New Stock Positions

Today I bought Southwest Airlines (LUV) and Corning, Inc. (GLW).

The management team at Southwest continues to impress me. Southwest is the only airline making money right now, due in large part to their ability to hedge against future fuel costs in the derivatives markets. I read this week that they're buying fuel for only $2.01 per gallon right now. The Wikipedia article on Southwest Airlines has more details on their fuel hedging strategy.

I also bought Corning, Inc. after reading about their latest quarterly revenue tripling due to LCD TV panel growth. Their factories are currently running at capacity, and they stated that "demand for liquid crystal display televisions and computer monitors are unhurt by the U.S. economic slowdown".

I also took a look but decided to hold off on adding to my position in MEMC Electronic Materials Inc. (WFR) today. Although I still like the stock, it looked set to close below its 200 day moving average today on almost double its average daily volume. I want to be sure it's able to hold above its 200 day moving average before committing any more money to it.

Have you bought any stocks lately? Which ones, and why?

Professional Real Estate Agent in Phoenix Arizona

If you're looking for a professional real estate agent in the Phoenix, Arizona metropolitan area I highly recommend Gary Basden. Gary has over 30 years of real estate experience, he's extremely knowledgeable and works very hard for his clients. He also happens to be my father's cousin, so that worked out great when we needed to buy a home a few years ago!

We bought our first home back in 2003 and Gary helped us every step of the way. We got a great education on the whole process, and he always looked out for our best interests. The following year we recommended Gary to some close friends of ours who were looking to buy a house, and he helped them find their first home as well. In our experience, he truly cares about his clients.

Home prices and interest rates are the lowest they've been in years. If you're looking to buy or sell real estate in the Phoenix, Arizona area then I highly recommend you get in contact with Gary Basden and see if it might make sense to engage him as your agent. When you contact him, tell him Mark sent you!

Gary Basden - Phoenix, Arizona Real Estate Professional

Google First Quarter 2008 Results Up 30 Percent

Google reported earnings yesterday and surprised analysts with a 30% increase in earnings over the same quarter last year. Contributing to this result were lower than expected taxes and strong ad revenues being generated outside the U.S.

This is the 12th quarter out of 15 since Google went public that its performance has exceeded analyst expectations. So is it time to buy some shares?

Evidently some institutional investors think so. The stock is already up 20% today in the first hour of trading with nearly 10 million shares traded--25% more volume than an average day.

As companies get larger it becomes more and more difficult to sustain double-digit earnings growth, so it will be interesting to see how Google does over the next few years. So far, their business model has paid their investors handsomely.

Anyone out there buying Google today, or better yet, did you own it yesterday?

How To Make Money In Stocks

Yesterday I posted an article that mentioned Investor's Business Daily. Their website is a great resource to help you spot market leaders and identify buy and sell points.

One of the first books I read on investing was written by the founder of Investor's Business Daily, William J. O'Neill, and is titled How To Make Money In Stocks: A Winning System in Good Times or Bad.

To date the book has sold over a million copies and is now in its 3rd edition. In the book, you'll find Bill's CANSLIM system outlined, with an entire chapter dedicated to each letter:

C = Current Quarterly Earnings per Share: The Higher The Better
A = Annual Earnings Increases: Look for Significant Growth
N = New Products, New Management, New Highs: Buying at the Right Time
S = Supply and Demand: Shares Outstanding Plus Big Volume Demand
L = Leader or Laggard: Which is Your Stock?
I = Institutional Sponsorship: Follow the Leaders
M = Market Direction: How to Determine It

You'll also read about the nineteen common mistakes investors make, when to sell to cut your losses, and when to sell to capture your gains. How To Make Money In Stocks contains proven techniques on how to build a profitable portfolio and should be a part of every investor's library.

When The Stock Market Has A Strong Up Day

Today was a strong up day in the stock market with the S&P 500 advancing 2.27%, the Nasdaq up 2.80% and the Dow up 2.08%. It was indeed a great day to be invested in index funds and stocks that are outperforming the broader market.

When the stock market has a strong up day like today you can learn a lot about which sectors and individual stocks are relatively strong, because they will generally outpace the broader market. This is due to institutional investors buying a lot of shares to either open or add to existing positions, bidding the share prices up in the process.

Three out of four stocks follow the direction of the broader market, whether up or down.

If you invest in individual stocks, on a strong up day like today take a look at how your basket of individual stocks have performed compared to the market's advance. Did any outpace the broader market advance? You may want to add to these positions. Are there stocks that are clearly lagging, or did some even close down in price on a day like today? These may be candidates you want to trim from your portfolio in exchange for stronger performers.

A great free online resource to help with such decisions is Investor's Business Daily, which lists stocks each day that have moved Up and Down in price with greater than average volume. This type of price/volume action represents institutional money that you don't want to be betting against.

When the stock market has a strong up day it's a great time to identify leaders and laggards!

How To Invest In A Recession

Many friends and family members have been asking me lately how to invest in a recession, so I've put together these thoughts and recommendations:

The market's long term direction is UP. Populations grow over time and people always have to eat, wear clothes, have a place to live, and so on. Demand on goods and services increases as time marches on and over the long term the economy expands.

Patience is not only a virtue, it's a requirement. Housing recessions typically work themselves out after about 5 years, but who knows when this one will end. If you need to re-allocate your existing investments in order to reduce your exposure to volatile sectors of the market and obtain the correct balance for your age and the years left until retirement, do it. Then be patient while the market works itself out.

Max out your 401(k) contributions so you buy more stock as the market declines. Come to think of it, you should always max out your 401(k), but if you aren't contributing the maximum you can right now, now is a good time to increase it. In any case, invest in a good target date retirement fund if you have such a choice available to you. If not you can always allocate a percentage to stocks according to your age and time until retirement--a good rule of thumb is take 100 minus your age and allocate this percent to stocks, 10% to cash or money market funds and the rest to bond funds. Most financial advisors these days recommend you put 10% of your portfolio into international funds. I'm about 40 so here's how it breaks down for me:

100 - 40 = 60% stocks (50% S&P 500 + 10% International)
30% bond funds
10% cash or money market

Diversify, diversify, diversify. Put the majority of the money you invest in stocks into index funds (such as an S&P 500 index fund) or Exchange Traded Funds (ETFs), which are traded just like a stock but represent a basket of stocks just like a mutual fund. If you absolutely must buy individual stocks, put no more than 5% into each one.

The market won't stay down. People who buy stocks all throughout this downturn will make out like bandits over the following years. While it's true that stock markets go down faster than they go up, they simply go down less often. It's the shock of watching the market drop that's emotionally difficult for us, but it's the nature of the beast.

Focus on other activities besides babysitting your portfolio. It's spring and there are much more interesting things to do right now. Get out and enjoy the weather, plant something in your yard if you have one, visit friends and family, take walks. Life is short so enjoy today while you have it. Is worrying about the market or the economy the best thing you could be doing right now with your time? Not likely.

And my final thought...remember that dot com bubble back in 2000? The market WILL come back, higher than ever. Thing is, we just don't know when.

Do you have any thoughts on how to invest in a recession? Sound off and let me know what you think!

What Can We Do About Gas Prices?

With the price of oil going through the roof, what can we do about gas prices?

We may not be able to do much about gas prices, but we can definitely do something about how much gas we use. Here are some things you can do to save money on gas:

1. Keep your tires properly inflated. Check the tire pressure each time you fill up for gas. Doing so is safer and gives you better control of your vehicle, saves wear and tear on your tires so they last longer, and saves you about 3% on gas.

2. Locate a gas station with cheap prices that is on your daily commute route or near where you live and fill up there. Where I live in Phoenix, Arizona prices vary about 5% between discount gas stations and name brand stations.

3. Remove items you don’t need to have with you from your vehicle. Hauling that extra weight around will cost more gas.

4. Use synthetic motor oil. This can save you up to 5% on gas.

5. Drive more moderately--reduce rapid acceleration and braking.

6. Drive during non-rush hours when there's less traffic. You’ll save money on gas and your commute will take less time, too.

7. If your job allows it, telecommute to work one or more days a week.

8. Give your car a tune up if it's due for one. A tuned engine uses less gas.

9. Keep your air filter clean, or replace it if needed.

10. Pay for gas with a credit card that gives you cash back. Chase, Discover, and American Express all have cards that pay you cash back on your gas purchases (and you can earn up to 5% cash back depending on the card you use).

11. Buy gas at warehouse stores like Costco or Sam's Club. This will typically save you 2%-3% on gas.

12. Whenever possible, plan your driving to be efficient and run several errands at once.

13. Avoid drive-thrus and wasting gas while your car is idling. Park your car outside and walk in for transactions at the bank, fast food restaurants, etc.

14. Walk, ride a bicycle or carpool whenever you can, or take public transportation.

What can we do about gas prices? Make sure we get the most bang for our hard-earned buck!

Got another tip? Tell us about it!

FREE Coupons for Tom's BBQ in Phoenix Arizona

If you live in the Phoenix Arizona metro area and you like Chicago Style BBQ sandwiches, Vienna beef hot dogs, rib tips, beef brisket and more then be sure to check out my favorite Arizona barbeque restaurant: Tom's BBQ - Chicago Style.

Tom's is a nice little casual Arizona barbeque restaurant with two locations in Mesa and one in Tempe. At Tom's you'll get a great meal and it won't cost you a lot of money. They serve traditional barbeque items including a pulled pork sandwich (their best seller), chopped beef or chicken, hand carved beef brisket, and more. If you're into spicy, you might want to give their Spicy Hot Link sandwich a try. Side items include home cut fries, coleslaw, potato salad, macaroni salad, BBQ beans, corn cobbettes and more. If you need some great barbecue for a party or special function they also provide catering (here's their catering menu).

They're open for lunch and dinner every day of the week and their restaurants have a fun, casual atmosphere. Join their e-Club and you can save money by getting coupons and special offers emailed to you each month.

Tom's motto is “More meat falls off our sandwiches than most put on theirs", and from my experience it holds true.

Be sure to check out Tom's BBQ - Chicago Style and get a taste of why it's my favorite Arizona barbeque restaurant!

Protect Your Finances With Virtual Credit Card Numbers

If you shop online, one way to protect your finances is to use virtual credit card numbers.

A virtual credit card number is a one-use only number that is provide by your credit card issuer. You can use a virtual credit card number just like you would use a regular credit card number--either online, over the phone, on a paper form along with your signature, etc.

The benefit of a virtual card number is it can only be used once. After you use the number it is no longer valid, so even if someone gets ahold of the number it is worthless to them and they cannot make a purchase with it.

Credit card issues generally offer either free software downloads of software that will allow you to login and generate a virtual card number, or a web interface to do this, or both. When you create a virtual number you are provided with all the information you need to make a purchase, include the credit card number, expiration date and 3-digit CVC (Card Verification Code) number as appropriate.

The Citi MasterCard and Discover Card both offer virtual numbers, and I am sure that other credit card companies offer them as well. Check with your credit card issuers to see if they offer virtual numbers, and how to get access so you can create them for your account.

Use virtual credit card numbers to protect your finances when shopping online!

Here are some related tips on how to Protect Your Assets.