Just wondering - Am I cheap, frugal, or very wise?
I got a renewal notice for my Runner's World magazine subscription which just expired. The notice offered me a "special price" for $21.97 for 12 issues or $1.83 per issue. The notice also indicated that I could get 18 issues for the same price if I renewed online. So being FRUGAL I decided to go online to renew and to get the price per issue reduced to $1.22 for a total savings of almost $11.00.
So I go online, press subscribe (couldn't find a renew button) and what comes up is a new subscriber price of $24 for 24 months or only $1.00 per issue. Now I'm kind of ticked off. Why should a new subscriber get a better rate and an existing customer? So what did I do? Picked up the phone and called customer service. The call was this quick.
CS rep: How may I help you?
Carl: I want to renew my subscription but I don't want to pay more than a new subscriber would pay.
CS rep: How much was the offer?
Carl: $24 for 24 issues
CS rep: OK, I can give you that rate. How would you like to pay for it?
Carl: Send me a bill please.
CS rep: OK. Is there anything else I can help you with (they are trained to say that)?
Carl: No - Thank you.
So by making the call I saved $21.97. Does all this effort make me cheap, frugal, or wise?
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Wednesday, June 23, 2010
Thursday, May 13, 2010
Investment Club - May 2010
Investment Club YenoM had an excellent meeting on May 17, 2010 with six members in attendance. Carl presented a new stock to the club, U. S. Ecology (ECOL). The company is one of the older firms that recycles of hazardous material (radioactive, polychlorinated biphenyls, etc) and not-hazardous industrial waste. It services both commercial and governmental entities.
Number of Stocks: 14 (goal is 16 plus or minus 4)
Company Size: Large, Mid and Small are all out of tolerance. We need less large and more mid and small.
Sectors: All in tolerance except for Technology. We need less technology
Individual Stock Percentage: One stock, SunPower (SPWRA) is too low. That means we need to sell or add more. This is the first time since we've adopted this methodology that an individual stock is out of tolerance.
Percent Annual Return: in the sweet spot but on the low side
Quality: Good
Growth: in tolerance but on the low side
Individual Stocks analysis: Two stocks are of concern.
Sun Power due to low position and a very low quality rating and Hornbeck Offshore Services (HOS) due to a negative PAR and slightly low quality rating.
Our intent this month was to increase PAR and Growth while improving Mid and Small company size.
DECISION: Sell all of Sun Power (SPWRA) and use the funds plus available cash to purchase U. S. Ecology. Reasoning: Sun Power is not a quality company (based upon Manifest Investing) and the news seems to indicate that their product is not cutting edge. Their growth rate is around 6% which seems low for a company of this nature. U. S. Ecology's PAR is in the upper portion of the sweet spot, is a quality company with better growth prospects than Sun Power. So these decisions had the impact of improving overall growth potential and replaces a stock that we had lost our confidence in.
Number of Stocks: 14 (goal is 16 plus or minus 4)
Company Size: Large, Mid and Small are all out of tolerance. We need less large and more mid and small.
Sectors: All in tolerance except for Technology. We need less technology
Individual Stock Percentage: One stock, SunPower (SPWRA) is too low. That means we need to sell or add more. This is the first time since we've adopted this methodology that an individual stock is out of tolerance.
Percent Annual Return: in the sweet spot but on the low side
Quality: Good
Growth: in tolerance but on the low side
Individual Stocks analysis: Two stocks are of concern.
Sun Power due to low position and a very low quality rating and Hornbeck Offshore Services (HOS) due to a negative PAR and slightly low quality rating.
Our intent this month was to increase PAR and Growth while improving Mid and Small company size.
DECISION: Sell all of Sun Power (SPWRA) and use the funds plus available cash to purchase U. S. Ecology. Reasoning: Sun Power is not a quality company (based upon Manifest Investing) and the news seems to indicate that their product is not cutting edge. Their growth rate is around 6% which seems low for a company of this nature. U. S. Ecology's PAR is in the upper portion of the sweet spot, is a quality company with better growth prospects than Sun Power. So these decisions had the impact of improving overall growth potential and replaces a stock that we had lost our confidence in.
Tuesday, May 12, 2009
Stock Decisions
Last night (May 11) my investment club met. Let me explain what an investment club is, just in case you don't know. Investment Club YenoM is made up of 14 individuals that contribute various amounts (from $25 to $100) each month and then we meet to determine stocks to buy and sell. We use software designed by IClubCentral to keep track of how much each of us own. It works just like a mutual fund with two exceptions. We only value the stocks once per month (a mutual fund does it daily) and the club members make investment decisions (a mutual pays big bucks for others to make the decisions).
We have a well defined portfolio management process with 7 separate criteria.
Last night we decided to sell 1/2 of our position in Lowes (LOW) and purchase a similar amount of Fastenal (FAST).
We decided to sell Lowes for 3 reasons: 1) our projection for the future return was lower than any other stock in the portfolio 2) it is a large cap stock and we have too large a percentage of our stocks in large cap and 3) sales growth projection was too low.
We decded to buy Fastenal for 3 reasons: 1) it is a mid cap stock and we need more mid cap 2) our projection for 5 year return put it in what we call the "sweet spot" and will raise overall portfolio return and 3) sales growth is 13% which will raise the oveall portfolio sales growth.
We had an new person join the club, welcome Irene and one visitor.
We have a well defined portfolio management process with 7 separate criteria.
Last night we decided to sell 1/2 of our position in Lowes (LOW) and purchase a similar amount of Fastenal (FAST).
We decided to sell Lowes for 3 reasons: 1) our projection for the future return was lower than any other stock in the portfolio 2) it is a large cap stock and we have too large a percentage of our stocks in large cap and 3) sales growth projection was too low.
We decded to buy Fastenal for 3 reasons: 1) it is a mid cap stock and we need more mid cap 2) our projection for 5 year return put it in what we call the "sweet spot" and will raise overall portfolio return and 3) sales growth is 13% which will raise the oveall portfolio sales growth.
We had an new person join the club, welcome Irene and one visitor.
Sunday, May 10, 2009
Portfolio Management
Here are the seven criteria that my investment club uses to decide on stocks to add or remove from our portfolio. I'll give a brief description of the criteria. If you have any questions please leave a comment.
1. Number of Stocks: 16 stocks plus or minus 4. This is enough stocks to be diversified but not too many to follow.
2. Company Size: Large Cap stocks 50%, Mid Cap stocks 25%, and Small Cap stocks 25%. We want stocks of all size because one never knows what are going to be the next ones to increase. Our weighting towards Large Cap is a bit more conservative than I would like. We have had problems finding Mid and Small Cap stocks so this forces us to keep looking.
3. Sectors: We use 10 different sectors as defined at Manifest Investing. Our goal is to have no more than 25% in any one industry and no more than two industries with no stocks. This helps to make sure we aren't loading up on stocks in one sector.
4. Portfolio PAR: PAR stands for Percentage Average Return. PAR is our estimate of the return we might expect from a stock. We also use Manifest Investing to give us an estimate of the weighted average PAR. We look for portfolio PAR to be 5 to 10 percentage points above the median PAR of all the stocks in the Manifest Investing data base.
5. Portfolio Quality: Manifest Investing has a method of measuring the quality of the companies. We expect our overall quality for the portfolio to be above 65 (Excellent).
6. Portfolio Sales Percentage Increase: We look at the weighted average percentage expectation of the increase in sales for the portfolio. We want it to be between 10 and 14 percent - generally toward the high end of the scale.
7. Individual Stock Percentage: We don't want any stock to be more than two times its proportional share nor less than 1/2 that same share. For example, if there were 10 stocks in the portfolio a proportional share would be 10%, therefore, we won't want any stock to be more than 20% nor less than 5% of the portfolio.
It's always fun trying to balance all of these.
1. Number of Stocks: 16 stocks plus or minus 4. This is enough stocks to be diversified but not too many to follow.
2. Company Size: Large Cap stocks 50%, Mid Cap stocks 25%, and Small Cap stocks 25%. We want stocks of all size because one never knows what are going to be the next ones to increase. Our weighting towards Large Cap is a bit more conservative than I would like. We have had problems finding Mid and Small Cap stocks so this forces us to keep looking.
3. Sectors: We use 10 different sectors as defined at Manifest Investing. Our goal is to have no more than 25% in any one industry and no more than two industries with no stocks. This helps to make sure we aren't loading up on stocks in one sector.
4. Portfolio PAR: PAR stands for Percentage Average Return. PAR is our estimate of the return we might expect from a stock. We also use Manifest Investing to give us an estimate of the weighted average PAR. We look for portfolio PAR to be 5 to 10 percentage points above the median PAR of all the stocks in the Manifest Investing data base.
5. Portfolio Quality: Manifest Investing has a method of measuring the quality of the companies. We expect our overall quality for the portfolio to be above 65 (Excellent).
6. Portfolio Sales Percentage Increase: We look at the weighted average percentage expectation of the increase in sales for the portfolio. We want it to be between 10 and 14 percent - generally toward the high end of the scale.
7. Individual Stock Percentage: We don't want any stock to be more than two times its proportional share nor less than 1/2 that same share. For example, if there were 10 stocks in the portfolio a proportional share would be 10%, therefore, we won't want any stock to be more than 20% nor less than 5% of the portfolio.
It's always fun trying to balance all of these.
Tuesday, February 17, 2009
Stock Market Recovery
Recently the government confirmed that we are in a recession (2 quarters of negative growth). This has been evidenced by the housing problems, the dramatic drop in the stock market, and the rise in the unemployment rate.
So how does one know when to anticipate an increase in stock market prices? Should one wait until the signs of an improving economy are in place? The answer is NO. The stock market, in the past, recovers a full six months before the "economy" shows signs of life.
So what does this mean to the average investor? To me it says that any money you have that is earmarked for the stock market should be in the market now! No one, and I mean no one, can predict when the economy will improve. Six months, a year, two years or more, no one knows. So grit your teeth put your money in the market.
So how does one know when to anticipate an increase in stock market prices? Should one wait until the signs of an improving economy are in place? The answer is NO. The stock market, in the past, recovers a full six months before the "economy" shows signs of life.
So what does this mean to the average investor? To me it says that any money you have that is earmarked for the stock market should be in the market now! No one, and I mean no one, can predict when the economy will improve. Six months, a year, two years or more, no one knows. So grit your teeth put your money in the market.
Monday, February 2, 2009
How recency hurts investors
I"m currently reading "The Intelligent Asset Allocator" by William Bernstein and a comment he makes in the book is especially true given today's market.
Picture taken by Lori Fisher in Estes Park, CO
"... but this [making investment decisions based primarily upon current market conditions] is a perfect example of so-called recency, the single biggest mistake that even the most experienced investors make. This referes to our tendency to extrapolate recent trends indefinitely into the future."I've spoken to a number of folks concerned about today's weak stock market and they are considering pulling all of their money out of the market and putting it in something "safe". They are falling victim to recency by thinking that the weak market will extend forever into the future. Most investors, especially those that are not close to retirement, should be doing the exact opposite. They should be putting money IN the market now. To sell now they are buying HIGH and selling LOW - not a way to retire comfortably.
Picture taken by Lori Fisher in Estes Park, CO
Tuesday, January 27, 2009
Mortgage Mess
I read a letter to the editor in the March 2009 issue of Consumer Reports (a great magazine, BTW) discussing a previous article in the magazine about the mortgage crisis. I've struggled for the last few months trying to determine a clever way to express what I see as a large part of the problem. The letter writer, John Leonard of Seattle, expressed it nicely.
He said that the most important reform that was needed because of the mortgage crisis was to "Reform the consumer." We should start with these steps:
1. "Thou shalt not covet more house than thou canst afford"
2. "Thou shalt not use thy credit card for long-term debt"
2. "Thou shalt not bear false witness on thy mortgage application"
This is not to say that the consumers of debt are totally at fault for the meltdown but I would opine that consumers are more to blame when it comes to not being able to pay their debt. Lending organizations (banks, savings and loans, etc.) are in the business of lending money and NOT in the business of managing individuals personal budgets.
If an individual or family borrows money to buy a bigger house than they can affordand then they can't make their monthly payment - who's fault is that? In most cases it's not the mortgage company - it's the unrealistic expectations of the home buyer.
He said that the most important reform that was needed because of the mortgage crisis was to "Reform the consumer." We should start with these steps:
1. "Thou shalt not covet more house than thou canst afford"
2. "Thou shalt not use thy credit card for long-term debt"
2. "Thou shalt not bear false witness on thy mortgage application"
This is not to say that the consumers of debt are totally at fault for the meltdown but I would opine that consumers are more to blame when it comes to not being able to pay their debt. Lending organizations (banks, savings and loans, etc.) are in the business of lending money and NOT in the business of managing individuals personal budgets.
If an individual or family borrows money to buy a bigger house than they can affordand then they can't make their monthly payment - who's fault is that? In most cases it's not the mortgage company - it's the unrealistic expectations of the home buyer.
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