled in. I spent some time looking at Money.com to see if there was anything interesting going on. Spent some time getting caught up on what was being debated on the boards, but mostly just killed time till the opening bell. Truth be told I was looking for something, anything I owned to have a big day. No particular reason I just thought it would be a nice way to fully enjoy my day off.

So what happened today? Nothing. SNDK closed down a few cents (nothing new there) on near anorexic volume. Still dragging my feet. And CROX was just as lackluster to watch. CROX traded in a near perfect flat line pretty much all day. Look at today’s chart, around 1:00 p.m. it looks like someone else got tired of watching too. They hooked up one of those medical defibrillators and tried to shock the crap out of the stock. No luck. All said and done only about half of the 3 month average daily volume traded today.
The good news is I got a day off. The bad news is the market was like watching paint dry.

Given the chance would you watch your stocks for much of the day?

That’s it for today. Here’s to tomorrow being entertaining and I won’t get to watch much. Remember watch the market when you can and keep an eye on your EveryDay Money.

Freebies (budgeting)

2006-12-19T17:44:00.000-05:00

There’s money to be made, well gift cards anyway, for merely managing your money well. I have always tried to pay my credit cards off every month. My Mom told me when I first got one, at 18, it would keep me from getting “out of control”. Over the years I have had to carry a balance a few times, but for the most part I do as my Mom told me. Until about two years ago that money management didn’t get me anything.

A little over two years ago I took another hard look at rewards programs from the credit card companies. I had looked at them before and knew that lots of them had some kind of yearly fee. I had crunched the numbers and figured it wouldn’t be worth it if they had a fee. Times change. This time around after some hunting and research I found one that didn’t have a yearly fee. (There are several programs now that don’t charge a fee, if you just look.) The program is simple; I charge stuff to the card and collect points. The points accumulate till I have enough to exchange for a gift card. I can get a gift card to a variety of stores. In order for this to work and get me more than some lousy $10 gift card every year I have to charge everything. The “pros” tell you that this “charge everything mentality” is a sure fire way to lose control of your money and your mind. Charging McDonald’s… naughty naughty. I paid them no mind and set about charging groceries to auto insurance in an attempt to rake up points. And it has worked.

My wife and I have decided to use the gift cards on things that will last for awhile (no dinners out). The first year it was a digital camera and rechargeable batteries she wanted. I had to throw in $12 and the rest was gift cards. She was happy. There’s a great return on my twelve dollars. We are now saving points for a camcorder.

None of my friends are doing this. Many are still trying to get their money to what they want it to do (for some of them it is like herding cats). About the time I am feeling that we are the only ones doing this crazy gift card chase I hit upon an article the other day. Come to find out there are lots of people with this idea, so many in fact that it got a write up on MSN Money. (here’s the link) The lady that put her remodeling on her credit card takes the cake. I am thinking she has complete control of her money. Pulling this to a close I would be remiss if I didn’t mention that the benefits don’t work out very well if you are carrying a balance and paying interest. If you are not, look around, there are rewards for good money management just waiting for you.

Do you participate in a credit card rewards program? How is it working for you?

That’s it for today. Here’s to free money. Keep watch over your charge slips and an eye on your EveryDay Money.

Dragging my feet (trading)

2006-12-18T16:22:00.000-05:00

So I have been dragging my feet on selling Sandisk. Last week I was looking for the towel and today I sit with the stock still. You never can predict luck. This morning the company announces that they are buying back $300 million of stock. Some analyst says he thinks they can beat estimates coming up and like that the stock is off and running yet again. One part of my brain says, "stick with the plan and sell. Take the loss and move on. You are down enough and that is the smart thing to do." While the other half of my brain is screaming, "the quarter’s numbers will be great, end of January, sell now and you will be watching it climb all through February." And in the mist of those two competing voices the margin interest keeps a humming its own little tune.

All said and done if I wait and cash out at $45.73 I pretty much break even. That is if we get to $45.73. The only thing I would lose is a few pennies of margin interest and two months of time. Anything over $45.73 is some kind of profit. The problem is that I don’t have hard and fast trading rules. I know, I know, all the books say you are supposed to have rules. After all that is how the “pros” do it. There in lies the problem; I am just your average guy battling my own fear and greed demons.

If I am right and this stock buy back plan puts a floor under the stock we should move up from here going into the earnings announcement. If the earnings and gross margins are good then Sandisk continues to climb into February. Maybe. If the numbers are bad or even mediocre then everyone says, “I told you so”. If that happens then $44 won’t even be a bus stop on the express way to the $30’s. Maybe. All I need from here is a little over 4% to the good and I could get out without a loss and watch it all play out from the sidelines. The problem with that is I have found the view is never as good or as rewarding when you are on the outside looking in. So for now I am still dragging my feet on selling. Peering out from the inside at those on the outside watching that have nothing at risk.

Do you have and follow hard and fast rules with your trading?

That’s it for today. Here’s to being part of the game. Take a risk and keep your eye on your EveryDay Money.

What’s in a name? (investing)

2006-12-17T13:32:00.000-05:00

American Express (AXP) has been a part of my long term holdings for over 15 years. It has done me well over the years. From the beginning I have had their anorexic dividend reinvested through their DRIP. It is tiny but every little bit helps over the years.

Thursday last, AXP jumped up over 3%. Rumors that Citi Bank maybe looking to buy AXP was suggested as the main driving force for the upward move. I don’t really know, but it is nice to see AXP over $60 per. I just feel a little better when my stocks go up. The reason I’m not more excited is that I have heard this tune before. It seems every so often for the past few years some “pro” starts talking about how great a “fit” AXP would be with (your bank of choice). Nothing has happened yet. Citi and American Express have no comment right now. I think that is what AXP said last time the rumors started.

Let’s say for argument’s sake this time is different, Citi does buy American Express. Two things come to mind quickly. What would they use as a name for the new company? The American Express name is worth its weight in gold, at least I think it is. It would make me a little sad, after all these years, to see the name erased from the corporate landscape. The other thing is would Citi make a cash offer or would we receive Citi stock? I already own a bank and not really sure if I want my money tied up in two.

It is all speculation anyway right now. If I had to guess probability, this Sunday afternoon, it would be less than 20% chance that Citi throws money on the table. Now if come Monday morning Citi announces an offer in that $75 - $100 share range we will know I was wrong. Wrong and a few dollars better off than I was at Friday’s close.

That’s it for today, good luck during the new trading week. And as always keep an eye on your EveryDay Money.

DRIP DRIP (investing)

2006-12-16T12:37:00.000-05:00

You put a bucket under a steady drip and in time the bucket gets full. Give it a little more time and it overflows. This is precisely the idea behind Dividend Reinvestment Plans (DRIPs). Those smallish dividend checks that we don’t seem to really know what to do with now have a purpose. Many companies offer the chance to reinvest those checks back into fractional shares. Your dividends buy more shares, which throw off more dividends, which buys more shares… DRIP DRIP DRIP.

Make no mistake; these plans work best over the long haul. I have had a couple of my DRIPs for over 10 years and counting. With DRIPs and a long term view you will see the market different, at least I do. You may even catch yourself looking for the stock to drop some so your dividends will buy you even more shares. The natural ups and downs of the market becomes an advantage over the long run. Your checks buy more when the stock is down and less when the stock is up allowing you to average a good buy price.

Companies that have a strong track record of paying dividends are good places to start looking. You also want companies whose payout ratio is not super high. If the payout ratio is high then they may be using all of the profits to pay dividends instead of using the money to grow the business. Ideally you want a company that is still growing, it doesn't need to have rocketing growth. This growth allows them to not only pay consistently but also increase the size of the dividend, yearly would be nice. Think bigger and bigger drops in the bucket.

A few companies that pop into my head are MO, XOM, GE, and PG. (The fine print: these are ideas only; please do your own homework, make your own decisions, and take responsibility for the good and bad things that result.) Here are some of the companies that mange all the paperwork and details of the DRIP programs for many companies (a place to start). Computershare.com,
Bank of New York, and Mellon Investor.

Remember the sooner you get your bucket under the DRIPs the quicker it will get full and start overflowing.

That’s it for today. Have patience with the DRIPs and keep an eye on your EveryDay Money.

Flashbacks (trading)

2006-12-15T17:37:00.000-05:00

As I thought, option expiration day draws to a close and I still have all of my CROX and SNDK. I am down dollars on both positions and ready to make adjustments. SNDK is already on the delete list. I am looking to get out next week, take my modest loss and move on.

Crocs is a little different story. For the past month CROX has shown all the consistency of the girl I dated, long ago, in high school. One day things could not get better and the next she would turn into this chaotic, irrational energy that threatened to propel us both into the abyss. Watching CROX race up yesterday and then drop over 3% today I’ve had all too vivid flashbacks.

Unlike the old girlfriend, my desire to hold Crocs has not changed. I just have decided that with its little tantrums, that always cost me money, I am no longer willing to hold shares that are on margin. Between the banging of the ups and downs and the margin interest clanging everyday it is like insanity in stereo some days. So I will trim down ever so slightly and hold CROX free and clear and wait to see if she can grow up a little. The next few quarters hold great promise, unlike the High School romance I hope Crocs can deliver.

That’s it for today. Here’s to rolling with the punches. Keep your hands up and one eye on your EveryDay Money.

Coming expiration (trading)

2006-12-14T18:35:00.000-05:00

So… around 10:00 am my time (11:00 am market time) I don’t see much to get excited about. From the look of it, I figured, today may shape up to be like yesterday. A little underwelmed was one way I would describe how I was feel this morning. In between work, I get a quick look in the afternoon. $44 plus. Hitting refresh was the first thing I did thinking my browser must have a glitch. Nope. Seems that a bunch of good reports came out and some other companies reported solid numbers and everyone came a running dollars in hand. A fat 2.57% up for the day, worth getting out of bed for.

With today’s run being called out tomorrow on my December $45s is now a real possibility. Maybe not a great chance but a greater chance than there was yesterday. If I get called out that would cut my position in Crocs in half. Not sure how I feel about that right now. If half gets called away I don’t plan on writing covered calls on the remaining shares. Continued growth; that is what I am still betting on going into the New Year. The new spring line has made me believe the company understands the need to diversify its product line look and appeal. Building a brand is never an easy thing to do and I am willing to give this management some more time to see how they do.

If half of my stock becomes cash going into next week I am not sure where I would put it next. Unfortunately a few days ago when I mentioned Garmin I didn’t have the reach to get a few shares. Now with them sitting $53.44 I’ll wait. But it won’t really matter unless CROX finishes tomorrow over $45.

That’s it for today. For those of you sitting with options hope tomorrow goes the way you need it. Remember to keep an eye on your EveryDay Money.

Fired up (musings)

2006-12-13T18:51:00.000-05:00

There are the longs, the shorts, the ones trying to spin people up, and occasionally your ordinary idiot. Stock message boards attract them all. The two key traits seem to be passion and intensity. Nothing gets the blood flowing and the fingers typing like making or losing money and on the boards you have both in quantity everyday. Threads range from the inane to stock analysis that will equal any the “pros” put out.

With so many threads going in so many directions it may seem better and safer (to the ego) to just watch. Don’t! It isn’t double dutch jump rope; there is no “good” place to jump in. Just jump. Be prepared to take your knocks (there’s usually is no shortage of people ready to take a poke at you, no matter how great your post). Have a thick skin, a sense of humor, and some passion. Ask some questions, answer some back, try calling a bottom or a top, take sides, and have some fun with it.

Watching people surf is nice, catching a big wave is better. Before you go to bed tonight find a board and post something, anything. Let me know how it goes.

That’s it for today. Here’s to wanting everyone involved. Between posting and reading keep an eye on your EveryDay Money.

Where did I put that towel? (trading)

2006-12-12T19:16:00.000-05:00

So… I’ve slept on it and then watched as Sandisk continued to throw off money again today. It is all but a done deal that my December covered calls will expire this Friday without anyone wanting to give me $50 per share. Too bad, at $50 per share I was going to throw in a big Thank You card, a cleverly wrapped box of chocolates, and a music playing Christmas card.

In all seriousness, I feel the odds of making money on this stock, near term, going against me. I feel there is something I am missing or not understanding about something going on with this stock / company. That is not a position that I want to still be in come earnings time. I will be looking to unwind my position in the coming days, take my lumps and move on to the next opportunity.

Just writing this is aggravating. For me making a bad call is like taking a UFC elbow to my brain and confidence. The money loss is just a (BEEP BEEP BLEEPING) exclamation point on the whole thing. A not so subtle reminder to do better next time. I’ll let you know how it unwinds.

That’s it today. Here’s to taking the medicine and getting better. Keep an eye on your Everyday Money

Concerned (trading)

2006-12-11T19:19:00.000-05:00

With the 2% drop today I am officially concerned about this stock. The January 50’s call prices are getting bad and I am starting to think of outs. This week looks like it will pass with SNDK under $50. I will still have the stock next week and need to decide whether to try and wring out some more nickels and dimes by writing January covered calls or just throw in the towel. Can’t really say right now which way I will fall. I try and not make any big decision after a down day without first sleeping on it.

That’s it for today. Here’s to everyone holding stocks that let them sleep well. Sleep tight and remember to keep an eye on your EveryDay Money.

Just looking... Thanks (trading)

2006-12-11T18:28:00.000-05:00

Garmin LTD (GRMN) still pops up on my radar every few days. I had some Oct $47.50s covered calls get called away and still keep an eye on it. Today Soleil upgraded them from Hold to Buy. The company is solid, makes cool stuff that more and more people seem to think is a necessity. Their products are everywhere from airplanes to people’s pockets. The problem, and this has happen more than I care to think about, is lack of available funds right this minute. My whole trading account and margin too is tied to CROX and SNDK.

But let us pretend for a minute that I have room for another stock. Because the other two are taking longer to work out than planed I would see GRMN as a short term play. (Give me my money and let me go back to worrying about SNDK.) Covered calls would be my vehicle of choice for this play. Here’s one scenario: Close today was $50.25. A buy at that price and writing Jan $52.50 covered calls for about $1.60. I would fully expect (and hoping) to get called out come January. $2.25 price appreciation plus $1.60 premium is $3.85. That is around a 7.6% return for less than 40 days, not counting margin interest and commissions. If I didn’t get called it would still give me a shade over 3%. The 3% is enough to cover the margin interest and I would still be holding a stock that I like.

Ideally I would like GRMN at a price south of $50 and would be ready to wait a few days for that chance. This stock seems to rock up and down. I’m pretty sure I would be forgoing some upside by letting the stock go at $52.50 but for a quick short term play I’ll take 7.6% for 40 days. Thoughts and ideas welcomed.

This is just me thinking out loud. Please do your own research and take responsibility for the good and bad things that happen in your life.

More later.

Rolling along (trading)

2006-12-10T18:39:00.000-05:00

Friday Heelys Inc (HLYS) started trading. Like other IPOs that I didn’t invest in they started sprinting right out of the gate. After being priced at $21 the day before they traded as high as $38.75 and closed at $32.60. If it wasn’t for my money in CROX and Heelys being debated about on the CROX boards I don’t even know if I would have looked at this company. One. That is the total number of kids I have seen around here that have had these shoes. But I will give Heelys this; their sales have been rocketing the past two years. Being in Middle America it just might take a bit for the craze to get to us.

As a rule I don’t do IPOs, scared I guess. Too often with the IPOs I can’t find enough information to allow me to invest and be able to sleep well. Since I have a job other than picking stocks sleep is important. I saw Google below $100 and passed, with hindsight 20/20 I think we all know that that pass was costly. First few months of an IPO still seems too much like lottery tickets and I told my Mom long ago that I wouldn’t waste my money on such things. Putting money into CROX, going on a month ago, is as close as I have been to an IPO. When I started it was nothing but big, old, dividend payers. Look at me now, years later, money pushed into CROX, which doesn’t even have its baby teeth. Progress?

In closing let me add my two cents into the Heelys / Crocs debate / comparisons. There isn’t one past the fact they are both a kind of footwear company. Crocs is already expanding their line of offerings. The new Spring ling is a long way from the fun loving clogs of the past summers and should help drive sales going into next summer. The Heelys product line is limited to variations of the same design. My opinion is that if Heelys doesn’t come up with another type of shoe then their market is limited. Your guess is as good as or better than mine on how limited that market will end up being. Don’t get me wrong money will be made on HLYS stock. Those that got shares at $21 must be feeling pretty smart right now. I just feel the growth of Heelys will slow sooner and with more suddenness than Crocs. With both stocks throwing around a P/E in the 30’s growth is what we are all paying for. That growth slows and so does that P/E.

As Sergeant Phil Esterhaus used to remind all of us,
“Let’s be careful out there.”

That’s it for today. Here’s hoping you have a good start to the trading week. And as always keep your eye on your EveryDay Money.

Crocs Spring line pics (trading)

2006-12-10T11:29:00.000-05:00

Here is a link (Crocs Spring line) to the new Crocs shoes for the Spring and Summer. Good to see the company expanding the look of their offerings. I think that these will attract an even wider range of customers and should help keep sales strong. But will it keep sales strong enough to move the stock up and pacify the nay sayers? Only time will tell. Let me know what you think about the new looks.

More later.

The Buffett way (musings)

2006-12-09T19:28:00.000-05:00

So I DVRed this profile on Warren Buffett last night. I have read several books and articles about him and his investing style. I have seen him on 30 seconds sound bites but never in an extended interview. This show was an hour. Most of the interview took place in Omaha with Mr. Buffett driving the reporter around showing off his fair city talking about a wide range of topics.

He drives himself, still lives in the same house he bought 40 some years ago, eats cheeseburgers, takes time out of his day for visiting college kids, and has a good sense of humor. You would think an old man worth billions would have a well groomed driver, personal secretary following him around managing his every minute and like muscle bound ex-Navy SEALs type for bodyguards. Nope.

As the hour came to a close two things kept racing around my head. 1) Mr. Buffett found something he loved to do first then the money followed and flowed. There is a lesson there somewhere. 2) How would serious money change me?

Let’s say we aren’t kidding ourselves and the investments and trading we do eventually makes us some money, money. Would our wealth change us? And if so how?

Many people would love to be able to invest like Mr. Buffett and have the same results as he. For me, after watching that show the thing that I wish and hope to do just like him is to be able to remain myself. I want to get to his age, with my piles of money, and have a long ago friend walk up and say, “Damn. You got old. But you ain’t changed a bit.”

That’s it for today. May we each find a little bit of the Buffett way in ourselves. While we are looking remember to keep your eye on your EveryDay Money.

Building blocks (investing)

2006-12-09T18:07:00.000-05:00

Picked up a good book from the library the other day,
“Building Wealth with Dividend Stocks”. The book is not a nail biting page turner but well worth the read. This is more of your foundation type book. The book walks you through how to pick solid companies with growing dividends. There is also a nice section on DRIPs (dividend reinvestment plans), how they work and the long term benefit of being involved with a good one. In the back of the book is a huge listing of companies that offer DRIPs to their shareholders. The list makes getting started a snap. It provides web addresses, summary of the DRIP plan, and even a phone number to the company. If you are new to investing or just want to get some consistent pieces in place before short term trading then spend sometime with this book. I admit, I had a little smile as I scanned down the list of top quality companies and realized that I had DRIPs with some of them. I make all my own decisions after my own research, and take full responsibility for the ups and downs. But, it is still nice every now and then to see someone else agreeing with those picks. If you get a chance to take a look at it the author’s name is Joseph R. Tigue.

More later

Got a dime? (trading)

2006-12-08T18:47:00.000-05:00

The idea seems simple enough, borrow money from your brokerage costing X percent in interest and then buy stock returning Y percent. The difference between Y and X is pure profit. By doing this the returns on an account can get a good size boost. The small print: your loan is secured by the value of your stock. The value drops below a certain point and either the stock gets sold out from under you or you have to put more of your money into the account to offset the decline in stock price. Caution! Any bad trades you make the losses will be magnified by use of margin loans.

I have been buying stock on margin for awhile now. Day in and day out the value of my account ticks up and down. The loan amount sits right above my current value and remains steady day after day. A nice, red, steadfast reminder that my picks and decisions need to be right. In the back of my mind I can hear the interest stacking up day after day.

I will admit that using margin over the years has helped my returns. It has also upped the stress level a notch at times. I try not to overreach. I always leave a good cushion percent wise so that I can suffer a drop and not face a margin call. (Margin calls are when your stock is sold for you or its pony up some more cash time, depends on your broker.) I have yet to have to deal with a margin call. Knock on wood.

Some of my SNDK and CROX were bought on margin. So as the stock prices bounce around the one constant to my day it that the interest bill is still clicking upward.

Click the comment link and let me know if you do or do not trade on margin and what you think about it. I am always interested in hearing other’s take on things.

That’s it for today. With the interest meter running here’s a reminder to keep your eye on your EveryDay Money.

Good foundations

2006-12-07T19:21:00.000-05:00

Before I start I want to give a nod to the Pearl Harbor boys getting together, perhaps for the last time. Deepest thanks to you and all the ones that wear the uniform THEN and NOW.

It is again today, with CROX and SNDK falling off the table that I am reminded why you don’t trade with your retirement money. That and how much I like the steadiness of dividend reinvestment programs.

I would urge everyone to look into creating a solid foundation of top mutual funds and dividend reinvestment programs before going off and trading stocks. And if you still have a balance on your credit cards… I would fix that before playing in the Street. Don’t get me wrong I really like trading and the research and the ups and downs and trying new strategies and well all of it. But I don’t think I would enjoy it as much if I hadn’t first strung a safety net. I was told and stick with one simple reminder:
“Don’t push any money into the market that you aren’t totally ok with it disappearing… forever.”

If you need ideas take a look at the post “Do you Roth?” Do a search on index mutual funds, dividend reinvestment programs, and ROTH IRAs. That should get you started. I’ll be doing a more in-depth piece on dividend reinvestment soon (it is the get rich slowly theory).

Trust me, build that solid money foundation so when you have a SNDK fall 3% from under your feet in a day it will be easier to remember the sky really isn’t falling.

That’s it for today, here’s to hoping you always remember Enron, until tomorrow keep your eye on your EveryDay Money.

When it rains it pours (trading)

2006-12-06T18:46:00.000-05:00

Today it rained buckets of goodness as both my SNDK and CROX took off running. My confidence was climbing with every tandem up tick. I will admit my excitement was somewhat tempered by the memory of yesterday (see A kick in the teeth). But still by the end of the day Sandisk’s 3%, that’s a nice fat 3%, rise on good volume was a really nice sight to see. Almost Pavlov like I see green and feel smart. When the numbers turn red I feel dumb. Maybe it’s only me?

I would like to send out a big Thank You to all that watched the ticks, fingers crossed, this whole day while I worked. Your positive thoughts and mojo directed at Sandisk (SNDK) did not go unnoticed. With that said it does make me wonder where all of you were yesterday?

As for Crocs (CROX) they finished a nice 1.70% up ($43.05). It was reported that they introduced their Spring line-up at some conference thing yesterday. I still haven’t been able to find pictures of the new shoes. With half of my shares having Dec. 45s calls sold against them (see Ugly Shoes) I am starting to think I might lose them next Friday. Not sure how I feel about that possibility right now.

That’s it for today. Here’s good luck to all of you trying to get ahead tomorrow. Until then keep your eye on your
EveryDay Money.

A kick in the teeth (trading)

2006-12-05T18:31:00.000-05:00

So… I sat and watched as the rocket ship took off this morning. Sandisk (SNDK) was racing up on good volume faster than the closet longs could get to their keyboards and post the
“I told you so”s on the boards.

As the stock and volume continued to rise I started running numbers as visions of a Money Christmas danced in my head. If this go go feeling stayed for a couple of days then, hey, I might actually get called out on my Dec 50s. Then what am I going to do? If it pulls up slightly under $50 by next Friday then the 52.50s or 55s calls of January may be good to sell. And I could make even more money. (Never a bad thing) Work beckoned and I had to push away from the computer and the party going on throughout the message boards. Funny how being right is contagious. For the rest of my day I walked with that little spring in my step. You know the one, the one that comes from being up nicely at the start of your day. (Don’t tell me I am the only one that gets that bounce?)

Finally, I got to check back towards the close. And like that… my air of a good day was kicked out of me. When I left this morning we were closing in on $46.50 up 3 some percent and cruising. At the close THAT stock sat at $45.23. Crap! Screw work. I should have kept watching. My watching was the driving force this morning; I was THE good luck charm. (I am not the only one that has had those thoughts run through their head … am I?) I have been trying to look on the bright side, and just be happy with a positive close. But I can’t. Giving up almost all of this morning’s gains is just a kick in the teeth. Crap!

That’s it for tonight. Here’s to tomorrow being another day. Until then keep your eye on your EveryDay Money

p.s. don't forget to throw your vote in the poll (Hang On) Thanks

Green is good (trading)

2006-12-04T19:47:00.000-05:00

What a nice close today to see SNDK and CROX both in the green. Perhaps Mom was right about playing nice with others (see Momma said… & pound of sorry entries for the beginning of that story).

Volume wasn’t that terrific for CROX today, but still an up day is an up day. I think, for the record, that with the large amounts that institutions hold and all the shares that are shorted we will not see much of anything in either direction until some kind of sales numbers are reported. Or at least leaked.

Nobody really knows which way this is going to go yet. We are all just trying to guess right. I am still holding long thinking positive things about positive numbers. Just guessing again, I think the deal with the University Crocs will far out strip the Disney deal at least in the U.S. Overseas I give the edge to the Disney Crocs.

A reminder to cast your vote in the poll (Hang On)

That’s it for today. Here’s to seeing another up day tomorrow. Until then keep your eye on your EveryDay Money.

Oh... you mean that drug. (Investing)

2006-12-04T18:38:00.000-05:00

So how is that one drug? Which one? The new cholesterol one in clinicals. Which? The one you guys have pumped $800 Million into. What one? The one replacing Lipitor as it gets closer to patent expiration. Oh… that drug. We had to pull it today. It was… killing too many people.

With the report of Pfizer (PFE) pulling Torcetrapib shares fell off the table just as soon as trading started today. Here’s one for the WOW category; 3 month average shares traded is a shade over 32 million. Shares traded today… just shy of 290 million… WOW!!

Pfizer’s troubles are out there for you to find during your DD. The big ones are patent expirations the next few years (going to hurt a lot.) And the pipeline seems to be a little thin in the blockbuster category. But still I wonder? Could the new few weeks be a great time in history to try and catch this falling knife? The company is slashing people and expenses as I type. The dividend stands around 3.5% with today’s closing price. Pfizer also has a good dividend reinvestment program. If I was sitting on a stack of dimes I didn’t know what to do with and plenty of time. I would have to think about it. It would have to be strictly long term time horizon and making use of the dividend reinvestment program. Makes one at least pause and think. And thinking if never a bad thing.

What do you think?

More later.

A little extra (budgeting)

2006-12-03T18:18:00.000-05:00

I blinked and November left me. It is the dawning of a new month and a new set of bills. The mortgage is still one that I write out by hand, no online banking for the house. Again this month we decided to send in a few extra nickels and dimes. Every little bit extra sent in goes straight to principal and pays the loan off earlier than designed.

Depending on your interest rate, I have read just one extra payment a year (13 instead of 12) gets your loan finished about 7 years early. That early finish saves you thousands of dollars in interest. Send in more and it goes away even faster. A side note. I have had friends ask me my feeling toward the bi-monthly payment programs that basically works out to an extra payment a year it is just someone else managing the effort. As Nancy Reagan once said, “Just say no.” Most of these programs charge some kind of fee. If you just send in extra every month on your own you accomplish the exact same thing only there is NO fee. (Check with you loan provider to see if you have to specify that the extra is to be applied on the principal or not.)

Sending in a little extra gives me a little feeling every month of goodness, of controlling my money and future. That’s why I still put it on a check. I like to see the extra in writing on paper. I joke with my wife that one day we are going to wake-up and there won’t be a house payment. I create grand ideas of what we will spend all that money on when we don’t have a house payment down the road. Those little visions keep me motivated every month. So again this month licking the envelope I thought the same thing as months past, here’s a little extra and one more step toward freedom.

Click comments and let me know if you do or don’t send in any extra and why?

That’s it for today. Remember; happen to things instead of always letting things happen to you. And as always keep your eye on your EveryDay Money.

part 2

part 3

Baby Gear (budgeting)

2006-12-02T19:04:00.000-05:00

So with a baby due in March I thought back in September we should get started buying baby stuff in order to be able to space out the outflow of money. So with the stride of a new Daddy to be I strolled into Babies “R” Us hand in hand with her. I couldn’t believe all the cool stuff they had and I couldn’t believe how much stuff matched. You can get a high chair, stroller, diaper bag, car seat, and Pack-N-Play all the same color pattern. WOW! As we walked around looking at all the miniature stuff (clothing, toys, beds) something else struck me, harder than the color scheme, and that was the prices. WOW!

We talked about all the stuff we needed to get by March and decided that there had to be a better more cost efficient way, at least for us. Garage Sales were the ticket. Let me tell you upfront it takes loads of time and lots of visits and drive bys of worthless sales to find those unbelievable bargains. The kind of deal that when you get in the car and look at each other and you bust out laughing because you got such a great deal. Besides the hours we spent driving around and talking about our future and the baby’s future, well I’m not sure how to put a dollar figure on the time.

But find great deals we did. A Graco stroller (little scuffed but not bad) $7. An almost new Graco Pack-N-Play for $20. Nice 6 speed Graco swing for $20. Two exersaucers, one for $6 and the other for $1, both usable. There’s more but you get the picture. I figured everything we found at garage sales compared to retail saved us about $700 or more.

Here’s my thinking about our baby not having new and matching stuff. If I invest $700 and get a 10% return then in 18 years that’s $3,891.94. In twenty-two years it is $5,698.19. In 30 years the $700 becomes $12,214.58. I told my wife we could give her $3,900 for graduation or $5,700 for college graduation or $12,200 when she turns 30 for a house down payment. With that in mind hopefully she will forgive the scuffs on the stroller. Drop me a comment if you have ever found a great deal on something at a garage sale.

That’s it for today. Focus on what’s truly important and keep your eye on your EveryDay Money

A few pounds of sorry

2006-12-01T19:12:00.000-05:00

My Mom always told me to play nice with the other kids and not say bad things about them. Yesterday I took a poke at the Nollenberger Capital analyst and his Buy rating (see yesterday's Momma said... post.) It was all in fun, but like my Mom used to tell me, “What goes around, comes around.” She was right. I made fun of his Buy rating last night and today CROX falls off the cliff. (2.82% DOWN)

So here goes. Nollenberger Guy I’m sorry for suggesting that your Buy rating caused our beloved company to finish in the red yesterday.

Now with that settled I am fairly certain that we will be on the positive side come Monday’s close. Sleep tight longs.

That’s it for today. Play nice with others and keep your eye on your EveryDay Money.

P.S. Don’t forget to give your vote on the poll (Hang On) a couple of posts down from here. Thanks.

A few ounces of hope (trading)

2006-12-01T18:31:00.000-05:00

Back to back days in the green for SNDK. Today was a squeaker but it held. Perhaps the bottom is in and it is up from here. The cost of flash drives is nose-diving and it seems everyone (including me) is wondering how it will affect the bottom line. I figure Sandisk is the dominant player and can take the thinning margins, not sure if the smaller companies can?

Lots of hope is placed on the semi new U3 flash drives. These drives are not just storage on the go. They can let you tote around secure software applications, literally, in the palm of your hand. Fascinating. The future so bright I gotta wear shades. (Oh man... am I that old to make that reference? Anyway.) Check it here (U3) if you are interested.

After two green days I am back to looking down the road. If the stock can continue to rise and doesn’t get called away in a couple of weeks, because of the December 50’s covered calls, then I am thinking about writing January $52.50’s if I can get a good price. I am thinking $52.50’s because I want a little more room for it to run but still a little hedge with the covered calls.

Do you own a flash drive? Sandisk or other brand?

More later.

Hang on (Poll closed)

2006-12-01T10:11:00.000-05:00

Here's how it came out on this vote. 36% of people said they usally hold on to a stock less than a month. 36% report they hold less than a year. And 27% tend to be buy and hold thinkers. I have no idea where the other 1% went to. Thanks to everyone that voted.

Tag

Momma said there'll be days like this

2006-11-30T18:04:00.000-05:00

When the market finally closed and the last blinking numbers came across the ticker I wonder if the Nollenberger Capital guy thought he might have trouble hitting water if he were to fall out of a boat? This Nollenberger Capital guy initiated coverage on the shoe guys (CROX) today with a BUY rating to start. Does the market give this guy any love? Nope. CROX closes in the RED. Although in fairness it was down only .69% and on volume less than their 3 month average. But still, it was a BUY rating. Momma said there’ll be days like this… I can hear tonight’s dinner conversation already:

Wife: “Hi honey. How was your day?

Nollenberger Guy: “Well, I started coverage on the company that makes those shoes you like so much. Started them with a BUY rating.”

Wife: “That’s great! Those shoes are so comfortable. You know they come with Disney characters now right? Well anyway what did everyone think about your BUY rating?”

Nollenberger Guy: “The market said, “Shut-up!”

That's it for today. Nollenberger guy keep your head up there is alway tomorrow. Until then keep your eye on your EverDay Money

Duck and covered calls

2006-11-30T10:26:00.001-05:00

So I have never dabbled in options before now. From what I have read trading options is a gold brick road to riches… if you are right in your trades or guesses. If you aren’t then you can disappear a pile of cash in a blink of both eyes. That being said I have found a more conservative use of them that seems to fit me better.

Can’t even tell you how I first heard about covered calls a few months back. They have been there the whole time just for some reason I haven’t really looked into them until now. From what I have read and understand selling covered calls can get you some money coming in right now. That is never a bad thing the way I see it. The downside is that your upside is limited to the strike price. Which in a nutshell means you pick a winner it takes off galloping past the strike price then you miss all the money above the strike price. This is the part that stresses me some.

I am always looking for an edge and new trading strategies are fun to read about even if later I decide they aren’t for me. But with covered calls (CCs) I thought that it would be worth the effort. I was looking to do one strike price out of the money and one month out. With price increase plus the premium I wanted to find trades that would give me 3%-5% for the month’s time. Sounds good don’t you think?

In August I did September CCs for Best Buy (BBY) and Starbucks (SBUX). Both got called out and the stock price continued to go up. Made money but missed some upside. In September I wrote EBay (EBAY) and Garmin (GRMN) both called out and the stock continued to rise. But still made money and still missed some. In October it was Yahoo (YHOO), Advance Micro Devices (AMD), and Sandisk (SNDK). Yahoo was called away. AMD was not and I sold the stock shortly after because I didn’t think the following options premiums were that great. SNDK didn’t get called. (See Batting Single A for the first chapter of what so far is a less than happy X-mas story.)

I have decided to stay with covered calls for at least awhile longer and try to give the strategy a fair shake to see what I can do with it. I have eased up a bit and don’t have CCs on everything now. Only half of my Crocs (CROX) have contracts on them. (See Ugly Shoes for the start of that story. Which may or may not turn into a best seller?)

More later.

X-mas day (trading)

2006-11-29T17:44:00.000-05:00

SNDK red 2.32%, CROX green 1.53%. With these one up one down red and green days I don’t know how to feel at the end. This is not the first time they have gone in opposite direction. Red and Green what am I freaking Santa.

Microsoft reported that they now have 9% of market with their ZUNE. (What is this pick a product name by committee?) With their 9% that puts them in the number 2 spot ahead of Sandisk MP3 players. Is that why they continued to fall today? Some on the boards seem to think that is it. Well it was that or simply SNDK is the worst company ever. I would like to think today was more of the first and less of the second. I am glad that my retirement and life style doesn’t ride on the nickels and dimes that I have in this account. Knowing that, it is fun and interesting to watch (all be it painful at times). I am not ready to let it go, at least not yet. Have been looking at the Jan. options already. The plan right now is to sell covered calls again in December to generate a little money coming in. I’ll let your know. And now the GREEN ( yea!)

CROX, my ugly shoe guys bounced a little today. I am not even going to hazard a guess as to why. Some bodies somewhere bought shares and some bodies sold shares and when all was said and done today it was up 1.53%. Good. If they could get back to $45+ and I was called out in Dec. (on half of my position) I would be fine with it. Average price for me is $44.26. I received $1.60 for the calls. If called out in December then .74 + $1.60 = $2.34 divide by $44.26 give me 5.28% return on half of my position for what 25 days. I’ll take that. See I am so much more positive when talking about green stocks. On green Days I almost have that winning stock picker swagger. It is just these freaking X-mas days that my emotions get whipsawed.

That’s it for today, may more of your days than not be Green. And keep you eye on your EveryDay Money

Ugly Shoes

2006-11-28T21:15:00.000-05:00

I admit it I was seduced by the story (it is a great build your own company, create your own destiny type of story) and the sales growth is something just shy of straight up. Plus I see tons of them on people’s feet.

Crocs (CROX) has had stellar growth since coming public this year. I stayed out even as the stock doubled. When it hit $50 a share I was thinking Holy Cow!! The pull back to the $45’s, I thought, offered a good entry point.
Bought some at $45.50 (11-20-06) I know, the day before insider lockup expired. Not one of my greater decisions. The next day it started dropping and when it hit $42.95 I doubled my position on margin this time no less. I thought of all those on the message boards screaming about one trick ponies, fads, and catching falling knives. Well I was a little gun shy so I sold some covered calls on half of my position (Dec 45’s @ $1.60) Still think that was a good idea.

Yesterday I watched as the market sold off and my SNDK took a real big hit and my ugly shoes drifted lower. Today CROX comes back a little and SNDK drops more. Now the head games start. How far do I let either one of them go? Buy back the options and sell the stock? Admit a mistake? Hang on write some covered calls in Dec. that way I at least have some money coming in? The mind does crazy things when you’re bleeding money. I’ll let you know.

That’s it for today keep your eye on your EveryDay Money

batting single A

2006-11-27T17:17:00.000-05:00

Well with SanDisk (SNDK) taking almost a 5% hit today it is hard to think my picking it anything but a mistake. Of course if it had GAINED 5% today, instead, I would be thinking, “… I knew it, never had a doubt.” And there in lies the rub. Today was a little confusing to watch. The CEO had nice things to say about the company this past weekend. Then boom! Red numbers today that trickled lower as the day wore on.
Perhaps I should start back a bit.

I poked at Sandisk (SNDK) at the end of Oct. (10-30-06). Pushed the chips in at $48.20 and knew almost immediately that it was going against me. Looked at the numbers again (P/E, sales, cash flow, the usual suspects) and still thought the company worth my dollars. Instead of selling out I wrote Nov. 50’s covered call options at $1.25 that same day. I then spent the next few weeks watching it drift downward. November expiration came and went and I still had the stock all be it underwater. Not ready to call it a mistake I wrote the Dec. 50’s at $1.35 on 11-20-06. The stock has been treading water in the 47’s most of the time, until today. I wait and watch as the Dec. expiration draws closer. Some days I rationalize the buy and the covered calls were the smart thing and other days (like today) I feel like I stepped on a landmine.

The difference between the “pros” and the others is the ability to take small losses and move on. (Read that somewhere) The way I change my mind on whether this was a good or bad trade and hang on to it in the mean time makes it look like I will be batting single A for awhile longer. Stay tuned I’ll let you know how it all works out. Maybe tomorrow I will tell you about buying Crocs (CROX) on margin and still hanging on to that too.

That’s it for today. Keep your eye on your EveryDay Money

Do you ROTH??

2006-11-07T19:45:00.000-05:00

ROTH!!! So now it has finally hit me that tax FREE is tax FREE forever. And that boys and girls is a great thing. Funny how as I get older the idea of death and taxes seems.. I don't know what the word is?? REAL.

$4k is what can be thrown into an account this year and everything that it earns is tax FREE when you start to take it out. There are some strings about age and income levels and such… so read up before you put money anywhere.

But really folks if it is inertia keeping you from reading and learning and then investing read up. There are about a million web sites that can point you in the right direction. My only desire today is merely to light that fire. Did you learn something new today? If not then the ROTH IRA basics would be a good trade of your minutes. The new knowledge could be worth thousands down the road.

That's it for today. As always, keep your eyes on your Everyday Money.

Are we all doomed??

2006-09-17T12:17:00.000-04:00

Read another retirement nightmare article this morning. If you are between 35-44 there is a 50% chance you don't even have 25 grand set aside for retirement. Sad. Have no idea what this really means down the road but it can't be good. What do you think is going to happen to all these people if they really don't have money down the road? I for one am trying to save now and hope to be off the treadmill at around 55. That would be grand. Do what I want, when I want and damn the Man. For all you out there that have your big butt parked in front of that BIG screen TV that isn't paid for yet, I say this; "Get off you butt and save some money. Don't expect your kids or your government to keep you afloat in your golden years."
That is it for today. Keep your eye on your everyday money

Re-valuing

2006-04-29T08:10:00.000-04:00

It is so easy, it seems, to lose sight of good things we already have. Well, lose sight is perhaps a bad choice of phrase. Re-value (is that even a real phrase?) would be more descriptive of the feelings flowing through my head a few weeks ago. Routinely my wife and I go for walks in the evening. We try to walk together at least once a week. The walking is not so much exercise but rather a way to spend time together and share ideas. There are times when there is everything to discuss and others when a setting sun gobbles up all the words and treats us to a quiet, free nature’s painting.

The other day, to be different, we walked around the neighborhood across the street. How easy it is to get caught up re-valuing what you own. All of those houses have three car garages, mine has two. All those houses have professional landscaping, ours has a single starter tree and some purple and some white flowers my wife planted. I am sure if I looked they all have four bedrooms and finished basements. Our house has three and exposed concrete and insulation in the basement.

Funny how in the time it takes for a brief walk I can go from being totally great with my house to feeling that it is the “small” one in the area. It did flash through my mind as I walked, “what can I buy to make my house look and be better?” I re-valued for the rest of the walk back. That night I resisted running out and buying something “well deserved”. For the next few nights I thought about what I should buy so my house could “compete” a little better against surrounding houses.

Finally after a few days I stopped contemplating and returned to the thinking I had a year ago when we first moved into the house. I like the home, I like the yard, I like the neighborhood, and above all I love who I am living with. Let others compete against that.

That is it for today. Keep the re-valuing to a minimum, and keep an eye on your EveryDay Money.

Money Books I

2006-04-25T17:03:00.000-04:00

If you haven’t taken a look at Dave Ramsey’s book “The Total Money Makeover” then you need to. Even if you have your financial life in order it is still a good read. Throughout the book there are stories from real people that are “getting it done”. Some of these people have pulled themselves out from under a truckload of debt. If these stories can’t get you pumped up about fixing your own money life then you may already be too far gone. The ideas are neither totally new nor particularly hard to understand. Some may say just common sense advice.

Another good guidebook I have read lately is “The Automatic Millionaire” by David Bach. Another straight forward easy to read and understand money book. The main idea that I got out of reading both books is spend less than you make. After that there are ideas and advice on what to do next and how better to utilize money but is still comes back to the spending.

Why do you think so many people screw up their money when there are good money books aplenty? Is it a lack of intelligence? Or is it a problem of focus, discipline, desire to get it all under control? Perhaps a better question is do they know their money life is screwed up? When exactly does a drowning man know for sure he is drowning? Let your thoughts be known, anonymous or by name. I would also like to hear if you have read these books or know of others that are worth sitting down and reading.

That’s it for today. Keep an eye on your EveryDay Money

Mortgage free?

2006-04-16T19:59:00.000-04:00

Quick question: Is being mortgage free a realistic goal?

I am sure you have heard the idea, pay an extra monthly payment once a year and you drop like 5 years off your mortgage. Go really wild and you can get it done in 15 years. Push really hard and it is 7 years. But is that realistic? I read an article that says the average credit card balance for those that have a balance is like 9 thousand. If we can’t even get a hold of our credit cards balances do we really have a hope of being mortgage free? Well mortgage free before we turn 90. So what do you think? Mortgage free a reality? Are you trying to get yours done before the stated term? If so how quick of a goal do you have?
For me the answers are: yes, yes, 6 years total.

That’s it for today. Keep an eye on your EveryDay Money.

Paying for Credit Cards

2006-04-02T20:38:00.000-04:00

So I get this very nice envelope in the mail the other day. And inside this very nice envelope is a very nice letter telling me that because of my years of customer loyalty that I have been pre-approved for no-other than a (or should I say) no-other than THE gold card. The first year totally free. I looked closely at the fine fine fine print and after the first year THE card was going to cost me… like 9 million dollars just to have in my pocket. My shredder got an early evening snack.

Folks, People, Smart guys and gals… STOP!! If you are paying any dollar amount every year merely to have the card. Well that behavior (not you personally) is stupid. There are like hundreds of cards that cost you nothing. And if you are good and pay what you owe every month then it is stupid (behavior not you :-) ) not to have a cash back or rewards card making you money every month. With our rewards card that earned us gift certifs my wife now has a digital camera and rechargeable batteries all for a grand price of $10 out of pocket.

Short answer:
1) Don’t pay to have a card
2) Pay your balance off every month
3) Get a good rewards or cash back card
4) Make money off your spending.

That is it for today. Keep an eye on your EveryDay Money

Check cashing

2006-03-12T21:52:00.000-04:00

Welcome to EveryDay Money,
Let me jump right in from the beginning. People, me included, do some of the dumbest things with money. If we can minimize the number of stupid things that we do with our money, then we may find that we can simply do more things with our money.

Hmm.. Perhaps I should stop, jump halfway back out and mention a few things first. I am NOT a professional money person, any and all information, pictures, ideas, stories, mistakes of the dollar, clever thoughts or usage of same are not meant to solicit, force, demand, you to buy, subscribe, read, think or ponder your EveryDay Money. Make no money or life decisions without first being ready to take responsibility of said decisions. If you do any of these things, let’s see, it is because you are a free thinking responsible human being. In short reading, thinking, doing is your own responsibility and can not be delegated or transferred to another every time you screw up.

Back in we go. The other day I am standing in line in the lobby of Bank of America waiting to cash a small check. I was in Bank of America because they have my small account, so I bring them my small checks to cash. They are happy, I am happy. So, I am standing there in line, two people behind me was this young man about 18-19 years old. He too had check in hand. Come to think about it the guy behind me also had a check. Perhaps a trend for that day? As it would happen we all get to the counter within second of each other. I have one on each side of me. My BOA lady takes my check and is using the drive-up computer on the other side so I have a minute. The kid beside me is cashing an AMC theater payroll check. (Sound travels in a quiet bank.) I am thinking good for him, has a job and everything. (I always try to applaud those that can work and do, beats those that can and won’t.) The lady asked him if he has an account. No. (What! A job and no savings account... say it ain’t so. Hasn’t your mother ever told you… perhaps not?) The nice lady informs him that since he doesn’t have an account it will COST him $5 to cash his check. He replies, “No problem.” He says no problem to someone taking $5 of his money for a 2 minute conversation. Interesting. Stay with me here: Pay check every two weeks (I am guessing, I know nothing about AMC theaters besides they are big and evening shows cost enough that they should come with an autograph of every actor in the movie. Free.)

Cost of cashing check: $5. Cost of two cashing per month: $10. Cost of cashing 12 months in a year: $120. $120 of his money in the bank’s pockets at year’s end: price…. Oh! Can’t say that, lawsuits and all. Anyway, I submit $120 a year to cash checks is stupid. I know of at least two banks and there may be more around here that $100 will open a basic savings account, no fees. Cost of cashing checks Zero, interest on the $100 in the account something greater than Zero.
Teach your children better. That’s it for this one.

Keep a close eye on your EveryDay Money.