The Plan - Can the Economy Grow Forever?

I often talk about the Pillars that act as a beacon guiding my life, business, and financial decisions so I like to revisit those from time to time.

                 Urbanomics Pillars: “Spiritual”, “Financial”, “Physical”, and “Mental”

We often preach about balance and diversification in the financial world but how often do people consider this in their day to day loves.

Financial –

I’ve been moving comma’s so don’t start no trouble with me…

I hear you Drake, keep moving those commas. My mission is to do the same while helping people in the process. But before I get started I’d like to remind people of the incident at Starbucks this past week. Can you imagine getting kicked out of a coffee shop just because of the color of your skin…and my response is YES.  Those young gentlemen were having a business meeting, trying to move comma’s but trouble, haters…and risk interrupted their lives.  This is not an isolated incident for many of us so I ask for them to stay strong and rely on their other Pillars for balance and keep pushing forward.  Here are my views on all things financial:

Stock Market - Again, you won’t find me writing much about the stock market these days because things are steady. I said a few years ago, when Mohammed El-Erian described this economic period that we are in as the “New Normal”, that I thought we would continue to bump along higher and higher coming out of the near depression period of 2008. So the goal has been to find amazing stocks at discounted values and when they rise, part way above your target level...part ways with them.  Why because we are in the 9^th YEAR of an economic rally (soon to be the longest in history). I’ve learned over time from Mohamed, Warren Buffett, and others to try to keep it simple. So find stocks you like, determine what is the ideal price you would buy it at…sometimes take another 5% of that number and wait to see what happens J

Remember Lululemon recommended in the 40s, Apple in the 90s, Alibaba in the 80s, Caterpillar in the 80s, Manchester United @ 14 if not use the search tool and track these old friends of mine down. I still holding Apple, Alibaba, and Manchester United as core holdings and am learning how to protect these holdings as they've appreciated nicely. So to the many people that say growth has dominated the market in recent years I agree but I remind them…for me it’s the long game and how much you bought something for and amazing even a few growth stocks like Apple and Alibaba will fall into your lap.

And for the people that trust in the process, support others, call out injustice when they see, and pay it forward here’s what I’ve been trading.  It’s my way of giving back…my free and very simple knowledge. A chart is included below and simply represents prices where I’ve had success trading these stocks over the last three to six months. The Column on the left are shares I've owned and traded options in. The column on the right I’ve just traded options only. The asterisk means I still own the stock:

Note: Please find the correct spelling for Qorvo 

More to come on how I'm planning for the future (real estate, biz development, taxes) as the soon to be longest economic rally history WON"T last forever. And yes...I was channeling Drake’s hit song God’s Plan when I was developing this post and was equally inspired by Kendrick Lamar and Jay-Z’s recent projects and social consciousness. Many blessing to them and to you all.  And if you haven’t seen the video, of course I recommend that you check it out here:

Stock Investing - Reality TV Style

I began looking at my blog posting over the last few years and my posts are wayyyyy down. Now there are simple reasons for this but as one takes on more responsibilities at work and family needs grows I have less and less time for writing. Oddly enough, I do want to address one thing with this post and that is that my time put towards doing my homework doesn't waiver but gets more efficient. It can't waiver because this is your lifeline into financial freedom...one of the pillars that I often blog about.  Now I'll give you the second reason why my posts have diminished a bit (little bit of a cop out)...the markets keeps streaking HIGHER and the HIGHER it gets the HARDER it is for me to find VALUE.  I'll give you an example...I won't give you my age but I grew up in an era where a standard candy bar was usually $0.50. and one could enjoy a Snickers, Reese's PB Cup, and even a pack of M&Ms for less than a dollar and if I I felt like a king...the king size was probably $1.00.  My search for value never waivers so in today's world so when I visit a store I don't bother looking at the candy bars...can't do it! I do the simple math and if I don't see a merchant getting close to my value threshold of 50 cents then I don't give in. Nice thing for me is I don't have a sweet tooth but when I find the occasional deal, I enjoy my Reese's cups.  Similarly, the stock market keeps shooting higher and I'm not finding very many candy bars to choose from. I keep looking but I don't give in unless on my terms.

Now for the Reality TV portion of this blog. I hope over the course of the next few months to change my blog up a bit. Instead of writing, I'd love to simply post a video blog and just talk to you about what I'm seeing. I have to be efficient with my time. I'm still researching a lot so I can't wait to share with you my thoughts on areas I want to invest in NEXT but only at candy bar prices.

I always tell people to start with what you know and venture out to areas you don't mind reading about. So my areas, which I've been keeping up with are:

CYBER SECURITY - Think Palo Alto Networks, FireEye, Cisco, Symantec, F5 Networks, Checkpoint, Cyberark, Fortinet
TECHNOLOGY - Apple, Alibaba, Google, Facebook, Netflix, Qorvo, Amazon, Qualcomm

FINANCIAL PAYMENTS - Paypal, Visa, MasterCard, Square, Stripe, Vantiv,

I'm not great at these areas but I also follow Retail, Pharmaceuticals, Telecom. 

Name Names: Over the last 12 months that small group of stock that have popped up on my radar have been: Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and I own all of these names.

Buyer Beware: Then there are names that I watch and watch because it's like buying Fireworks after the 4th of July OR candy bars that have past expiration dates. Is it worth the risk and Are they still good often come up.  Who might that be: Twitter, Snapchat, BlueApron, Kroger, Under Armour, Dicks Sporting Goods, Foot Locker.  For these names I often don't buy at $.50, it's not worth the risk so I have to recalculate and see will they hit $.25 and is it worth it or will I get a stomach ache. For a select few I might bite, think Jack Dorsey (Twitter), Kroger (feeds middle class), and Under Armour (they have Steph Curry, enuff said).

I'm out.

Full Disclosure: I own Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and for a number of them my candy bar prices are near their lowest price ranges in the last 52 weeks.

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