Movin' On Up

Thanks to Lemuel Craft

We are crazy! My husband just took a job in Texas. Let me explain something to you. We are from Georgia. We both grew up in Georgia. Our families all live in Georgia. Our friends and church are in Georgia. Nobody in our family has ever lived outside of our town, let alone state. So why the move, you ask? We wanted an adventure. Why not try something new before we have kids? If we hate it, we can always move back in a year or so. Since we know nothing about San Antonio, except that’s where Eva Longoria is from (love her!), I mostly relied on google for all of our decisions. For instance, I googled san antonio texas and actually found a security system provider for our new house. I spent countless hours googling and researching the best neighborhoods to live in and the best companies to use for utilities. It was hard, but worth it. We are all settled in now and really enjoying a different way of life: a Texas way of life. No matter what though, we’ll always be Georgia peaches at heart.

Ulta is the Top Performing Chicago-Area Stock for 2011

The Chicago Tribune recently had an article listing the best-performing 2011 stocks among Chicago area-based companies.

The number 1 performing stock was Ulta Salon, Cosmetics, and Fragrance, Inc. (ULTA). The stock was up 91% in 2011.

Ulta has been called the "Best Buy" of the beauty market. It offers one-stop shopping for cosmetics at every price range, as well as a full-service hair salon.

It is a classic example of a growth stock.

On one hand, some analysts feel it could sell off this year because it trades at 32 times estimated earnings. Also, they may face competition as Walgreens and CVS increase their beauty product offerings, and from women shopping online.

On the other hand, the reason for their success is the fundamental shift of women going from malls to strip malls. Most high-end beauty products used to be bought from department stores. Now, women like the convenience of being able to drive up to an Ulta in a strip mall and find all products in one place.

As a result, Ulta is growing at a fast pace. They currently have 449 stores, and have room to expand - especially on the East Coast and Northwest. They plan to increase their number of stores by 15 - 20% a year until they reach 1,000 stores.

At the same time, they recently experienced a 12.6% increase in sales open at least one year.

In addition, since their stores average 10,000 square feet, they are experimenting with launching 300 square foot stores inside devoted to men's skin care and grooming products.

You can look to buy it on a drop for a GAARP play (Growth at a reasonable price) or buy it now as a growth play. Either way, you could then manage it with the "Stock Trading Riches" system to play the fluctuations, and pump money out to enhance your return, while reducing your risk/cost basis.

Seven Year Return on My "Stock Trading Riches" Portfolio

For the past 7 years (2005-2011), I have exclusively used my Stock Trading Riches system to manage my portfolio.

While I lagged the market in 2011, I have beaten the S&P 500 over those 7 years:

Year, Me, S&P 500

2005, +13%, +4.91%

2006, +14%, +15.79%

2007, +22%, +5.49%

2008, -40%, -38.49%

2009, +44%, +23.5%

2010, +22%, +13%

2011, -5%, 2.11%

My portfolio has had a cumulative seven-year return of +57.38% vs. +12.32% for the S&P500.

A Successful Niche Business Specializing in Laptop Carts

As a regular subject in my blog, I like to describe on-line businesses that successfully focus on interesting niches. I believe that the key to success for a small business (both online and off) is to specialize in one area where you can be an expert - and command a higher value.

Today, I'm writing about eLapTopCarts.com, which specializes in selling laptop carts.

Computer accessory websites which sell hundreds of different products, such as cables, are a dime a dozen. Their product offerings are generic, and they provide no value-added service. Thus, all they can compete on is price, and they basically make nickles and dimes from their sales.

eLapTopCarts.com doesn't bother with the $2 cables. Instead, they focus on being the specialist for those businesses that need a laptop cart or other secured laptop storage solution. They even promote their expert customer service on their website's home page.

Thus, eLapTopCarts.com aren't competing as a commodity with regular computer accessory websites - even those that carry a few laptop carts. Instead, they have positioned themselves as value-added experts when it comes to laptop storage and protection. That is all they do and, thus, they carry the widest selection of products in this category, and have a lot of value-added knowledge to assist their customers.

Finished The Yearly Rebalancing of My Portfolio

Today I finished rebalancing my portfolio, as required by the Stock Trading Riches system. This involved buying or selling each stock that was under or over my constant value target by at least 10% - so that each stock position was now at the constant value.

This year, I did it in two parts: sales last Friday and the buys today. This was because I now keep the majority of the cash portion of my portfolio invested in a no-load short-term bond fund.

After selling the gainers, I then calculated how much more money I would need to complete the buys, and then placed a sell order for the mutual fund on Friday. Today, the mutual fund sale proceeds were in my account, and I used them to complete the buys.

Finding the Right Credit Card For Your Needs

It can become hard to choose between credit cards because there are just so many options out there. You have choices such as annual fees vs. higher percentages, cash back, airline miles, branded cards, etc.

This is where sites like FinanceGlobe.com are important. This site has specialized sections devoted to credit card information, credit card reviews, and ratings.

Then, if you decide on a credit card you want, you can even apply for a credit card right from the site - saving you time and effort.

The Importance of Stock Market Capitalization For Building A Diversified Portfolio

Stocks can be separated into 4 groups, according to their market capitalization:

1. micro caps - below $300 million

2. small caps - between $300 million and $1 billion

3. mid caps - between $1 billion and $5 billion

4. large caps - over $5 billion

I talk in more detail about market cap analysis in my book Stock Trading Riches because it's important for investors to allocate their portfolios among all market caps to provide diversification, avoid cyclical returns, and take advantage of "regression to the mean" (e.g. one market cap segment outperforms another, but then they converge).
Market cap is calculated by multiplying the number of shares outstanding by the share price. For example, if stock ABC issued 6 million shares, and the price of each share is $6, then ABC has a market capitalization of $36 million.

In general, micro caps are new companies that are just hitting their stride. Small caps tend to have their infrastructure in place and are in growth mode. Mid caps are big regional or national companies. Large caps tend to be established multinational corporations.

Stocks within each market cap share important characteristics in the areas such as growth rate, risk, dividends, visibility, and international exposure.

A Specialized Investment Bank for Chemical Related Companies

Today I came across another example of a niche business - where you keep things simple, small, and focused, while being viewed as an expert and commanding higher margins.

It was a niche chemical investment banking firm called the Valence Group.

Normally, we think of investment banking as a business dominated by a few large Wall Street players. But, there are plenty of opportunities for smaller firms that specialize in a certain industry. In this way, they are sought after because, while they don't have the name and reputation of a large firm, they make up for it by knowing the nuances and leverages that come with having inside knowledge and experience.

Being an expert in a certain industry or type of company is especially valuable in tasks such as chemical m&a advisory. In fact, industrial expertise is so important and valuable in mergers and acquisitions that a "judo" move occurs. Instead of being opposed by the force of a Wall Street giant, the Valence Group is asked to partner with them in chemical mergers and acquisitions deals, and thus gets to tap into their power and reputation.

Successful Traders and Investors Keep Their Emotions in Check

To succeed while trading the stock market, you need to be able to control your emotions. You can't become angry or fearful when you are on a losing streak. Alternatively, you can't become euphoric or greedy when you are winning.

Individual stocks, the stock market itself, and trading systems all run on cycles. They will enter money-making modes some of the time and then, without warning, switch.

The only thing we can predict 100% is that, whatever the current state of the market, it will eventually switch, and then eventually return.

If you jump out of the market when it is down, there is a good chance that you will miss the rebound. Similarly, if the market has been strong for a long time, and has reached fantastic heights, you can't become greedy and buy a lot, because the market may fall.

To keep myself from trading impulsively on emotion (and losing), I developed a simple trading plan that lightens my positions as they reach high levels, and starts scaling in as my positions go down.

As a result, I built up my positions at good prices, and scale out as the market goes higher.

Why Specialized Options Brokers Can Be Better for Options Traders than General Stock Brokerages

A pure option broker called MyTrack.com offers a big advantage to their customers (options traders) over larger brokerage firms who offer options as a sideline to mainstream stock, bond, and fund investing.

They use their expertise and accumulated years of data to offer analysis and convenient order placement for complex options trade and spreads.

For example, they are the best online options broker at offering automated routines for placing complex options spreads such as butterflies, condors, etc.

Also, because options trades are short term and require active monitoring, MyTrack.com's trading interface is non-browser and was designed for both computer and mobile device access.

Many other options trading software don't offer options traders tools and user interfaces that differ much from their standard stock trading screens.