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November 08 Tough SellWe're two weeks into this challenge and I'm relatively happy with my investment. LRW is at this point flat for the day, but well above the S&P for the same time period. However, the overhead on the purchase of this stock this month is going to make beating the S&P for the one-month reporting period extremely difficult. To make a successful (net positive) trade of this stock I need to sell above 18.27. At least it's heading in the right direction. The complication of meeting a 15% annualized return means that it needs to be even higher. One of the sell triggers that I'm watching closely is the 30 day moving average. So far the stock has stayed well above it, but if it falls below then this trade may be in trouble. October 27 LRW #55 @17.55I finished my analysis of my stock sheets and LRW still has the best potential. The stock recovered from the lower estimates for the 4th quarter and has plenty of room to run. The order was filled at 11:59am this morning at a price of 17.55 October 26 IBD Access Free this WeekI was looking for access to the IBD 100 for the list of stocks and discovered that it is available for free this week. No registration required. www.investors.com This is an excellent resource! Technical IssuesI've been tracking around 100 top-notch stocks in Excel for about two weeks to help win this challenge, and about a day ago my laptop starting experiencing errors. I can't keep Excel from crashing. Thankfully it's all running well on my backup system at the moment, but it's terribly inconvenient. I'll keep working on it... Update: I appear to have the system working again... took me a couple of hours, and I'm seeding it with a large number of quality stocks. It BeginsThe challenge has begun. I now have $1000 in this account withdrawn from FFFFX at 9.50 a share which Fidelity accurately states is 105.263 shares. Now the money is sitting in a holding account (FDRXX) earning 4.96% APY. Obviously that isn't going to beat any of my benchmarks, but it will help hold the value and slightly offset the $19.95 trading fee I'm going to incur on my positions. October 25 NFLXThe other potential purchase tomorrow morning would be Netflix. I love this company, and I'd love for them to succeed long-term, but I guess I don't have enough confidence in their ability to fight off Blockbuster to vote with my cash. They did very well this week already, and look for them to continue their winning ways for a larger rally. Challenge Starts Tomorrow MorningWell, I am not certain that Fidelity has executed the trade to get the funding for this, but I have an investment opportunity in the morning. I am looking at hlx the energy development company. They are trading well below their value if they are capable of maintaining their growth rate long term. However, probably because of expansion, the cash flow in their fundamentals is not something I'm comfortable with. Frankly, I'd like to stay out of the energy market as I don't think I understand it well. HLX is a buy for somebody right now, but at this point, probably not me. October 24 LRWOne of the companies I've been watching is LRW. They are a contractor for hire firm and show a stock price well below intrinsic value. I suggested buying this company on Oct. 6th after it closed at 16.89. They subsequently released earning reports that sent the stock downward after a jump up to just over 18. Now the stock is trading at 16.68. So the loss on a sale right now wouldn't be too bad, but I'll bet that in less than 2 weeks from today it will recover and be above my original hit price. Now, my indicators do not suggest buying this stock right now, but it is back at a favorable purchase price and I'll keep an eye on it. Method Investing...I have a request in to Fidelity to make certain that I won't have any problems with moving the money to start this challenge on time Thursday. I also decided that instead of attempting to spell out the method generically I would give some of the sources for further research. So, you will now find the 'Rule 1 Investment' book shown on my space here. Also I would like to quickly highlight the excellent community at http://www.ruleoneforum.com/ which has excellent ideas, spreadsheets, and research which I will make extensive use of. UPDATE: Blockbuster's MoatWell, my information is confirmed, but the timing was off. Blockbuster is planning on merging their online business with their storefronts. According to the staff at a second store which I questioned yesterday it will begin on November 2nd. I just wish I could have handed them the disc that arrived broken yesterday. October 21 ProcessThe process I'll be following to realize this goal will be based loosely on what I would consider value investing. I want to be clear that I am not a professional and am in no way qualified to give anyone professional investment advice. Some of the stocks which I am considering for my first trade are listed in the stock module to the right. I would love to find a portfolio module to place there instead to track the percent changes of these different measures over time. If you know of any, please let me know. October 20 Welcome (Just the Facts Ma'am)This is my 15% Challenge to create an equity return of 15% over the course of one year from Oct. 26th 2006 until Oct. 25th 2007. Scoring Details: 1) I will attempt to grade myself against a number of different returns. First, (FFFFX) from which I am taking the initial investment. Second, the S&P 500 which is easy enough to evaluate. Third, my mortgage rate at 5.75%, where if I fail to beat this, then my whole investment philosophy fails. And last, but greatest goal, 15% return. If I can beat all four measures then I'll get an A, 3=B, 2=C, 1=D, 0=F! Scoring will occur on the 25th of each month. This money is sitting inside an IRA which I won't be touching for over 30 years and isn't affected by capital gains or losses. I'll continue to give out more details as the starting date approaches.... -- Jared October 19 Blockbuster's Moat Fills Monday?I haven't introduced myself or this blog yet, but this is just too much to pass up. Last night while renting a movie at Blockbuster I heard about the Netflix (NFLX - 22.31) worst nightmare. According to the employee at the brick and mortar Blockbuster, starting Monday instead of mailing the movie back to Blockbuster Online a customer may simply bring it into the store and have it scanned back into the system instantly. And if that isn't good enough, if I understood him correctly and if he is right, he stated that the customer can then use that return as a trade-in immediately on a new movie rental. If Netflix isn't scared yet, well, they now have a HUGE brick&mortar moat of Blockbuster to swim. |
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