Open Hand Investing Entry 1 -- Intro

Well, it's been a  long, long, time since I posted a blog entry.  I was woried that if I started writing that it would eat into the other things going on in my life, and it probably will.  But I have decided to get back to it because I think it is going to help me get my thoughts in order.  I am going to play my investments "open hand" and invite questions, criticism and commentary.

Recently, I have gotten into investing in the stock market.  My company issued bonuses this year (they have for the last 4 years actually, which is pretty cool). Ususally I take a little bit and buy something for myself or for the house and take the rest and put it towards paying down debt.  This year, my debt is down, so I decided to put the money to work.  Now keep in mind, this is not a large sum of money and my wife and I have retirement funds already in place, as well as education money for the tyke, so this is purely fun money.  My goal right now is to pay for travel expenses for the next family vacation...I think tha's a resonable goal....

So I took 2/3rds of the cash and opened a brokerage account.  The rest I put in a money market account earning 5.5%.  At this point I should insert a caveat....right around the same time bonuses were issued, I started watching "Mad Money" on CNBC.  For those not familiar with the show, an ex-hedge fund manager named Jim Cramer rants and raves about the stock market and tries to provide valuable stock tips.  The show is quite unorthodox when compared to just about any other financial show and can be quite entertaining even if you are not into stocks.  Keep in mind that people seem to either love or hate the guy, so know that going in.  It's on at 6:00 PM and 11:00 PM weekdays on CNBC.

So, now back to my investments....maybe it is better to tell you what I have leared so far....

• Never take your whole position on a stock wth one purchase.  You are basically saying, "I am betting that this stick never goes down."  For most stocks, this is not true....wait, watch the stock and try to find good entry points.  Wait for some sort of bad news that hurts the market but not necesarrily (sp?) the stock or the segment....plenty of that this week, lots of great stocks "on sale."
• Only buy stocks you are interested in...basically, buy what you know.  If you aready know the product/stock, then you probably already know the competition and the sector.  This makes evaluation so much easier.  Additionally, it's dfficult to get excited and do the dilligence on stock whose product is "boring" to you.  Trust me on this one.
• Watch those commsions -- This is more imortant for me because I have such a small bankroll.  I am usng Tradeking.com which has very low commisions (4.95 a trade) but they still add up and eat into your earnings...plus, it's round trip so you are paying $4.95 to buy and $4.95 to sell.  Buy and sell 10 stocks and that's $100...that's almost half a Wii!
• Paitience, paitience, paitience...yeah, wish I could practice what I preach...I tend to be an overly active trader (which contradicts my last rule about watching my commisions) and that can kill you...more to come on that sometime when I discuss my foray into Jones Soda....

So there are a lot more rules I have learned so far, but I want to leave some stuff for future entries....now for the good part, what do I own right now and why....

Apple, Inc -- AAPL -- Cramer's growth stock of the year, and boy was he right.  I made my first purchase at $103.50.  Since then I have bought twice more, including one purchase yesterday in anticiption of news for next week at their developer conference.  Lot of controversey on this one.  Cramer is recommending that we sell off everything but 1/4 of our holdngs prior to launch of the iPhone....I'm not so sure...I am going to manage this one closely with trailing stops over the next few weeks...sees to be tremendous amount of exuberance and that can raise expectations too high sometimes (again, see Jones Soda).  That being said, I think that Apple is really hitting it's stride right now.  They dominate the mp3 market with hardware and software and they have recently started to make serious inroads in the PC market...and that to me might be the real story here.  Whatever hapens it's been a lot of fun so far.  I don't own any Apple products, but I am familir with their markets and their main product, which to me is innovation of User Interface.  So far, I have an 8% gain overall on this one with a cost basis of 115.27/share.

Crocs, Inc -- CROX -- Another Cramer recommendation.  Growth stock, these are those "ugly" rubber shoes that were made somewhat famous by Mario Batali.  Sales have been skyrocketing as America seems to be approaching the tipping point for these shoes.  The company's financials are fantastic with incredibly high margins.  They are starting to diversify their offerings now.  Earlier this week they annunced a new high-end fashion women's line.  Most importantly, they are the most comforatble shoes you wll ever wear  If you are in the "ugly" camp, I urge you to just try a pair on sometime....I bought my third pair yesterday.  I am currently sitting on a 14.48% gain with Cost Basis of $78.18/share 

Delphi Corporation -- DPHIQ.PK -- Very speculative play on GM's spinoff bankrupt (yeah, I said bankrupt) auto parts company.  I don't have very much in this stock. The play here is that private equity is trying to negotiate a deal with Delphi, GM and the unions to bring the company out of bankruptcy.  If that happens(big IF) I could catch a double or a triple.  Of course, it could go to nothing as well and I would lose the whole investment.  Bought it at $2.14 and it's currently trading at $2.40, which translates into 16.27% gain after commisions.  Cross your fingers on this guy....

Well, getting late today.  I'll get back to you on the rest of the portfolio, past and present, (incuding my dabbling in Jones Soda and Activision ) my plans for future trades/equities, and any new developments.  If anyone has any quuestions or comments, fire away...

Current YTD return on investment actualized and not actualized is 1.97%