Visa (V) Follow-Up

On March 24, I wrote about purchasing Visa (V) after the IPO because my theory was that it would track the performance of the Mastercard IPO because they are more or less equals.

I executed this technique successfully before.  I bought Chicago Board of Trade (CBOT) when it went public, because I figured it would behave similarly to the Chicago Mercantile Exchange (CME).  I ended up getting rewarded pretty well.

It looks like Visa is working out.  The IPO price was $47, and I got in at $65.  Today, just over a month later, it is trading at $83.

I think this technique (of buying new issues that have similar market share to stocks that have performed well) works because mutual funds will want to own both.

If you can identify stocks that the funds are going to start buying, then you can "ride" their purchasing.  It typically takes them months to build up a position, and all their buying drives up the price.

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Bonus Testing Scripts

My investing book, Stock Trading Riches, includes awk and perl scripts that can be used, along with free data from BarChart.com, for testing the Stock Trading Riches formula.

The book both prints the scripts and includes links to where they can be accessed online.

As a further bonus, the Stock Trading Riches formula is also now available as a Microsoft Excel spreadsheet.  This spreadsheet can be downloaded from http://www.StockTradingRiches.com/word.html - where "word" is the third word in the first paragraph on page 12 of my book.

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Real Estate Rip-Off

Forbes Magazine had an interesting article on how Lehman Brothers was swindled out of $50 million.

This article is about two developers and a real estate broker to movie stars, who pulled off a real estate scam in the overheated real estate market of a few years ago.

They are accused of buying Beverly Hills real estate at fair prices, getting phony, inflated appraisals, and then using the appraisals to get big loans from Lehman Brothers and pocketing the cash.

The article gets into some of the juicy details of their lives: vacation homes, Ferrari's, Mercedes', Gulfstream Jets, etc.

One of them even had 2 wives! His regular wife referred to her as "his weekend wife" ;-0

The article goes on about how many lenders turned a blind eye to overinflated appraisals.

Now that the real-estate market is down, more scams might come to light.

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Facebook and MySpace Help Small Businesses

Forbes Magazine recently had an article on how social networking sites can help small businesses actively market to their customers - rather than waiting passively for them to find their websites.

For example, they profiled Sabena Puri (no relation to me) who owns Junnoon, and Indian restaurant in Palo Alto.

When she realized that customers were talking about her restaurant on Facebook, she created her own free profile page. She included photos, reviews, and a link to the chef's cookbook on Amazon.com.

She offered a free glass of wine to anyone who joined her site, and she got 94 friends in the first 5 months or so. Fans can post reviews and make reservations.

Facebook also is trying to generate revenue through locally targeted ads for small businesses. So, they told her which members around Palo Alto like Indian food, and she can target ads to them.

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Hollywood Filmmaking is Back in the U.S.

For years, Hollywood was making movies in Canada - because of the cheaper Canadian dollar and subsidies.

Now, with the dollar down and states, such as Oregon increasing their tax rebates, film makers are returning to the U.S.

In British Columbia - the largest film center in Canada - 2007 motion picture revenues dropped 23% from 2006.

The Canadians are fighting back.

British Columbia extended its tax credit to 18% and is willing to accept the U.S. dollar at par on film making projects, as long as the U.S. dollar is below the Canadian dollar.

Halifax and Nova Scotia increased their tax credits to 50% and 60% respectively.

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IRS Places Wedge Between You and Your Accountant

I was reading in Forbes Magazine that, starting January 1, the IRS is now enforcing a new rule that can cause your accountant to be less aggressive in serving your interests.

Previously, the old standard was that your accountant could safely give you tax advice if it had a "realistic probability" of success. In other words, as long as there was some reasonable basis for it.

Now, the new rule is that your accountant will risk fines ($1,000 +) and career-damaging disciplinary actions if they sign returns using advice that doesn't have at least a 51% chance of winning in tax court.

The exceptions are: if you do your own taxes, if the accountant sends a form to the IRS flagging that it is iffy (definitely not in your interest!), or documents that he warned you that there is a less than 51% chance the ruling will stand.

Some CPA's say that this will have a chilling effect on accountants. They will now effectively work for the IRS - instead of the taxpayer.

Other CPA's say that they will end up charging some clients thousands of dollars extra - to do research and write memos to CYA (cover their *sses).

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The Next Blade Movie Will Have to Wait...

http://news.yahoo.com/s/ap/20080424/ap_on_en_mo/snipes_tax_trial

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Secret to A Fast, Stable Computer Environment

I heard this sage advice years ago: "Always try to use the most recent hardware, but the oldest version of software you can get away with…"

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Start Making Consistent Money Online

My blogs were profitable right away.

I started with a couple of free Blogger blogs and made a little money through Adsense.

Then, after my blogs were 3 months old, I signed up with PayPerPost, and started averaging $200 per month by writing a few sponsored posts.

Since my expenses were nothing, it was all profit.

You can just imagine how much of a psychological boost this is. You hear about newbie internet marketers who invest thousands of dollars in seminars, ebooks, etc. and don't recoup it. Meanwhile, I was profitable from Day 1.

Then, you can take some of your PayPerPost income,which was actively generated, and re-invest it to develop a passive income stream.

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My Birthday

Today is my birthday, and I am now 41.

I felt depressed when I turned 20, but I didn't care when I turned 30 or 40.

It is sobering, though, when you think that I have out lived great historical figures like Alexander the Great and Martin Luther King - not to mention celebrities like Jimmy Hendricks, Janis Joplin, and Jim Morrison.

One fact, though, does give me pause - I can join my parents in AARP in 9 years...

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Sony Sells First OLED TV

It's thinner and sharper than both LCD and plasma, but expensive right now.

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Apache (APA)

I checked my account today and noticed that my shares of Apache (APA) - the gas and oil company - climbed 32% in the last month.

This certainly has helped my account out ;-)

Now, you may be thinking that I should sell quickly and grab the profit.

But, I don't think that way anymore.  Before I had my system, I would have gotten excited and sold my shares weeks ago.

After years of success with my system, I trust it completely for long term success.

The idea of giving in to fear and greed, and not following my system, just does not occur to me anymore.

I will take profits exactly when my rules (which are in my trading book) tell me to.

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Top 5 Online Portfolio Management Tools

This is a guest post from Heather Johnson:

There are many kinds of online resources available to investors, not the least of which are portfolio management tools. When operating a comprehensive and user-friendly portfolio manager, you will be able to minimize risks and maximum the return on your investments. Below are five recommended online portfolio management tools.

1. AOL Money & Finance – While the popularity of AOL has waxed and waned over the years, the company's financial site still offers one of the best online portfolio managers around. Here, you will also learn the latest news in personal finance and investment.

2. Google Finance – Is there no end to Google's many features? Although still in a beta phase, Google Finance is quickly becoming a highly regarded tool amongst investors. Here, you can add or import as many portfolios as you'd like to manage.

3. MSN Money – Similar to the tools above, MSN Money allows you to manage your portfolios in the same place you receive the latest news and research. There is a free version of the MSN Money portfolio manager, as well as a more robust paid version.

4. TradeTrakker – This is a user-friendly, yet comprehensive, investment program that is available for download. This shareware management tool has received numerous 5-star reviews from various online publications.

5. NAB OnLine Trader – NAB offers a feature-rich portfolio management tool that is regularly updated with prices for securities. You will also be able to illustrate your portfolio graphically with this tool.

With the resources above, you should be able to track all of your investments with ease. By organizing your portfolio with a user-friendly management tool, you will ensure that you have optimized your accounts for maximum returns.

Heather Johnson is a freelance writer as well as a feature article contributor for Reward Programs, a site which helps consumers pick the best rewards program to best meet their needs. Heather welcomes your comments and emails related to job inquiries at her email,
heatherjohnson2323@gmail.com.

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Internet Marketing Success - Sell Physical Products

My "Stock Trading Riches" book on Amazon.com was selling pretty well, and the Stock Trading Riches website was converting between 5-9% of unique visitors.

So, it was going very well.

I then decided to expand and offer an eBook version of my book. I used PayDotCom, set up a separate webpage for ebook affiliates, modified the main sales page to promote both versions, and created affiliate tools - such as popups, etc.

I even advertised the 5-9% conversion rate - which is much better than the standard 1-3%.

But, the verdict is in. Expanding to an eBook lost me sales and money.

What happened?

1. I had no affiliate eBook sales - all my eBook sales were non-affiliate.

2. My book sales dropped down.

Even though I grossed more from each non-affiliate eBook sale than from each book, sales of the former did not make up for a drop in sales of the latter.

Why were book sales affected? I think this proves that a successful sales website must be simple and focussed on selling ONE thing.

I have therefore discontinued the eBook version. Anyone interested in selling Stock Trading Riches can still promote the book through Amazon Associates.

Some takeaways:

1. The most stable business model on the internet is to sell your own products. It is more dependable than selling affiliate products, or expecting affiliates to sell your product. The product creator is more likely to succeed because they have the knowledge, motivation, expertise, and creditability.

2. Keep it simple. This is my mantra and philosophy and, looking back, I did have reservations about selling both an eBook and book version. Over the years, I have learned that keeping things simple, uncluttered, and straight-forward pays off.

3. Published books have more credibility and demand than eBooks. From my own experience, I know that, on the whole, I have been much more satisfied with physical books than eBooks. Too many people slap together crappy eBooks.

Publishing a physical product (books, cds, dvd's) requires a certain barrier of effort - and effort weeds out the get-rich-quick lemmings and forum-junkies.

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Low-Powered Air Conditioning in Iraq

The Chicago Tribune had an article that the hot new summer gadget in Irag is a low powered AC.

In the summer, Iraq has temperatures in the 120's (Fahrenheit). This summer, to better distribute electricity across the country - the Iraqi government is limiting each home to a 10 amps program.

This makes regular air conditioners obsolete, because they require 16 amps to run. Somebody then invented a split-unit air conditioner that uses only 5 amps.

Even though the units cost $350 (which is a lot of money to the average Iraqi these days), stores in Iraq can hardly keep the unit on the shelves.

This goes to show you that "necessity being the mother of invention" is true - even across different cultures.

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Fighting To Save Windows XP

People don't like Vista and don't want Microsoft to stop selling XP...

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2 Stocks To Think About...

Pfizer (PFE) looks good, and has income growth of +82% in the last 12 months.

Its stock price was pushed down because of the FDA crack-down on anti-inflammatory (cox-2 inhibitors) like Vioxx. But, some think it was pushed down too much.

Also, Pfizer is promising to cut costs, buy back shares, and increase its dividend. The company has no credit or derivative exposure, and they have a strong pipeline of potential new drugs.

Microsoft (MSFT) also looks good. Sales growth +15% and income growth +79% in the last 12 months, and they are trying to buy yahoo.

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Improving Desert Communities in Eritrea With A Low Tech Project

A simple, low tech project to plant mangrove trees in salt water is dramatically improving the lives of villagers...

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Rich Jerk Builds Business Around eBook

Here is an example of creating a win-win situation in internet marketing:

After buying The Rich Jerk eBook, you can sign up free at their website, and you not only get access to forums, but you also get access to an owner's section where you can freely download updated versions of the eBook!

This is a win for the customer because they get the unusual benefit of having paid for an eBook once, and then getting years of use out of it because any outdated info gets regularly replaced.

It is a win for the Rich Jerk company because they achieve a "stickiness" with their customers - usually selling an eBook is a one-time transaction, but now there is an incentive for the customer to keep coming back to the website.

This kind of "out of the box" thinking is a big reason I enjoyed reading The Rich Jerk and recommending it.

It is a good beginner's resource for starting an internet business.

It is relatively low-priced (compared to most info marketing ebooks on Clickbank) and provides a solid, quick, no-fluff introduction to all the fundamental ways of making money on the internet.

It even provides information on importing physical goods and selling them on eBay.

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$75,000 For Dog Poop

The Chicago Tribune had a profile on a suburban man who got laid off after 25 years in the telecommunications industry.

He then tapped into the booming market for pet-related services by starting his own business for cleaning dog poop from people's yards.

Spring is his busiest time, because all the melting snow reveals months of poop.

His business is booming and he works as many as 85 hours a week and is thinking of hiring an assistant.

He made almost $75,000 last year.

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When Do I Get My Economic Stimulus Rebate?

The IRS recently released its distribution schedule for the stimulus rebates.

The date depends on whether they have direct deposit on file for you, and the last 2 digits of the main filer's social security number.

For direct deposit:

00 - 20 May 2

21 - 75 May 9

76 - 99 May 16



For paper checks:

00 - 09 May 16

10 - 18 May 23

19 - 25 May 30

26 - 38 June 6

39 - 51 June 13

52 - 63 June 20

64 - 75 June 27

76 - 87 July 4

88 - 99 July 11

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Sears: Back to the Big Book

The Chicago Tribune ran an article that the bright spot for Sears has been their websites.

The combined Sears/Kmart websites are now 4th in the top 5 (behind Amazon, Target, and Wal-mart, but ahead of Ebay).

Sears, of course, got its start in the 1800's with their Big Book catalog, which sold almost anything (including homes) to people living remotely out in the Plains.

They are now taking a page from their past, and planning to sell a bigger variety of products (including music) than they sell in their stores.

Edward Lampert used the example of Sears' PartsDirect.com to show the potential of online sales. This site is a cash-cow that sells 7 million repair parts, along with how-to articles and schematics, for people who want to fix their appliances themselves.

This is a great example of marrying products and content on the same site.

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A "Monster" Scared Me This Morning!

I was in the shower when my 2 1/2 year old son startled me by bursting into the bathroom wearing a green blanket and yelling "AAARRRGGGHH!"

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It Pays To Be An Ex President...

According to the Chicago Tribune, Hillary Clinton recently released her income tax statements.

It seems that the Clintons were $5 million in debt when they left the White House, due to their legal bills.

Since, 2000, however, the Clintons earned $109 million - mostly from former President Bill Clinton's speeches (at an average $150,000 each) and books.

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The IRS Are Humans, Too...

Last week, my 76 year-old father called me up in a panic. I thought something might have happened to my mother or someone.

Instead, it turned out that he received a letter from the IRS saying that he had not accounted for a 1099-B statement on his 2006 tax return.

My father had sold a mutual fund worth about $36,000 and, since the IRS did not have the cost basis, they included the whole amount as unreported income. The additional tax, along with penalties and interest, came to about $9,700.

My father has never touched a computer in his life, and does his taxes by himself, on paper. He is used to 1099-INT and 1099-DIV forms but, because my parents are conservative, they just buy and hold and are not familiar with 1099-B's.

Anyway, I told my father that he will probably have to file an amended return, and I would come over on Sunday to help him.

When I got there, I found out that he was OK.

The IRS had included two response forms with the letter - one to use if he wished to send a full or partial payment, and one form to use if you are not going to make a payment.

During the week, my father had called the IRS and talked to an agent on the phone. My father ended up pleasantly surprised - the agent was patient with him and explained that all they were after was the cost basis. All he had to do was send the form, along with documentation of what price he paid for the shares.

Since my father had originally paid $32,000 for the fund, he only had a $4,000 gain - which did not result in him owing any additional tax.

Some Takeaways:

1. It reinforces my view that the U.S. desperately needs tax simplification.

2. Make sure you always account for all 1099s - a copy does go to the IRS.

3. If you make an honest mistake and are confused, don't be too intimidated by the IRS to not ask for help.

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Refreshing, User-friendly Captchas

I'm tired of seeing most captchas - they make you strain to decipher numbers and letters that have been turned and twisted in ungodly ways ;-)

But, I have seen some captchas that are clever - they foil automation, but they are user-friendly.

These captchas ask questions like "How many months are in September?", "What day comes before Wednesday?" or "What is the opposite of North?"

That is very refreshing!

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How To Test Websites, Part 3 - MuVar

In part 1, we looked at split testing. We concluded that split testing was easy to implement, but it delayed optimization because you can only test one variable at a time.

In part 2, we then looked at multivariate testing. This type of testing can optimize a web page relatively quickly (especially if Taguchi or MuVar algorithms are used), but is too complex to be implemented from scratch by most internet marketers.

In this third part, we will look more closely at the MuVar software package for testing websites. This is one of the most powerful statistical analysis software packages available for testing websites.

By powerful, I mean that it not only completes multivariate analysis quickly, but it completely hides implementation complexity from the user, and provides an automated turn-key solution.

After you install MuVar on a website, you assign variables to different parts of the page (i.e. headline, first paragraph, testimonials, guarantee, etc.) You can then add in as many variations of the variables as you like. MuVar will then go to work, presenting different combinations of variables to visitors, and tracking the results automatically.

MuVar encourages constant incremental improvement. Even after your sales page settles down to a certain level of conversion rate, you or your contractors can continuously add new choices for each variable.

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How To Test Websites, Part 2 - MultiVariate Testing

In part 1, we looked at Split testing. We showed that it is easy to implement but, since you can only test one variable at a time, it takes time before your web page becomes optimized. This results in missed sales.

In this part, we will look at multivariate testing.

In multivariate testing, different combinations of multiple variables are shown randomly to website visitors, and the multivariate process uses statistics to determine which combination is the most effective.

The advantage is that optimization happens much quicker, because you are not constrained to only test one part of your web page at a time.

One disadvantage of standard multivariate analysis is that it would take a lot of data before you could be statistically confident about the results - which will cause delays if you do not have a high traffic website. For example, if you tried to test 3 variables at the same time, and each variable could have four possible values, you are looking at 3^4 = 81 possible combinations.

However, there are 2 modifying algorithms that can counter this disadvantage. They speed up the analysis process through mathematical shortcuts. They are: Taguchi methods and the MuVar algorithm (proprietary to the MuVar software package).

Taguchi tries to approximate standard multivariate analysis by eliminating some of the possible combinations. MuVar, on the other hand, is more subtle. It tries to slightly bias the weight of combinations that prove successful early on, as well as cut down the testing of combinations as soon as they prove to be statistically significant losers. Testing has shown MuVar to be the faster and more accurate algorithm.

The biggest disadvantage to multivariate analysis is that it requires mathematics and statistics beyond the level of the average internet marketer.

However, the MuVar software package eliminates this disadvantage. It actually provides the best of both worlds - the simplicity of split testing with the quick optimization power of multivariate analysis.

In part 3, we will look more closely at MuVar.

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How To Test Websites, Part 1 - Split Testing

In a previous post, I showed why testing your website is important.

Now, let's look into how you can test your website.

There are basically two types of testing you can do on your website: split testing or multi-variate. In this part, we will cover split testing. In part 2, we will look at multi-variate testing.

Most internet marketers probably use split testing.

With split testing, you change one part of your web page (for example, the headline) while keeping the rest of the page constant. You then send equal traffic randomly to each alternative page, and see which headline results in the most conversions.

The advantage of split testing is easy to implement. Just create N number of alternative web pages that are identical except for the part to be tested. Then, on your actual page, use javascript and the rand() function to randomly forward 1/N users to each alternative page.

For example, if you want to test 4 headlines at a time for www.mydomain.com/salespage.html, create pages salespage1.html, salespage2.html, etc. Then have salespage.html send 1/4 of your traffic to each alternative page. I have an example of using JavaScript to randomly forward a web page on my Unix blog.

The disadvantage to split testing is that you can only test one variable at a time. It might take many months of testing / tweaking parts of your sales page before your page starts to reach its optimal conversion rate. This will result in a lot of missed sales.

In part 2, we will explore an alternative testing approach that optimizes sales pages must faster.

In part 3, we will examine MuVar, one of the most powerful website testing software packages on the market.

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New Contrarian Investing Website

For years, I ignored my contrarian instincts and tried to be a good "trend is your friend" investor...and I kept losing money.

I finally realized that, to do really well in investing, you have to avoid following the crowd. It is hard to buy low and sell high if you are flowing with a stampeding herd. So, my trading system is contrarian, and I developed a new appreciation for fellow contrarians.

There is a new contrarian Stock Market Investing News website called ContrarianProfits.com. This site focuses on ideas, stories, and techniques that are missed by the conventional financial press.

For example, one recent article concerns the connection between Africa and India, which goes back to colonial days. People in the U.S. and Western Europe might not realize how much business in Africa is influenced by Indians.

With India booming, and Indian stocks already high, there may be ways to play the Indian market through African stocks.

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Test Your Awareness

Test Your Awareness

P.S. Mike and Jeff will like it because it promotes cyclist safety.

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Jerry needs no help playing with his ball.

http://video.yahoo.com/watch?fr=yvmtf&v=2261988

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The Effect of Dictators and Hyper Inflation...

The New Zimbabwe $50 million note...

Good for U.S. $1 or 3 loaves of bread...

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My Book is Also Available at Waldenbooks.com and Borders.com

I just found out that, besides Amazon.com and Target.com, Stock Trading Riches is now carried at Waldenbooks.com and Borders.com.

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Will Sarbanes-Oxley Hurt the Returns of non Hedge Fund Investors?

One area that non-hedge fund investors may miss out on are small cap growth stocks.

Because of compliance costs with Sarbanes-Oxley (which, ironically, was passed to “protect” investors - never mind that the Enron, etc. fraudsters were prosecuted successfully under the old laws), a lot of companies are delaying going public.

This means that, for example, if Microsoft was starting out now, itmay not have gone public at the point that it did, so public investors might not have had the same opportunity for return.

Hedge funds, on the other hand, could invest privately in the companies before they go public.

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An Invitation to Affiliates

Update 04/15/2008: I have discontinued the Ebook version. I found that offering it hurt my sales conversion rate. It looks like I need to keep it simple and only sell the original paperback version.

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