 I bought BP shares this past month. In some ways the decision was dead easy, in other ways I must admit that I am still questioning my choice- but not for the regular reasons. Let me explain to you first why it was an easy decision (my rational side) and then lets talk about why it was a tough decision (let’s call it my emotional side).
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 I always have a running list of great companies I would buy if they were priced a whole lot differently- my wish list you might say. Being value investors we all spend a lot of time trying to differentiate between garbage and gold. Usually when I am looking at a company it has hit my screens because it is suddenly cheap – my job is to find out if there is a good reason or a bad reason for this, and invest accordingly. This activity can take some time, days, sometimes even weeks. Some opportunities simply don’t last that long though, they can dry up in a matter of a day, an hour or even mere minutes.
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 A few years back the SEC licensed a new class of ETFs called actively managed ETFs. Being a big fan of the ETF area I thought it would be worth saying a few words about this new class.
ETFs are usually passive investments, some of my favorites are those that model an entire market like the S&P 500 or the S&P TSX. These funds emulate the components of the S&P 500/TSX allowing an investor to gain a diversified exposure to the market at a very very low cost or MER. In these traditional ETFs there isn’t a fund manager making a decision about which stocks to select- which is the chief reason for the low MER.
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For your reading pleasure a few interesting articles from around the globe about dividends, stocks, the market and other just plain interesting finance or economic oriented articles- enjoy!
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 Every industry faces periods of rise and periods of decay. The last few years have, not surprisingly, been a period of decay in the REIT Area. But like nuclear stocks after 3 mile island, or banks after the savings and loan scandal, or bonds after the junk bond era, after a sector has been decimated what is often left are the high quality well managed companies that will rise to dominate the sector in the future. Is now the time for REITs?
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For your reading pleasure a few interesting articles from around the globe about dividends, stocks, the market and other just plain interesting finance or economic oriented articles- enjoy!
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 I am a big fan of companies that make it a regular habit of dialing up a dividend. This is why I have been such a proponent of the dividend aristocrat group. Nothing perturbs me more though than to buy into a 2% dividend stock that I believe will crank up its rate only to be forced to wait multiple years before seeing that increase. To counteract this here is a simple parachute that can increase your confidence that a rate will increase.
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 I had a fellow investor tell me one day that they would never buy shares in Microsoft (MSFT) as their software is so widely pirated. I’m not a big fan of Microsoft stock but I’ve heard that reason given before and it is just silly- let me tell you how it works.
Microsoft widely subsidizes licensing for high schools, universities and colleges. They also provide university bookstores with deeply discounted licenses for their products to sell to students. This puts the product front and center and forces students to learn it or face failing their courses. After four or more years working with the product students in all ranges of study become proficient users. This indoctrinates users into Windows’ users. The cost of retraining these people would be tremendous, so the net effect is that it forces future employers to buy Microsoft products.
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For your reading pleasure a few interesting articles from around the globe about dividends, stocks, the economy, the market and other just plain interesting finance or economic oriented articles.
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 Before any investment in a company I try to do business as a consumer with that company. Balance sheets can only tell you so much about the “true” story of a business. When the option came up to buy a new laptop for my wife I thought, Dell (NASDAQ:DELL) stock has been interesting to me for some time, let’s give them a go.
Let me tell you, it wasn’t pretty. After going through far too many pages and a number of strange web errors on the dell site my order was lodged. Content to write off these bizarre website errors I went over to the track order page. To my surprise I discovered my estimated delivery date for an off the shelf, uncustomized, mass manufactured, laptop was over a month away.
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 A recent mass layoff at my company has given me a fresh perspective on layoffs. Normally, as an investor, we see layoffs as a courageous way to drive profits forward by shaking off some areas of weakness. I have personally invested in companies shortly after a mass layoff if I believe that such changes will benefit the profitability of the business. From a purely financial perspective viewing a company as a machine is an easy thing to catch one’s self doing. However there are some soft costs involved in layoffs to a company culture that I wasn’t really aware of until the week after I witnessed fellow employees walking out the door for the last time:
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 It has become formulaic that when a movie comes out one of the advertisements will feature reviewers comments like “riveting”, or “one of the must see movies of the year” and of course my favorite “an instant classic”. The point, obviously, of these reviews is to convince you, based on some other expert’s testimony, that you need to see this movie.
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The largest struggle I have as an investor is not researching companies, or finding and analyzing data, or even pricing a stock; it is having the patience to do all of these things properly.
Patience serves as a protection against wrongs as clothes do against cold. For if you put on more clothes as the cold increases, it will have no power to hurt you. So in like manner you must grow in patience when you meet with great wrongs, and they will then be powerless to vex your mind.
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 A day off from US markets is a great opportunity. With the world being what it is markets are not entirely driven by internal factors. Use your day off today to read international business news. This news can certainly give you a heads up as to what you should expect from the markets in the next day. This trick helped me immensely during the early days of the credit crunch. Bad news would break crashing out European and Asian markets while US markets were closed for holidays- guessing what the US market would do the following day?
Today is a good day to look closely at the Google vs. China story. While China’s business accounts for very little of Google’s bottom line, as the story evolves we have certainly seen market fluctuations. Maybe today is a good day to setup a buy if you have been looking for some weakness, or maybe if you think the market will overreact to Google leaving China (if stories today point that way), and today is a good time to plan your exit from Google. Your call read the news and see what you think.
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 Having been on a recent trip to the southern US I was awestruck with the prices of property there. Being out of my element in a new city I simply wasn’t comfortable with the idea of investing though. With proper preparation trips of this type can be quite rewarding and one of your best tools is often overlooked- Google Maps.
With a simple browse of an area in Google maps you can learn all of the following:
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- How far away is the local hospital, school, police station, prison, garbage dump, shopping mall. All of these can increase or dramatically decrease your long term value.
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I am always surprised to see the enthusiasm people exhibit when they hear that housing prices are rising, to me this is 100% bad news.
I hear remarks all the time like,
Housing prices are up 12% over last year, I am going to make a killing on this house when I sell in a year or two!
Let’s say you buy a house as a primary residence at $300K and are fortunate enough to see a 12% compound increase in the price of the house for 3 years in a row. So that makes the value of your house now an impressive $421K- wow $121K nice return, well worth celebration.
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 I had an interesting email conversation with a reader named Bill that I wanted to share. Bill is a stock broker in Oregon and has been working with the same brokerage firm for over 10 years. As I have taken several opportunities to slag their profession I was interested to hear more about his experiences. In the back and forth chat he said something that I think epitomizes my real issue with brokers.
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Investing is done successfully by understanding direction, and velocity, not by looking at velocity alone. Velocity (in this simplified context) is the speed and distance a company achieves over time, this may be earnings, profit, sales or margin. Direction is which way the company is pointing, up or down, this speaks to a deep value assessment, or an understanding of the health of the overall business.
If you would like to profit from the stock market I would argue that you as an investor need to have a thorough understanding of each of these elements to truly estimate your risk in any given investment. Too often the analysis of companies is lopsided towards an appreciation of the sheer velocity with little regard to direction.
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 Executive Compensation is a touchy subject. Some believe executives should be compensated in relation to share price. Others feel that an executive should derive their satisfaction from the growth of their business and not from pulling down a massive salary. Buffett for one is a huge proponent of this approach. He pays himself a comparably paltry $100K salary per year and several of the businesses owned by Berkshire have CEOs who share this same compensation package.
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 As a new service for readers we are now offering free stock analysis. None of that automated technical analysis you see on other sites, and no one is going to contact you about purchasing services after you submit, I am talking about straight forward free fundamental analysis.
All you have to do is provide the company name, ticker symbol and we will do the rest. Submit the stock you would like analyzed here and once a week we will select one reader’s request to perform free stock analysis. Sorry we can’t process more than one at the current time!
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 The practice of prebooking sales involves a business going out and contacting its regular customers and requesting that they purchase the inventory they are forecast to purchase in the next quarter now.
An example: Company A always buys 500 widgets from our sample business every quarter at a fixed cost of $5 per widget. In order to show boosted sales in Q4 of the year Company A is convinced to purchase 1000 widgets at $4 today, accept deliver of the first 500 now, and the second set of 500 during the following quarter.
The net effect of this over the short term is that our company has massively increased its sales- at least on paper. Over the long term though it has the opposite effect; unless Company A’s needs suddenly increase they are going to cancel their order in the following quarter.
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 The reality of investing is that the further you are removed from managing your money, the further removed you will ultimately find yourself from the profits you are trying to reach. Every additional person you involve in making a financial decision will demand to be compensated- no one works for free.
Lets look a simple example; you buy some mutual funds though your broker.
An innocent enough activity, but who all is involved with this transaction and do they profit at your expense? Well there is:
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