Investment Club-Nov 2009

My investment club, Club YenoM, decided to sell all of our Oracle (ORCL) stock.  Factors that led us to this decision are:

1.      We had more stock in the Technology sector than we wanted (32% vs 25% desired)

2.      We already own Microsoft and the group felt better about the future of Microsoft and, at a minimum, we understand how they make money better

3.      We are attempting to lessen our exposure to large cap stocks

4.      The projected annual return (PAR) is 12.6% while the overall porfolio’s is 15% so selling ORCL and replacing it with higher PAR stocks will improve the expected return of the portfolio

We decided to hold on to $200 of the proceeds from the sale to invest next month.  The remaining money from the sale will be equally divided between FTI Consulting (FCN) and NVE Corp (NVEC).  Here’s the reasoning.

1.      FCN is a mid cap and NVE is a small cap thus improving our position in those sectors

2.      Both companies had PAR’s in excess of 16% which is better than ORCL’s

3.      FCN is in the financial sector

4.      NVEC is in the technology sector so we didn’t reduce tech as much as the sale of ORCL might indicate.  Our desire to improve PAR overrode the technology sector diversification needs

Next month we will be on the hunt to add an additional stock to the portfolio with almost $2000 in cash.  We decided that the stock should be a small or mid cap and NOT technology.

Taking Inventory

I decided today to inventory the fruits and vegetables that I canned this year, my most productive ever. Here is what I canned.

Spaghetti Sauce - 22.5 quarts - I've made and canned spaghetti sauce for the last several years and it is always excellent.

Strawberry Jam - 8 pints - The second year that I've made jam. It is so easy and good.

Cherry Jam - 4 pints - Used Door County tart cherries. Just as easy as the strawberry jam.

Peach Syrup - 4 pints - Just as easy as strawberry jam but learned that you must follow the instructions. That's why it is syrup and not jam.

Salsa - 11 quarts - Made two batches - the best ever.

Still to can this year.

Chili - going to try it for the first time - will have to use my new pressure cooker.
Apple Pie Filling - I've already bought the apples and will be going to a class next week.

Time to Plant Tulips

Each summer after the tulips have finished blooming and are starting to die back I dig up the bulbs that I planted 3 years prior so they can be divided. I started doing this 20 years ago with a total of 30 red and yellow tulips. I now have over 600 bulbs planted and I can't count the number I've shared with friends.

The picture is of the tulips ready to be covered. The yellow stuff that looks like grass seed is really rice hulls that is a great addition to help loosen the soil.

I also like tulips in a line vs planted in clumps. Almost all of the planting beds in the yard are lined with tulips and they make an awesome display in May.

Rosemary for the Winter

Each year I grow the herb rosemary in my garden. I just love fresh rosemary with potatoes. The plant produces so much rosemary that I also dry the limbs so I can use them throughout the winter. Each year around this time I dig up the plant, pot it, and bring it inside. I've had pretty good luck with the plant making it through the winter but I have lost some as well. I generally don't get any fresh rosemary during the winter - the plant goes dormant - and like me is just trying to make it until spring. That's when I'll put it out in the garden again.

My favorite potato recipe using rosemary. The ingredients are approximate since I've never measured the amounts - I just throw in what looks right.

2 TBS Olive Oil
2-3 Potatoes, cut into 1/2 inch cubes
1 onion, diced or sliced
1/2 green pepper, diced
1 tsp garlic powder (you can use fresh as well)
1-2 tsp dried rosemary (or 1-2 TBS fresh)
Salt and Pepper to taste

Heat the oil. Put the potatoes in oil making sure you don't burn yourself. Add the onions and green peppers and spices. Cook on medium heat until the potatoes are soft, turning frequently so they don't burn. Serve hot with ketchup.

Planted Garlic

I planted garlic that will be harvested late in July 2010. The garlic cloves that I used were some of the cloves that I harvested this year in July. I planted the variety of "Siberian Red". The cloves were big so I'm hopeful that they will produce big cloves again next year.

I use the garlic for homemade salsa and spaghetti sauce and, of course, any other dish that calls for garlic.

I love garlic.

Drumstick Torte

If you remember having "drumstick" ice cream cones as a kid - you'll love this recipe. It is simple to make and oh so yummy. I've been asked many times to bring this dish to pot luck dinners and it has never failed to please.

2 cup Vanilla Wafer, crushed
1/2 cup melted butter
1 cup Spanish Peanuts, crushed
1 cup powdered sugar
8 oz cream cheese, softened
1/3 cup peanut butter
4 cup Cool Whip
2 small packages chocolate instant pudding mix
3 cups milk
Chocolate for garnish on top

Pre-heat oven at 350 degrees. Mix Vanilla Wafers, melted butter, and 2/3 cup crushed peanuts. Press the mixture into a 9 x 13 pan and bake for 10 minutes. Remove from oven and cool.

While the crust is baking and cooling, beat together powdered sugar, cream cheese, peanut butter, and 2 cup Cool Whip. Set aside. Mix the chocolate pudding with milk and set aside to firm up slightly.

When the crust is cool spread the peanut butter mixture evenly over the crust and then the slightly firmed up chocolate pudding as the next layer. Finally, frost with 2 additional cups of Cool Whip. Sprinkle with 1/3 cup crushed peanuts and garnish with chocolate curls. Keep refrigerated.

Servings: 16

Canning

I learned a valuable lesson in canning. First, let's start by letting you know that I'm a novice at canning but I'm learning. The plan was to make peach jam and cherry jam. I got the peaches and cherries from the local farmer's market and went to the store to get "Sure Gel" to make the jam. The only other ingredient is sugar and lots of it.

I decided to do the peach jam first and this is when I learned the lesson. I thought I was following the directions but I put the sugar in with the fruit, heating, and then the "Sure Gel" and heating. The directions had me doing it the opposite way. I thought to myself how big of a deal could that be. Well the peach jam looks good but it did not set. So I have four pints of peach "slurry". It is excellent on vanilla ice cream however.

The finished product

By following the directions I successfully made cherry jam for the first time.

Garden Pictures 2

My tomatoes are growing slower and smaller than in years past. I think the cold spring, minimal water in June and July are the main reasons. I'm starting to get some off them the plants now but I'll probably have to buy tomatoes to make all of the spaghetti sauce that I plan on making.

Tomatoes - finally starting to bear fruit

I grew green peppers somewhat successfully but I've never been satisfied with the size, quantify or taste of the green peppers that I grow. Anyone have any tips?

My harvest today

Flowers

There are still flowers blooming in the garden

Harvested Garlic

I harvested over 30 heads of garlic today. I've got them in the dark drying out so I can use them to make spaghetti sauce once my tomatoes ripen.


Below is a view of my onions. They will be ready to harvest soon and will also go into my spaghetti sauce.

Strawberry Jam

Strawberries are ready for picking here in Green Bay so today I went to Sunny Hill and picked a flat of them. It was overcast, the berries plump and ripe both which made for pleasant picking and even better eating.

When I got home I put up 5 pints of strawberry jam and froze the rest to use in smoothies. The strawberry jam is very easy to make by following the instructions in the Sure Gel package.

Strawberry jam on the cooling rack

And since I had the water heated up to do the water bath for the strawberry jam I decided to make some BBQ sauce. I have a recipe that I found on the internet years ago that is supposed to be a knock off of KC Masterpiece - my favorite. I don't think the sauce tastes like KC Masterpice, however, it is better! This is also an easy recipe that just requires combining the ingredients, simmering on the stove for an hour and then putting them into jars with a 45 minute water bath.

BBQ Sauce

Garlic scapes

The garlic planted last October in the garden is growing well. The garlic scapes were at the point of needing to be removed. The scapes are removed so the plant will put more energy into the garlic bulbs and not into creating the scpaes (seeds). I've been told the scapes can be using in cooking but haven't used them myself. An interent search turned up a few interesting looking recipes.

Garlic scapes before being removed

Growing Hops

I'm growing hops to use in our home brewing process. Below are a couple of pictures of the progress of the vines. Hops vines grow 20 to 30 feet per year. I planted them on the south side of the house under the eves. Then put in twine from the ground to the underside of the eves on the second story. The hops have already reached the eves and, in some cases, have grown another 6 feet hanging down.

The variety I'm growing is "Mt Hood". Good for making honey wheat beer.

This picture was taken April 15.

These pictures were taken June 15.

Garden Pictures

Below are a few pictures of the flowers currently in bloom in my garden. Enjoy.

Iris

Portfolio Management June 2009

My investment club met last night (Jun 8, 2009). We reviewed two new stocks and followed our portfolio management process. The overall shape of the portfolio is better than it has ever been so we decided to:

Sell our remaining holding in Lowes (LOW). The stock was our lowest PAR (percentage average return) and we didn't think the future looked good for the stock.

Buy additional shares of Fastenal (FAST). We purchased the stock a month or two ago and it still looks good and did not have a "full" position yet.

Buy an initial position in Apollo Group (APOL) with the $$ from the sale of Lowes. Apollo seemed to be the best company in the education group. We also considered Strayer and ITT.

Another Cellcom Half Marathon story

After most big races you can read numerous human interest stories about the runners, their history, and their amazing run. I always felt these stories were glorified or otherwise made newsworthy by folks that "enhanced the truth". Well now I'm a believer in these stories-now that I have a personal experience with one of them.

The start of the race.

In January 2009 I went to the first Cellcom training run and as you might imagine it was cold. I met Joe Lamers at this run. He is from Appleton WI and had just stated running a few months prior and made a commitment to run a half marathon in 2009. This was the start of serious training and he was a novice at long distance running. Over then next several months I saw Joe improve and grow as a runner and our friendship blossomed.

Fast forward to race day on May 17, 2009. Joe and I hadn't seen each other or exchanged e-mails for 3 or 4 weeks. My running partner and I lined up at the starting line with the other 10,000 runners and guess who was right next to us? Yep, it was Joe. Thus begins the human interest story.

Joe was excited, nervous, and pumped. Here is what he told us before the race began. On Saturday (the day before the race) he was on the East Coast. His flight to Green Bay ended up being canceled but there was no way that Joe was going to miss the run that he had trained for 5 months. He caught a flight into Minneapolis MN (a five hour drive from Green Bay), rented a car, and drove through the night - arriving in Green Bay a few hours before the race. This is when we saw him.

Below is his e-mail to me describing his race.

Yes, I did the race under 2 hours and just about died. I was on my 8 minute per mile mark at 7 miles. I then hit "THE WALL" and everything was going so bad. My feet were going so numb that I could hardly walk. My biggest problem was I could not get air. My heart rate was fine, but no air. I had cramps, numb feet, over heating with jacket and no air. I had to pee for the first time ever while running. At mile mark 8 I peed and dropped jacket.

Then at mile mark 11 I sat on grass and loosened my shoe laces. I laid down and start to cry. I was getting taken over by emotions. It was then that I decided that the race was not going to end this way! I did not train all this time and drive across the state all night for it to end this way. If I didn't get up and run like hell I never would make it under 2 hours.

I thanked God for this opportunity and got up and ran like HELL! I thanked all the people who got me this far (you were one of them) and focused on a spot ahead and reeled it in. Then I hit the spot and picked another and another and another and another. At one point I realized that I was talking and yelling out loud. People around me must have thought I was crazy!! Others started helping me reel in spot after spot.

Half way through Lambeau Field where the fans where screaming I started to run faster and faster. Just before I crossed the finish line I could see the clock reading 1:XX . I had no idea of the time I had finished but I knew it was under two hours!

And to make this even more incredible Joe told me that 3 1/2 years ago he could not even ride a bike due to spinal problems!

I find his story inspiring and hope you do as well.

Cellcom Half Marathon

I'm ready to race.

My running partner, Melodie Dugenske, and I ran the Cellcom Half Marathon yesterday. The temperature at race time was about 40 degrees and sunny. Perfect for a great race.

We finished with an overall pace of 9:32/mile which was way below our expected/hoped for time of 9:00/mile so we could finish under 2 hours. We came in at 2 hours and 05 minutes and, while disappointed that we didn’t get 2 hours, it is a personal best for me by 45 seconds.

At 5 miles we were dead-on the pace for 2 hours with 8:57 miles. We both ran out of gas around mile 7.5 and our overall pace at the 10 mile mark fell to 9:22-ouch. The last 3 miles were a struggle with us both saying at some point – “I just need to make it to the next water station” and “When the hell will this end?”. Looking back it doesn't seem that hard.

We saw the back of the t-shirt on one of the runners that summed up our last three miles well.

Next year I think I’m just going to run for fun, slap high fives along the course, and generally just soak in the experience. Just forget about time and pushing myself.

Enjoying a beer specially brewed for the Cellcom.

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.

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.

Beer Making at Home - Is it Legal?

Did you know that brewing beer at home for personal use was illegal until 1979. In 1920 brewing beer was made illegal, period. There was a "mistake" in the laws the repealed Prohibition and that mistake allowed wine to made at home but not beer. One of the better actions by President Jimmy Carter was to repeal the federal restrictions on home brewing in February 1979.

So now adults over twenty one years of age are permitted to brew "not more than one hundred gallons of beer in a year". The beer brewed must be for personal use and it is illegal to sell home brew.