Let me preface this by saying that I've never been one to understand why the social norm is that discussing your finances is rude. I'm pretty sure it's tied to this ridiculous concept that your self-worth is tied to your net worth (which is dumb on so many levels, but whatever). The lesser you're obsessed with materialism, the better. Of course, that's not to say that living a parsimonious life is ideal.

For me, my financial goal is to maintain financial flexibility (some level of asset liquidity) while maintaining a high level of personal freedom in my own life. Although I've always said the stock market is a crappy play, I've been doing a bit more research into it, and I've softened on that position a bit. Stock markets offer me exactly what I'm looking for - financial flexibility (I don't have to wait to a certain year before I have access to my funds) while offering a relatively stable way to grow my assets.

The one thing I've learned as I've done more and more research is that ... a lot of research is absolutely pointless. One day I'd like to get a talented stock broker drunk and find the "real" secrets to being a "smart" investor. I would imagine it has a lot to do with luck. Through Fidelity, I can literally spend hours reading through reports from analysts which are all filled with conflicting reports. For example, from the Reuters "report:"

March 30th, 2006
On March 30th, 2006, Reuters upgraded YAHOO! INC. from NEUTRAL to OUTPERFORM.

March 29th, 2006
On March 29th, 2006, Reuters downgraded YAHOO! INC. from OUTPERFORM to NEUTRAL.

Professionals can't seem to make up their minds- what chance do I have?

So for the next year or so, I'm going to do an experiment. I'm going to publicly reveal what stocks I am holding (not the the actual amounts, I will use percentages). I will detail why I am holding a particular stock in as much laymen's terms - you can assume that unless I say otherwise, the fundamental outlook for a company is strong; I'll explain the reasons why I think this particular company deserves my money over others.

These posts, I imagine, will be spread out every few weeks; I simply don't have the money to constantly invest, and I'm not keen on becoming a day trader. My interests are generating good half-year to year-long picks.

Please do not use this for your own personal finances. You WILL lose money. I am not an accredited investor, and this is my first foray into the investing world.

I am writing this more for personal reasons; I hope that by writing about my picks, I can look back when a pick goes wrong and see what I did wrong. Accountability, friends.

Short financial history: Portfolio was opened in December '05. It's a bit small and not very diversified right now - my goal for '06 is taking more high-risk plays and learning about the system more than protecting my portfolio.

So here is my current portfolio:

  1. Total portfolio: Up $3, which is 0%
  2. Barnes Groups, Inc. (B) [11.5% of portfolio]
    Bought @ $38.61, Currently @ $40.50, Up 4.90%
    They make industrial crap like springs and equipment for airplanes and cars. Sounds like a solid bet that there will continue to be a market (if not from the US govt, then from the private industry as space travel takes off). They also paid $0.22 dividends per quarter (which works out to roughly 2.2% a year). Although the dividend is rather small, I'm wililng to accept that because I just think this is one of those companies that will continue to grow.
  3. Yahoo, Inc. (YHOO) [11.5% of portfolio]
    Bought @ $33.09, Currently @ $32.06, Down 3.06%
    This pick is a bit hazier for me to figure out. It earns no dividends, Google is eating away at its profits, and there's been a lot of executive messups. So why did I buy it? To be honest, I was impressed with Yahoo! releasing their widgets library. To me, Yahoo! is one of the few big companies that quietly creates quality products with open APIs and is commited to building a strong fundamental business not based on advertisement. Flickr is fantastic. Yahoo! purchased Oddpost, which was a HUGE web-based email client (before GMail) and has done a fantastic job (from what I hear) in integrating Oddpost's technology. I have a feeling Yahoo! will keep Flickr alive as a separate community but applying the lessons learned to their Yahoo! photos ... and I love their business model (subscription). If I had more money, I would probably continue to load up on Yahoo! until ~$34 or so. A few weeks ago it was at $30 and I was just dying to pick up more stocks, but I had no money. I think Yahoo! is great for holding long-term (a year or so).
  4. Fidelity Blue Chip Value (FBCVX) [53% of portfolio]
    Bought @ average of $14.05 (I've bought it a few times), Currently @ $14.26, Up 1.5%
    This is my conservative play that I'll use for consistency. it's major holdings are American Insurance General, Honeywell, GE, Exxon Mobbil, Bank of America, Hewlett Packard, and a few more. Basically the huge consistent giant corporations. Barring an Enron-like scandal, all of these should maintain fairly consistent over time. I would probably own a few of these stocks individually if I could, but holding this mutual fund is enough for me.
  5. Toronto Dominion Bank (TD) [24% of portfolio]
    Bought @ $56.10, Currently @ $55.58, Down 1%
    This is an interesting pick for me. I love our neighbors up north; Fidelity's Canada Mutual Fund has been growing at an amazing rate (I think it's grown nearly 33% this past year), so I took a deeper look at the companies that compose this mutual fund. I found that the top holding s include EnCana (gas), Royal Bank of Canada (bank, obviously), Manulife Financial (seeing a pattern here with finances?), and Toronto Dominion. I wanted to invest in either the Royal Bank or TD. I ultimately chose TD because: (1) they recently won an award for "best online banking experience" or something to that degree in Canada (online banking is awesome and having an awesome website shows to me their commitment to online excellence), and (2) their PE ratio is ~11, while RY's is ~18.
Currently listening to: Fountains of Wayne - Mexican Wine
Posted by roy on April 4, 2006 at 01:04 PM in Finances | 15 Comments

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Comment posted on April 9th, 2006 at 09:42 AM
SWEET, you fixed the comment/log in thing.

do you use e-trade?

I have a strong desire to start investing soon too. I wonder if there's any merit in buying your own company's shares? :-p
Comment posted on April 9th, 2006 at 10:04 AM
Don't use e-trade. I'm going to start using Ameritrade for my non-investment portfolio because it's cheaper.

Your company might have an employee stock option plan. If that's the case, and you think the company is a good one, it's a good way to get some equity at a lower cost. But the best thing to do in the long run is diversify.
Comment posted on April 5th, 2006 at 10:57 AM
I am a TDCanadatrust customer, and even though they're stingy has hell on lines of credit everything else is a banking dream.

Managing my chequing, savings, and Waterhouse investment account online is insanely simple. I've been doing it since the late 90s moreover, when people were afraid that what happened to Sandra Bullock in 'The Net' could happen to us all.

So good pick, Roy!
Comment posted on April 4th, 2006 at 09:11 PM
I have a separate category in my blog. I absolutely don't have any problem discussing my finances or even advising others. The problem begins when everyone starts braying things like 'Don't buy XYZ' or 'But ABC because it looks cool' just because they want to be respected as financial gurus. That's when chaos sets in and people make foolish decisions.
<a href="http://www.tabulas.com/~simonkayar/category/3885.html" rel="nofollow">http://www.tabulas.com/~simonkayar/category/3885.html</a>
Comment posted on April 4th, 2006 at 09:32 PM
Oh, quite interesting! I'll have to give those a read tomorrow. Thanks for the link :)
Comment posted on April 5th, 2006 at 12:29 AM
Hi, I should warn that they may be country specific (India). But a few articles are generic.
Comment posted on April 4th, 2006 at 07:54 PM
ARE YOU SICK IN THE HEAD!? A Canadian bank? Have you seen their fake worthless monopoly money? At last check, sales of Monopoly board games aren't going up. Fine, gamble it all. It's your money. Don't even think about buying THI.
Comment posted on April 4th, 2006 at 08:05 PM
Did you know that you can use Canadian quarters at those gas station vacuum cleaners? You can actually use a Korean 100 won piece (which is like $0.10) too. Saves me a bundle in the long run.
Comment posted on April 4th, 2006 at 08:29 PM
A long time ago, yes. I used to use them to buy newspapers out of a vending machine. I can't even use them at the toll booth.
Comment posted on April 4th, 2006 at 06:17 PM
I've never understood why people are hesitant to discuss their finances outside the family. It doesn't bother me to talk about what I make, what I spend, and even what my debt is. I do think it can come across as rude or mean to brag about all the money you have to someone who you know does not have much.
Comment posted on April 4th, 2006 at 02:43 PM
remember my x-mas stock pick of bestbuy.. up 25% since then =( I even posted about it... =(

I can't find my other stock posts though.. wanted to track overall performance. though i can tell you overall cost performance since.

Basically.. i'm of the theory of shotgun investing. hit big in one or two.. and go red in 60% of your picks. =)
Comment posted on April 4th, 2006 at 05:34 PM
interesting. i think once i get more money, the shotgun approach will probably be best. for now, i want to try with solid picks that'll return nicely for a year or so.

now i just gotta find a good dividend growth stock (and not pfizer, i'm not totally sold yet!)
Comment posted on April 5th, 2006 at 11:02 AM
*cough* MERCK!

sorry.. can't help it

other than that.. all the Major Financial institutions usually average around 3-4% dividends. JPMorgan, Citigroup, etc.
Comment posted on April 5th, 2006 at 11:51 AM
didn't know that. i did look at those stocks and they seemed relatively underpriced. maybe i should buy some.
Comment posted on April 4th, 2006 at 02:12 PM
what teh crap?