This Week's Activity – January 25, 2014:
This week, the world market indices were down on expectations The Federal Reserve will make a further cut to their bond buying stimulus program, by as much as $10 billion per month, and concerns on the slowing growth in
. Read more: China
I still think the markets are overpriced but continue to look for good values on individual stocks of good solid companies.
My wife and I, and my son Trey, and his wife, are all reading “The Total Money Makeover” by Dave Ramsey. In this book, Dave clearly explains his 7 step plan to financial independence, and illustrates it with testimonials from people who have successfully implemented his plan in their finances and lives. You must be fully committed to this plan because it requires a lifestyle change while you pay off ALL of your debt.
Before you can start his 7 step plan, you must set up a monthly budget so you can clearly see how much money comes in and then make a list of every single place this money goes out each month. Here are the steps and Dave’s estimation of how long each step takes his typical followers:
1. Set aside an Emergency Fund of $1,000 (several months)
2. Pay off all your debts except your house. (2 to 3 years, work overtime or 2nd job)
3. Increase your emergency fund to equal 6 months of living expenses (several months)
4. Start saving 15% of your income for retirement. (until you retire)
5. Start saving for your kid’s college fund (until they get out of college)
6. Pay off your house (7 to 10 years)
7. Manage your own investments to be wealthy for the rest of your life
We got our copy of Dave’s book from the library for free, but the information he provides is extremely valuable, yet very common sense. I recommend this book. Please let me know if you have read it.
Visit our website: http://www.ultimatestockfinder.com/ for more investing ideas, links, training, tools and information.
Summary Table of Worldwide Market Index Closing values for this week:
This week I sold a PUT on LF and a CALL on TTWO. See the details below in (CALL or PUT) Sells for This Week. LF closed this week at $7.12 which is near their 24 month low. Revenue is up 4%, profit margin is 13%, but stock price is down from $11.50 in July due to a software glitch on their newly released LeapPad Ultra this summer. They have corrected the glitch, but now are gaining more competitors (Amazon, Apple, Samsung) in the education tablet business. LeapFrog already had VTech as a competitor. So there are many downward pressures on LF stock, but they have good fundamentals, and I think they can compete with these rivals and will recover from this.
See the Yahoo 5 year chart for LF at
TTWO closed this week at $18.46 which is near their 52 week and 6 year highs. In September they released the world’s largest selling video game “Grand Theft Auto 5”. I bought TTWO six years ago at $18 on the recommendation of my younger son. You can see from the chart that after I bought them the lights went out. So now that they are finally back to my buy price after 6 years, I am fully happy to sell a Covered CALL on them. I am nothing if not patient.
See the 5 year chart for TTWO here:
StockEvaluator ‘Short List’
View ‘Short List’ here: http://www.ultimatestockfinder.com/stockevaluator_short_list.xls
‘Short List’ screens using 12 fundamental value limits that I want to see in a stock before considering it as a possible buy.
View our training video that shows how to enter your preferred values for each of these ‘Short List’ screening limits:
View the ‘Short List’ screening criteria and target limit values here: http://www.ultimatestockfinder.com/short_list_12_criteria.JPG
Stocks on the ‘Short List’ list this week are: CAJ, KYO, CVX, PTR,
Stock Evaluator ‘Volatility Sort’
View ‘Volatility’ sort here: http://www.ultimatestockfinder.com/stockevaluatorvolatilitysort.xls
Stocks on the ‘Volatility Sort’ have Current Price <5% above 52 week low, Volatility >3%, Profit>0%, <6 Red cells in Stock Evaluator.xls.
Stocks on the ‘Volatility Sort’ this week are: UVE, GNI, IMG.TO, AEO, SCSS, ZA, SHOS.
MutualFundEvaluator ‘Short List’
View ‘Short List’ here: http://www.ultimatestockfinder.com/mutualfundevaluator_short_list.xls
Mutual Funds that are within 3% of their 52 week low AND have less than 3 Red cells.
This week’s list has 40 funds. All except 1 (FRIFX) are Bond funds, which are all still 3 to 8% above their lows from 2006 to 2008 before The FED dropped interest rates to bring the U.S. out of the recession. When interest rates go down, bond prices go up, and when interest rates go up, bond prices go down. These bond funds only pay a 3 to 4% annual dividend and I think the bond prices will go down another 3 to 4% when The FED finally lets interest rates go back to historic levels which mean 10 Year Bond interest rate of at least 3.5% compared to today’s 10 year rate of 2.74%. I will continue to wait before buying any bond funds because I do not want to lose a whole year’s worth of interest if I buy back in too soon.
The top two funds on this week’s short list are BCOSX and MWTRX.
Here are their 10year charts to show why I am still waiting to buy.
Next Monthly Meeting 2nd Tuesday of every Month:
Tuesday, February 11, 2014 , 7:30 PM at my house.
Here are my Stock BUYs for This Week:
Target Sell Price:
Here are my Stock SELLs for This Week:
Here are my Option (CALL or PUT) Sells for This Week:
I only Sell Covered CALLs or Cash Secured PUTs
Option: Covered CALL
Stock Symbol: TTWO
Sell Date: 1/22/2014
Expiration Date: 1/17/2015
Strike Price: $20
Option Price: $2.30
(I bought TTWO in Jan 2008 at $18)
Option: Cash Secured PUT
Stock Symbol: LF
Sell Date: 1/24/2014
Expiration Date: 1/17/2015
Strike Price: $7.50
Option Price: $1.40
Visit www.ultimatestockfinder.com to download all Stock Evaluator and Mutual Fund Evaluator spreadsheets, read training articles and check out all our web links for investing information.
Please remember to send me any other investing ideas, information or questions that you want to share with the group.
The author has no positions in any of the stocks or mutual funds mentioned in this article unless clearly stated above. We certify that except as cited herein, this is our work product. We received no compensation or other inducement from any party to produce this article. Please see our full legal disclaimer at: http://www.ultimatestockfinder.com/stockevaluator_disclaimer.html
To Remove Your Name from this email distribution list, reply to me and I will delete your name.
Ultimate Stock Finder is also on Facebook, you can ‘Like’ us on FB and receive our weekly ‘Investment Idea Sharing’ letter (summary paragraph only) to your FB page. https://www.facebook.com/UltimateStockFinder
You can read our weekly ‘Investment Idea Sharing’ letter at our Ultimate Stock Finder blog: http://ultimatestockfinder.blogspot.com/