If Stocks Were Like My Playlist...

My playlist would go something like this:

a) Hold classic stocks for the long haul - Like a good wedding playlist (Kool and the Gang, Black Eyed Peas, Jay Z, Notorious BIG, Montell Jordan) these tracks will not disappoint as they are loved across generations.  Apple, Verizon, Manchester United, Coach are often the most used technologies, watched sports teams, and worn jewelry items in the world. They may fall out of love briefly...so buy them when they do and press play and enjoy the ride.

b) Keep Watch for Young fiery stocks - These names take the industry by storm and rise to the top very quickly. In the music world, they are often associated with one name: Drake, Kendrick, J Cole, etc.  In the stock world think Facebook, Amazon, Netflix, Tesla, Google. The only problem is these stocks or albums are almost never on sale. If you find a dip, get in while you can.

c) Flip Through Old & New Songs - This is the most important category for me. I'll listen to anyone, especially if you have Lil in front of your name: Lil Wayne, Lil Uzi Vert, Lil Yachty.  Old and new artists like ASAP Rocky, Travis Scott, Joey Badass, Gucci Mane, Bruno Mars, The Weeknd.  These are the songs that when played someone absolutely loves, hates, or admits they've never heard of the artist. I try to find stocks with this profile. These songs must be listened to over and over again to determine do they still have it, are they hot, or ready to flop.  If they were stocks, would you bet $10K on the following:

• Lil Wayne  - will the Carter 5 come out, does he still have it??
• Bruno Mars - is he the next greatest thing since MJ?? #24karat
• Lil Yachty - he's been hated on by ever hip hop purist but was just in a Target commercial...is he about to break out or break down?
• Joey Badass - Can a lyricist make it big without big crossover hits?

Take this approach, follow the news and make educated decisions. For me, I would bet on all of these scenarios above. Lil Wayne's come back story would be worth a buy, Bruno bringing R and B back, Lil Yachty giving us fun rap (sorry rap purists), and Joey keeping conscious rap alive.

I have a number of big winners in the past few years making some educated calls:

Apple - bought when ppl said they couldn't make new products or sell phones in China
Alibaba - everything on the site is counterfeit and sales would not grow
Coach - all the purses are being sold in outlet stores and no one will pay full price
Whole Foods - Whole pay check has no value because everyone sells organic

The calls for early demise in these household names were great opportunities to get in. The hardest thing is to be the only person not selling when things don't go right. I'll list my new playlist here but feel free to share yours:

Verizon - losing every wireless carrier to TMobile and Sprint
Lululemon - somehow the stock I sold last year is BACK down to the levels I bought during their last crisis
Synchrony - not so great earnings and people are starting to default on credit cards again
Gilead Sciences - they have no drug pipeline and earnings will keep getting crushed

How to Invest in a Clinton / Trump Election Year...

First, I'll address where I've been since my posts have dried up for about a year. My answer is: "Still Right Here".  As we all know for the last few years, people continue to have to do more with less and that extends to companies. With unemployment pretty low for most big companies, they have to squeeze more out of every employee.  Good old fashion hustlin', and I got the memo and have been very busy at work and in my personal life.  The other reason, I haven't written much is because as a country and in the stock market things appear to be in a holding pattern.  I had a feeling a little over a year ago that the stock market was reaching its tops and I took my ball and went home.  For my portfolio, that meant I decided to sell some of the stocks that had been big winners. If you need a reminder flash back to this post: http://urbanomics.blogspot.com/2014/08/marketsno-longer-starting-from-bottom.html

I never like selling but if life you can't get too greedy so I parted ways with names like:

• Allergan - maker of botox (Allergan was acquired Actavis for a nice price) :)
• Lululemon - athletic wear (bought when it was in the low 40s, after some of their pants were showing too much skin and when the CEO ranted he didn't want bigger sized women wearing the clothes, and waited for them to correct their missteps)
• Caterpillar - big equipment maker (bought early and they fell, then I acquired more shares over time through patient dividend investments and they rallied above my purchase prices...just sold in the last few months for a small gain)
• NovaGold - gold miner (bought over 3 years ago and they dropped by over $50 percent; my old mentor reminded me if the fundamentals make sense buy when they are on discount. At roughly $3 I bought more and sold a good portion of it this year at just under $7. 

I felt a little over a year ago we were closing in on the top and I was just a bit early, but by planning then I was starting to set myself up for what's to come. A market near its highs, a Hillary Clinton and Donald Trump election year, and other surprises like the UK leaving the European Union have kept the markets a little uneasy. So I'll tell you what I've been quietly doing as I've sold my winners over the last few months:

Buying Top-Tier Companies (when they reached Low Prices):

• Apple (bought in the low $90s)
• Verizon (bought in the low $40s)
• Manchester United (bought b/w $13-14 range)
• Gilead (bought b/w $73-74) 
• Alibaba (low $80s)

These bigger names anchor my portfolio and should grow in good times and fingers crossed, the bad times. They all pay a dividend so they will pay you to wait :)

I then decided to begin thinking about how I wanted to thin my portfolio out to and hold higher quality names. I've been making hard decisions and here are some of the mistakes I think I have made:

• Gold - NovaGold (I still own a small portion and should have sold it all when it hit its highs)
• Oil - There is too much oil around the world and oil stocks are NOT going anywhere anytime soon. I own (British Petroleum(BP), Oasis Petroleum, Cheniere Energy) and the only good thing is the latter two, I don't hold big positions. BP pays a nice dividend so I use that to buy more shares and love that this is a long-term cornerstone of my portfolio at these levels.
• Non-Dividend Stocks, Not Growing - Lastly, I have a few stocks that don't pay a dividend!! I've held them for quite some time and they are just sitting there taking up space. For me names like:  St. Joe's Company (real estate), Nuance Communication (voice services like Siri), Hertz, and a few others just are not bringing much to the table. So I'll likely be parting ways with these names in the future.

I'm reminding you to go Vote, go Cubs, for me...go focus on higher quality names in this crazy election year.

~ Get Ur Urb On

Value Investing - Look4Leaders / FollowUrGut

Here is an article where I get to make a mental note about a stock I own, why I bought it and when I thought it was a good time to ring the register (sell some of my stocks).  Doing a quick search on my blog, gives me a quick peek into when I first took notice of Lululemon. I like to think of myself as a VALUE INVESTOR. Just like in life, I sleep better knowing I'm getting a deal on my bills, that new TV, and hopefully when I invest. Value investing can be tough because if you are a person that loves to follow the crowd then this investing style can make you nervous. I recently watched the movie Draft Day, and to quickly summarize the movie: The consensus #1 player did not get selected with the first draft pick and shortly thereafter the other teams began to panic and also decided to not draft this player and he remained available until the 7th pick.  So it made me think about the following:

1) Was he really the best player and team #7 got a huge bargain, while teams #1-6 got scared and made a huge mistake
OR
2) He was never the best player and everyone had really bad info, making him the consensus player

In short, these are the types of stocks I try to search for: "A potential number one draft pick that is falling in value". Lululemon was that out of favor company that caught my eye. I won't revisit everything here but my mental notes are to remember how I found out about the company and is there a legit reason for the fall from number 1.

First Found Out - Friends wearing the clothes, carrying the bags, Yoga craze, and me laughing at their high price tag ($100)
Fall From #1 - The company began a freefall after the CEO made disrespectful comments indicating that Yoga pants were not for women above a certain size. Then the next black eye came from a huge manufacturing mishap that caused the pants to be more see-through than women had bargained for.

The hardest thing then was not buying this amazing stock at full price ($70+) because they were the #1 pick...the favorite Yoga pants for many even with a little bad news. Then soon after, fear kicked in and I didn't want to buy the stock as it dropped under $45 a share. Right!?? I told myself this company was a huge mistake. Stop...I got myself to relax took a few deep breathes and tried to understand could they eventually overcome these things and remain a world class leader. I thought so and began to buy the stock from $37-42. This past few weeks it made sense to finally sell most of the shares after 1+ years because they have come full circle and I'd like to walk away and not be greedy.

I sold 75% of my stake and I'm on to the next hidden gem. #Value, #Patience, #Look4Leaders, #FollowUrGut

Urbanomics Pillars - The Path Set For Stability and Financial Freedom

I have not written much lately because my focus continues to on working thoroughly on the Pillars I have written about so much over time. A quick recap of those principles that are grounded in the following Pillars:

Spiritual - a belief in something (for me that is God), love for your family, and a willingness to treat others with the respect and the equality they deserve

Financial - a belief that financial independence on your terms will give you a freedom from the shackles of debt, the privilege to work on your own terms and a future legacy to pass down to the generations of your family.

Mental (Education) - a belief in the importance education and the sharing of various human experiences to allow you to grow

Physical - a belief in the importance of enhancing your physical health to support a sound mind, body, and soul

I hope you find these simple pillars interesting but you can't stand tall with just one, while the rest languish.  Here is a quick example of why just having lots of money can't get you Financial Freedom. We all pick on star athletes and how much money they make. But they are also given a blessing at such a young age. Without the proper nurturing, it's easy to see how a mult-million dollar star can go broke fairly quickly. Forgetting about taxes, living for today but not for tomorrow, and making bad investments usually seem to be a common theme. Listen to this story and remember money is just relative, someone will ALWAYS have more of it than you will. But if you use it to free yourself or UNPLUG from what everyone always tells you that you should have or that you need...you'll find yourself the richest person in the world.

1) Article on a NFL Player Who's Mom Demanded $1Million Dollars

http://profootballtalk.nbcsports.com/2015/04/11/phillip-buchanons-cautionary-tale-my-mom-demanded-1-million/

2) Quick Video from former NBA player Josh Childress (Why Athletes Go Broke)
courtesy of Grit Media

Personal Finance 101 – Starting an Investment Account

Picking A Broker

This is a quick tutorial on how to get started with opening your personal investment account.  While there are a number of choices, the average investor just getting started should only consider discount brokers. That’s because if you are no bringing a 100K or more to the table to begin with, the banks are that considered with giving you a break on fees and charges.  I am personally sending you two of the biggest players in the industry:

TD Ameritrade - https://www.tdameritrade.com/

eTrade - https://us.etrade.com/home

These two are brokers have been around since the beginning of online investing and the Dot.Com era and are still around.  There are many brokers to consider but these two do just about everything you will need them to do when just starting out. Go to TD Ameritrade or ETrade and trust me you will see a link to “OPEN AN ACCOUNT”. Click on that link and fill in the following:

Account Minimums – In today’s world the minimum amounts are going to be roughly $1,000 to $2,000 to open an account. Have this amount stocked away in your checking account before you begin your application.

Opening an Account

Personal Details:

-          Have your Social Security Number and Employer Name/Address ready

-          Name/Phone/Email

Citizenship

-          Select your status

Account Type

-          Choose “Individual” for traders looking to establish their first account

-          Choose “Buy & Hold” for investors starting off with the basics. You can always upgrade to complex trading in the later years

-          Confirm you are a “first-time” investors

Account Owner Details

-          You will be required to fill out unique account details that prove you are who you say you are and not trying to open an account through some type of illegal enterprise.

o   Employment Information

o   Financial Information (Be honest about your net worth, its likely 0 – $15K)

o   Personal Affiliations ( Select No, if you are new to investing and have no family members that work for Wall Street)

They will have you review and edit your details, agree to their terms, and eventually choose an “Account Login and Password” and “Funding Type” (how you want to fund your account). 

Funding Your account - Think “Direct Deposit” when getting a tax refund.

-          You will enter the “Routing” and “Account Number” of say your checking account into your newly established broker account.

-          Your broker will deposit a small amount of change into your checking account.

-          You will identify that amount deposited and login to your new brokerage account and CONFIRM that the two accounts have been setup to sends funds between each other.

-          Once confirmed, you will be asked to initiate an electronic withdrawal for minimum deposit amount over to your new brokerage account.

-          Remember starting off with $2,000 as a minimum is just that to these guys so be ready because the key is to meet that amount so no fees will be taken out against your account.

Happy Trading

Sears / Kmart - Blue Light Special Losses its Flicker

In a constant search for deals, you have to be watchful of a company that is down and out versus a company that is down for the count. As you've read in the previous posts, I have not been able to find very many beaten up companies and the economy continues to steadily improve. My favorite has been Lululemon (LULU) and I stuck with it through the rough patch. The good is they delivered great news during their last earnings announcement and rose over 10% after that announcement!  Now we are on to the next potential candidate.

Sears Holding (SHLD)

Back in the day Sears was one of those places I remember going to for all of my needs. Then came the competition from Walmart, Target, and the INTERNET. Sears even bought Kmart (big blue) and that still has not turned this big company around. My quick assessment is Sears is big and burly and has not attracted me with lower prices or easy store locations to navigate to. So for me, they often lose out to Amazon, Target, and my local grocery store.  Sears has been on my radar as a company that is definitely down and out. The latest news is now they will be borrowing money from their CEO and hedge fund manager Eddie Lampert. They will borrow roughly $400 Million dollars which is abnormal and smells a bit like desperation. I think other investors may agree with my assessment as Sears stock has fallen from somewhere in the $40 dollar range to $27!!!

Sears is not only down but likely knocked out for awhile. The one thing I will watch closely is the CEO. Why?... because smart people usually don't throw good money after bad. Eddie Lampert may be trying to save face by continuously trying to revive a sinking ship...OR he may just have one more trick up his sleeve.

URB Assessment:
I don't shop here, the prices still are the lowest, and the stores have not been remodeled in quite awhile. I am curious if it can get any worse so a VERY SMALL investment could be stored away for a rainy day. But I don't think this company is a hidden value waiting to be unleashed. More like a Boxer than needs a new trainer or recognized its time to retire.

Markets...No Longer 'Starting From the Bottom'

I have not written a post in a while and I guess I fall into the age old Wall Street saying: "Sell in May and Go Away".  This phrase is well known in the investment community and is used to describe the the summer season where investors like myself find better uses of their time than keeping up with the stocks or the Kardashians.  I have kept fairly busy and have been distracted by a nice summer of sun, sports, and home projects.  Being busy has reduced my investment activities and I guess that I was 'busy in May...and went away'.  So the question is are you missing out on in the markets, this summer??  As you know, I always start with my view of how I believe the economy is performing. Here are some of the things I've observed: 

Work and Mobility Increasing
- People continue to work more
- More Job Openings / Recruiters Calling
- People Accepting New Jobs
- More people moving to new homes/ in-state/ across state lines

Frugal Country
- Pay is increasing slowly upwards
- People are looking to continue to reduce their expenses,
- Find affordable housing and living
- Everyone is looking for deals

Controlled Splurges
- More Staycations (Stay at home vacations - theme parks, bed and breakfasts, etc) Also 1 tank gas trips
- People waiting for great deals on vacations
- Tech Purchases: Phones/tablets, touch devices - People want exciting devices that make their lives easier and considered cool

What this means to your portfolio:

The stock market is often a leading indicator and has been doing VERY well for the last few years. To put it into perspective...I heard a stat that I found amazing: At one point stocks, specifically the SP 500 had 75 days without a correction recently. This means things have rebounded very well and astonishingly there hasn't been much of a pause.  So using my best Drake impersonation...this market is definitely NOT "Starting from the Bottom". Do I have some grand plan...Yes and NO.

My Investment Plan
- Don't do anything grand :)
- Take notes from Drake: This market started at the bottom (hit bottom) in 2009 and 2010 and now we are here at market highs. I have kept it simple...Starting last quarter whenever the Dow Jones enters into the 17000 territory I take the time to SELL some of my big winners at the top. At this point, I don't mind holding a bit of cash, buy something paying a dividend, and or wait until stocks I like drop.
- Activate the Activist Investors: When I sell some winners, I'm buying stocks that may rise quickly because they are being bought by other companies or are being pushed to do something by big time investors like: Carl Icahn, John Paulson, or myself, The Oracle of Hyde Park. Here is my quick list:

TIME WARNER CABLE 
ALLERGAN 
LULULEMON
HERTZ