I want to focus on low quality stocks because I want to help you avoid losing money. During the Tech Boom in the year 2000 there were so many low quality stocks such as VA Linux, Red Hat Linux, The Globe.com, Infospace, and the lists go on and on. Why do I say that these companies are low quality? The reason is that the business model was not sound and promising. We just buy it because we were crazy about any companies that have things to do with the Internet.

How Do We Find Quality Stocks? We will use Coke as a quality stock for our example. Coke is a fine quality stock because it already has loyal fans. You see Coke and Pepsi everywhere. Coke already proved to us that it can keep making money no matter if there is a recession. When there is a recession people will stop buying expensive items but they will still drink Coke.

Anheuser-Busch Companies will always sell Bud Light because people will still drink beer. I made good profits from Bud Light when Anheuser-Bush sales were declining, and I took advantage buying the stock.

The last example is Procter & Gamble, they sells everything that you will need to run your daily life. They sell Tide, Crest toothpaste, Always, Duracell, and the list just goes on and on. If you really want the ultimate defense stock than Procter & Gamble would be the One.

But you have to ask yourself why would I buy it if the stock is not going up or down? The only reason I can think of is that you can’t find anything to buy. Warren Buffet owned all three of these companies that I mention.

He owned large stakes of it more than anyone. That old man really know about business model more than I do, but I won’t give up on making myself a great investor. The more I make fun of that Old Man the more I am becoming like him. I guess you can call it Karma or Sin.

Final Thought. Most bull markets always have this characteristic:

• The stock price is always high
• The P/E (price earnings ratio) is always high, but not always because high earning make P/E low
• Low dividend yields compare to bond
• Crazy earning reports is a must
• IPO of low quality stocks such as Infospace, VA Linux, and The Globe.com, etc.

First Published: March 21, 2008 @ 16:41

How focus is your portfolio? Do you have 30 to 45 stocks in your portfolio? Can you keep up with all those stocks? If you can’t keep up on which dumb dumb is running the company, then your portfolio is not focus. You don’t have to be a hawk but some of your stocks will need some check up. How long have you own this company? If you own it for 3 years, then how did it perform during those 3 years?

How Did My Stocks Performed?
I used to owned Oracle, Microsoft, Cisco and GE for couple of years; and I found out that I would have made more money from CD then putting money in these companies. Yup, my portfolio was not focus. These big name stocks hardly performed. I had to dumped the trash and find some attractive and promising stocks.

Too Many Stocks To Keep Up
I used to own 30 stocks but only 3 or 4 perform. The reason was that I was too over diversified. I over diversified and I hardly make any money. I found out that if I want to make any money; my portfolio have to be focus. I agree that you have to be diversify but over diversified hardly make you any money. I don’t own more than 25 stocks in my portfolio. The reason is that I want my portfolio to be focus. I own about 3 stocks in each sector. If transportation sector take a hit, then it wouldn’t be all lost; it would only be 3 stocks I made mistakes on.

Final Thought
The concept of having your portfolio focus is nothing new. My portfolio were not well focus, the end result was that it didn’t perform well. Your portfolio needs to be focus and need to be in check. You need to know if you’re making any money at all owning Microsoft, Cisco or Intel during those 2 or 3 years. You cannot sit on your butt and hope that you will double owning Microsoft, Cisco or Intel.

The market got tumble today, when will the credit crunch be over? I don’t really know but it making a lot of banks stocks very cheap. I’m I buying banks? Yes, I am buying bank. When everyone lost hope in financial stocks, I still think there is hope. Some banks will go away and some will survive.

I have lost $677 from Wachovia (WB) now and I am staying with Wachovia. Managements are buying their company stock and it gives me some confidence in Wachovia. I don’t like to see management jumping ship. I like to see management buying the company stock when it falling.

I also lost $410 in Well Fargo (WFC) and I am staying with Well Fargo. When all seems lost, I still think the two banks have a good business model and show promising sign of recovery. When the rain is over the flowers will bloom.

What mistakes did I make?

The mistakes I made was that I bought too early when investors are sinking the ship, I didn’t wait for the ship to sink to the bottom of the sea. You probably thinking that just so dumb why do you do that? The reason is that I’m all-alone and have no friends (I’m just kidding). Mistake wills be made that just part of investing, I am sharing it with you free of charge. I am buying more Well Fargo and Wachovia because I think when the rain stops these 2 stocks will bloom.

The business model is still there. Managements have not jump ship. The price is on sale and at very deep discount. You can say I am taking investors fear and transforming it to my advantage. I like buying from what people fear and don’t want.

Why Don’t You Ask Other for Advices?

Most of them want you to pay for their advices. Some of them think they are so prefect and don’t want me to joy their millionaire club. I am just a poor man holding a sign that read “Will Work for Cheesecake!!!.”

Did I lose all my money in stock? No, I have diversification in place. I don’t own just one sector I own about 7 sectors in case I makes mistake. I did make money in Nucor (NUE) and Burlington Northern Santa Fe (BNI). I bought Nucor at 50 now it 68 dollars a share within month. I wish I can determine where the market is going before everyone is getting in, but it is very difficult to do.

First Published: March 07, 2008 @ 14:00

I bought Visa ( V ) for 64 and now the stock is at 84. I just hit the jackpot on Visa ( V ). Cheesecake, if you are making money then why are you telling readers how to make money for free? I don’t know I guess I want to help people with no charge. You’ll charge people in the future for your secret formula? I have no secret formula. I wouldn’t charge anyone; I just want to help people with their financial freedom. I hope that one day they are going to do the same for other.

It Easy In The Stock Market Than The Casino
I go to the casino a lot, and I found it very hard to win in the casino. The reason is that the house has greater advantage. In the stock market, the player has the greater advantage if he knows what he is doing. I only have two income sources. My incomes come from working 9 to 5, and investing in the stock market. The money I make in the stock market help supplement my income. I try gambling in the casino but it is not working. I had been losing in the casino for 6 months now.

How Do You Define Success?
What does it mean to be successful? I don’t even know what success is. How do you define success? I always thought that to be successful, you have to be wealthy. I am surprise that I have a lot of members. I would never think my article would be interesting. You could just say I have some low self-esteem issue that I need solve.

Final Thought
When you won you feel like you’re some hot shot, but when you made mistake you feel dumb. I will still work 9 to 5 but I don’t have to if I don’t want to. I guess that is the definition of success to me. If you want to make money without losing any money, then you can play virtual trading; and still get pay if you beat the market according to site called updown

I sell my stocks a lot of times for personal reasons like paying off credit card, or putting more money in checking. I need to do a better job of where the money is going. I am sick of the $70 that SunTrust charge for over draft. You wonder how bank make so much money is because of the overdraft. I’ll think of a way to manage the cash flow better. Anyway, let talk about selling to gain the maximum profits. I have 3 reasons why I sell (no it not personal selling). I must end the battle with SunTrust so they don’t steal my money. Must become better at balancing a checkbook.

You Made Mistakes
The first reason, you should know already. When a mistake had been made on the purchased of a stock. You realize that the CEO only think of himself and don’t give a dame about shareholder. You later found out that the company is only sound on the balance sheet but not promising. Promising mean the company is going to be a diamond and not lemon. A mistake will always be made; the only best thing you can do is to limit it.

Bill Gate Is Not The CEO Anymore
The successor can’t manage the company as good as the founder. Windows Vista suck and we all know it. The company is slowly, slowly breaking down. MS Office can’t adapt to Web 2.0. The company is not focusing on software but instead on XBOX hardware. You could just call the company MicroHard instead of Microsoft.

It Cisco But It Not Going to Make Me Wealthy
There is just no room for Cisco to go anymore. Cisco if you listening get into the phone business. I as a consumer want to see my friends face on the phone. When Cisco is a 152 billions dollars company, it is very hard to find any room to move. Cisco you are not a growth stock anymore, pay up some dividends and become a value stock. I like about 7 percent dividend yield please.

Final Thought
Investing to me is a journey. I made many mistakes when I first started investing. I bought stocks for 1 reason, the fact that it going to go up. I didn’t really look into the business side to see if it sounds and promising. The past mistakes must be carefully study and learn so that it wouldn’t happen again. No one is born to be a hotshot investor overnight; it take years and years from your experience, skills and judgment.