Stock Picks Bob's Advice

Tuesday, 13 February 2007

Additional Thoughts on Investing.

I came back from my accountant this evening after spending time last night getting information for my taxes together and submitting it to her for submission. She lectured me about the wisdom of writing about investments on the Internet as an amateur. Maybe it would be wiser to have a CFP after my name, or some other set of credentials, like CFA, or CPA. I don't have any of those.

For I truly am an amateur investor. Sometimes I pick great stocks and other times they trip up and fail to meet my own expectations.

There are not guarantees about anything I write. No guarantees that the choices I make are any better than random. I leave that all up to you to decide and to monitor.

All I can bring to you is my own experience. The ideas that I have adopted and adapted from many wiser investors and financial thinkers. People like William O'Neil who developed the CANSLIM approach to investing. Or others as varied as Paul Sturm from Smart Money or Robert Lichello who believed in the AIM System of automatic investing. Nothing I write is exactly like what any of them believed; and yet, nothing I write is without the inspiration I received from those writers as well. I strongly encourage you to read as much as you can from as many writers as possible so that you can decide about what works for you.

But what I do bring to you is my own perspective about identifying quality stocks. Just the process of determining what is quality is open to debate. But I do believe that my perspective is valuable.

I also try very hard to give you some ideas about dealing with market volatility. Finding ways to manage your stocks without being whip-sawed and forced out of investments only to find them climbing once again but without you. I also don't want to find myself strapped to sinking equities, feeling helpless and not knowing when to bail. Rules give you framework and frameworks can give you freedom.

So as I write about stocks day in and day out, think about my comments about vocabulary of investing. These stocks are the words that you or I can put together to build a powerful language of investing. Each of us may make different sentences and different paragraphs with these words, but we shall all be talking the same language.

Neither I nor you have time to own every stock. Nor do we wish to. So we need to decide which stocks to own. Only the best for me. Only the stocks that can consistently perform over time, relentlessly growing earnings, revenue, and producing free cash flow. Only those with solid balance sheets need apply to my portfolio. Hopefully this will help me to do just a bit better than the market. If so, I shall be satisfied with my own success.

I write this blog because I am able to. Because I enjoy sharing ideas. I enjoy pointing out things that I can see that others may find hidden in front of them. I believe that I can add something to the entire discussion. Maybe somebody somewhere will learn more about approaching stocks from what I write and they shall remember me somewhere to someone. If so I shall be successful.

In addition, I write so that I can learn. Like telling all of my friends that I am on a diet (I am), you become witnesses to my new-found discipline in investing (or eating) and you become my support group as I work to maintain that discipline, buying only when I need to buy and selling only when indicated. When I call you my friends; I do this because all of you are. You are my friends and witnesses to my own trading and investment investigation. I bring you all along for the ride because I need you, not the other way around.

So I shall apologize once again to my accountant who prudently suggested I pull this blog because somebody somewhere may indeed lose money on something I have written about and even though I may also lose money on investments they may blame me. You all need to know that I am an amateur, I am not qualified to advise you on what to do with your money, and that my discussions may well lead to losses as easily or more easily than to gains. Time will tell in this regard.

But meanwhile, I write because I need to. I write because there is so much to say and so little time to say it.

Thank you for coming along for the journey. So few of you comment; but for those of you who do and for those of you who email me, let me express my appreciation. You all make it worthwhile!

Bob

Posted by bobsadviceforstocks at 11:25 PM CST | Post Comment | View Comments (4) | Permalink

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Wednesday, 14 February 2007 - 9:02 AM CST

Name: "Tom"

Bob,

Yes I know you are an amateur investor. I don't buy many of the stocks you research. But I do enjoy your method of selections and I have learned a lot from you, and hope that you continue.

Just a few words of encourgement for you. Keep up the good work!

Thanks so much

Tom

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Wednesday, 14 February 2007 - 10:02 PM CST

Name: "Lee"

Just want to let you know, as a newbie, I benefited a LOT from reading your posts. And I greatly appreciate your sharing. You are the most sincere and nicest investor on the Internet. I am thankful for your sharing, not just the picks, but more importantly, the discipline, the attitude, and the wisdom.

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Friday, 16 February 2007 - 12:43 PM CST

Name: "Skip"

I'm with the others that have already posted. I very much enjoy reading your posts as a learning experience. Maybe your accountant should focus on the math and quit doling out legal and/or psychological advice....

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Friday, 16 February 2007 - 9:59 PM CST

Name: "Robert Freedland"
Home Page: http://bobsadviceforstock.tripod.com/bobsadviceforstock

To Tom, Lee, and Skip, and all of my friends around here,

Thank you all so much for your kind words. It is nice knowing that what I write is appreciated by others. I try very hard to honestly present information and explain everything I write. It is sort of like a high school writing project with the required footnotes and quotes :).

I have grown convinced that many people are confounded by the myriad investment gurus who have just as many beliefs and approaches to buying stocks. Drawing from a lot of other investors, I have grown to believe that if we concentrate our holdings in the highest quality stocks of the best-performing companies, we may stand a chance at doing at least as well as the indices. Time will tell whether I am right or wrong at this.

Adding to this is a necessary element of knowing when to buy and when to sell. And when to replace cash with equities and when to move back into cash once again.

I have tried to address all of these questions with my blog. I am glad some of you have found this helpful.

And of course it is a blast to write a blog and then have someone else comment on what you write from thousands of miles away. It reminds me of the old-fashioned short-wave radio fans, of which there still remains a loyal group, who like to see who can bounce their call letters the furthest away off the high-altitude clouds and atmospheric layers. I still enjoy receiving questions from people in other cities, other states and other countries.

So thank you all for visiting, writing, and participating. And as for my accountant, she is a very nice woman who never is impatient with me as I bring in my assortment of unfiled receipts and records and who is always encouraging me in my financial matters. She worries sometimes about the blog, that somebody might lose money and hold me responsible.

I also share that concern, so please do double-check with your professionals everything I write before assuming it is appropriate for you as well. But do enjoy my writing and share my ideas with your advisors. Let me know what they say.

Bob

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