Month: March 2012

Recent Buy

/ stoicinvestor / 16 Comments

On Tuesday March 6th the market finally put on the brakes and offered buyers an opportunity to pick up a few shares of companies on their watch list.  Even though I’ve been investing in cash for the last few months I did have some cash set a side for the purchase of any stocks that might meet my buy criteria.  What is The Stoic Investor looking at these days?  VOD and PEP are high on the list of new additions I would like to add to my portfolio.  ATRI and NPK are a couple of small caps that have experienced quite a bit of price depreciation in the past few weeks that I would like to add as well.  However, none of these were actually my buy candidate on Tuesday.  Nope, I went with a company I already own.  The hated or loved: TEF.

I’ve listed in a previous post why I’m an investor in TEF for the long-term.  Those reasons still stand and with it dipping to a new low on Tuesday I picked up a few more shares.  This represents my second purchase of TEF shares and I was able to add 215 shares at a price of 16.36.  TEF now represents my second largest holding and unless there is another substantial drop in its price I will probably hold steady with the 575 shares I now own. 

TEF is either a value play or a train wreck waiting to happen.  Although it has substantial debt that makes it less appealing even for a telecom, it has a geographical diversification that I find appealing in a rapidly growing region, South America.  It is my belief that the market is punishing TEF for its domestic market, Spain, and the 22.8% unemployment experienced in that country and discounting the growth prospects in its largest market.  Combine a horrible economic picture in its home market with substantial debt and a recent dividend cut and you have a stock that is taking a beating in the market.  Clearly it is not without risk and will likely suffer more in the short-term.  In the long-term I believe that TEF will turn the corner and provide me with price appreciation as well as a nice dividend.  Only time will tell…

Considering Real Estate

/ stoicinvestor / 18 Comments

I was snooping around over at Dollar Disciple the other day and it rekindled my interest in adding real estate to my investment strategy.  Real estate has always been a planned part of my asset allocation strategy, but I decided to put it on the back burner.  With the stock market not wanting to play the game on my terms I’m thinking it may be time to reconsider the prospects of real estate.

I know people are as divided about real estate investing as they are about renting vs. owning their own home.  For me, real estate represents another form of investing to add to my overall plan.  Right now with the housing market still recovering probably makes it the undervalued asset class that some investors find appealing.  I’m in a fortunate position to have a some cash I could utilize in making the purchase of a small single family home.  Ideally I would like to have a 2-4plex, but for starting out I think a single family property might be the way to go. 

My plan is to find a place that is in a decent neighborhood that is in need of some work.  Being able to rehab a home that is in need of minor renovation will allow me to make a profit from the price appreciation of the unit as well as from rental income.  Living overseas will require me to hire a property management service to handle most of the rental property business.  This will be an added expense, but one that will be necessary with my current circumstances.  I have a few properties that I am looking at and need to sit down and crunch some numbers to see what is necessary to get the return I want. 

I go on my annual leave in May and there is a good possibility that I will come back the owner of an investment property.  The rental business is full of potential risks just like investing in the stock market is.  Being aware of these risks and making decisions that mitigate the known risks as much as possible is a step towards preventing unwanted losses.  Just like stock investing many of the losses we incur are a result of our own behavior guided by emotion and not reason.

What do you think reader, is investing in real estate a good idea or a bad one? 

February 2012: A look in the rear view mirror

/ stoicinvestor / 11 Comments

February turned out to be another good month for The Stoic Investor.  I managed a 79% savings rate of my gross income and I’ve continued to stay the course with investing in cash.  This is still an easy task at the moment as the market continues its upward trajectory.  Oh well, I can be patient.  Nothing wrong with sitting on a bit of cash for a little longer.

March will probably see a drop in my savings rate as I will be paying my tax liability for 2011.  Blah, I’m not a huge fan of taxes, but I doubt many people are.  2012 is starting out on a very good note and I’m looking forward to seeing how it progresses.

That’s it kids. Not much going on these days while I’m still investing in cash.  I do have a few stocks I’m watching closely, waiting for that ever elusive pullback.  You seen one of them lately?  Me neither.  Oh….. I did rake in 399.50 in divi income.  Not a bad month for dividends.  Granted last month it was zero.

How was your February?  Leave me a comment and let me know.

Stay The Course

/ stoicinvestor / 2 Comments

At the beginning of each year there are many people, myself included, who participate in the ritual of making resolutions to change some aspect of their lives.  There is just something irresistible in the start of a new year that focuses our attention on things we may want to improve in our lives or something we have always wanted to start.   It’s two months into 2012 and I ask the question, where are your resolutions?  Have you faithfully been making progress on those fitness goals?  Are you saving more of your take home pay?  Are you still writing everyday like you promised yourself you would?  Did you succeed in quitting smoking, eating less junk food or begin learning that new instrument you’ve always wanted to play?  Just as there are many people who start with good intent at the beginning of the year, many also lose hope that they will achieve their stated goals and simply stop trying.  Today I want to suggest a change in strategy that may increase the odds of meeting whatever goal it is you set for yourself.

If you’re anything like me when you find that you have been slacking on your commitment to your goal you decide that you just lack the will power to stick to it and say to hell with it.  I’ve done this a number of times with a number of different resolutions I’ve set over the years.  However last year when I really decided I needed to change my financial habits I stayed the course.  Sure, there were times when I spent too much and didn’t save enough, but overall I stayed dedicated to my plan and slowly but surely changed my behavior from a spender mentality to a saver.  So how did I do this with my finances and how can you apply it to your own situation to achieve your goals?  The biggest change I’ve been able to identify is this; change your focus from being outcome oriented to process oriented.

When we start out with our resolutions for the new year it is usually with the end result in mind.  Maybe it is how we will look being twenty pounds lighter or how it will feel to run that marathon.  For me it was being out of debt and finally being responsible for my monetary resources.   I imagined how it would feel to be debt fee and not living paycheck to paycheck.  To have the freedom to pursue my interests.  These were the outcomes that I focused on.  Reaching any of those outcomes doesn’t happen overnight, it happens with small everyday choices (behavior) that end up producing a specific result.  Focusing on how we would feel or what life would be like is motivating, but usually not motivating enough to remind us that getting to that outcome requires making different choices on a daily basis.  This is not as exciting as imagining the outcome, in fact it’s down right boring.  We forget that to change our behavior requires a change in our thinking, it is this thinking that begins to change everything.  If you only think of changing your habits until you have achieved your goal then the behavior never becomes a new way of thinking , it remains something you just have to endure and that is no way to affect long-lasting change.

Bringing about this change in thinking and behavior is how you become a better saver, more frugal, in better shape, a writer or any other goal you have set for yourself.  Just remember to do those things that those people mentioned above do.  They use their income to save, they are active and eat healthy, they write daily.  It is the process, filled with the sum of all the little cumulative acts, that bring about the outcome you are looking for.  If you have fallen off the wagon of bringing about the change you had hoped for at the beginning of the year, that is ok.  Dust yourself off and climb back on.  Think of one thing you can do today that will get you to where you want to be.  Follow it up with something else tomorrow and the day after and so on.  Keep yourself focused by surrounding yourself with like-minded people.  Blogs are wonderful for this, because you have an audience who shares the same goals as you and people you can bounce ideas off of.  I read personal finance blogs every day last year and it helped me to stay focused.  It put my financial goals front and center every day.  It will seem tedious and you will get bored with it sometimes.  That is how our minds work.  Just put it aside and continue on.  In time you will be amazed at how much progress you have made .

You have ten months left in this year to make progress on the resolutions you set at the beginning of the year.  No matter how you have done in the first two months,  recommit today, right now and carry on.  I’m looking forward to hearing how you do.

Drop me a line in the comments and let me know how you’re progressing.