Warren's Words of Wisdom

I've been googling my face off the last few days for investing advice in times like these. There are so many opinions out there, mostly telling people not to sell because getting out is not the answer. I wonder if that's what AIG shareholders thought two weeks ago.

I get it! Sheesh. I'm in and I'm staying in.

Anyway, I found an article today on Yahoo with some more advice that that alerted me to a gem of a quote from Warren Buffett. The article is part of a Yahoo series called Beginning Investing. The next quote for the quote book I've kept since college is:
"Only when the tide goes out do you discover who's been swimming naked."

I wonder if that's what AIG shareholders thought two weeks ago.

Anyway, articles about the federal bailout plan's pros and cons are pretty dry and confusing. I think I'll go read more Warren Buffettisms instead. Sphere: Related Content

Buying Stocks on Sale

The market is down. Again. The fever I felt the last few weeks when watching my cheap-o stock climb almost a full dollar a share to $2.75 is gone. (That diamond in the rough is hovering around $2.20 today so it's not that bad.)

I keep hearing on the morning TV news shows that financial analysts now play the role of shrinks. Their best advice for their clients is to do the opposite of "Don't just stand there -- do something!" I've been interpreting this as don't sell, sell, sell and do buy, buy, buy.

That's because the talking heads are encouraging us to think of the this down market as a special sale. And who doesn't love a bargain?

Since I do love a bargain, I bought more Corning (GLW) stock today. I bought 10 shares last month when the share price was close to $20. Then it fell a bit. Then the tender offer came, then it fell some more. Then it dipped below $15!!! Despite another $7 trade fee to Scottrade, I bought more of the same because I believe in the company, I believe it's on sale and I believe the shrinks when they say what goes down, must come up.

Could it be happening already? Here's today's news of a stock surge. It would be nice but I keep reminding myself, I'm in it for the long haul.

Could Sphere: Related Content

Tender (Offer) Moments

I got an email from Scottrade this morning about a tender offer from TRC Capital Corporation. TRC wants to take my 10 shares of Corning stock (GLW) off my hands for $20.50 a pop. While the offer per share is higher than today's opening price of 17.75, I wasn't sure what to do. What the heck is a tender offer anyway?

So I phoned Scottrade. I explained to "Scotty" why I was calling and immediately launched into my trademark list of questions. Most important of which was ... is this a wise move for me?

I'm not sure how much he could tell me or wanted to tell me since I'm a teeny-weenie fish among Corning's owners. But he provided me with a sounding board for my ideas and helped me determine my answer.

There are few key ideas at play here. Firstly a tender offer sounds sweet, but in my case, is not sweet enough. A tender offer is a third party's solicitation to purchase a substantial percentage of a company's shares, according to the SEC. The biggest issue for me? I only bought the stock last week at 20.19. So the 20.50 offer would give me 31 cents a share. That's 3.10 minus the $7 commission I paid to buy the stock in the first place and a $25 reorganization fee I would owe Scottrade to transfer it to TRC Capital. My goal is to make money, not give it back.

I decided to leave a tender moment alone and said no. The basic math is enough to see why. I also googled TRC and found a few interesting articles, mostly from the companies imploring stockholders to resist TRC's "tender" moments. I read this one: Corning Recommends Rejection of below-Market Mini-Tender Offer by TRC Capital Corporation. Gannett said something similar in May. (Gannett's stock is 18.04 today compared toTRC's offer of 29.45. Yikes!)

The bottom line is this: I bought GLW last week because of what I read in the June issue of Money Magazine. Corning is big into LCDs, which are used in everything from electronics to cars (trying to overlook the news today that this sector is bloated and will stall in Q3) and makes emission-control systems for trucks -- an issue that gets air time daily as we try to walk the talk of our environmental consciousness. I'm into Corning (and My Economic Stimulus) for the long haul. I'm not sure how long that is ... but I'm certain it's longer than one week.

Sphere: Related Content

Join the Savings Revolution

Here's a tidbit in the September issue of my Smart Money Magazine listed under the title, Juicing the Economy:

"Americans are so often chastised for not saving enough, but the rebate checks recently pushed the national savings rate to 5 percent. If it stayed this high, it would be the highest percentage of saved income since the late 1990s."

That's kinda cool. I've never been part of a revolution before.

If you recall earlier this year when the big wigs announced the stimulus package, they implored us to spend, spend, spend. Instead, I banked my $600 and started My Economic Stimulus.

Have you started saving more this year than ever before? If so, post a comment to this blog entry so we all can benefit from your experience! Sphere: Related Content