Talk to Hal.

Members present: Brian, Bickford, Danak

SPY is currently doing pretty well, and we were wondering if we wanted to see if it is going to go higher or do we want to lock in our profits. If there is some downturn on the horizon, when do we want to get out? Granted, SPY is an index of the S&P 500, which means that as long as the parts of the fund are doing well as a whole, we are good.

SPY is hovering at $151, and historically it hasn't gone much past $160. We purchased it at $119, so it has been mildly profitable. It might be a good idea to set an automatic sell, say at $140, just to limit the amount that we can lose in the case of a crash. Using automatic orders is good for a small, informal group such as ours. We meet once a week, and none of us is at the computer all day looking at the numbers. Using these tools allow us to keep a watchful, robotic eye on our money.

EWZ is steady.
ENZL is humming along, as is ATT.

Now, on to the problem of figuring out where to put our money.

We took a look at a few different funds, and did some reading. A while back, we were thinking about investing in HILO, an emerging markets ETF. It is billed as a low-volatility, emerging market, dividend ETF. Also, we looked at EELV and EEMV. HILO is unfortunately a little more "expensive," because it has a high expense ratio. The fund is performing well, but it drags a little because it has to work that much harder to make up for the higher expense ratio.

Next week we should delve further into these funds, and maybe even make a decision on a buy.

Profit!

Yousef forgets to write the minutes [insert joke here]

We started talking about retirement, and some among us are less inclined to crunch the numbers for fear of realizing they will be absolutely destitute, so we crunched some numbers. Here's the take-away:

A pension plan is a stable option, if you can secure one. However, it hinges on the idea of not leaving that job before retirement. If you do go with a pension plan, you need to take the few minutes to look at the calculations of your benefit. It is not as painful as you think...promise. Also to consider, is what happens should you leave and take on another job.

Stocks:

SPY is still doing well, still above the [rising] DMA.
ATT is doing okay, even if a little down--still getting dividends.
ENZL is still going up.
EWZ is still doing it's crap self.

What to buy next?

Profit!

effin' ETFs!

Members present: Brian, Bickford, Yousef (and a unicorn?)

We finally bought some ENZL, but not when we were expecting. We put in a bid price for when the market opened on Monday, but the stock opened a few cents more per share, so Scottrade didn't buy it. However, when the fund dipped below a few days later, we were able to get it at about $4 lower, nearly taking care of the trading cost!

The bid-ask spread was really big with ENZL, partially because the volume is really small and also because it was the weekend. Because the bid-ask spread was large we would have spent several dollars more per share to buy the stock. Since we are dealing at such low dollar amounts, we have to take a look a our margins being eaten up. The bid-ask difference goes into paying the middlemen along the way. If we were dealing in larger dollar amounts it wouldn't be as significant to us.

Speaking of ENZL, from an article on seeking alpha:

             New Zealand's GDP grew a much faster-than-expected 1.1% in Q1, helped by a rise in   

             agriculture and business services. Economists had targeted 0.5% growth. It's NZ's fastest pace  

             of growth in nearly five years, but some strategists worry "the large rise will only cast further  

             doubt on the veracity of the national accounts data, which have been subject to considerable 

             revisions recently. 

                    (link here)

Seeking Alpha has some neat-o stats and links to news related to a particular stock or fund. It is worth checking out for research and monitoring. Glancing over the site, though, we noticed some unfamiliar terms and started talking about parsing all the financial-ese. Here's a nifty glossary for some of those terms. 

Take for example concentration risk, which is a numerical value that tries to explain just how diverse (or not diverse) a fund is. A high concentration risk would mean that there are a lot of different parts to the stock and it is fairly diverse. Take SPY, the S&P ETF--it has a concentration risk of about 8%, whereas ENZL has one hovering at 22%. This means ENZL is less diverse, and while that might not be a problem, it is good to be aware the makeup of an investment. 

The diversification of an ETF means that if one individual stock in a fund tanks, the other parts mitigate that, which is really the appeal of an ETF in the first place. 

You have a few types of ETFs:

Market Share Weighted:

     Market share indexes are based on the number of shares of each company in that exist in the   

     market.

Capitalization Weighted

      Capitalization weighted indexes are based on the market capitalization of the company--the size of   

      the company. 

Float Weighted:

      Each stock is based on how many stocks are floating, or being traded.

Price Weighted:

     Two stocks of the same value, A and B.

     A has double the market cap of B. 

     A makes up twice the percentage of the portfolio than B because of the market capitalization (based   

    on how big a company it is). A will have twice the impact on the value of the fund because it is 

    twice the percentage of the portfolio. 

    The DOW is price-weighted, which means it only depends on the price of the stock. The DOW has   

    fifty stocks, and the fund has one share of each of the stocks. The value of one share of the DOW is  

    the combined price of one share of each of those fifty stocks. Only a cool thirteen large. 

And then there's a few more stuff that we're not even going to attempt to get into (Price, market share, market capitalization, fundamental). 

     

The point of all this is to try and understand what exactly effects the value of an ETF. Really getting this might help us be more informed when we select (and eventually sell) shares of various funds. 

It's a process, yo!

Profit!

The gang buys the Mordor ETF!

Members present: Brian, Bickford, Danak

One of our members recently got hired for a new position, and he was able to have a conversation with his new employer about his internet footprint. Interestingly, his new employer is friends with one of his former colleagues on Facebook, and so she was able to take a look at multiple layers of his presence online. The good news is that he apparently had been a responsible and not-too troubling netizen. However, the real story, if any, in this is that even the precautions of locking things up tight may expose some cracks, say from unintended and unknown relationships. It seems best to use the Babysitter's club axiom of not writing anything down that you wouldn't want copies posted around school of.

Apparently, in late June we earned a 2% dividend on EWZ, so that means we have 2% more of disappointment.

SPY and T are on their way up. EWZ is floating.

It is decision time, and here's our shortlist: ENZL, NORW, and HILO

Comparing ENZL and NORW with respect to percentage changes (see below) shows that ENZL seems a little less volatile. The comparison to HILO (not pictured) shows ENZL to be the least volatile.


So we decided to go with ENZL, partially because it seems like a good buy and partially because we just needed to make some sort of decision. It doesn't feel like a hasty one, but we have had a tendency to sit on money and just let it pile up.

But wait!

As we were about to buy ENZL, we noticed that there was a difference in price between the bid and asking prices. These are the prices that you get and will pay, respectively. The discrepancy between these two is called the spread. A large spread can be the result of a low trading volume for the product or for a product that is not actively being traded.

*More information here.

So the question became, is this worth it? In other words, are we going to be able to make up the spread in the long run? We thought we would, so we went with it. Another fun thing with trading during nights and weekends is that the market is closed, so technically when we click buy, nothing has officially been bought until it goes through when the market is open. There are several buying options, including market and limit.

Market: you agree to purchase the stock/fund at whatever the market price is
Limit: you set the limit for what you will buy or sell at

You can also set the window in which the trade can take place.

This opens up some interesting options for automating your transactions to a certain extent. You can go as deep as you want to with these, however make sure that you don't set up something disastrous or you could end up defaulting or getting your trades restricted. Trade safe, America!

So I guess that means we have a piece of New Zealand, but the real question is, why isn't the symbol LOTR?

Profit!

Euro Momma Jokes

Members present: Brian, Bickford, Danak

So Europe is going to have a banking, and the market approves. Even our crummy Brazil ETF (EWZ) was up a little. A banking union for the Eurozone means that there is some more guaranteed stability.

Here's a the Planet Money article that gives some more deets.

Even EWZ is up a little, about 2.5%

SPY: The market is liking this banking union thing.

Telecommited to profit!

Of course it is still time for us to make a stock purchase. There are currently three contenders: NORW, ENZL, and HILO. 

Here's the sector breakdown for each (remember, we have a small portfolio, and we are trying to diversify):

As you can see NORW is the most energy-heavy of the lot, but that might not be a problem because Norway seems to have a good reputation for keeping things sane. If anyone can handle a giant national endowment of Texas Tea, is the Vikings. Plus, remember the movie at the Norway kiosk at EPCOT? If  you can sit through that snoozer, you know they have no taste or irrational exuberance.

And here's a breakdown of the sectors and what each would do to our total portfolio:



With each of these, we would stay pretty well-diversified. However, if we do go with NORW it might be good to avoid energy in the future. Really though, it is probably necessary to sit on this and take a look at this chart in more depth next week.

We could also look at these as our next three buys, and just choose which makes sense next. This would give us a short list of investments, which will always be ready for the next buy. We tend to work in cycles of about six months, but we don't buy as often because it is always so hard to commit to something specific. The idea is that we will add to the list and be prepared for upcoming buys waiting only on the funds to roll in. 

Oh the things you can do with screen capture.

Profit!

Heeeeeey, it's a party with the DMA!

We're dancing around the 200 DMA.  Should we do something?

We're sucking... we're sucking.  The 50 crossed below the 200.  It's just getting worse.

AT&T may be a defensive move for other market players.  If that is the case, it'll act as a hedge against a dropping SPY.  Let's just ignore what is happening with Brazil.

Norway is fairly stable when you look at the dollar range that we're moving between. 

New Zealand seems to be a pretty steady hold as well. 

No real meeting today due to technical issues and video games.  We'll try for more next week.

NZ, CPI...ABC, BVD?

Members present: Brian, Yousef

ENZL: Today's main event, is New Zealand worth investing in?

Brian found a nifty journal of economic events for ENZL from Seeking Aplha. The information is a little overwhelming but it paints a picture about events in the country and the region, and the effect they have on the ENZL fund.

As a side note, this led to a discussion on the consumer price index (CPI). Basically, it is an index of what things cost consumers over time. A large rise in CPI during a short period means inflation and a large drop in a short period means deflation. Check this video out for a fancier explanation.

But then again, where does one start researching, and what might make the decision?

By the way New Zealand has a relatively low debt-to-GDP ratio (hanging around 33%, according to this).

Then there's this article (also from Seeking Alpha), which says some interesting things about how NZ is looking good. But then you look at the comments and it's like trying to buy a vacuum on amazon all over again.


Random charts:

Ick, Brazil, Ick. 

SPY. Okay. 

American Telegraph & Dividend Company

Next week, we take a look at Norway and its fisheries.

Profit!

On the Euro? Nope, we're on the Gryro?

Members present: Brian, Bickford, Danak

So Greece, what the Love, Greece? It seems uncertain as to how things are going to shake down. They are still in electoral limbo, and the market hates nothing more than uncertainty. So it's a wait and see, as temperatures rise, and markets fall. At least there's summer vacation for some of us.

But it's buy time, so we need to decide what it is we want to own pieces of. New Zealand is still on the table, in particular ENZL:

ENZL

It looked like it is still going down a bit, so it might be a good thing to wait a while and see what it does.


And then there's helium, which doesn't sound as crazy as you think. Yes, it's the second most common element in the universe, but check this video out.


Ugh, Brazil, just ugh:

EWZ

SPY

AT&T: Doing the best of the lot. 

For next week:
1. No Bickford
2. Brian and Danak will look into New Zealand, like, for real this time.
3. Brian will be working on a Bonds presentation for the following week.

Profit!

It's pronounced "tin"

Members present: Brian, Yousef

We have been trying to decide about ENZL, the New Zealand ETF.

Their currency is currently low against the dollar. We have learned that China's "cheap" currency means that they can increase their exports. This is because other nations get a favorable rate with their money, and the idea is that those countries will buy more stuff with their more powerful money. This is because a good will seem cheaper than in the home country. The question then becomes, is this the same with NZ? We took a look at the holdings of the fund, but that didn't really tell us about the economy as a whole. Then, we found this nifty Tree map of their exports:

You can see that New Zealand's exports are largely agricultural. Interesting fun fact: February is a big month for apples (and presumably kiwis?)--there's that whole Southern Hemisphere flipping of the seasons. So does this mean that we should invest? Not yet. Tune in next week as we further solve the Mystery of the Mysterious Winter Kiwi. 

And the other charts: 

Ick. Brazil. Maybe we should create an automatic sell.

AT&T.

Profit!

Hard Drives in the Sky!

Members present: Brian, Bickford, Yousef

So we were talking online storage, and Bickford brought up Box.com, a rival to Dropbox. Apparently, you can upgrade from the free 5GB of space to 50GB of cloud storage simply by logging on with an HP touchpad. But you say, I don't have one of those? Just find someone who does (like Bickford). Congratulations, you have some more online storage, but why should anyone in a finance club care about that? It seems like if one is intrepid, one can get in on various free online storage deals. Haven't paid for a dropbox, or a google drive, or now a box account. The internets wants to give you stuff to try it out, in the hopes that you won't be a cheap bastard and just stop at the free level. It beats clipping coupons. Yay free!

EWZ: continues to tank. 

AT&T: Looking good.  

SPY: Up is good. 

So what is the next buy?

New Zealand. There is a NZ ETF:

ENZL Top Ten Holdings

1. Telecom Corporation of New Zealand Ltd (TEL): 15.78%
2. Fletcher Building Ltd. (FBU): 15.34%
3. Auckland International Airport Limited (AIA): 6.43%
4. Sky City Entertainment Group Limited (SKC): 6.27%
5. Chorus Ltd Common Stock Npv: 5.02%
6. Contact Energy Limited (CEN): 4.62%
7. Fisher & Paykel Healthcare Corporation Limited (FPH): 4.50%
8. Sky Network Television Limited (SKT): 4.17%
9. Ryman Healthcare Limited (RYM): 3.90%
10. Goodman Property Trust (GMT): 3.85%

 The small slice in financials is nice. It is a new fund (2010), but it might be a nice place to store some cash. This article in seeking alpha says some nice things.

And here's a chart:

And finally, here is a listing of our proposed portfolio by holdings (by sector).

Profit!