Wednesday, November 26, 2008

Asset Play: VVTV

Spent a bit of time researching VVTV  (Value Vision Media) today and ended up securing a small position. They have a home shopping network and also retail products online. The company's performance is horrible, however the value of their assests is not reflected in the stock price at all. They appear to be a really good value in both cash and assets. 

Instead of going into details here I would suggest reading this informative post at the Old School Value blog.

discloure: I own shares of VVTV

Thursday, November 13, 2008

Dry Bulk Shipping

So I have been buying stock over the past month and 1/2.  One area I have been watching and buying stock in is the Dry Bulk Shipping Industry:

"Dry bulk shipping refers to the movement of significant commodities carried in bulk : - the so-called major bulks, together with ships carrying steel products (coils, plates and rods), lumber or log carriers and other commodities classified as the minor bulks."
Basically things like iron ore need to get moved around the world. Dry shippers operate the boats that do this. They usually charter the boats out in one of two ways:
  • Spot charter (or voyage charter) - A charter for a specific number of trips or voyages.
  • Time charter - A charter for a specific time period, usually between 1-3 years.
So other companies charter these boats to move cargo. Sometime the charteree is another cargo company or sometimes its a producer of the raw materials that need to be moved.  

As most things at this point in time there is alot of uncertainity in this industry. Demand for dry shippers is way down. This is measured by the BDI or Baltic Dry Index:

…an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.
Every business day The Baltic Exchange in London calls shipping companies around the world and gets quotes for moving various stuff across various routes in the different sizes of ships (Supramax, Panamax, etc...). From this derive the index. It kind of like the LIBOR for the shipping.  

Demand is way down which means a lot of people are scared of these stocks. Although its fair to say a lot of people are scared of most stocks right now. I personally find Dry Shipping very fascinating because its a key component of how our global enconomy operates and yet the business it self is very easy to understand.  So although like alot of industries its on shaky water (pun?), I have been trying to educate myself about it so I can make investment decisions that will hopefully survive the carnage for however long it goes. 

Something I will probably go into more detail later on which I find very interesting is how the BDI is used by economists and investors as a general tool and indicator.

Saturday, November 8, 2008

The first month

I opened my investment account through Etrade towards the end of September. So it's been over a month and the results are not spectacular however they are pretty standard considering the volatility of the market recently. 

Overall my portfolio is down 18.20% at the markets close this Friday. I am not going to go into great detail at the moment about what I have in my portfolio just yet. But I will say for the most part I have been buying stocks I am comfortable with holding on to for a while and using money that I do not anticipate any need for. There are a few purchases I slightly regret where I treated a stock like a race horse and have been burned accordingly. But overall for a rookie I feel like I have done a pretty good job.

As far as the loss goes... Being down 18.20% at the moment is not really not that bad. I bought stocks when they were already undervalued in the midsts of the first wave of sell offs. I probably like a lot of people had thought we had reached bottom. Surprise! I was wrong. Imagine someone who has been in the market for a while, potentially buying stocks near their 52 weeks highs, ouch that has to hurt. 

First Post

I have decided to start blogging about my journey through the world of personal investment. I am not entirely new to the markets. I have learned alot over the years through family members and friends but I have only recently decided to take the plunge and attempt to make my money for me instead of sitting on it or spending it.

Most people dream of being able to live a life of freedom. That can mean many things and to alot of people it means financial freedom. I do not believe that money alone will set you free or that you can't be free without it, however I do feel that understanding markets, finance, and using them as tools to move toward financial independence is something everyone should at least understand.

So I hope that my potentially my mumblings on this blog will be of value to those who are in similar situations.

On that note I will add a disclaimer here that I assume no liability for any of the information presented.