Friday, November 21, 2014

Kevin O'Leary - Cold Hard Truth On Business, Money & Life - Book Review

Introduction
The business autobiography of Kevin O'Leary aka Mr. Wonderful. He is an entrepreneur and star on the hit shows Dragon's Den (in Canada) and Shark Tank (U.S). Kevin O'Leary is from Canada. This book is the story of his money and personal journey.

Details about the Book
This book is very interesting, inspiring, and honest. The book has some useful advice at the end of each episode of O'Leary's life. The lessons learned if followed can be used to preserve capital and build wealth. The book is easy to read only being 245 pages. I do wish it was a bit longer. At the end of each chapter there is a question asked about the main theme of the chapter then points of advice that are helpful. If you are a fan of the hit shows Shark Tank and Dragon's Den you get insight on how each started. Overall the book has personal feel to it. I personally like the inside view on venture capitalism.

Kevin O'Leary's Story
I found O'Leary's story interesting and entertaining as he takes the reader through different times he was employee. He gives examples of why he couldn't be an employee and why he was destined to be an entrepreneur. He takes the reader though what it took to build his small business. The ups and downs he had on the way to selling his company to Mattel Inc. There is an interesting event in the book when Mattel the big toy company buys his small upcoming company and how the mind set of an founder and the mind set of a manager differ. The investing tip I learned from the book is big companies who have lost their founder don't always take the chances or risk to be super successful. Mattel took over his Learning company, they changed many things that were working to fit it into their system. The short of it was it didn't work and they lost tons of money with the transaction.

Kevin O'Leary details his mom's principles of aways investing in companies that pay a dividend. She also taught him never spend the principal only the interest. She proved this to him by heeding her own advice throughout her life, the proof was there when she passed away she was well off despite a modest income. His dad was a tragic story but O'Leary learned a valuable skill of selling from him.  

You always need a good team. Kevin O'Leary makes it clear he always is looking for people who think like himself to be successful. He has had good partnerships and teams in every business venture. His mom gave him the biggest lessons in his life but each person he teamed up with also were influential in his success and he gives credit to many people.

Rating 4 of 5
I think most people will learn something and be entertained by the story. Teaches some basic financial lessons. The only down side is it is short and for the sophisticated investor the book might not have new material.



Saturday, November 15, 2014

Investing Strategies around a common Theme: Sports Entertainment

Today I am writing about my favorite investing theme and how I pick the companies that profit from this theme. I'm not writing about looking for specific stocks that fit a category like being just a dividend investor, or income investor, or growth investor. I am simply looking for profitable companies which fit the theme! In past YouTube videos and in past blogs one theme I continue to invest in is finding founders of companies who have built the company and have skin in the game. I have mentioned Berkshire Hathaway (BRK.B) with Warren Buffett, Icahn Enterprises (IEP) with Carl Icahn, and Amazon (AMZN) with Jeff Bezos. Today the theme I will analyze was also analyzed in my premium report on this channel when I covered a few of the companies that fit in this theme. The theme is investing in entertainment through sports from a personal level all the way to the professional level. If you have ever watched an NFL game or UFC fight and thought it would be cool to make some money getting in on a piece of the action. It is easy and I'll show you in my blog today how I do it. I will go through different companies that profit from the popularity of sports. This theme is part of society for the long term and is only growing it is a form of entertainment that has stood the test of time from Gladiators of Rome to the modern day Athletes and professional Sports Franchises.

The U.S. Economy has more Potential now than anytime in History
One argument about our economy that is a pet peeve of mine and I have seen argued over and over in articles and videos is people complaining about technology taking jobs away from people who want to work. They say it is taking away jobs from hard working people giving it to a machine. Ignoring the fact the machine is making the process more efficient. Technology enables labor intensive jobs to leave the USA if it isn't cost efficient to other countries because people will work for less money. I say this is great because as a country we are getting jobs that take more skill which pay better in the development of new technology and we benefit from lower prices and better opportunities. When people are not needed in one industry because of a more efficient process this creates opportunities for others who are creative to create a whole new industry. If you asked someone a 100 years ago or older this question: if they would like to go to the gym to get some exercise. They would of looked at you crazy because they would of been tired from a day of labor or further back maybe tired just trying to make the food needed to eat that day or tired from traveling. Today is totally different, work and transportation for the vast majority is less physically demanding.

The Industry Creates Jobs!
Now back to this new economy! Let's talk about the benefits of the creation of professional sports and sports as a whole as an industry, I hear all the time about players getting overpaid or sports don't mean anything in real life or sports are a waste of time. This is a shortsighted view without taking into account how this industry effects so many lives and it is all for good. My view is totally positive if you haven't noticed. Sports industry is good for young people, gives them a place to learn teamwork and gives them a chance to be part of something they can be proud of. Many charity programs from sports leagues have helped countless people and will continue to do so. Sports industry it is a huge job creator, its not just the athletes, but journalist in every city and state that work in every sport. People work at the facilities and people work to provide all the equipment and clothes to all the players and fans who want these products. The media teams at every venue that are needed to cover all sports at all times. The jobs continue to grow with the sports medicine and injury experts on all levels. From here we go to jobs created to support all these activities. The fact for any industry is that the free market sets price and people vote with their wallet.

Sports and Health at the Personal level
At a personal level people don't even think twice that a gym used to be considered strange. How technology and advances in our standard of living make exercising a must do activity to stay healthy. Now being active has turned into a huge industry with room to grow all around the world so the question becomes how to profit from this. I think the best way is to invest is through the apparel companies like Adidas (ADDYY), Nike (NKE), or Under Armour (UA). Everyone needs equipment and these companies are everywhere they are also coming up with new technology to help with personal and professional workouts. I am invested in Adidas because the company is the most undervalued in my opinion and has the highest dividend yield. Another way to invest is to buy the companies that sell all these company's products like Foot Locker (FL) or Finsh Line Inc. (FINL). Then there are the companies who sell vitamins and supplements like GNC (GNC). You even have companies like Pepsi (PEP) with Gatorade and Coke Cola (KO) with Powerade and Monster (MNST) other beverages for athlete of all stages and sports including extreme sports. One cool part about owning a piece of Adidas is when I wear a product I am advertising for my company.

Professional Sports and the Media
Media is important with content and advertising dollars! Everyone who likes sports watches the games live which is unique to the sporting industry compared to TV shows and movies. Media companies are great for getting advertising dollars. The company that is the number one leader is ESPN which is owned by The Walt Disney Company (DIS). I like Disney for ESPN and its other media content. It is congruent with my theme and also contains a nice dividend and yield.

Food and Beverage side of Sports
Sports entertainment is a place to have fun and enjoy free time. The next set of companies to invest in related to watching and enjoying one's time. The beer companies first to come to mind. The best are Budweiser (BUD), Molson Coors (TAP), and Boston Beer (SAM) just to name a few. My favorite company to take advantage of all these companies is Buffalo Wild Wings (BWLD). It is a perfect place to enjoy the games and the company sells all the beer products above. They have differentiated themselves as the best in the industry. BWLD does have huge competition and to benefit people must choose to dine there. With a market cap of 3 billion it is still small with promising growth. Small gains in market share will lead to massive increases in revenue and profit. Other competitors and ideas are pizza companies like Domino's Pizza (DPZ) and Papa John's International Inc. (PZZA). Domino's is also doing a great job on the technology front. Papa John's with advertising and teaming up with athletes like Peyton Manning who actually owns at last count 21 Papa John's restaurants.

My Stocksnowball.com portfolio holdings under this theme:

Adidas (ADDYY)
The Walt Disney Company (DIS)
Buffalo Wild Wings (BWLD)

If you have any questions or comments feel free. I like to hear others thoughts.

DSF


Disclaimer: This is a personal weblog. The opinions expressed here are my own. All data and information provided on this site is for informational purposes only. Please do your own research before investing.

Saturday, November 1, 2014

November 1st, 2014 Stocksnowball.com Portfolio Review! New Purchases NAO and RDS.B

I can say with some confidence that if you are not investing in "stocks" which represent companies and their earnings you are feeling some pain. Let us review. Stocks have bounced back, good companies are increasing earnings and many companies are increasing revenue and profits. Oil is down which hurts oil stocks but helps other parts of the economy. Looking at production numbers I think oil is down more from supply then a weak economy. Commodities down, silver and gold are getting crushed, the metal and stocks!

So why did I invest in NAO and RDS.B knowing they have a connection to oil? With NAO it has a strong high dividend, I think it is safe. A dip in the share price can be made up with the dividend over time and when oil does rise I think NAO will benefit from that but NAO is more into services in the oil business. RDS.B is more of a restructuring story and the oil price doesn't hurt the company as much. The dividend is high and it was a great time to DCA the position. The power of dollar cost averaging! I made the initial purchase of RDS.B at $86.80 and recently bought at $69.34 to average out at $77.12. See my Stocktwits account for when I post purchases and sells live. The way to let DCA work for you is to be patient with a position you like and then buy after a  bigger fall of 10 to 20 percent. Some people buy after a small drop and don't have enough bullets to take advantage of the correction. You must understand your company! RDS.B is an oil stock and we know oil is a volatile market. The reason I don't use stop losses is I understand the swings in price and am a long term shareholder. I prefer to DCA and trade around a core position. You must understand your company and how it moves to the market conditions. 

My next YouTube video and blog entry will be one of the "themes" I invest in.


Stocksnowball Portfolio 
Starting Value $20,000 on June 27,2014








Company 11/1/14 Close Buy Price Shares Market Value Cost Basis Gain/Loss  Gain % Weight of Portfolio Commisssion Dividends (drip) and Int. Annualized IRR
RDS-B
$74.67
$77.12
27.1390
$2,026.47
$2,106.88
-$80.41
(3.82%)
10.07%
$13.90
$0.94
-5.84%
TGT
$61.82
$58.72
17.1452
$1,059.92
$1,013.69
$46.23
4.56%
5.27%
$6.95
$0.52
5.48%
AG
$5.13
$9.58
41.0000
$210.33
$399.73
-$189.40
(47.38%)
1.04%
$6.95

-47.38%
MCD
$93.73
$94.05
21.1813
$1,985.32
$1,999.01
-$13.69
(0.68%)
9.86%
$6.95
$0.81
0.17%
ADDYY 
$36.31
$37.61
27.0000
$980.37
$1,022.42
-$42.05
(4.11%)
4.87%
$6.95

-4.13%
BWLD 
$149.28
$134.55
15.0000
$2,239.20
$2,032.20
$207.00
10.19%
11.12%
$13.90

16.36%
IEP
$105.58
$104.41
10.0000
$1,055.80
$1,051.05
$4.75
0.45%
5.25%
$6.95

0.45%
DIS
$91.38
$86.87
12.0000
$1,096.56
$1,049.39
$47.17
4.49%
5.45%
$6.95

4.49%
NAO
$16.00
$14.58
75.0000
$1,200.00
$1,100.45
$99.55
9.05%
5.96%
$6.95

9.05%
Subtotal



$11,853.97
$11,774.82
$79.15
0.67%


$37.13
2.01%
Cash (USD)



$8,275.45
$8,275.45
Total Gain/Loss w Div

41.11%

$16.59
0.23%
Total



$20,129.42
$20,050.27
$132.87



$53.72
0.66%
Transactions 
Date Type Instrument  Shares Price Commission Amount
Oct 31, 2014
Interest




$3.45
Oct 16, 2014
Purchase Royal Dutch Shell plc
15
$69.34
$6.95
$1,047.05
Oct 10, 2014
Purchase Nordic American Offshore
75
$14.58
$6.95
$1,100.45
Oct 8, 2014
Purchase Walt Disney Company
12
$86.87
$6.95
$1,049.39
Oct 8, 2014
Purchase Buffalo Wild Wings Inc.
8
$125.50
$6.95
$1,010.95
Oct, 1, 14
Purchase Icahn Enterprises, L.P. 
10
$104.41
$6.95
$1,051.05
Sept 25, 2014
Reinvestment Royal Dutch Shell plc
0.1390
$81.14

$0.00
Sept 16, 2014
Reinvestment McDonald’s Corp. 
0.1813
$93.83

$0.00
Sept 10, 2014
Reinvestment Target Corp.
0.1452
$60.88

$0.00
Sept 1, 2014
Interest




$5.64
Aug 21, 2014
Purchase First Majestic Silver
41
$9.58
$6.95
$399.73
Aug 20, 2014
Purchase McDonald’s Corp. 
21
$94.05
$6.95
$1,982.00
Aug 7, 2014
Purchase Adidas Ag
27
$37.61
$6.95
$1,022.42
Aug 1, 2014
Interest




$7.50
Jul 30, 2014
Purchase Buffalo Wild Wings Inc.
7
$144.90
$6.95
$1,021.25
Jul 2, 2014
Purchase Target Corp.
17
$58.70
$6.95
$1,004.85
Jun 27, 2014
Purchase Royal Dutch Shell plc
12
$86.80
$6.95
$1,048.55
Jun 27, 2014
Deposit




$20,000.00
Total 




$76.45

General Motors (GM) the GOOD, BAD, AND UGLY!

I've been talking about GM on this blog because of its really big dividend yield. The company has been undervalued to the market for som...