Posts Tagged Economy
Is My Girlfriend A Better Investor Than Me? Final Results
Posted by Sonny in Trading/Investing on June 12th, 2009
Overall Results
Four weeks ago I read an article about if women are better investors than men, so I decided to play a week investment game with my girlfriend. The game turned out to be more about the fact that I had some investment knowledge and my girlfriend didn’t. However, the results were shocking to me. My girlfriend officially won the game with an overall return of +9.05%. My return was a good +7.77% but not good enough. The stock that sealed the victory was her pick of Coach (COH) the luxury goods maker which gave her a +35% gain in 3 weeks. I was incredibly surprised at this pick especially when the economy is in such bad shape. I didn’t think a luxury bag company could be going up but shows how much I know. The two stocks that helped me at least stay in the game were OIH (+14.5%) and ATI (+7.19%). Unfortunately, Oil is running back up and at least I saw this was going to happen to profit from it. Sadly I filled up last night and gas prices went up 4 cents in about 5 days. Allegany Tech was up 7% in one week which helped narrow my girlfriend lead along with her losing 3% in Target.
Final Thoughts
I think some key elements really played a role in the overall success of the game that should be investigated:
1. Prior experience was no guarantee of success – Just because I have traded stocks for years really did not give me a clear advantage over my girlfriend who has never purchased a stock in her life. My paradigm for investing said there was no way Coach could perform well in this economy and that made me miss out a fantastic opportunity. My girlfriend had no preconceived notions about investing and gave her more freedom (and ultimately, the win). So have an open mind when investing for yourself!
2. Importance of understanding the overall market trend - Had we played this game in Oct of 2008 instead of May-June 2009, both of us would have been down probably in the double digits. It must be understood that since the March 9th low, the market has been in an upward trend and during our investment game the S&P 500 was up about 6%. That means I could have invested in the SPY (S&P 500 Index ETF) and been up about the same as what I did with all of this investment maneuvering. It would have been less work and less agony with about all of the upside. So if the market (or even real estate) is in an uptrend, it’s easy to make money, when it isn’t that is when you have a real challenge. If you don’t believe me ask all the people in 1999 who quit their jobs to become full-time day traders.
3. This wasn’t an Investment Game - This was a trading game, pure and simple. We took a short time frame and played a game for fun. Trading off of what you like as an investment theory is a dangerous idea in my opinion. For a real investing period of like 20-40 years, I think diversifying in equities with Index funds, no-load mutual funds and few stocks picks is the right way to go. I will talk about my investment strategy in another post but just understand my girlfriend and I were both flat out lucky!
Please note: there is no recommendation to buy or sell here and ModernMoneyBlog.com will not be held responsible for any action on your part. This is for informational purposes only.
Is My Girlfriend A Better Investor Than Me? Week 3 Results
Posted by Sonny in Trading/Investing on June 5th, 2009
The Rich get Richer. My girlfriend was beating me by about 6% last week and now is beating me by 8%. This is getting depressing now and I think the emotional aspect of this is really getting to me. Now I’m not sure if I should continue to buy stocks that have economic factors influencing their movement or if I should just try to win the game. With only 1 week left in the game this is it and I think she has won. I might make our 4 stocks an index of sorts and track it even after the game is over just to see what happens. Anyways here are our results and our picks for the last week. I don’t think I’m going to win the game!
|
Overall My Return |
7.86% |
|
Overall GF Return |
16.95% |
|
Buying Price |
Thursday Close Price |
Gain/Loss |
% Gain/Loss |
Time Held |
|
|
XLF |
11.75 |
12.43 |
0.68 |
5.79% |
3 Weeks |
|
WFMI |
20.55 |
21.43 |
0.88 |
4.28% |
3 Weeks |
|
MCD |
55.62 |
60.24 |
4.62 |
8.31% |
2 Weeks |
|
COH |
19.82 |
26.94 |
7.12 |
35.92% |
2 Weeks |
|
OIH |
99.64 |
109.08 |
9.44 |
9.47% |
1 Week |
|
SBUX |
13.71 |
15.17 |
1.46 |
10.65% |
1 Week |
Fourth Week Picks:
Me – Buy ATI (Allegheny Technologies Inc) at $40.36
My analysis – I think this metal and basic materials company will do well in an improving global economy.
My GF – Buy TGT (Target Corp) at $40.95
My GF’s analysis – She thinks people enjoy going to the stores more than a crowded Wal-mart and thinks this store will benefit as the economy improves.
Please note: there is no recommendation to buy or sell here and ModernMoneyBlog.com will not be held responsible for any action on your part. This is for informational purposes only.
Foreign Owners of an American Team
Posted by Sonny in Personal Finance on May 29th, 2009
Earlier this month, in my post Buy American? What Does that Mean?, I wrote about the impact of globalization on the economy and our everyday life. It appears globalization has now changed the American sports landscape. On May 24th 2009, the Cleveland Cavaliers, one of the four remaining teams in the NBA playoffs, sold a 15% stake in the team to a group of Chinese investors. The deal must be approved by the NBA’s board of governors but this would be the first major American team to be owned by foreign investors, even if it’s only a minority share. Foreign players on US teams has become ordinary and foreign ownership overseas is more common in football clubs(soccer for us Americans). In the English Premier League alone Derby County is owned by a US based group, Aston Villa is owned by the Cleveland Brown’s owner, Chelsea is owned by a Russian Billionaire, and Fulham is owned by the Egyptian owner of Harrods department store.
Mark Cuban owner of the NBA’s Dallas Mavericks, actually predicted this would happen in his blog post, When Will Foreign Ownership of US Sports Teams Start? on Feb 29, 2008. A little over a year later he has his answer. The irony of the whole thing is that one of the hardest hit parts of the Rust Belt is Cleveland, OH. Globalization has caused many manufacturing jobs to go overseas; no doubt bitterness for foreign companies and the US companies that moved operations elsewhere, must be high. In April, Ohio’s unemployment rate was 10.2%, one of the highest rates in over 25 years. One place the city of Cleveland could find solace was in the Cavs who looked poised to win the team’s first ever NBA championship. Now a championship might be bittersweet.
The only thing for sure is globalization is here to stay and will continue to change the way all business is being done.
Is My Girlfriend A Better Investor Than Me? Week 2 Results
Posted by Sonny in Trading/Investing on May 29th, 2009
Never assume anything! I assumed that with the economy in the process of recovering, the first things people will go out and buy will not be coach bags. Apparently I’m wrong! COH is up roughly 30% which means my girlfriend is up about 10% and beating me by 7%. Yikes, who knew? I won’t be handing over the investment money to her just yet, lets finish the game first. Great job by my girlfriend!
|
Overall My Return |
3.36% |
|
Overall GF Return |
9.38% |
|
Buying Price |
Thursday Close Price |
Gain/Loss |
% Gain/Loss |
Time Held |
|
|
XLF |
11.75 |
12.01 |
0.26 |
2.21% |
2 Weeks |
|
WFMI |
20.55 |
18.33 |
-2.22 |
-10.80% |
2 Weeks |
|
MCD |
55.62 |
58.13 |
2.51 |
4.51% |
1 Week |
|
COH |
19.82 |
25.68 |
5.86 |
29.57% |
1 Week |
Third Weeks Picks:
Me – Buy OIH (Oil Services HOLDRs) at $14.91
My analysis – the global economy is recovering and the world is using more oil again. Don’t look at the price at the pump it will only hurt.
My GF – Buy SBUX (Starbucks Corp) at $13.71
My GF’s analysis – she likes Tazo Tea which Starbucks own and she knows people love the coffee (like me) even though she doesn’t.
Please note: there is no recommendation to buy or sell here and ModernMoneyBlog.com will not be held responsible for any action on your part. This is for informational purposes only.
Buy American? What Does That Mean?
I was going to write about something else today but I got this email and I wanted to discuss it. Here is the body of the email:
My grandson likes Hershey’s candy. It is marked made in Mexico now. So I do not buy it any more. My favorite toothpaste Colgate is made in Mexico now.
I have switched to Crest. You have to read the labels on everything.
The email goes on to say:
So my challenge to you is to start reading the labels when you shop for everyday things and see what you can find that is made in the USA - the job you save may be your own or your neighbors!
If you accept the challenge, pass this on to others in your address book so we can all start buying American, one light bulb at a time! Stop buying from China or Mexico……….
(We should have awakened a decade ago……)
Let’s get with the program…. help our fellow Americans keep their jobs and create more jobs here in the U.S.A.
If you are flag-waving American like I am, I’m sure the thought of Americans losing jobs is certainly alarming; anyone losing their job is depressing. However, the question in my mind after reading this email is what does “buy American” mean?
In the email above, the person states she doesn’t buy Hershey’s products because the candy is made in Mexico. Hershey’s headquarters, however, are in Hershey, Pennsylvania, USA. I think that at least qualifies it as being American right? So if this person gets enough people to boycott Hershey’s products, couldn’t they themselves be responsible for the loss of American jobs? Let’s think about Toyota’s manufacturing plant in Texas and the Hyundai manufacturing plant in Arkansas: They aren’t American companies but they do provide American jobs. If Americans start boycotting these foreign companies aren’t they responsible for hurting their “neighbors”? Gets a little murky doesn’t it.
Do to globalization trends, manufacturing is going overseas where there is a large labor pool at very inexpensive wages and therefore America is becoming a more service-oriented economy. The tricky part of this whole thing is people in the US, who are in the manufacturing sector, will unfortunately be laid off. These people need to get re-trained. Solving this problem is a complicated issue I will leave for the politicians to tackle but there is no such thing as “buying American” anymore.
