Commentary (Page 463)

There is a great article on Blogging Stocks that discusses what the author would have done differently over his lifetime had he been investing with today’s wisdom.  Below are his 5 pieces of advice and you can click through here to read the full explanation. 

My advice though is quite simple.  Only invest in companies that have shown a track record of consistent growth and them actively manage your investment in that company so that you avoid the inevitable times when the market goes against even the best of companies.

1. Don’t try to hit the ball out of the park with every investment.
2. Save more!
3. Do more homework on sites (like the stocks that I rate here at Confident-Investor.com and call out as Good companies).
4. Diversify the portfolio
5. Buy more bonds (this is almost the same as 4).

Check out the original article, it is a good read.

The stock market in the US is closed today so there will not be a company analysis posting.  Enjoy the day off.

Editors Note: There are few ways to earn a great return that are better than just not wasting your money and saving it. If you are living from paycheck to paycheck then you are almost definitely not getting the maximum and safest return on your money. A Confident Investor saves money continuously and religiously. You must remember to pay yourself BEFORE you pay anyone else.  Stella has some great thoughts here so I wanted to publish this guest post.

Guest Post by Stella Mak

For most people, saving money has been the best way to a better and more established future. Thus for those who believe in the immense power of saving money, they will somehow find ways to put away some money for saving for a rainy day.

Over the years, people find that it gets harder and harder for their goal at saving more money to take place. They feel that, unlike the good days, common folk’s saving money goal is now no longer a part of life but it has become a commitment that they have to force upon themselves in order to accumulate a sum of money at the end.

In addition, there are also some people who insist that saving money is no longer a possible trait in the lifestyle of modern people. This is due to the increasing standard of living, resulting in many people having to look forward to the next paycheck in order to survive the last few days of this month. In such a situation, is it possible for anybody to be really saving money for a rainy day or for retirement? With the basic commodities rising in prices everyday, it seems unlike that saving money is a solution out of poverty.

However, the key point to note is that it is definitely possible for people to be saving money more successfully, despite all the contention. How? Below is a list of some revolutionary ways that have been proven to give you more success at saving money.

1. Fix the percentage from your salary for your goal at saving money.

It is not uncommon for regular money-savers to set aside at least 30% of their salary for their money saving goal. Most people will first spend whatever money they have from their monthly paycheck or sometimes even more before turning to fulfill their money saving goal. Thus, if you are able to limit your expenditure, your attempt at saving money will definitely be more successful.

2. Pay everything in cash

Most customers are used to paying with their credit cards. This can become a big problem when people start to spend everything on credit. In recent statistics, it has been discovered that the average outstanding credit card balance is around $7000! Plus, as high as $1000 per year is actually spent only on credit card interest charges alone! With such a high credit debt, how can anyone fulfill his goal at saving money?

As a result of people’s desire at wanting more, they did not remember to keep track of their monthly expenses with the end result of accumulating more payables instead. Their saving money goal has to be shelved in order to make room to fulfill this desire for wealth.

3. Goal Setting

It is very important to set goals and stick to them. You should also be very exact about the amount you want to put aside for your saving money goal.

Besides setting your goals based on priorities, you should also set the time frame for achieving your goal at saving money.

4. Study your company’s retirement plan

One other way to help in your saving money goal is to study your company’s retirement plan to see if it will benefit you when you finally retire. Some companies have a plan whereby they deduct a certain percentage of your salary from each paycheck for your investment funds. This can be seen as forcing you to set aside funds for your saving money goal.

The important point to remember is that your goal at saving money is not an attempt to integrate it into your way of life or to make it your yearly resolution simply because everyone else is doing it. What is vital is what you get at the end when you’ve finally achieved your goal and has proven to be successful at saving money.

Saving more money in this bad economy is not impossible, you just need to have the right strategies and get the right advice from the right people! Find out how you can actually make and save more money at http://www.makemoneyideas.expertreviewslist.com

Article Source: http://EzineArticles.com/?expert=Stella_Mak

I am continuously asked: Of all of the Good Companies that I list on this site, which are the best?

It is likely not in your best interest to invest in all of the companies that are Good Companies (which are re-listed for you in the Watch List). That strategy will spread your investment out too much and you will not be able to spend the time necessary to truly understand the companies and their operations. Instead you should focus on 10-20 companies that you can truly understand.

The best way to pick your investments is to diversify your companies into several industry segments (banking, retail, manufacturing, etc.) and that is why the Watch List is so long. It allows you to find several companies that are well run in any given industry segment.

But what if you didn’t care about diversification (perhaps because you satisfied this need via a diversified mutual fund strategy) and you just wanted the best of the best?

The Confident Investor Rating is a continuous integer rating scale. I break up that scale for this site into 3 segments: Poor, Fair, and Good. It is no surprise then that there are companies that are all the way at the top of that scale. The best of the Good Companies are:

• Millicom International Cellular SA (USA) [stckqut]MICC[/stckqut]
• Volterra Semiconductor Corporation [stckqut]VLTR[/stckqut]
• Capital One Financial Corp. [stckqut]COF[/stckqut]
• Image Sensing Systems, Inc. [stckqut]ISNS[/stckqut]

I think that every portfolio should include these 4 companies. They have consistently grown their EBIT, P/E, EPS and revenue over the last decade. They are simply excellent companies that score 10-20% higher than any other company on the Confident Investor Rating scale.

To be clear, Millicom and Voltera currently have a perfect score on the CIR scale and they are the only 2 companies that I am aware of that currently have that high of a score! Capital One and Image Sensing Systems are the only 2 companies that are currently one level below that perfect score. There are approximately 15 companies that make the next level after that.

There are quite a few reasons to not invest in a company’s stock. The biggest reason, of course, is that the company is not a good financial investment. Perhaps the earnings are not good or the growth is lackluster. Perhaps you are already over-invested in the sector and want to make sure that your portfolio is balanced. Spending a few minutes on this site will show many examples of companies to avoid for one of many reasons.

Another reason to not buy a stock is that you personally do not like the company. Perhaps it engages in selling products that you don’t think should be sold (alcohol and cigarettes comes to mind). Perhaps it sells fast food and you think Americans eat too much fast food.  Perhaps it is a medical insurance company and you think medical insurance should not be a profit making venture. Perhaps it is a military contractor and you don’t want to be part of the war machine.  Perhaps you think the CEO is a goof ball and cannot see how he will not destroy the company even if it is financially strong today.

Whatever your reason for not investing in a company, that is your right. I will never suggest that someone violate their principles in search of profit. Our standards are intensely personal and should never be violated. Unfortunately, one of the most famous modern investors that I really admire, Jim Cramer of Mad Money, doesn’t agree with me on this point. That is okay – we are all entitled to our opinion.

However, the opposite corollary of this is simply not true! While you should never buy a company’s stock if you don’t like the stock, you definitely should never buy a company’s stock just because you like the company or its products. Peter Lynch (another famous investor) coined the term “buy what you know.”  While this is a fine place to start, you should never own a company’s stock just because you buy the company’s products! You need to make sure that they are an extremely well run organization and do your due diligence on their financial condition.