Friday, January 30, 2015

Shake Shack: A delicious new stock joins the NYSE

Lets welcome SHAK to the NYSE

Regardless of whether I plan to invest in a company or not--- IPOs* are exciting days in my book. Specially when it comes to companies and/or services I am familiar with and have experienced in the past. My first time at a Shake Shack location was back in 2013 when I worked in the Wall Street area of Manhattan. I visited this particular location by Fulton street. Despite what felt like an eternity waiting for a burger and fries (I was on my lunch hour) the wait was well worth it. I don't remember experiencing a more delicious burger in my lifetime. The burgers are freshly made to order, which is one of the reasons why I had to wait (plus, the long line in front of me).

After filling for an IPO* in late December, things apparently moved quite quickly for Shake Shack as today is their stock market debut! The initial public offering price has gone from an originally disclosed $14 all the way to $21, which is the price at which the stock is set to start trading today, as per the WSJ.

I don't personally plan to invest in the company any time soon mainly because I don't invest during an IPO day or any days near it for any company. I like to wait for the "hype" to settle in order to be able to see with clear lenses rather than getting swiped up by the excitement. However, after doing some research on the company's background and learning some facts I was not aware of, I realized this could actually be a good investment. However, I will sit and watch for now. 

*IPO: Stands for Initial Public Offering. In simple terms, is the name given to shares of a company that have never traded in the stock market before. Think of it as an "initial offering" to the market. 

Company Background

As a former MBA student, I always find stories of entrepreneurship  pretty inspiring. As per their website-- founder Daniel Meyer, opened the first Shake Shack location around 2001 and was originally meant to be a simple hot dog cart in the middle of Madison Square Park in New York. The mission behind the cart was to use the sales to support the Madison Square Park conservancy first art installation. For three summers in a row, the cart became increasingly popular. In 2004; a permanent location was opened in the park (which is still there today). 

Today the company has several U.S locations in Pennsylvania, Las Vegas, Washington DC, and Chicago. They've also branched out internationally with locations in the middle east, United Kingdom, Turkey and Russia. 

Competitive Advantage (differentiation)

This company is far from a McDonalds or a Burger King heating up frozen burger patties. They seem to be following the new trend of pure, hormone-free, healthy ingredients that other super successful companies have been adapting in the past several years (think Chipotle). As most of us have probably noticed; the popularity of "ingredient-conscious" restaurants have increased tremendously during the past several years. Even if we are eating a hamburger, I guess that 'psychologically speaking' we'll feel a lot better about it knowing that the ingredients are pure and free of antibiotics or any other artificial chemical out there.  Millennials and people in general are looking to be healthier and if the food is also amazingly delicious, thats a win-win. 

Check out the menu description of the burger patties:
"100% natural angus beef. No hormones and no antibiotics ever. Our proprietary Shack blend is freshly ground. All burgers are cooked medium unless otherwise requested". 

This theme is pretty consistent throughout their entire menu. 

Aside from hamburgers, fries, and shakes, their food menu also includes hot dogs, a delicious variety of "frozen custards"- dense frozen goodies, crinkle cut fries, and get this-- even meals for your 4-legged friend (they have a "woof" category in their menu at certain locations). Here is their NYC menu at a glance.

Financials/"Prospectus Info"
  • A total of 63 restaurants world-wide
  • Out of the 63 restaurants: 31 are company-operated (including seven in Manhattan), 5 are licensed throughout the U.S, the remainder are internationally licensed, including 20 in the middle east. 
  • Each restaurant is valued at around $10.7 Million
  • Sales for the trailing 12 months were of $107M with profits of $0.66M 
  • With an IPO of $21 a share, the company is being valued at $745.5 million <-- whether or not this is a little rich for a 'burger joint' is up for debate. 
  • The deal has already sold 5 million shares to institutional investors, raising $105M (reason why IPO price shoot up to $21 per share)
Plans for Growth and Expansion

One of the main reasons why companies go public is to gather substantial funds that will allow it to expand and grow to its best potential. The "Shack" is no exception. Their prospectus indicates that beginning fiscal year 2015; they plan to open at least 10 company-operated restaurants in the U.S per year with a goal of at least 450 new restaurants in the U.S. Plans for expansion at the international level were not quite clear but appears they may continue the licensing model for those locations.


Lets not forget about other companies out there with a "similar" concept of serving delicious burgers made to order. A couple from the top of my head are In-N'-Out burgers and Five Guys. The latter already has a strong presence in NYC and while we are still waiting for the privilege of an in n' out-- I would not be surprise if they appear at a corner near us in the near future. These companies I just mentioned are not yet publicly traded but who's to say that's not already in the works? Lets stay tuned and see what happens. 

And that's all folks. Thank you for reading. Join me today in observing how this stock does during the stock market debut. Exciting times for the Shake Shack team, ladies and gents.

Thanks for reading and cheers to profits!


Thursday, January 29, 2015

COACH: Still not where it needs to be but showing improvement

Side note: This is my 100th post on the blog! I absolutely love blogging about one of my passions which is finance and investing. Thank you for reading and your ongoing feedback. Means a lot to me.
Coach: Earnings Commentary
I woke up bright and early this morning to listen to a live earnings call (something I have never done before, as I usually read the transcripts after the calls). The experience was pretty cool and I plan to do that more often. I imagined myself as a part owner of this company waiting to hear what my "employees" had to say about their performance during this last quarter.

Obviously I live in an imaginary world as I don't own enough shares to call Coach's management my "employees". However, feels good to think it. As a shareholder of Coach for the past 2+ years, that's kinda' true, wouldn't you agree? Please don't judge me.

Anyways, as I listened to the call my heart kept sinking with all the announcement in the drops of sales and revenue in several segments and poor performance in Japan. I then felt a lot better as I soon realized that these reported decreases were actually an improvement  from prior reports. Looks like slowly but surely Coach, Inc. is showing signs that their aggressive initiatives and strategies to turn around the company are finally paying of. I then thought to myself:

"What a relieve!"


  • Total sales decreased to $1.22 million, a drop of 14% in comparison to the $1.42 million reported during the same quarter last year. Part of this was attributed to the strengthening of the dollar.
  • Reported profit of $183.5 million ($0.66 per share), a decrease from the $297.4 million ($1.06 per share) reported during the same quarter last year.
  • Comparable store sales in North America decreased 22%, an 'improvement' from the 24% decrease reported last quarter. This was specially noted for their bricks and mortar channels (actual stores v. online). The improvement was attributed in part to a newly introduced "Modern Luxury Concept" which features designs by their new creative director, Stuart Vevers as well a revamp of their marketing campaigns.
  • In a year over year basis, North American sales were down 20%, international sales decreased 1%. Although sales are weakened in Japan (partly due to a weak yen); china continues to show strong demand. Sales in Europe continue strong with double-digit growth.

Plans and Initiatives

“We are on track with the strategic agenda outlined in June and know that our transformation will take time – it is an iterative process that requires significant investment. As we look over our planning horizon, we remain confident in our roadmap to reinvigorate long-term sustainable growth and realize our vision for global modern luxury.” -Victor Luis, CEO.

  • Coach continues to make aggressive "transformation" moves which include the closing of under-performing stores and redesigning stores at premier target locations around the world including New York City and parts of Europe. 
  • Enticing demand in their male merchandise-- participated in their first man wear fashion show this month in London.
  • At the very beginning of this year, Coach agreed to acquire show brand "Stuart Weizman" in a deal valued around $547 million which will be paid mostly in cash and some debt. The coach brand is confident this new acquisition fits perfectly in to coach transformation in to a "lifestyle brand". Stuart Weizman has sales of about $300 million per year. As stated by Mr. Luis: "...And, as announced, just after the quarter ended, we signed a definitive agreement to buy luxury designer footwear brand Stuart Weitzman, which we believe has significant domestic and international growth potential.”  

The bottom line

To be quite honest my head was spinning as I listened to the call. I appreciate the improvement and understand the company has some time to go before it turns around completely. In the meantime, I continue collecting my dividends- currently at solid yield of 3.60% per year ($1.35 per share). Thankfully I have a long period of time ahead of me when it comes to my portfolio and investing. I am grateful in knowing that the money I invested in Coach is money that was designated for investing purposes and I can let it be. I will continue to watch the company's developments as the quarters go by and from what I can deduct, it wont be long before we'll be able to see a strong turn around towards increased profitability. Patience is virtue, specially with this stock.

**The stock has been up over 7% today after earnings call.

As always: Thank you for reading and Cheers to profits.



Saturday, January 24, 2015

Earnings Commentary: Buying Starbucks was a good idea

...The stock, not the coffee {although I love the coffee too}.

Starbucks reported first quarter 2015 earnings this past Thursday after market close. To say that I am one happy shareholder would be an understatement.

I purchased shares of Starbucks (SBUX) not too long ago. See investment thesis and thought process behind my purchase in this post.
I took some time today to read the full earnings release in addition to a couple of articles that appeared in the Wall Street Journal this week. I could not be more excited about the future of this company. Here are some of the highlights.

  • Consolidate Net Revenues increased to $4.8 Billion, a 13% increase in comparison to first quarter 2014.  Reasoning for this nice increase was attributed to a 5% increase in comparable store sales*, a total of 1,641 net new stores opened during the past 12 months, and increased revenue from the ongoing acquisition plans of Starbucks Japan {you can read more about that here. *Note: Comparable store sales includes same store sales of locations open for 13 months or longer.
  • Consolidated operating income increased to $915 Million for first quarter 2015, also a 13% increase from the $813.5 million earned during the first quarter of 2014.
  • Earnings per share came in at $1.30, in comparison to FY14 $0.71. The jump in EPS includes gains from acquisition of Starbucks Japan.
  • Adjusted operating margin increase to 19.5% {company is now making $0.195 per dollar of sales before interest and taxes}, an increase from 19.2% reported during first quarter 2014.

Notable Highlights
  • Dollars loaded on Starbucks cards increased to a record $1.6 billion during 1st quarter 2015, a 17% increase when compared to first quarter 2014.
  • About 14% of Americans (1 out of 7) received a starbucks gift card in quarter 1; this is an increase from the previously reported 1 out of 8 {~12%}, during first quarter 2014.
  • The company added 896, 000 new “My Starbucks Rewards” members during the month of December alone. This brings member total to over 9 million members (and counting).
  • A total of 100 million Starbucks K-cups were shipped out during the month of December alone—reaching a new record high.

New Developments {“coming attractions”}
  • Starbucks used Portland, Oregon as its testing ground for a new initiative called “Mobile order and pay”. This allows customers to place their orders before they get to the store and pick them up at participating locations. The pilot was deemed successful and should be rolled out to other parts of the country in the near future. This is meant in part to increase number of customers as well as sales (of course) and improve customer service as it should lessen the time for people waiting on the line, especially during peak hours when customers are in a rush.

  • Seattle, Washington was the chosen location for the opening of new Starbucks Reserve Roastery & Tastingstores—the stores are meant to serve “limited availability coffees” and additional “sophisticated” goodies (this last one is my guess judging by the name). The plan is to open a total of 100 of such stores throughout the country.

Dividend News
{Gotta' love a company that shares the wealth}

President and CEO, Howard Schultz, confirmed a cash dividend of $0.32 per share will be paid on 2/20/2015 to all shareholders on record as of 2/5/2015. {Annual dividend yield for Starbucks is at 1.60%, or $1.28 per share}.

On a Personal Note

I know that I've only been a "part owner" of Starbucks corp. for about 4 months and some may argue is too soon for me to conclude that buying this stock was a "good idea". I just want to clarify that I am not saying that simply because of yet another stellar quarter. I am saying that because after a ton of research I've come to the realization that Starbucks is much more than simply a coffee shop. Is a company with tons of technology-driven initiatives with plans of growth and continuous global expansion beyond the "just coffee" business model.

They are already making incredible advances with the strategic acquisition of customer data via their Starbucks cards as well as their mobile transaction feature (Starbucks payment app) which has been extremely successful- among tons of other initiatives on the works. Despite so much success, this company is not one to simply sit and collect revenue. They continue to work hard towards growth and towards remaining relevant and a leader within its respective industry. That's what I like to see in all of the companies where I am a shareholder.

Starbucks has some sort of "cult" following and I don't see it slowing down anytime soon. With that said, anything is possible in the volatile world of stocks so, as with all the other companies I own, I will continue keeping an eye on how this company continues to develop.

Thank you for reading and cheers to profits!


Tuesday, January 20, 2015

Why Is Earning Season important?

Hello dear investors,

If you are in the U.S; hope you enjoyed a relaxing Martin Luther King holiday. If you were working, as I was, hope your day went smoothly. My favorite quote from the king himself:

So, what is earning season all about? I received the question for this post via email from one of my readers and felt it would be perfect to write a post about it. 

This post is part of the Investing 101 series and is targeted to new investors or people thinking of investing but the content can be useful to everyone, seasoned and new investors alike.

First earning season for this year, 2015, started last Monday January 12, after the closing bell, with Alcoa being the first company to report earnings. 

Publicly traded companies (those that trade in the stock market) have a duty to report earnings on a quarterly basis (four times per year) for various reasons but mainly to disclose all relevant financial information which can help investors assess how a company is doing and how it has progressed (or not) since the prior earnings report. Earnings season is the official name for the period of time in which the vast majority of U.S publicly traded companies release their earnings reports; hence the name.

One single earnings report is not enough. Many investors utilize and compare the information from various quarters in order to make investing decisions. Factors to look in the earning report include but are not limited to:

  • Earnings per share growth
  • Profits
  • Plans for present and future growth and development 
  • Sales increases (or decrease)
  • Net income increases
  • Results and/or progress of company initiatives put in to place
  • Signs of any new risks and/or competition the company may be facing
  • Return on investments from various projects and/or marketing campaigns

Consistency in revenue growth and profits is what we all look for. Improvements in this area quarter over quarter can help us determine whether the company is on the right track. However, a company that is constantly reporting losses for several quarters in a row can serve as a red flag and a warning to investors.

Earning season is important (and awesome) because it prevents insider trading from happening. Some of you may not be aware that financial information was not always accessible to individual investors like you and me. There was in fact a time in U.S history when companies had the option to keep their information private or would only share information with a selected group of high net worth individuals, leaving a lot of people blindsided. Thankfully, that came to an end shortly after the crash of 1929.

Although said crash was one of the most devastating financial downfalls in U.S history; it was also the reason why, today, we can all enjoy the privilege of having access to the financial information of every single company that chooses to participate in the stock market. Thanks to the Securities Act of 1933; insider trading* is illegal and every single investor-- from the average individual on "main street" to the richest person on earth has to have access to the same exact information from companies when it comes to investing. 

*Insider tradingthe illegal practice of trading on the stock exchange for one's own advantage through having access to confidential information. 

As clearly outlined in the SEC's (Security Exchange Commission) website:

Securities Act of 1933

Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:
  • require that investors receive financial and other significant information concerning securities being offered for public sale; and
  • prohibit deceit, misrepresentations, and other fraud in the sale of securities.

I have mentioned several times on the blog how much I enjoy earning season as it is an opportunity for me to follow the companies where I am a shareholder and see how they are doing. It also allows me to evaluate other companies for prospective future investments. Below is a list of the companies in my portfolio and the date they report earnings. 

Company Earnings
Johnson & Johnson 1/20/2015
Starbucks 1/22/2015
Coach 1/29/2015
3M 1/27/2015
Apple 1/27/2015
Procter & Gamble 1/27/2015
Colgate 1/29/2015
Google 1/29/2015
Visa 1/29/2015
Mastercard 1/30/2015
Disney 2/3/2015
Coca Cola 2/10/2015
New York & Co. 3/23/2015*
Nike 3/23/2015*

*Date is estimated, not yet confirmed

As it is the norm here on the blog, I'll be sharing some of the results from the companies in my portfolio as earning season unfolds.

One quick tip: Most earning reports transcripts are super long and may be too time consuming to read. If you'd like to get a nice summary of the report for any company you may be interested in, I recommend you search for the earnings press release which is usually a significantly shorter version that summarizes the most important parts of the full earning report. I read the earnings releases when i am short on time. More on how to find it and what to look for on the next post.

thank you for reading!

Cheers to profits,


Friday, January 16, 2015

Recent Buy: Why I re-started a position in Apple (AAPL)

Good day my fellow investors.

I am here to share the news of a new addition to my portfolio, AAPL. This is a company that needs no introduction. If you read my November "wish list" you may remember this stock was on the list. You may also remember that I mentioned the fact that I owned apple stock about 2-3 years ago but I sold it not too long after Steve Jobs passed away. The fact that the stock price started to tumble quite rapidly, competition was getting fierce, and I wasn't very clear about the future of the company with the new CEO; I was propelled to sell my shares and take my profits elsewhere.

Truth is that this company was my "portfolio star" for many years until I sold, and it was always on the back of my mind to buy shares again, 'someday'. When the company did its 7:1 split (back in April of last year) and I noticed that Tim Cook (new CEO) was actually doing quite an excellent job with the company, among other factors, the possibility of buying shares again kept getting stronger. And so, back in December, during a very down day when the stock market had a "mini crash" and the shares of apple sunk along with the rest of the market, I made my move. Happy to say I am once again a shareholder of Apple.

I have to be honest that this is probably one of the most followed companies in the world among analyst and one of the most talked about. I remember reading somewhere (probably more than once) that it may not be a good idea to put your money in companies that everyone is always talking about. Although I somewhat agree with this statement, I also believe is somewhat flawed. I think that if you wait for the 'hype' to quiet down a bit, you are patient and wait for the right time to put your money in said companies, the decision can turn out to be quite positive. So far so good.

Apple also reports earnings on January 27, so I am looking forward to what they have to say. The earning announcement should encompass information regarding overall sales of the new Iphone 6, sales of other apple products, patent technology, among other news.

Without further 'ado here are some of the top reasons why I re-started my position in Apple:

The brand is still creme of the crop, and extremely popular:

As previously mentioned, one of my prior fears about apple (and one of the reasons why i decided to sell several years ago) was that they were loosing their edge and competition was getting extremely fierce. Although competition against apple is definitely strong-- the truth is that this company is still creme of the crop when it comes to what customers look for. What other company in the world has people lining up and camping out for days at the time or 'paying people off' just to get ahold of their new device every time there is a new phone upgrade:

imagines of lines around a mall for the Iphone 6 debut.

The only other product I can think of that people do this for is Nike Jordans. When a company has this type of strong popularity and a strong "cult" of people who are obsessed with its products, is hard not to notice. And of course, this line around the block means sales through the roof and more money for the company and its shareholders. We will see whether that was the case during the upcoming earnings call. 

The company is eager to keep growing:

Although apple has several popular and innovative products. It is true that bulk of its revenue comes from the Iphone alone. This graph can help illustrate--

Source: artsTechnica

A far second is the Ipad which, although it sold about 237 million units in four years, sales have actually fallen about 4% during the past year. With that said, apple continues to work hard when it comes to innovation and is in no way sleeping in its laurels. As you may already be aware, they not only have the upcoming Iwatch, which can become a pioneer and may very well set a ground breaking standard going forward for this type of devices; but they are also winning patents that can allow it to go head to head in competition with popular devices. For example, this past Tuesday, Apple was granted a patent for action camera technology (think GoPro cameras). The news triggered a 12% drop in GoPro shares with the fears that Apple may eventually come out with a similar device which could possibly take market share away from the popular company.

Excerpt from Apple's fourth quarter conference, for year ending Sept. 27th, 2014:

“With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”
-Tim Cook.


You would think that after a 7:1 split, the stock rising over 30% in 2014 alone, and a market cap of over $628 billion, this stock would be extremely expensive.  That's apparently not the case. the price is still fairly cheap in comparison to other tech companies in the industry. The company's earnings are growing at about 33% faster than the average big stock in the tech sector. Price to earnings ratio based on projected profits is about 12.41, which means the stock trades at an over 16% discount to the S&P 500 technology index. Average P/E in the tech sector is over the moon-- with companies like Google and Facebook, at 26.41 and 68.76, respectively. Hence, AAPL current valuation seems quite attractive.

An "efficient" market would tell us that the current price has every single noted factor baked in and there is no much room for growth. Hence, this is one of the reasons why the valuation may be low. I beg to differ on that. I think that Apple as a company has a lot of in-house talent and a CEO excited and willing to take the company further, coming up with innovative ideas for an constantly evolving high-tech world.


So there you have it. I am back to being a "part owner" of Apple. Not to mention that with over $68 billion in current assets (Source), the company has more than enough cushion to pay a nice anual dividend yield of 1.77% ($1.88 per share) and participate in share-buy backs. You all know how much I love dividend paying stocks. My plan is to hold shares for at least 3-5 years.

Excited to see where this goes and as always keeping my eye out for any industry changes or anything that may change my original investment thesis.

Tell me, what are your thoughts of Apple's prospects for the future? Do you currently own any apple products?


*I am long AAPL. This is not a investing recommendation. Please dont invest or cease to invest based on the information from this post.

Wednesday, January 7, 2015

Best Resources for Investing Ideas

Hello everyone!

Hope you're all having a great week so far. One of the most common questions I get from people is whether I can recommend any good books or publications regarding finance and investing. I have a post coming up regarding my top recommended books (in the meantime, you can see a quick glance in the 'favorite books' tab). In this particular post I'll like to share the top three publications which I use for any one of the following reasons:

  • To get new investing ideas
  • To keep updated on any news related to stocks I already own
  • To find out whether stocks I own are in the right track (examine what they may or may not be doing to grow and remain competitive)
  • To keep informed and up to date about any new investing and personal finance developments as well as international news/happenings 

I believe the content in every single publication outlined below is perfect for individuals just getting started in finance and investing all the way to well experienced folks.

Anyways, without further 'ado, here are my top three favorites:

  1. Kiplinger Personal Finance magazine
  2. The Wall Street Journal
  3. Money Magazine

I came across Kiplinger personal finance about two years ago while browsing around the Barnes and Noble periodical section. I took a quick glance at the articles and decided to purchase the magazine. I pretty much read the entire thing in one sitting and have been hooked ever since! What I find so great about Kiplinger is that the articles are very quick and easy reads. I always find practical advice that I apply to my own financial life.

This is going to sound extremely nerdy but every time I am able to get my hands on a wall street journal I get a little bit too excited. The ironic thing is that while I was in college getting my bachelors degree, I actually subscribed for one of my finance classes and found the material super boring. I rarely ever read it! Fast forward almost a decade later, I am so passionate about this newspaper that I am one of those weird people that actually reads (almost) the entire thing. 

My favorite session of the paper is the “Money and Investing” session where I can read about different companies and what’s going on within their respective businesses. I feel that the Wall Street Journal brings a lot of value to investors because it actually has incredible, well researched, and well thought out articles that make us think and evaluate whether companies are on the right track or not. It can help you brainstorm new investing ideas, help you decide whether an idea you currently have may be a good one, or can assist in helping you identify whether a company you currently own is on the right track or not. Besides that, they obviously cover current events and is a perfect way to keep up with what’s going on in the world with a specialized focus on the financial markets, as it would be expected.

Finally, MONEY is another publication that made a “come back” in my personal preferences in terms of things to read. I used to subscribe back in 2006 and for some reason didn't find the articles very intriguing. However, I decided to give it a try again this past year (2014) and read pretty much every single issue for the year. Similar to Kiplinger, they offer personal finance and investing advice but I would say at a different angle. While I feel that the advise on Kiplinger magazine may be more ‘practical’ for the average individual; I feel that money magazine takes it a step further in terms of the information they provide and goes more in depth.  Nonetheless, they are both incredible publications which obviously made the cut here. It may simply be a matter of figuring out what you like best.


For all of the above recommendations, I am not telling you to run and pay for a subscription. Obviously, this is a money-mindful blog and to be quite honest I wouldn't tell you to spend the money until you are sure these publications are for you. I actually got myself a subscription to each and everyone of the mentioned publications for this new year 2015 and I am super excited to get my issues each month (or daily, which will be the case with the Wall Street Journal).

However, I’ll let you in a little secret—I actually spent the entire year 2014 either borrowing the publications from my local library or browsing through them at Barnes and Noble. I then decided that paying for a subscription would be very well worth the cost and a solid investment in my own financial growth and education as well the future of Teach Me To Invest, inc.; so I got myself subscription (WSJ was a gift actually, thank you-- you know who you are). 

Anyways, hope you found this article useful. As always, let me know if you have any questions or if you have your own personal favorites that you’d like to share.

Cheers to a prosperous 2015!


Tuesday, January 6, 2015

Book Review: Every Woman Should Know Her Options

Good Morning World!

So whats happening? The market has been a little weak since the year started, oil has now reached $49 per barrel, the federal reserve may eliminate their bond-buying stimulus program at some point this year (my guess is probably year-end), AAPL shares have 'tumbled' a bit (random insert), and the list goes on. Regardless of it all, my passion for investing education and my mission remains intact and stronger than ever.

I've been reading a whole lot lately. Hence, felt it would be a good idea to share book reviews from time to time whenever I read something finance related. 

I am here today to share my opinion on a book I read recently:

This book was sent to me by my online broker, TDAmeritrade after I participated in one of their online training sessions on options. Something you probably already know about me is that I am constantly looking to educate myself and expand my knowledge on the subjects that are of interest to me. Hence, I am always in the look out for interesting seminars or training sessions I can participate in. 

The training was targeted specifically towards woman and options trading. I have been investing since 2008 but my sole focus has been on individual stocks. I love the idea of being "part owner" of a company and this is the type of investing I've always felt comfortable and confident with.  The concept of 'options investing' is something that I was truly terrified of for years. Whenever I heard the word options in the media or in my finance classes my mind would automatically race towards reckless investing techniques where one could loose significant money quickly if not careful. I am sure that's the case for any kind of investing if one is not very knowledgeable. However, for some reason I always saw options as extra 'dangerous'....until I read this book.

By the time I finished the book, I realized the author definitely did a great job of proving the following statement:

"...the bottom line is that if you are already taking the risk of investing in the stock market, the two options strategies I teach in this book, if applied properly, will actually reduce your risk when investing in the stock market". -Laurie Itkin

I believe the title of this book should be changed completed to involve pretty much everyone interested in options (not just woman). It is a very easy, straight-forward read with practical advise. It gives a general explanation of the four basic kinds of option investing out there:

1.Buy a Call
2. Buy a Put
3. Sell a Call
4. Sell a Put

The book then focuses on the two main forms of options for income which are:

  • Writing Covered Calls: "Renting out" your stocks
  • Selling Puts: Getting Paid to Wait and buy stock "on sale"

In a nutshell, the above noted techniques allow an investor to receive income for either agreeing to sell shares of a stock you already have at a particular price OR receiving income for agreeing to purchase a stock you want at a particular specified price. The income can be received on a weekly, monthly basis, or longer length of time depending on the chosen contract. The above techniques basically can be seen as an 'insurance premium' other investors pay YOU in the event they either have to sell or buy shares of a particular company at a specified price. Its a guarantee that they'll be able to carry out the transaction regardless of what happens (within a specified time frame) because of the contract in place.

This may sound a bit confusing coming from me since I didn't write the book but I can tell you the book does an excellent job of explaining this in simple terms and with great examples. Obviously this is a very summarized version and there are risk to keep in mind (as there are ALWAYS risks with investing). The author clearly explains the risks but also goes in to great details explaining the techniques step by step and even shows screen shots of an actual brokerage account and  how you can purchase the options contracts. Books that offer practical, hands-on advise instead of "theoretical" and generalized ideas, are the best.

My plan of action: Obviously I have a long way to go when it comes to options investing but this book made me excited to take it a step further and learn even more. TDAmeritrade has a section called "paperMoney" where investors get $200,000 of "fake money" to invest in pretty much anything. I will be using that virtual account to understand this further and make sure I master the techniques. And then, we'll see what happens! Will definitely keep you guys updated. 

Tell Me, 
Are you an options investor? what is your experience like?
If not-- is this something you feel you'd be interested in?

Thank you for reading!

And as always, cheers to profits.


Book was sent to me after being part of a tdameritrade seminar. I was not asked to write this post. No monetary compensation was received from tdameritrade for this post. all opinions are honest, personal, and my own. It's truly a great book and I felt important to share a review with my readers. 

Saturday, January 3, 2015

My 2015 Investing Objectives

Hello my dear readers!

Welcome to the very first T.M.T.I post of 2015! I am here to share some objectives I have in this new year specifically related the enhancement of my investment knowledge, being able to share what I learn with others, as well as the growth of my personal investment portfolio. Without further 'ado, here are the top five:

1. Learn how to trade options (specifically two types): I recently read an incredible book specifically targeted to women and options investing (full book review coming soon). I've been an investor of individual stocks since 2008, and is something I  absolutely love and truly enjoy. However, it has always been an idea of mine to eventually branch out in to other forms of investing or at the very least educate myself enough about it to decide whether or not is something I'd want to continue doing. The book focuses on two forms of "options for income" which include selling puts and writing covered calls. Hopefully I can master both or at least one of them. I'll share my "adventures" in learning. I plan to use my papermoney account (aka fake money) on TDAmeritrade while I learn. 

2. Read more investing books and become a 'regular' reader of the Wall Street Journal: I've been picking up the wall street journal at my local library but I recently got myself a membership which I am super excited about. Besides that, books on my radar to complete this year include the following: Flash Boys, The Big Short, Liars Poker, The Smartest Guys in The Room. 

3. Add more money to my brokerage accounts: I want to be able to transfer a good chunk of my salary for investing purposes. I'd like to have new money ready to go as I search or come across solid investment opportunities. And that brings me to my next objective.

4. Start a 'fresh' watch list of stocks: I'd like to take my list a step further by  also including reasons why the stock is on my 'radar' (sort of like a mini investment thesis) and keep the list updated throughout the year. Will start by taking a look at my current list (which is about two years old) and updating it by deleting stocks I've already invested in or those that no longer fit my criteria.

5. Give back to my community via education:  I will be volunteering my time even more in sharing what I know about personal finance and investing. I am already an active member of a non-profit organization here in New York City which has a purpose of teaching personal finance and investing to high school students. I will be taking this one step further by also volunteering at a friend's after school program to teach about stock market investing to students and staff. If given the opportunity, I want to do a similar program within my own community targeted to women and investing. One day when I've made a good amount in the market (maybe my first million) I've already made a personal commitment to give back financially to organization(s) that are close to my heart. That's more of a future objective I would love to carry out. :)

...and that's all folks. Thank you for reading. Cheers to a prosperous 2015!

Do you have any personal investing objectives (or resolutions) for this new year? Would love to hear about it!