Apr 22, 2023
This post summarizes ways that I keep tabs on the companies I'm holding in my investment portfolio. I tend to hold stocks for a long time, regardless of stock price movements. It helps to see the whole picture, industry, customer mentality and metrics like free cash flow and profits. These are ways I try to glean insights into a company's future potential or lack thereof.
Here are 10 ways I keep up with my stocks:
- Use a Charles Schwab investor checking account to buy assets + make trades.
- Watch CNBC for free in the Charles Schwab mobile app.
- Track dividends received in Charles Schwab account.
- Use Google Finance to manage watchlists and monitor daily prices. Schwab also has a watchlist but I prefer Google Finance's UI for watching short term price movements.
- Observe the company "in the wild".
- If public, visit the company and observe what you see. Is it a well run operation? Are customers happy?
- Note the frequency you see people choosing the company's products day to day.
- Bonus points if you are the customer, you know intimately what value the company is creating.
- Earnings calls: listen to the call live or most companies post the call transcript online.
- Read investing blogs and books from the greats. I subscribe to my followed blogs via an RSS feed. Here are a few I recommend:
- Monitor sentiment with Twitter and Reddit. Read the Twitter cashtags for individual stocks and browse social media for overall sentiment monitoring. Beware there are emotional posters with an agenda, opinion or position that may contradict yours. I find it useful for gaining a sense of general feelings about the market or shares in a company.
- Use finance Python libraries, like ffn to see more complex financial calculation about a stock. I wrote in depth about the endless tools you can apply for financial calculation here on my other blog.
- Talk to people about their investments. What are they investing in? What's working for them? What are they excited about? They have a perspective that differs from yours that exposes you to a new concept or industry.
Mar 20, 2023
In March 2023, I achieved a new milestone of passive investing. Since beginning in 2018 with approximately $15,000 in savings, I've accrued a six figure portfolio of funds and stocks with a "DCA and buy and hold" long term mentality. I did this by holding a full time job and earning multiple pay increases along the way.
About 50% of my retirement funds are in a managed employer match 401(k) with a different bank. My primary bank is Charles Schwab. Most of my self-directed IRA is collecting dividends with Schwab index funds (SCHB, SWPPX and SWTSX) and MSFT. My self directed IRA has a smaller weight of non-dividend growth stocks also. In my taxable portfolio, the core dividend earners are stocks like MSFT, NKE, AAPL, F and NVDA.
Additionally, 3-5% of my investment portfolio is committed to cryptocurrency assets. After buying incrementally from December 2020 to 2022, I now have market value exceeding $5,500 staked in Ethereum. Approximately 60% of my crypto portfolio is in ETH, followed by 25% Bitcoin, which does not have a staking protocol. Over the past 7 months, my staking rewards netted me $12.48 per month by my calculations.
Passive Investing Income Breakdown
Stock Dividends: $38/month
Ethereum Staking: $12.48/month
Combined, they add up to a investment income of $50/month and counting with time. Hold dividend stocks and index funds. Stake Ethereum, if you can handle elevated risk that surrounds crypto. Then again, with the recent banking shakeout, maybe a more decentralized store of value is intriguing. Find a job or start a business, keep saving and reap the rewards of investing. This is how I achieved a new level of passive income. In both, their dividends are automatically re-invested.
This post and all posts on this blog are not financial advice. All investment decisions have personal risk and you should assess them thoroughly before taking any financial actions.
Jan 09, 2023
Volatility is scary because when a stock thrashes down, it hurts pretty bad. Investors need to set aside their emotions and ask themselves, "Has my thesis about this company changed?". If you still have conviction, the market's volatility has created a possible buying opportunity.
It sounds simple put into words, but observing the market in real time never goes so smoothly. Your perceptions of a "bottom" or a stock's range can be way off. Volatility is an opportunistic investor's friend, and a timid or inexperienced investor's foe. However, even a seasoned pro can get it disastorously wrong and get wiped out by a falling knife. Make volatility your friend, but be careful!
Dec 14, 2022
Gains tend to happen quickly in a short time. This is a reason to hold onto those shares a little longer. That sudden unpredictable catalyst might be around the corner.
When a stock moves, it can happen after years of stagnant price action. Don't miss your gains by exiting at the wrong time. If earnings are heading the right direction, the gains will come.
Nov 28, 2022
Corporations value humans, until times get tough. Then they start to cut.
I thought they were less brutal, deploying strategies so feudal. Employees are just a line item to them.
What's good for the company? They'll land on their feet. They don't care about a human in the balance sheet.
Oct 08, 2022
I can't shake the feeling that we are being toyed with by invisible forces. First, a disease is manufactured and propagated. Then, a response to the disease is conceived. It includes locking down society and subsidizing the people with printed money.
This is all a tidy narrative for companies to retrofit to their own needs. A cycle of boom and bust is synthesized in the name of the greater good. Employers now have a reason to fire their employees and raise prices of their widgets. Stocks suffer because it's going to be difficult. Everyone knows a recession is coming!
Fear mounts. Worries pile up. The Federal Bank must curb inflation. They need to raise interest rates on borrowing money to get this nasty inflation monster under control. Now it costs more money for people to take out a loan and buy houses. Companies don't give raises. Inflation of consumer staples eat into our salaries. "The recession is coming!", they said.
In summation, we have a (natural?) phenomena, seized by world governments to extend their power in the name of protecting the people. Stocks go down for now. That's ok as a long term investor. However, I can't get over the idea that is all humans, all the way down. Humans doing human things: scheming, reacting and seizing an opportunity to claim the sky is falling. All along, fat cats padding their own pockets at the expense of their fellow man!
Do you think a recession will happen? Is it already happening? Or is it only our reaction to the idea of it? I, for one, find it amusing how humans can be so sure they know what is coming and what has already happened. I'm a skeptic! This recession is bullshit.
Sep 08, 2022
I have enjoyed Josh Brown's perspective as the market thrashed the past few years. A CNBC regular with razor sharp takes, I think I heard him recently say something to the effect of "check your expectations".
I agree with many things Josh says, but especially with this sentiment. Stoics know that by checking our expectations, we can better regulate our perception of what is happening with our investments. Consider lowering your targets for ROI and just relaxing your expectations in general.
Sep 02, 2022
The goal of this post is to find a layman's idea of what a stock's "intrinsic value" means. Intrinsic value is often praised as a claim to why the market price of company should be higher. What does that mean?
Checking Investopedia, the top hit on Google, "There is no universal standard for calculating the intrinsic value of a company... Typically, investors try to use both qualitative and quantitative to measure the intrinsic value of a company, but investors should keep in mind that the result is still only an estimate." - Investopedia, https://www.investopedia.com/terms/i/intrinsicvalue.asp
The next hit, Corporate Finance Institute offers a "Net Present Value" based formula, along with net cash flow, interest rate, etc. So it seems that the mathematics of instrinsic value calculation are sound, but the weighting of possible future outcomes is where an an analyst is more of an artist.
https://corporatefinanceinstitute.com/resources/knowledge/valuation/intrinsic-value-guide/
In essence, intrinsic value is a mathematical model an analyst creates by weighing projected outcomes. There is no standard for producing an intrinsic valuation of a company. I find this somewhat amusing, because before when I heard the term intrinsic valuation, I assumed there was more to it. Such as a formal methodology that is carried out. However, like all future prediction models, they are subjective and sound more like a guess to me. I will be sure to take these instrinsic value calculations with a grain of salt from now on.
Aug 28, 2022
When picking investments, I like the idea of selecting assets based on their industry or the rise of a specific technology. One can observe the world, watch trends come and go and consider adding them to your portfolio.
For example, I believe that solar technology is likely to be an important source of energy in the future. I am basing this thesis on an anecdotal conversation with an energy engineer, along with generally positive sentiment for the solar energy industry as of late. For these reasons, I am marginally invested and building a position in a solar company, Sunrun.
Electric vehicles are another industry that I believe will play a big part in the future of humanity, so I'm holding Tesla. It's been my best investment by far. I'm still holding because I believe that electric vehicles are going to be huge in the future. One can hold a company based on principle, provided the quarterly earnings reports are acceptable.
Sometimes your thesis will be wrong. You can't win 'em all. You also don't need to win them all. Pick a few winners and mix with index funds to round out your portfolio and the 80\20 rule will emerge. A few of your assets will perform better than the others and reap most of your gains.
I think that this industry-based line of thinking is a way to frame your investments that can make it easy to remember why you're holding it. One can certainly be wrong about our projections into the future, but these are the types of angles a keen investor seeks out.
Jul 16, 2022
In my experience, markets sometimes open up with a pump in prices. In situations where I bought near to the open because of some anticipated event, I usually bought at a higher price than if I had waited.
I find it's best to watch stocks throughout the trading day, then put in a buy order in the final hours or minutes before the market closes for the day. This is general knowledge for most investors and traders. While not always a certainty, I think it is a good tip to keep in mind when adding to your portfolio on any given day.
Buy the close, because "gains happen overnight": https://breakingequity.com/blog/most-gains-for-spy-happen-overnight-a-quantitative-study