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I'm a long-time arm-chair market-watcher that decided to get into the game. As an observer with a heart and knack for analysis, my investment philosophy is that of outrunning the lion chasing the herd. Just stay ahead of the last guy in the group, and you probably won't get eaten. I'm not out... More
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  • Nothing Fancy Yields Education Savings Account 40% Gain In 6 Months

    I don't afford wasting money on things, especially if I have something that works already. I pay attention to tax-free opportunities for managing finances. I don't play the lottery. Like the bulk of people I know, I'm a retail banking customer.

    I like my bank because I have an ESA wrapped around a brokerage account. It's a real brokerage account, but tax free, with no fees for trading. Everything else my bank has is probably about the same as any other bank.

    When I first had the account set up, I figured that I would be trading the ING see-saw, the spectacle of the solar industry and the TZA/FAZ/TECS Neapolitan of Bear-dom.

    The ING see-saw

    I could have traded more, but it didn't work out that way. Working stiffs don't have tons of extra time. I had noticed a pattern in NRF, and managed to ride the post-August pops of 2010 & 2011. The rise was about 25% in +/- 6 weeks two years in a row, in roughly the same time frame. REITs can be risky, though, and I felt uncomfortable following in my own footsteps with a college fund.

    If the tax implications aren't a consideration (ESAs are tax free), why not a mix of more attractive dividend payers? Fire and forget would be my strategy.

    For my first riskier dividend pick, I bought a dip in MSB, which promptly kept dipping. The more I read about it, the more I wanted to get away from MSB, and realized I did not understand this type of security.

    I had counterweighted with a preferred-stock spider which has paid a nice, boring 5-6%, which is still cranking out once a quarter. The other two picks in the dividend pool were MCGC and FNFG.

    Any time a company gives the slightest whiff of a dividend coming down, markets pummel the common stock. So when MCGC had it's run-up before the 2nd $.125 declaration in early March 2013, I took the opportunity to get out with a solid gain.

    That leaves FNFG.

    This was my least favorite pick. Any time there is a big acquisition (FNFG bought a bunch of HSBC branches in May 2012), I wait to see what happens. As with a whittling down of a dividend to manage cash, if there is the slightest whiff of integration problems post-merger, markets hammer common stock. This is what happened when HOOK became BREW (Widmer and Red Hook getting together) and someone figured out that the road was a little bumpy.

    FNFG steady as she goes

    I kept FNFG on a potential-upside with low-beta watchlist. The stock price hadn't imploded a few months after, so I decided to get in, even though the dividend was pretty paltry compared to other types of dividend stocks. I bought the post-distribution dip in November 2012. There was nothing fancy about my strategy. I was simply patient.

    I've thought about getting rid of it a few times. Maybe putting the money somewhere more exciting, or with greater potential. Then I look at the return of 42% with no load, and start thinking about my options. If I let my bank manage it for me, the return is about 4% net. I like my bank, but not that much.

    I'll take my nothing fancy 40%+ for now.

    Disclosure: I am long FNFG.

    Additional disclosure: Like my post says, I'm not a broker or investment adviser. I don't recommend making the same mistakes that I do by taking any of this as investing advice. But if you have children, note that the price of college is growing more than the rate bank-managed ESAs are returning.

    May 20 2:56 AM | Link | Comment!
  • Nokia Bears, Distilled

    I've been reading a lot of articles and blog posts during the last few months about Nokia. Overall, I'm bullish, with a long position (disclosure).

    There seem to be two points that drive bearish articles. 1. Windows, and 2. Elop. The central bear desire appears to me to center on, at the very least, adding Android and giving Elop a little slapping-around.

    The Android Factor:

    Android has a giant app ecosystem, but most of them just aren't that great. I've tried to like Android, but I just don't. The main reason I have it, is because the phones are cheap. Android reminds me of early Windows 3.1 through the upgrade to 95 (meaning implicitly couched as cheaper than Apple). IMHO, if Nokia picks up Android, it's because Nokia is going to scrape the bottom of the barrel for a volume-driven piece the lowest-margin end of the US market, and that smacks pretty desperate. Seemed to me that was Motorola's strategy.

    Don't get me wrong: I'm no Windows evangelist. There are some irritating characteristics of the last few so-called upgrades to windows phone. If W8 for phones doesn't upgrade to 9 or 12 or whatever is next in line, I wouldn't be surprised. Overall, though, the Windows 8 apps I've used on an upgraded HP TM2T are integrated uniformly, and mostly work. Some of them I actually like. The Windows 8 environment reminds me of early Palm apps with ease of use, common appearance, familiar functionality and intuitive navigation. I'm not completely sold, but I'm more sold than not. My next phone could be Windows 8 or up, but I wouldn't switch cell carriers for it.

    The Elop Factor:

    As for dumping if Elop goes, I'm on the fence. He was a pretty senior guy at MS, and probably took a considerable amount of knowledge out the door. Choosing W8 was probably a pretty smart idea, because he was inside baseball. But, as the CEO of Nokia, he probably has more concerns than whether or not the Lumia gets a bunch of likes on FaceBook, or whether or not the ASHA has a sexier user experience than the latest iPad. I would bet his to-do list doesn't include much goofy stuff, and is more focused on the things that have kept me long NOK:

    1. Stop burning cash.

    2. Monetize flat units.

    3. Sell useless stuff.

    4. Sell useful stuff.

    5. Leverage strengths in delivery of hardware.

    NOK isn't just a phone company, from what I see, similar to Samsung, Apple, Dell, or any other peer.

    I guess my bottom line is if Elop steers NOK toward successful sales growth, but hasn't fixed supply chain/logistics problems to support The Grand Plan, then, yes, board action is reasonable (and hope you have your stop-loss up to date). Short of that, equity might be riding a nice turnaround for the next few quarters while the options run to crush the next wounded ex-king.

    Disclosure: I am long NOK.

    Additional disclosure: I'm not an investment adviser. Do what I do, and you'll end up learning the same lessons, so caveat emptor.

    May 10 10:26 AM | Link | Comment!
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