I started this blog for a number of reasons, but primarily because I’ve had a number of friends and relatives ask me to “let them know” after mentioning my trading and investing activities in a social setting.   Meaning, let them know about any good picks or when to get out of the market when it’s due for a crash.  I thought about just setting up an email alert system, but I didn’t think that method could convey enough information.  So, I decided to re-purpose my old consulting company’s website and use my website building skills and lots of really good, free software from Word Press to set up this blog.  So here ya go…

As you read through this site, likely the first thing you’ll notice is that I think what I learned in business school (from a bunch of mainly young Harvard PhDs) was a bunch of true intellectual drivel.  Beta and CAPM…completely worthless models for anyone managing less than $500M.  For example, Beta as a measure of risk…if a stock price I like or own drops by 50%, its Beta has just gone up (and therefore its “risk”), but if nothing has fundamentally changed about the company, in actuality the risk of owning that stock as decreased drastically, and the odds that it will increase in price has gone up dramatically.  How is this more risky?  My other favorite: “A Random Walk Down Wall Street.”  This really screwed me up…as one of the first finance classes I took, I learned that almost no matter what, I had no chance to beat the market.  So I never really tried…until I picked up a book called “Rule #1 Investing” by Phil Town.  He basically espouses a modern version of Buffet’s philosophy…modern in that he advocates using stock search engines to make picks, plus technical analysis to get in and out of stocks with good timing (which I don’t use anymore…I was trading way too much.  Now I go by ‘feel’ to make a decision as to whether the market is about to enter a panic mode).  His book made a lot of sense to me, and ever since I’ve been researching the market thoroughly…everything from how to pick stocks and what their proper valuation is, to why we go through our economic cycles.

In addition to the stock market research I was doing…a couple of years ago I got into a long email debate with a Libertarian friend of mine, as to whether or not we should eliminate the Fed and/or move back to a gold standard.  As a part of this debate, I had to do a lot of research on our economic cycles, and I ran across the 18 Year Real Estate Cycle theory.  This as well made a ton of sense to me and fits all the economic data we have going back to the mid 1800s.  (If you’re curious about this, comment on one of my blogs…I’m happy to opine on my findings).  So, I now had a complete model in my head as to both a Micro and Macro view of stocks…and based on this, I started trading.

My method is very “Buffet-ish”: I look for companies with strong past financial performance that are undervalued relative to their growth prospects.  Unlike Buffet, I do not shy away from technology, as I’ve spent 15 years in various capacities within this industry working for Intel, IBM, Sun Microsystems and numerous Silicon Valley start-ups.  I can often ‘see’ when a company and stock is about to take off  (as I write this, my favorite pick right now is AAPL — granted, this is not an unknown).  Also unlike Buffet, I work, so I can’t spend all of my time reading annual reports, so I rely on paid services to help me out, such as Investools and The Motley Fool.  Very much like Buffet, I will sell a stock when I think it’s overvalued…Buffet was quite prescient when it came to getting the big macro timings correct.

And last, one other reason why I’m writing this blog:  I really enjoy this…investing/trading is a lot like poker, which I’ve played for years as a hobby, but had to give up because I couldn’t play enough to stay competitive.

One note:  I work for IBM Corporation, and while I have no access to any “material” information, to avoid any possible notion of impropriety I do not trade this stock and have no position in it, not even via my employee stock purchase program.  All of my picks and trades are based on publicly available information, but if it’s a tech company, with much judgment based on my overall experience within the industry.