Sim City (Grupo Simec)

SIM = Grupo Simec = It is a Mexican company. They manufacture and sell iron and steel products. They export products to Central and South America, Canada, and the U.S. The stock is trading at $15.44/share, just off of its 52 week high of of $15.85. The annual low was $8.50. It does not pay a dividend and is strictly a growth play.

I usually don't like stocks that are near the high because I like having a lot of upside, but SIM is undervalued and Mexico is committed to increasing and improving their infrastructure. The stock also has a couple buy ratings and has most of the market share in Mexico. Its biggest clients are however the U.S. and China, believe it or not. We all know the economic boom that China is on and the amount of steel they require to build, I kid you not, a new city a week!

Furthermore, Simec is the second-largest producer of rebar in the world and the largest steel producer in Mexico. It has global exposure with 50% of its sales in Mexico and 50% outside of Mexico, which gives it some protection against country specific downturns. Overall, it is a good sound company that is likely to be a great long-term investment due to increasing demand & increased prices for steel.

Chart is below:

I am also going to post a great story from a book I read in my next post. Check it out.

When times are tough....

This is an excerpt from the novel The Pep Talk, co-authored by Kevin Elko and Bob Shook. It features stories taken directly from pep talks given to college and professional football teams the night before big games.

In one of the National Championship games, the University of Miami was playing the University of Nebraska in the Rose Bowl. In the locker room was a unique player named Joaquin Gonzalez, who grew up in Cuba and moved to Miami. Joaquin had perfect SAT scores and was offered an academic scholarship to Harvard but decided to play football at the University of Miami. What I often do when I speak to a football team is throw the football to a certain player and ask them to speak on how they should mentally prepare for the big game. Being extremely bright, I thought I would test Joaquin and see what he would say. When he got the ball he stood up and said, "I expect Nebraska to be the toughest team we ever played. Moreover, I expect the player across from me to be equally as good. As a result, I will bring the best me, not take a play off and maintain that intensity throughout the game." He went on to say, "My sporting blood is up and I am prepared for the challenge." That spectacular young man set the tempo and the game was not close as Miami dominated and won the National Championship.

The following year, the University of Miami was on a long winning streak and was playing Ohio State for the National Championship in the Fiesta Bowl. Again, I threw the ball to who I thought was another bright player. He took the ball, stood up and said, "Ohio State does not belong in this game." "I will wipe up the field with the guy across from me." Miami lost the game and the National Championship.

People are frequently saying that things are so tough right now or asking why things happen to them. What I would now say to them is similar to what Joaquin said. "Get your sporting blood up." Tough times will bring out the best in you. Tough times are a good thing. They let you step back and really assess and evaluate your life situation and your priorities. Tough times will not defeat you, but throwing personal discipline to the wind because you think times are too tough will defeat you.

Easy or tough, the price of winning is the issue. I remember the day that the racehorse Smarty Jones died; the horse's owner was quoted as saying, "The price of love is grief." I don't really know why, but that quote really hit me. I guess I thought love was free and took it for granted. Then I realized that nothing is free, we have to pay a price for everything we desire. This is evidenced in our own lives and the lives of others around us. I challenge you to look at what you love in life and make sure that you enjoy it while it lasts, because there will come a time when you won't be able to enjoy it anymore or as much as you used to.

This last paragraph reminds me of something. A friend mentioned to me that they recently got out of a long term relationship, one in which they thought that the person they were seeing would turn out to be the person they married. They said, "I now know how someone can die of a broken heart. But that being said, I feel good feeling bad." In other words, this person's broken heart was a price well worth paying for the love he gave and received because it really showed him what he had lost and how special it was. I guess that's why people say "you don't know what you have until it's gone."

Like Joaquin in the aforementioned excerpt, expect things to be hard and then it doesn't matter. After you make the decision that things are hard, manage the decision, and decide to bring the best you have to offer. Pay the price and stay on your day to day process. Give all you got, every minute of every day. It will be difficult but if you do this...you will not be defeated!

................................

I was thinking about what to write today and it just struck me; why do I invest? So I started making a list of all the reasons why some extra money would be beneficial in the future, and realized that had I had this list earlier, I definitely would have been more diligent in saving and would be in a better position to realize some of my financial aspirations. My suggestion: make a list. For me personally, there are many reasons I could list, but to name only a few:
-for retirement
-to do things I enjoy like travel, purchase art, etc.
-for my kids, when I have them, education
-capital appreciation, just to make my money grow so I have more purchasing power
-to achieve financial freedom and be worry free

All of these are reasons, however, it's not the process as to how you get them that I want to touch on, it's the actual end goal I want to focus on, those items I listed. The actual need or desire that you want to be able to afford or buy is paramount. That is what you need to focus on.

What I am trying to get at is that you should create a list of things you want to do in life. Yes, a list. That's it. This may seem a little bit corny, but fail to pay attention to what you'd really like to do in life, and you may find yourself one day, full of regrets. It's like they say, 'if you don't write down your goals, you won't achieve them'. It's so true. Think of all the things that you would have changed if you could go back and start over again or live life just a little bit differently. If you don't constantly remind yourself of what you want then where are you going to draw inspiration from? Creating this list is a lot more fun than you may imagine. Just think about the relief you will have when you check off accomplishments that you reach.

So how does this relate to finance? It is very simple. One of my financial goals is to purchase a home. This is the largest financial decision that many people will make, for me especially since I live in Los Angeles and homes are ridiculously expensive here. However, this goal is reachable, but I have to be willing to work for it. If reaching this goal means saving that extra $50, $100, or $200 a month by not buying some DVDs or going shopping one less time, then I am willing to sacrifice that. And you have to be willing as well. This is why keeping the list handy and constantly looking at it is important.

So, get a piece of scrap paper and jot down a rough draft of things you want to do, places you want to go, and money you need to save. This will give you a great idea of what you need to do NOW to achieve them LATER. Once you have this list, you can then begin taking steps in the right direction and make that nest egg grow.

The moral: If you lose sight of your goals, you will forget about them and ultimately not achieve what you set out to.



"May the wind always be at your back and the sun always upon your face and the winds of destiny carry you aloft to dance with the stars."

I am going Long TTM, check it out, good spot to look at investing

TTM, is Tata Motors. They manufacture and market heavy, medium and light commercial vehicles, utility vehicles, and passenger cars. They have 2 business units: auto and other. The auto segment includes the business of automotive products consisting of all types of commercial and passenger vehicles. The other segment includes construction equipment, engineering solutions, automotive components, and some software operations. The Group also manufactures spare parts for vehicles, marine engines, casting, and forging. The fact that their businesses are diversified is a great sign and they can draw profits from several places. All of their plants are located in India. Most of their business comes from that country as well, however, they just acquired Land Rover and Jaguar. This will make their business and line-up of cars very strong for the future, especially when the economy turns around.

On top of that, the stock is at $13.34/share. That is the lowest it has been since December '05. The main reason for the decline in the last couple months is due to the recent acquisition of Land Rover and Jaguar. Tata had to shell out some serious cash for the two car companies and that puts their balance sheet in a less attractive position. (Whenever a company makes a large acquisition, it will trade lower in the short term b/c it dilutes their earnings and they have to raise capital. In this tight credit market it is even harder to raise money so that hurts Tata as well.) TTM pays out a dividend of roughly 2.8%, which is always a benefit to investors. The 52-week high is just above $21/share and so that gives us a good upside for some profit.

Here is the chart:

Timing the market. (Don't try this at home!)

First off, let me throw in a disclaimer (CAUTION!!) and say that neither trying to time the market nor day trading are good strategies. This is just my opinion, but if you read enough publications, as evidenced by the link I pasted below, you will see how many so-called experts are routinely wrong.

Market and timing may not mean much alone, but when you put them together they become the most dangerous phrase in investing, especially when done by inexperienced 'traders'. Market timing is the strategy of trying to predict future price movements of an investment or the market and either buying or selling based on these 'educated' guesses. The real benefit of knowing what is going to happen is that your return from buying a stock before it takes off is obviously going to be better than if you buy the stock when it is already on its way up.

The ultimate “buy low and sell high” market timers are called day traders. These day traders, who move in and out of positions in minutes or hours, are the extreme market timers. They look for several small profits each day by capitalizing on swings in a stock’s price. Most market timers operate on a longer time line, but may move in and out of a stock quickly if they perceive an opportunity.

There is controversy about market timing. Many investors believe that over time you can’t successfully predict market movements. Market timing becomes more of a gamble, in their opinion, than a legitimate investing strategy. Other investors argue that it is possible to spot situations where the market has over or under valued a stock. They use a variety of tools to help them predict when a stock is ready to break out of a trading range. (I won't get too specific but many use a technical or fundamental analysis which you can look up and learn more about if you so choose.)

Unfortunately, stock prices do not always move for the most logical or predictable reasons. An unexpected event can send a stock’s price up or down and you can’t predict those movements with charts. This is why it is illegal to have inside info; if you knew about some good or bad news before the general public, you would be able to get in or out of a stock holding and benefit immensely.

The internet stock bull market of the late 1990s is an example of what happens when investors, in the excitement of the moment, become market timers. Everyone had a hot tip about the next “big thing” and investors were jumping on stocks as they shot up. Unfortunately, most of these rockets came crashing down just as quickly as they went up and many investors held on way too long.

The disastrous result was an exact reversal of what they hoped. In the end, it was a case of “buying high and selling low.” You don’t need to know much about investing to know that’s not a successful strategy.

For most investors, the safer path is sticking to investing in solid, well-researched companies that fit their requirements for growth, earnings, income, and so on and so forth.

In summary, if you look for undervalued stocks (like AMX and AIG, which I mentioned below, and many of the large banks, yes I said banks), you may find one that is poised for moving up sharply given the right circumstances. This is as close to market timing as most investors should get and takes a lot of time and effort to pick the right stocks to invest in.

Here is a good article on this topic if you want to read further:
http://www.fool.com/investing/value/2008/05/30/is-this-the-bottom-who-cares.aspx?source=ihptclipb0000001