Archives for December 2009

Win $25! Pick The Best Stock For 2010

Pick the stock that you think will perform the best in 2010. Give your reasons for why you think your stock will be the best performer of the year. The contest should have at least 20 contestants. The winner will receive $25 via paypal!

The only rules are:

You need to have a paypal account in order to receive payment.

Your stock pick must be original. Do not repeat any stock entry already submitted.

Your stock pick must be a US stock. 

The stock must have a minimum value of at least $5.

Only 1 stock pick per person.

All picks should be in by Monday, January 4th, 2009 at 9am.

Sales & Purchases

I closed out my Short term positions in Allegheny Technologies (ATI), Fairchild Semiconductor (FCS), Electronic Arts (ERTS), Ultra Basic Materials ETF (UYM). I added more shares of Chicago Bridge & Iron (CBI) and General Electric (GE).

How To Start Investing With $20

How To Start Investing

1. The first step is to determine what asset class that you would like to invest in. You can invest in stocks, bonds or mutual funds.

2. Now it’s time to get started. If you choose to invest in stock, you can use online sites like Buyandhold or Sharebuilder which allows you to buy stock with only $20. These sites have very low fees and are great for the beginning investor. Buyandhold has a fee of only $6.99 per month which allows you 2 free trades every month. Sharebuilder charges no monthly fee and costs $4 to buy stock and $9.95 to sell.

3. If you choose to invest in bonds, you can use the TreasuryDirect website. TreasuryDirect is the US government’s website that sells US savings bonds. I bonds and EE bonds can be bought for as little as $25.

4. If you would prefer to invest in a mutual fund, then should look at companies like T Rowe Price and the Principal Financial Group. These firms offer automatic asset builder plans that let you invest for $50 per month.

First Mariner Struggling To Survive

Last year I wrote in a previous post that that local bank First Mariner Bancorp(FMAR) was struggling for survival. First Mariner is the largest independent bank in Baltimore and operates 24 branches in the area. The bank has announced plans to close its downtown Baltimore branch after losing over $2 a share the previous quarter. First Mariner is also facing delisting from the NASDAQ exchange as the stock has failed to maintain a value of at least $1 over the past month. First Mariner has recently sold off one of its most valuable assets in Mariner Finance. Now comes news that the Federal Reserve has determined that the bank is undercapitalized and needs to raise an additional 20 million in capital. 

Raising 20 million in fresh capital is no small task for a bank with a total market cap of 6 million dollars. Even if First Mariner is able to raise 20 million; the bank still faces questions about its sustained viability. I believe that First Mariner has only two options going forward. The first option is to merge with a larger more financially sound institution. First Mariner would lose its independence but retain its brand name and branches. The second option is the option of last resorts and that is for the bank to go into receivership. This would involve the dissolution of the bank and the liquidation of all assets.

I believe that First Mariner’s situation is a microcosm of the troubles in the banking industry as a whole. Small and medium sized banks are facing the same issues that megabanks were just a year ago. The difference is that smaller banks are not being “bailed out” by the government like Wells Fargo, M&T, Bank of America, JPMorgan Chase, Citigroup and PNC. These mega banks are now gaining deposits at the expense of small community banks. Long term this will become troublesome for borrowers because we will have limited choices when seeking loans for homes, automobiles, education and etc.

Banking On Bank Of America

I read an article today about how Bank of America has seen a rise in short interest. Traders are betting against the nation’s largest bank and expecting a decline in price over the short term. While this may be true I think that any weakness in the stock should be looked at as a buying opportunity. I have been buying more Bank of America(BAC) whenever the stock drops to the $15 range. Shorts may temporarily drive the stock lower but I would just look at this as an opportunity to purchase more shares at a cheaper price.

Over the next few quarters Bank of America will be taking billions in write-offs from its home loan portfolio, small business loans and its credit card division. The country’s largest mortgage lender has seen its earnings hurt by foreclosures and loan modifications. Bank of America’ has seen loans in its small business division rise to the high teens. BofA is the nation’s 2nd largest credit issuer and has seen defaults rise to the low teens. 2010 may be a rough year for the banking giant but 2011 and 2012 should be better. The stock trades at 20 times 2010 earnings but just nine times 2011’s estimated earnings. BofA is selling at just 1.3 times tangible book value and should earn close to $3 a share by 2012. While BofA is the riskiest of the three major banks(Bank of America, Wells Fargo, JPMorgan); I believe that the banking giant has the most upside potential as well.

Merry Christmas!

Wishing everyone a Merry Christmas!

Best Product Ideas of the Decade

Who Knew?

One of the best paths to building wealth is entrepreneurship. It doesn’t matter if you are the CEO of a large company like Steve Jobs or a relative unknown like Todd Greene. Listed below are a just a sampling of profitable product ideas of the past decade.

Apple Ipod – The Ipod was launched by Apple at the end of 2001. Since its launch Apple has sold over 200 million Ipods and the stock has risen over 2000%. Steve Jobs entrepreneurial vision has reinvented the company and has made Apple relevant in the technological industry again.

The Snuggie – When I first saw the Snuggie I thought it was one of the stupidest inventions ever. Boy was I wrong! Over 20 million snuggies have been sold over the past 15 months. The product has been so successful that ASM is now selling designer snuggies.

Kernel Seasonings – Brian Taylor turned a popcorn seasoning business into over 5 million dollars in sales. Kernel Seasonings sells 14 types of seasonings to movie theaters and grocery store chains.

Headblade – Todd Greene proved that you don’t have to reinvent the wheel to be successful. Greene developed the headblade razor. He has sold over 1 million of his headblade razors which makes shaving your head easier.

Credit Card Companies Are Up To Their Old Tricks

I decided to google credit cards today and see what kinds of offers came up for individuals with poor credit scores. I was shocked by some of the offers that I saw. These cards won’t help individuals with bad credit improve their credit; these cards will only help their credit to get worse. These are some of the worst offenders.

Next Millennium Mastercard– This is a secured credit card which is supposed to allow individuals to rebuild their credit. I am normally a fan of secured cards for people with bad credit because the savings account keeps you from going over your credit limit. That is not true of the Next Millennium card. Next Millennium charges a $99.00 processing fee to open the account and a $59.00 annual fee. Numbers of people have complained to the Better Business Bureau about being charged the processing fee even though they did they did not fully complete the application. Other people have complained about mailing the company money and receiving no credit for their payments. The company’s contact information is hidden which makes it near impossible to contact them about their fraudulent practices. If you ever do receive the card your interest rate is a minimum of 19.5%. Next Millennium offers no grace period which makes it virtually impossible to pay your balance down to zero. This is probably the worst secured card on the market.

First PREMIER Bank– First PREMIER Bank offers the First PREMIER Bank Gold Credit Card, Centennial Card and the Aventium Card. First PREMIER’s motto is U + Premier are stronger together. So let’s say you believe this and apply for a First PREMIER card. Your initial credit limit is $250 before fees. What are the fees? As soon as you receive the card you are billed for a $95.00 program setup fee, $48.00 annual fee, $29.00 servicing fee, $84.00 monthly servicing fee billed at a rate of $7.00 monthly. Add all these fees up and your available credit is $71. But when you add in the servicing fee over a full year your available credit is actually $-6.00. That’s just the beginning of the fees. If you want to schedule autodraft payments that will cost you $11. If you receive a credit limit increase, you will be charged $25. Do you want to view your account online? That will be an additional $3.95. This card boasts the highest fees of any credit card. Based on all of the fees that First PREMIER Bank charges I am surprised that they do not send the card COD.

Since new credit card regulations are capping fees on these predatory lenders, they are going to lower fees and increase interest. First PREMIER is offering cards with an interest rate close to 80%. That’s just plain ridiculous. I would say its better to have no credit card then these cards.

Debt Solutions For The Holiday Season

The holiday season is the perfect time to discuss an issue that plagues just about each and every person, debt. During the Christmas season we use credit cards to charge electronics, toys, games, clothing and various presents. Many people buy items that they cannot afford or may not even need due to the allure of “discounted” prices. Bills created at Christmas don’t just last during the Christmas season; these bills last year round. People spend 11 months or more paying off bills created over the course of a single month. Excessive buying at Christmas causes many individuals to declare bankruptcy in the first three months of the following year.

So how can you avoid the debt trap during this holiday season? Follow these simple debt solutions.

1. Have a plan and stick to it.

Before you hit the malls set a predetermined spending limit. No matter what happens do not go over your spending limit. Department stores and retail outlets count on shoppers making impulse purchases during the holidays. Avoid the impulse to buy items not on your list.

2. Stick to “cash only” purchases.

Only purchase items that you are paying for by cash or a form of cash. Debit cards, bank cards and check cards work well because they will typically keep you from spending more money then you have in your account. Remember you don’t have to pay interest on money that is yours.

3. Minimize the dollar value of gifts.

Don’t be Scrooge but be frugal! Remember Christmas is about giving, not about how much money you spend on presents. Allocate a specific amount to each person’s gift that won’t wind up putting you in the poorhouse in the New Year.

4. Avoid store credit cards offers.

One of the best ways to solve debt problems is by not creating any new debt. Stay away from store offers that promise huge discounts for signing up for a charge account today. These offers exist to entice you into spending money that you don’t have. 15% off sounds good during the holidays but it doesn’t sound so good when you are paying 23% interest on the bill in January.

Follow these simple steps and you can plan to go into next Christmas debt free.

Four Employees Fired For Playing Fantasy Football

I read an interesting article online today. The complete article is from the Fort Star Telegram.

Cameron Pettigrew called himself the “Fidelity Man.”

Working as a relationship manager in the private client group at Fidelity Investments’ Westlake office, Pettigrew says he looked forward to work every day. He even remembers telling co-workers and friends that he planned to retire someday from Fidelity, the country’s biggest mutual fund sponsor and one of the world’s largest providers of financial services.

But that isn’t going to happen. Pettigrew and three other Fidelity employees were fired for playing fantasy football.

“Firing a guy for being in a $20 fantasy league? Let’s be honest; that’s a complete overreaction,” said Pettigrew, who lives in Grapevine and has an MBA from the University of Texas at Arlington. “In this economic time, especially. To fire people over something like this, it’s just cold.”

Said Fidelity spokesman Vin Loporchio: “We have clear policies that relate to gambling. Participation in any form of gambling through the use of Fidelity time or equipment or any other company resource is prohibited. In addition to being illegal in a lot of places, it can also be disruptive. We want our employees to be focused on our customers and clients.”

Pettigrew, who was the commissioner of his league, knew Fidelity had a policy against playing fantasy football at the office. But he said the policy was poorly communicated and ignored by leadership. Pettigrew said there were at least 10 fantasy leagues in which leaders and managers played.

Still, on Oct. 20, Fidelity officials investigated the matter after they intercepted e-mails exchanged in a different office league. After questioning the commissioner of that league, they discovered Pettigrew also ran an office league. Four league commissioners lost their jobs at Fidelity.

Pettigrew, though, said he never sent any fantasy football e-mails at work or using his work e-mail address. But the investigators found two instant messages that had fantasy-football-related material.

“One of my buddies sent me something about how bad Trent Edwards was playing or something like that,” Pettigrew said. “So they called me in and talked to me for about 90 minutes on everything I ever knew about fantasy football. They interrogated me as though I was some sort of international gambling kingpin. Then they released me for the day, and I was like, ‘OK.’ I never thought they’d fire me for this, but, the next day, I get the call saying I had been terminated.”

Pettigrew, who says he never had a warning in his 2  1/2 years at the company, said he would have understood a warning or a dock in pay. He says he also missed out on thousands of dollars because his 401(k) retirement plan was not vested. An employer’s contributions to a 401(k) don’t belong to the employee until a federally mandated period of service is fulfilled.

“It’s just hard because Fidelity was such a good company to work for,” said Pettigrew, who added that three weeks before he was fired he was offered a position with Fidelity in New York City but turned it down because of the area’s high cost of living.


The lesson to learn: Be cognizant of how you are spending company time!