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Thanks so much for your readership! Looking forward to new opportunities in the future!

Company Review Thursday: Amazon Inc

Online shopping has hit fever pitch in the United States. Some shop online for fear of going out and the dangers malls, department stores and outlet malls present. Others shop online for the comfort of having items conveniently delivered to your doorstep. Needless to say millions of people did their Christmas shopping online or from their phones this year and Amazon.com's bottom line is showing it.

Over the years, Amazon.com has built relationship with its suppliers, whether they be individuals or companies looking to sell inventory online using Amazon's platform. Everything from books, to electronics, jewelry and clothing, Amazon has it. This Christmas season Amazon added 3 million people to their Amazon Prime 2-Day delivery service and with this type of influx of users, Amazon put a strain on sales for big box corporations like Wal-Mart and Best Buy.


Company Snapshot (Yahoo! Finance Data)
Name:  Amazon.com Inc. (as of close of business 12/30/2015)
Ticker: AMZN
Current Price: $689.07
52 Week High Price:$696.44
52 Week Low Price: $285.25
Market Capitalization: $325.3B (Large Capital)
Price/Earnings (P/E Ratio): 979.46
Earnings/Share (EPS): $0.69
Dividend: No Dividend Paid
Industry: E-Commerce
Primary Business: Internet & Catalog Retailer


The Good
Amazon.com has become a centralized place for people to do business to buy and sell a tremendous variety of things. Suppliers are using Amazon's marketplace to sell their products and pay Amazon a portion of profits for platform use. Amazon also has it's own inventory of products that it sells generating even more profits. For example, the Kindle Fire tablet is one of Amazon's most popular products that brings Amazon in to competition with heavy hitters in personal electronics like Apple and Samsung.
Amazon also spun off it's web service as a basis for companies to expand their cloud computing capabilities. Its a free service that you can use, so small business owners check it out especially if you're looking to maintain a database of customers or maintain inventory. Amazon Web Service is the best cloud platform available right now and generates a lot of traffic through its sites. This makes it appealing to companies looking for low cost options for cloud computing, making Amazon a competitor to the likes of Salesforce and Microsoft in cloud services.
Lastly Amazon is building out its own fleet of delivery trucks, planes and have plans to user drones to deliver your items directly to your front door. With this type of capability, they have catapulted to the top spot for online retail. And with the addition of Sunday delivery, Amazon is staking its claim to be on top for a long time.

The Bad
The only issue I can foresee is Amazon becoming competitive with various companies in such a way that some companies stop supplying them with items to sell on the Marketplace. Amazon becomes competition for small companies because they begin to produce the same products, but offer lower prices because they have economies of scale on their side to buy in bulk and sell at a lower price with smaller profit margins. This would change the amount of money that Amazon gets from providing the Marketplace.

The Ugly
The ugly part of why people are shopping online so much in part is out of fear of going to malls or stores. People get in fights and some killed over items in the store on sale when inventory runs low. This senseless chaos paralyzes people and confines them to their homes. In a time when we should be at peace and have joy in our hearts because this time many years ago God sent His Son to be an example of how to love each other, we are so very much at war. My prayer for 2016 is for peace and love for all mankind. Hope you have an amazing start of the New Year.

Til 2016 folks...

Setting Financial Goals for 2016

I hope everyone had a wonderful Christmas last week. We have just a few days left in 2015 and it's time to really consider our goals for the year. Do you have financial goals set? Are you looking to decrease your credit card debt or eliminate it completely? Are you going to pay off a student or car loan this year? Or will you quit procrastinating opening that savings account? Maybe you'll open a brokerage account and start doing market research to build your portfolio. Whatever goals you have, make sure you're making decisions today to take you one step closer to achieving them.

That being said, there are so many apps on both iPhone and Android stores that help build a budget and monitor your spending. My favorite is Mint. Mint has both web and mobile application capabilities and can be used to consolidate your accounts into one secure location. You probably have separate log ins for your credit card, student loan, home loan, car loan and debit card accounts and it's so inconvenient to have to log in to each site to get your information. With Mint, you can consolidate all your accounts, monitor all of your transactions and see what you're spending your money on. The Mint tool allows you to set limits for your budgeted items like clothes, food, health and any other expense you could want to monitor. Mint is also great because it will send you a weekly activity update letting you know how your net worth has changed over the week.

Along those same lines the app Mvelopes is a great way to watch your budget. Similar to Mint, it actually uses secure connections to your bank accounts to monitor your transactions. Mvelopes provides a nine step program that will help you control your spending, live within your means and help you to target financial goals to improve your credit score and net worth over time. With so much financial information available about yourself Mvelopes will monitor your habits, and help you pin point those excesses and provide ways to save or spend your money more efficiently.

Those are just two of the top mobile and web app options available for free to help you get your budget in order in 2016. Other options include:

1) Good Budget
2) You Need A Budget
3) Toshl Finance

Research these five I picked or search for another. I chose these because they are free and offered on both iOS and Android phones. If you have an app you prefer to use, share it with me. I'd like to know what all is available and how you like what you use.

Until next post folks...

When Things Get Rough

 Dear Stock Market,

                     You have been #StraightOutta returns #BacktoBack days and my portfolio is #SuperUgly but this is #TheWarning I'm about to drop the hottest diss track of 2015 on you. I'm about to drop #Ether on you and all your index fund friends so you can't say I didn't #HitEmUp too.

       Sincerely, 

       An Angry Hip-Hop Inspired Investor

This was one of my more creative Facebook posts of 2015 and heavily inspired by the movie Straight Outta Compton. I was channeling my inner Ice Cube as he hit the studio with his notorious diss track titled "No Vaseline" because I was upset about hos volatile the market had become without real explaination. Hindsight is 20/20, so let's take it back to mid-August and reflect on some of the most pressing issues of the time:

1.  Donald Trump and his political incorrectness and audacity to be ignorant in more ways than one
2. State of Emergency declared in Ferguson over protests held on the first anniversary of Michael Brown's death
3. Unemployment reaching a 7-year low at 5.3%
4. Tom Brady beating Roger Goodell and the NFL in a case calling for a 4-game suspension of the future Hall of Fame QB

While the world was blaming Tom Brady for a crime no one can prove he committed or wondering how Donald Trump could be taken seriously as a presidential candidate, the stock market took a real blow. The global economy took a big swing as China’s economic woes were exposed, but like they say all things that are done in the dark come to the light. It would be wrong to put all the blame on China.

During the same period the US Dollar was very strong, meaning that the US Dollar could purchase foreign goods, but people looking to buy US products would have a weaker currency so it took more of their currency to buy the US product. Also the price of oil was dropping and the price of household items was going up, but wages were staying the same. People were more likely to put their money in a savings account than the stock market. My post about saving vs investing addresses this in more depth, but people in the US were looking for low risk and getting low interest rates on their money.

Now fast forward 4 months and unfortunately we have run into another rough patch for the stock market. Yesterday was a pretty decent recovery but data shows that one of the most well known market indicators (otherwise known as an index) is down 2% on the year. That's the worst we've experienced since the 2008 Recession.

This would generally be where the risk averse ditch the stock market because you really don't want to lose money. But understand markets do correct themselves over periods of time. We had significant growth of equities from 2011 to 2013 and in 2014 the US market recorded all time highs. However, the past 6 months have been haunted by the Fed increase of interest rates, low oil prices and other indicators that the powerful year over year gains are coming to an end. Instead of using this as a reason to stay out of the market, use this time to research what companies are doing to regenerate growth in their companies and spark enthusiasm for their investors. Are companies offering new products or services? Are they expanding into the emerging markets like India or Brazil? Or are they looking to improve the quality by choosing more vetted and seasoned suppliers? Whatever companies are doing now to adjust for the changing US and global economy will have an impact on their stock performance in 2016 and beyond.

Tasia's Advice: Keep your eyes open for opportunities. Don't close them in fear of the unknown.

Company Review Thursday: Dow Chemical

Last week my dad made the request that I do a review of Dow Chemical. At first glance, Dow seems like a boring option, but they have made a few headlines recently so investigation was actually entertaining. Founded in 1917, Dow Company is one of the longest standing companies in the United States. Dow has successfully operated its business in 5 different segments including agricultural sciences, consumer solutions, infrastructure solutions, performance materials/chemicals and performance plastics. They service a wide range of industries like construction, oil/gas production, pharmaceuticals and automobile part manufacturers. Here is the current company snapshot:

Company Snapshot (Yahoo! Finance Data)
Name:  The Dow Chemical Company(as of close of business 12/16/2015)
Ticker: DOW
Current Price: $50.72
52 Week High Price:$57.10
52 Week Low Price: $35.11
Market Capitalization: $58.76B (Large Capital)
Price/Earnings (P/E Ratio): 13.03
Earnings/Share (EPS): $3.89
Dividend: 1.84/year
Industry: Chemicals
Primary Business: Raw Materials Manufacturer and Supplier

The Good
First, let's talk about the dividend. With the high yield dividend of $0.46/quarter, Dow Chemical is probably one of the most consistent income generating stocks available at such a reasonable price. They also boast 635 US patents in 2014, which creates a tremendous climate to have competitive advantage especially in the chemicals industry where customizing materials is key.

Key Note: Patents give companies a way to protect their processes and products so that no one can duplicate what they are doing. Looking at the number of patents a company has can be useful to identify industry first movers/leaders.

Another interesting thing about Dow is the fact they are very aware of how their products impact the environment. They have 2025 Sustainability Goals of which Valuing Nature is the 4th (see news article). Although I wouldn't say I'm super passionate about the environment, I do know God gave us this earth to take care of and any initiative by a company to keep the environment safe for future generations, I'm here for it.

Lastly, Dow Chemical has recently announced a merger with the current competitor, DuPont Chemical, which itself has a pretty healthy balance sheet. The companies combined would have a $130 billion valuation and so much potential to gain a competitive advantage over other chemicals corporations. As a merged company, DowDuPont would dominate in the agriculture, specialty products and material science segments in 2016.

Because I care so much about dividends it's important to note that DuPont currently has a pretty hefty shareholder payout of $0.38/quarter. So combine that with a $0.46/quarter from Dow, can you say kah-ching, kah-ching, hotline bling?

The Bad
The Chemicals industry in general is not a segment that brings in significant year-over-year growth in sales and revenue. Dow Chemical hasn't had a tremendous increase of net income over the last 5 years and the stock price has steadily been within the $35-$60 over the same period. Similarly, DuPont's bottom line and stock price has seen similar consistency. Upon merge completion, I expect the larger research and development team will have more means to innovate and address global problems we are facing especially global warming.

The Ugly
Dow has been pretty active in getting patents approved, but that's not all they have been dealing with recently. Although they don't have any active lawsuits on the table, they did make a settlement back in February with a former employee who uncovered some spending issues and shortly there after got fired. Talk about whistle-blower woes.

If you're looking for a blue chip company to anchor your portfolio, look no further than Dow Chemical. They are really ramping up to make waves in the next 3 years with the initial merger planned for completion late 2016 and then a split 3 ways in late 2017/early 2018.

Until next post...and shoutout to R.M.J. for the company suggestion!!

Building your Retirement

Where to begin? Retirement planning is by no means an easy task, but it's necessary. One of the key strategies for long term investing in my opinion is asset allocation. The other is diversification.

Asset Allocation is a strategy used to leverage risk against reward by assigning a dollar value (or percentage) to a particular asset based on your risk tolerance level.

For me, because I plan to retire 35 or more years down the road and a relatively aggressive risk tolerance, I have roughly 90% of my portfolio dedicated to stocks/equities and 10% to bonds. Because I have such a high percentage in equities, that gives me more exposure to the risks of the stock market, and less insured income from bonds. As I get closer to retirement, however, I intend to adjust my portfolio accordingly to secure more income by having a higher allocation to bonds and lower my equities exposure. So when my retirement date comes in about 35 years, my hope is that my asset allocation will have flipped to 10% in stocks and 90% in bonds.

Some companies customize mutual funds with your retirement goals and risk tolerance level in mind. Vanguard has a list of all of their retirement balanced funds that are designed so that the asset allocation will be adjusted as the client gets closer to their retirement age. You can find that list here. They also provide IRA and individual/joint broker accounts, so if you're looking to open an account, you can do so with Vanguard.

Diversification is a strategy used to vary the content of your portfolio and  to avoid a heavy concentration of money allocated to a particular stock, mutual fund, ETF or bond.

When you have varying views or perspectives any business can benefit so even companies diversify their various portfolios. Companies offer multiple types of products to offset risks of only having one money generating product or to get into a new and growing business that aligns well with their current operations. 

Diversification is primarily used in an investment portfolio to vary the industries and companies you are invested in. For example, my investment group currently has ten holdings and this is a small snapshot of  how our portfolio is diversified:

Based on actual portfolio diversification metrics

We have a good bit of diversification, but we sill have a pretty high concentration in the healthcare industry. We are also heavily exposed to financials and the consumer discretionary industries as well. We intend to look for companies in the unrepresented or under represented sectors in our portfolio such as the energy, consumer staples and information technology sectors. Another option for diversification may be to look into international exposure through mutual funds.

Asset allocation and diversification can be applied to all aspects of investing. By no means are these two principles limited to your retirement portfolio. You can have real estate, stocks/equities, venture capital pursuits and many other money generating streams to make up your wealth portfolio. How well you diversify your portfolio and allocate particular portions of your income in each is reflected in the outcome of your long term investments.

Until next time...

Company Review Thursday: Netflix

There was a time when a Blockbuster membership card was worth its weight in gold. As a preteen, I used my parent's Blockbuster card to rent VHS movies and PlayStation games and buy truck loads of popcorn and candy. But 'when I was a child, I spoke like a child and thought like a child' and now that I've grown up, I've traded in that Blockbuster card for a Netflix subscription.

R.I.P. Blockbuster

At the turn of the century, DVD's took over the media distribution industry. Then there was Blu-Ray. And then there was Netflix. The strategy behind Netflix made it so easy for people to have access to thousands of shows and movies without actually having to purchase the movies and spend hundreds of dollars on the actual DVD or Blu-Ray discs a year. Plus once you have all those movies, how often is it that you watch them? Maybe once or twice, unless you're someone who watches the Friday trilogy every Friday for good measure. And what about those times you binge watch Glee because you never really dedicate yourself to watching the season as it came on primetime TV? You NEED to have access anytime, anyplace. And from this need Netflix was born.

Company Snapshot (Yahoo! Finance Data)
Name:  Netflix, Inc.(as of close of business 12/9/2015)
Ticker: NFLX
Current Price: $124.20
52 Week High Price:$133.27
52 Week Low Price: $45.08
Market Capitalization: $53.08B (Large Capital)
Price/Earnings (P/E Ratio): 330.32
Earnings/Share (EPS): $0.38
Dividend: No Dividend Paid
Industry: Internet & Catalog Retail
Primary Business: Internet Television Network Provider

The Good
Netflix has ruled the internet with exclusive shows like "Orange Is the New Black" and "House of Cards". Devoted watchers can not stop watching and the awards keep piling up for these shows. With exclusive rights to OITNB and HOC, new content in the works, and growth into international markets, Netflix is in the driver's seat in the internet video streaming world.
Netflix also has tremendous use of its technology and they use it primarily to create better experiences for their customers. They monitor how long customers watch videos, when they rewind/fast forward, and track the kinds of movies and shows customers watch. Having this type of data collected gives Netflix a competitive advantage in the customer experience category over other video streaming services with less subscribers.
As they provide customized services to customers, Netflix is also looking to create international movie industry partnerships in order to provide regional content in Chinese, Indian, Japanese and South Korean markets. In particular, Netflix hopes to work with Bollywood, Chinese movie creators and anime creators to provide regional content for international subscribers.

The Bad
Unfortunately Netflix doesn't pay a dividend and they also don't generate significant earnings per share (EPS). With such a low EPS, Netflix seems to be paying a lot of money to gain global market share. This leads me to believe that Netflix at its current $124.20/share is overpriced and I don't like paying more for something than I think it is worth.
Which leads me to my next point because next year my Netflix subscription price is going from $7.99 to $9.99 and I feel some kind of way about it. A significant amount of money is being spent in international growth in the emerging markets (i.e. China, India) and that initiative has yet to become profitable for Netflix. Also with movie and TV show content prices continuing to rise as competition for exclusive rights to content rise, this spending will chop even deeper into the revenue that Netflix produces.

The Ugly
Netflix offers a DVD-to-mail service that is losing traction to the internet subscription based service which now has 69 million subscribers worldwide. With competition as intense with the likes of Amazon and Hulu and network providers like HBO and Showtime inflating prices for their content, internet video service is prime for fierce competition.

I personally have no shares of Netflix. I think its overpriced. I wouldn't see myself paying more that $75/share for Netflix so I've missed the boat on entry. But do you think Netflix will continue to be the leader in online video streaming? Once Netflix has saturated the international markets, will it ever return a good profit or will they have to keep raising prices here in the US to cover some of those expenses? Will that lead to the subscription holders transitioning to other internet video providers for lower prices? And with loss of US subscriptions and in turn revenue, would Netflix be candidate for acquisition by a cash heavy company like Microsoft or Verizon? I have too many questions about Netflix. Its long term potential is hard to see because the price is so high right now. It's a great service provider, but not something I want to invest more in than my $8 monthly subscription.