wearmanyhats

Investors with a long term outlook build on their portfolios constantly.  Although the best buys right now are in global resources, there are a few individual stocks that are grabs as well in all price ranges.  Monday’s picks were mid priced. Today we’ll look at a one that is inexpensive, but has a solid profit margin, good revenue growth, and good insider activity.  This stock is such a rare find because after exhaustive research, this is the only stock under $10 that had such picky criteria.  

Globecomm Systems, Inc. (GCOM) : This company is in the satellite communications service.  It provides communications for a variety of customers from the private sector to the military.  The insiders feel good about buying into their company and have been trading steadily since the market turned down.  It has solid revenue growth and with the advent of mobile connectivity , the future looks even brighter for using the satellite services.  The P/E is under 7 and the revenues are growing yearly.  It is an excellent company for future growth.

This kind of stock is indeed rare. It is one reason why stocks in the emerging market sector is so hot right now.  There is so much growth overseas, and the prices are reasonable, that finding inexpensive bargains to get started with in a portfolio is super difficult. Tomorrow we’ll look at other bargain priced stocks.

To the average city dweller, the plight of the beef farmer is nothing worth even thinking about. It should be. Unless you are a vegetarian, the meat farmer’s life affects you more closely than you realize.  The commodity meat market fluctuates dramatically, sometimes making these farmers a good living, other times they have to wait until prices go back up.

The beef farmer, having enjoyed wonderful prices on his/her cattle for a number of years, has seen a drop in the price of cattle in the past seven or so months.  This deflationary period that caught producers by surprise, but when you can’t pay for your house payment, or car, when you’ve been laid off, you  don’t buy as many steaks.

Beef prices fell.

Some farmers have been holding their herds, hoping the price of beef will climb so they can sell off their herds and at least come out ahead.  By the time you buy the youngstock, then the feed to get them through the winter, and take care of any vet shots needed to keep them healthy, the bill for the initial investment is quite noticeable. Only a sizable profit can make the whole endeavor worthwhile.

Farmers are used to the gamble of their calling.  Sometimes you can buy grain and a good storm will wipe it out.  Other times it’s drought.  Sometimes you can invest in pigs, and the price of pork will drop through the floor.  It’s a risky business and a miracle that anyone even works the land at all!  

For now, the beef farmer waits and hopes for good times to return to the country.  S/he wonders if maybe pigs would bring the farm a better return next years.  Perhaps a specialty meat such as Hereford will bring a better price.  The farmer waits while we enjoy the prices of beef at the store.  Our good fortune is the farmer’s living slowly draining away.

Global resources took a tumble during the market decline, and although some metal prices have come back, not all of the stocks relating to mining have jumped back yet.

Enter Bucyrus International (BUCY). This stock has doubled since the falling market last fall, and has almost doubled since its drop down just over $10.00.  It is still a cheap stock with a P/E of almost 7.

Insiders are buying like crazy, and the revenues are climbing steadily.  If you look at the five year charts, the technical movement looks like a wonderful buying opportunity.  And in a press release in February, Bucyrus highlighted a conveyor belt system that helps reduce mining costs, offering a cost cutting tool that should be highly desirable.

Even though the stock is almost up 100%R in the past few months, it is still a great buy.  The 52 week high of $79.00 gives it great room to grow. All in all, since mining is not going to slow down soon, diversify by getting into mining equipment.  And then consider whether BUCY is the kind of stock you want to add to your portfolio.

In the classic comedy, good law abiding citizens are driven to behavior unlike their usual self.  The slapstick and situational comedy may seem extreme, but the truth is that money does make people completely stupid at times.  In this case, the finest comic actors and actresses spend over ninety minutes chasing around after hundreds of thousands of dollars only to see it go flying through the air.

Even the most sensible people can be overcome with the fear of becoming homeless, or old and poor, or unable to live up to the expectations of the family. Or they will want, and not know the end of their desires.  Only money can buy things to throw into that hole, that emptiness. So they will go to extra lengths to bring in extra money, legal or not, ethical or not.

Look at the young city clerk in a small town in Minnesota.  She liked “things,” helped herself to thousands of dollars of city funds.  In the end, she wound up in jail, has a rap sheet, and lost the respect of many of her fellow small town citizens.  Most of all, she has to pay back the money and can not find a decent job, as her criminal record works against her. She was on the move upward in city administration, but kissed it goodbye. What a loss for both her and the profession.

In another nearby town, a young accountant went to work for a local hometown hardware store.  He slowly took money off the account, to the tune of $80,000.  When it became apparent that he was going to be caught, he went home that night and put a bullet through his head.  For some reason, he let money rule his decisions, to a terrible end.

In Anchorage, a man who couldn’t control his drug habit, helped himself to his employers funds, then swindled out a customer.  The result: more surprising than you might think.  The police, overwhelmed by more physical crimes, concluded that it was a civil matter.  The employers knew that the former employee had no money and the stress to follow through with a lawsuit was too stressful for the male owner.  In the end, the swindled man sued the employers, who had to settle.  

Money makes people foolish. So few people keep their wits about them concerning money that it is almost unreal. This doesn’t have a darn thing to do with investing or saving, it has to do with attitude.  What is yours?  Is it one you have kept in perspective?  Can you live with money or without it without committing crimes or unethical behavior?  It’s important that you know, because it dictates how your live your life.  And if you don’t live your life with dignity and decency, then no amount of money will fix it.  

It’s just something to think about for the day.

Protesters were told to show up with signs with slogans and tea bags.  And they turned out en masse all over the nation.  These were people that wanted to let the government know that we are going down the wrong road, that the government spending is out of control, that they are fearful for their nation.

Not a word of comment came from President Obama, nothing came from Senators or Represenatives.  Nothing will come until the day after.  Why?  Because even though it got good press coverage, even though these are thoughtful, well educated individuals, even though they are dead on right about wasteful government spending,  the demonstration deserves only a passing glance.

If the TEA protest is going to be meaningful, there needs to be more of days of demonstrating.  They need to yell louder, and they need to have attainable goals.  Right now politicians don’t know how to make these noise makers happy.  What should they do?  Get control of spending?  How?  The budget is knee deep.  No one even really reads it before they vote on it. It’s not possible to do that at all anyway.

TEA protesters are screaming about turning socialistic. In the meantime, perfectly good American citizens are standing by trying to figure out how to afford medical care when they can’t afford the health care premiums.  Millions can’t figure out what they would do if they get cancer: bankrupt their families or die.  Not a good choice either way.  Bad spending?  Try letting millions die annually because in the world’s richest nation, we can’t figure out how to manage health care.

No one is suggesting we spend foolishly.  No one is looking to turn our government socialistic.  There’s got to be room for compromise.  But screaming while holding a tea bag is silly.  Give alternatives.  Come up with solutions.  Or be quiet. Because right now the nation needs solutions, not griping.

Many readers are trying right now to figure out how to take care of last year’s taxes.  The last thing they want to do is start worrying about next year’s taxes.

Big mistake.

Tax planning should take place yearly, and needs to be broad in scope.  There also needs to be a careful assessment of your financial situation in the process and goal setting that will culminate in the preservation of your wealth.  Here are a few ideas of planning to keep the money you earn.

1.  Look at your previous year’s taxes.  What did you do right and what did  you do wrong? For example, did you contribute to a retirement plan?  Was it one offered at work? Were you able to at least sock away as much as the employer would match?  Consider that to be free money.

2.  Look at which stocks you have lost terribly on this year.  You might want to wash them out of your portfolio by selling and getting leftover money into the market whenever you feel ready to deal with the risk.  That way, you have  the tax benefit and the time to recover.

3. Consider using real estate to use depreciation to reduce your ovrall taxes  You need to have a willingness to work with commercial or rental property, so be sure it is something you can handle.  

4.   Would having a side or home based business give you deductions that you can write off? Using a these businesses for tax benefits is something that your accountant can help you with.  If you can handle an additional side business, they can prove to be quite lucrative.  

5.  Plan to make home improvements based upon tax breaks that compliment the needs of the house.  There again, work with your CPA to find the best deductions before you spend a lot of money. Especially be mindful of “green” improvements . 

Taking the time now to make wise tax decisions is the way in which wealthy people keep their money.  Remember, you can always “pay your fair share” by contributing to the charity of your choice.  That way you will have a little more say in how your tax money is spent.

Throughout all of the corrections in the market, some stocks are holding steady.  One, in particular, has been running between the same range now for over three years:  British Petroleum Prudhoe Bay Royalty Trust. (BPT)  It vacillates between $69 to $96 depending on the price of oil or the time of the dividend payout.  And it’s on the low side right now.

There are good reasons to like BPT.  First, it has a quarterly dividend of 9%, a P/E of 6 and a consistent payout record.  In this time of economic trial, BPT is like the Energizer Bunny that just keeps moving along.

Consider the upside potential with BPT.  First, it is holding its value even though the price of crude is the lowest it has been in years.  That means if -or when- the price of oil goes back up, so will the price of BPT.

Critics say that the pipeline of Alaska is going to need replacement, that more sudden leaks could cost the company millions in clean up and restoration.  That’s true, but this cost is borne by all of the companies that partner in this pipeline endeavor.  Besides, any replacement parts will be one time expenses designed to last for many years, not a repeated fix.  The nice part about the pipeline: it’s in a relatively stable are of the world.  It doesn’t have to fight tornadoes or hurricanes, though earthquakes make everyone jump.  Only men can make it an environmental disaster, as happened several yeas ago when a man shot a hole in the line causing millions of gallons to spray out everywhere.

In general, though, BPT has been a great stock to have in this economic downturn.  And that is the finest thing anyone could have.

Governor Ritter of Colorado is planning to get the roads fixed up by raising $3 on the vehicle registration price.  He cited numerous statistics to back up his plan.  Of course, larger vehicles will have to pay more, but it would create jobs at a time when jobs are needed, and judging from the pictures that cbs4 in Denver took, get some much needed fixes for the roads.

One Republican lawmaker said that this showed how out of touch the Governor was.

Out of touch?  For $3?  That’s the price of desserts in some restaurants, the price of a drink in others.  Some people pay more for a fancy cup of coffee than this would give a once a year to fix the bridges that carry them to work.  He is fussing about a $3 raise?  Especially since they haven’t spent more in the budget for 25 years?

The Republicans instead said that the state should sell its equity in buildings it owns around the state.  What a terrific idea.  At a time when banks are lending very much, and it’s the worst possible time for pricing in the market, the state should take the hit and get rid of its equity.

What are these politicians thinking?

It is consistantly amazing to me that partisan politics can be so petty.  Let this be a cry to the politicians in this nation.  Americans, quite frankly are tired of stupid bikering.

$3.  Good grief.

We had a death in my husband’s family, and since Hubby was on the road, he decided to take a bus back home to attend the funeral.  He was as determined to make it home as I was to get him to understand that there was a blizzard between him and that funeral.  In the end, he made it to a town about 45 minutes away, then called for us to come and pick him up.

Did I mention the blizzard? 

At one point in the storm, the wind slowed, the visibility improved, and my sons and I set off to go get the Daddy Unit.  Funny how those storm improvements do not last long!  But we made it home with no mishaps, perhaps because we only encountered serious difficulties for the last half of our trip.

Entering a business during a recession is a bit like that.  Even in the best economic times, starting your own business is risky.  For those of you who didn’t know, only five percent of businesses make it past the first five years.  In the next five years, the majority fail of those who survived the first five!  Not very good odds. 

That’s not to say that you shouldn’t open a business.  I think anyone who can get the tax benefits of a business, or the extra income, or the satisfaction of working for themselves deserve to grab the golden ring. But be prepared that successful businesses are rare, and rarer still are the good bosses. Also, keep in mind that starting a business during a recession had better be bulletproof.  If there’s little money to be had, it’ll be tough to find people putting it in your pocket.

Let me give you a couple of examples.  Over thanksgiving, our nephew told us about his insurance business.  He started with several other men the same year in the same business.  Today he is the only one of them left.  How did he make it when the others didn’t?  Simple.  He worked part time while his business was growing, while his colleagues had to make it their primary paycheck.  They couldn’t handle the lean years.  Not only that, but he meets yearly with each client for an update about their needs.  Customer service is critical to him, as it should be to any business.

There are a myriad of other reasons that some businesses make it and others don’t.  One is luck, the other is advertising, another is the need for the area. It’s like the hero’s saying in the movie “Robots.”  He says, “See a need, fill a need.” 

But for all of those great ideas, think twice about starting that new business in a recession.  If you aren’t going to be living on the street because of the chance you take, then it might be worth it.  If, however, you will hurt yourself so badly that you will be too shy again, wait perhaps for a break in the weather.  Sunnier days always come again.

As we should never take the world of money too seriously, I have had a wonderful event happen: one of the squirrely writers of the Today blogs dropped in and gave me the lemonaide stand to deliver to ten other bloggers. It’s actually a Lemoniade Award. So for all of you visitors today, take a glass of virtual lemonade, kick back and relax from the heat of the markets, Christmas shopping, and anything else that makes you sweat.  Now I pass this on to the next winners of the Lemonaide award, to share in their right to make the winter full of sunshine.  (I have no idea who started this bizarre tradition, but I’m glad it’s easier than picking a thousand pink flamingos from my lawn or toilet paper out of my trees!)

Thank you to Theresa at Careermysteries.today.com for driving the stand right over.  Here’s a toast to her blog, as she is on top of both the Human Resources end of the job market, and enjoying life in general.

Here are the rules for you lucky recipients:

The rules of this award for recipients:1. Put the logo on your blog or post.2. Nominate at least 10 blogs which show great Attitude and/or Gratitude!3. Be sure to link to your nominees within your post4. Let them know that they have received this award by commenting on their blog.

5. Share the love and link to this post and to the person from whom you received your award.

I choose these blogs based on the fact that they looked as though they have worked hard on their blog.  I also choose folks I had never visited before and have nothing much to do with what I write about.   I encourage all of us to go visiting!

 The lucky winners of this award are: (Trumpets, please!)

1. disabilityrights.today.com

2. danceworld.today.com

3. popcultured.today.com

4. girlsrock.today.com

5. mosaicmoments.today.com

6. networkingonline.today.com

7.  educator.today.com

8. gentlecare.today.com

9. techspotlight.today.com

10. conventionfans.today.com

Just so all of you know, I spent a good long time perusing the today websites to find folks who take their site seriously, put some effort into it, and seem to enjoy sharing with others. Some of you have blogburst type quality, some are like journals, still others are just for fun.  I am impressed by the diversity of what is out there and hope that newbies will continue to get their sites set!

Enjoy the lemonade award and finding ten other blogs to award this Lemonade Award.