Crossbows & Bolts Blog

Since I last wrote about nvda the stock price has dropped by more than half. This is actually great news, because fundamentally nothing has changed. Tech stocks are always the first to go under when the economy is shaky. Competitor AMD (who bought out ATI, the chief graphics chip competitors of nVidia) is losing money on ATI hand over fist. Intel represents the only real competition at present, but is certainly not going to kill them off anytime soon.

I bought more shares of nvda when it dropped below $12 a share. I am dollar-cost averaged to about $18 per share, and I remain confident the company’s stock price will rebound sometime next year.

I recently bought shares of nVidia (NVDA) at around $23. Why do I like this stock? Because I’m a fan of video games and there are really only two big players in the 3-D chip making arena - nVidia and ATI. Personally I like nVidia’s marketing better - I think they come across much cooler than ATI. That may sound like a stupid reason to like a stock - and taken alone it certainly would be - but I’ve found my “gut feeling” about a company, product, or even a location is very often dead-on. If I like nVidia it’s strongly possible that alot of other people feel the same way.

In addition to - andVon den Mathematikern wird das Poker Spiel gerne als Modellfall der Spiel Theorie beäugtet und es dient bei der Entwicklung casino Automaten als Testfall.компютри more important than - the cool factor, their financials are solid (low debt, high margins, lots of cash) and they have lots of future growth potential in an industry that will just keep moving ahead. $23 is a great price as this stock has been as high as $36 in the last 6 months. I have no doubt it will return to that price and I will realize a 50%+ gain, at which time you may return to this blog to hear me gloat

I like Marvel. Alot. Aside from reading Marvel comics and graphic novels when I was younger, I particularly like investing in the company. In case you’ve been hiding under a rock deep inside a cave in Bolivia, Marvel Entertainment (MVL) owns thousands of fictional characters including Spiderman, the Incredible Hulk, and Iron Man, just to name a few. Marvel has a great business model, low debt, and has just recently entered into the realm of movie production. After receiving only small licensing fees from such blockbusters as the Spiderman and X-Men trilogies, they have taken a leap of faith and produced their first of several movies yet to come: Iron Man, starring Robert Downey, Jr. The film cost between $140 - $160 million to make, and cleared over $200mm worldwide it’s opening weekend. Just wait until DVD sales and merchandising start rolling in - this film could easily drop $500mm into Marvel’s bank account over the next 12 months. And that’s just for starters. Marvel is also releasing a second Incredible Hulk movie this summer starring Edward Norton and Liv Tyler, with 4-5 more films slated over the next 2-3 years. Not all will blast off like Iron Man did (watch for a sequel in 2010), but long term I think Marvel is a great investment. After news of IM’s opening weekend success the stock shot up nearly 10% on a day when the overall market retreated. It closed today (5/5) at $33.10, a record high. I suspect this stock will push it’s way up to $45 or $50 a share over the next 2-3 years - perhaps even higher.

I bought some additional shares of Marvel just last week at $29/share - now up over 12.5%. Look for opportunities to buy Marvel on the cheap - not during the Iron Man feeding frenzy which will linger for a few weeks. If it drops closer to the $30 mark as a result of overall sour economic news, or because the Hulk is less than Incredible at the box office, jump on it. You’ll be glad you did.

If you have plenty of money to invest ($50,000 and up) and you aren’t risk-averse, here are some outside-the-box investment ideas that may tickle your fancy. The more you know about each category, the better equipped you’ll be to make a sound decision and potentially reap the rewards of a wise investment.

Without further delay, here are five exciting business ideas:

1. Invest in a local band you feel has a shot at a record deal
   Bars, nightclubs, outdoor amphitheaters all play host to a variety of local bands, a handful of which have true talent and are looking to move on to bigger things. Go with what you know here: if you’re into blues look for the best local blues bands and follow them around. Get to know the band members. Talk to people in the audience and get their opinion. Are they a cover band or to they have original material. Armed with this information, approach the band through the manager or “lead” personality first. Find out if they have aspirations of cutting records, touring, and all of that fun stuff. If they don’t, don’t waste your time. If they do, make them a verbal offer before getting an attorney involved. Cast a vision for them of what could be, and try to get them all headed in the same direction.
   Offer to cover their expenses for some period of time, say 6 months. Upgrade their equipment, transportation, or lodging. Hire professional musicians to help them smooth out the rough edges, work on their stage presence, and so on. At a certain point, help them cut a demo CD. Hire or bribe an insider to get their CD in front of several independent and major labels. Include local coverage of the band with the packet (newspaper and local interest rags) to add dimension and third-party validation. If you’re lucky the band will get a contract. You should get a percentage of all revenues if you work the deal right from the get-go.
2. Pay a talented poker player’s entry fee into a large tournament
   Poker tournaments can be a cash bonanza. Scout local gambling halls for the really talented players. Ask around to see who is the best. Best idea: sit in a few hands and play against him or her. Engage them in conversation and show your respect. After the game approach them with an offer to cover their entry fee into a tournament in exchange for a share of any winnings. Get your agreement in writing! You can offer to pay for transportation, lodging and meals in addition to their entry fee. Any winnings go back to you against your investment, and anything beyond that is split 50/50 or whatever you agree upon.
3. Invest in a startup company with a good prospect of being bought out
   There are all sorts of online businesses out there. Find one that offers something innovative, useful, and scalable - something that Google might want to buy someday. Startups are always looking for capital in exchange for stock. Just do a Google search for “top startup companies” or something similar to that for a heaping helping of ideas. Bet you wish you’d slapped a few grand on the barrelhead for YouTube or FaceBook stock now, don’t you? Those are just the biggies. There are literally hundreds of smaller startups that have been snatched up by online giants, transforming their founders into overnight multi-millionaires but never even making the news.
4. Buy a stake in a local business
   Have a friend who co-owns a mortgage company and is strapped for cash right now? Offer to buy into the company in exchange for stocks or ownership rights. You may need to hire a specialist to valuate the company before agreeing on a dollar amount. The idea is that you give the business a cash injection during a slow period so they can pay their bills and gear up for the next housing run. In 4-5 years or so, business will likely be significantly improved and you can cash out at the new valuation amount.
5.  Buy houses on short sale and flip them
   Sometimes people get upside-down on their mortgage - meaning they owe more than the home is worth - or they lose a job and are forced to sell and move quickly. In these cases a short sale may become inevitable. A short sale simply means that the owner is willing to sell the home for less than it’s presently worth. Short sales require bank approval. Another option is to contact people who are about to enter foreclosure (a friend at the bank can turn you on to these opportunities) and offer to buy their home for the balance of the loan, saving their credit rating and pride. You get a home at a good price and the only thing they lose is equity.
   Spruce up the home a bit - new landscaping, exterior paint, and upgraded kitchen, etc., will all add value to the home and make it look “new.” You can easily make $10-$60k flipping nicer homes in this way.

There you have it. A handful of opportunities for you to put your capital to work.

The majority of Americans live from one paycheck to the next, with virtually nothing in savings for emergencies or unexpected expenses. Aside from the obvious risks of having this lifestyle (running up credit card debt when emergencies DO arise, having little or no long-term investments, etc.) there is another problem inherent in living this way.

The problem is inertia. Once you grow accustomed to living a certain way, it becomes hard to break out of the cycle. If by chance you DO have money left over at the end of the month, you don’t have a positive precedent in place so you end up spending the “leftover” money on a treat. Perhaps new clothes, a new electronic toy, or some other “item” you’ve had your eye on. Save? Invest? You haven’t done that in years - why would you start now? You won’t, because the “inertia” of your lifestyle is to spend everything you have…right down to the last dollar.

Breaking out of an inertial cycle - whether good or bad - is very difficult. That’s why it’s important to develop healthy financial habits as early as possible, so that they become ingrained in your lifestyle and worldview. It’s never too late to break away from spending’s gravitational pull, but it does take a plan, determination, and zealous action. Have a plan in place and commit to sticking to it no matter what. Then, step away from the place you’ve been and head off in a new direction. Make having savings an exciting goal - something you genuinely crave. Rewire your mind to place value on accumulated wealth as opposed to instant gratification.

You can do it.

I’ll admit: sometimes it’s hard to get on board the investment train when there’s so much instant gratification out there to be had. Here are just some of the reasons people don’t invest, or do so very casually:

• I don’t have enough money to invest to make a difference anyway
• I need this and that and the other thing now…I can’t do without it but I CAN do without stocks
• I want to spend my money NOW, not when I’m too old to enjoy it

How do you balance the desire (I would call it a requirement) to invest against the desire to spend? Some people think that you must invest every extra dollar you make, leaving no money for movies, a nice dinner, a vacation, or that new car you really want. No wonder they aren’t eager to invest. After all, what good is it to have money if you can’t SPEND it on anything? That’s why investing is a true balancing act.

The whole idea behind investing is to sock away money so that you can do even more things later on in life. And that doesn’t have to mean when you’re 70 either. My advice is that you don’t spend all your income on bills and temporary pleasures when - with just a slight shift in your thinking - you can create a better future for yourself. Here’s how:

If you don’t have a budget, put one together. Budget in “fun money” for short-term entertainment expenses so that you don’t get bored and depressed. Find unnecessary expenses that you can eliminate and shuttle some of that money to your entertainment bucket and some of it to an online brokerage account like Scottrade.com or SoGoTrade.com which both charge low, flat transaction fees. Buy small-cap stocks trading under $25 a share (use a service like Fool.com to find pre-screened stocks and narrow down your choices from there) when you have at least $250 or more to invest at a time. Transaction fees eat into your investment, so the more shares you can buy at a time the less significant those fees become. Anytime you get extra money outside of your normal paycheck, put it in your investment portfolio. Find ways to increase your household income and then invest all of that extra money. Don’t increase your living expenses just because you happen to start making more money. Eventually you’ll have a good chunk of change in your investment portfolio and you’ll feel better about using your “earnings” to buy that fancy new gadget or to take a nice vacation.

Anytime you’re tempted to buy something significant, think about how much money you could earn if you invested it for several years instead of spending it. If you spend $1000 on a new LCD tv rather than investing that money, you’re giving up $17,450 over the next 30 years if you consider a 10% annual compounded rate of return, which is very reasonable in the stock market.

Now I’m not saying that you should never buy anything fun, nice, or new. After all, this article is about “balance” right? So here’s what you do: once you establish the discipline of regularly investing and you recognize the value of money invested versus spent, you’ll naturally begin seeing the world through different eyes. Suddenly the things you thought you needed so badly will lose some of their luster. But when you do decide that you want to take a nice vacation or buy your wife a nice necklace for your anniversary, because you’ve developed the discipline and are seeing the results of compounding interest, go ahead and make those discretionary purchases if you want to.

If you have only $1000 in savings and you spend that $1000 on a necklace, you’re out the grand plus future interest. If on the other hand you have $5,000 earning 10% and you’re adding to it every month, that $1000 necklace becomes much less significant to your financial picture. Why? Because in the first scenario the $1000 spent was 100% of your finances. By comparison, $1000 is only 20% of a $5000 portfolio. Additionally, would you rather spend your hard-earned money on something…or the INTEREST that you earned on your hard-earned money? If you only spend interest than the only thing you’re losing…is interest. It’s kind of like going to Vegas and winning $500 playing poker after losing $100. If you only gamble from that point on with the $400 net winnings, then even if you lose it all you’ve lost nothing.

So that’s how you bring “balance” to your financial picture, maximizing your investments while still enjoying some of the fruits of your investing labors.

Making news today was an announcement that major credit card companies are starting to increase their interest rates, particularly for people who are higher risk users or are late on payments. Allegedly the reason for this is to offset losses from other financial sectors such as housing. Yet another reason to not get sucked into using credit cards. In the age of debit cards that work like a charge card but which are tied directly to your checking account, I can think of few good reasons to run up a balance on a credit card. Don’t get sucked in…especially if you’re using credit to buy “stuff” that you don’t need in an attempt to keep up with the neighbors or to maintain your lifestyle. Folks, in case you haven’t noticed we’re in an economic maelstrom right now, and those with the most debt and least amount of cash are and will be the first to get sucked under.

Let me break it down for you:

• The US dollar is weakening against almost every other major currency
• Credit is harder to obtain now than at almost any point in the past 20 years
• Interest rates on most credit lines are increasing even as the Fed is cutting key interest rates
• Credit card balances for individuals tend to grow year-over-year rather than decreasing
• 1.6 million Americans filed for bankruptcy in 2003
• Confidence in America is waning, both overseas and at home
• Gas prices are fast approaching $4 per gallon
• Food prices are up considerably versus last year, and some basic items are being rationed even in the US
• Iran is threatening world peace by endeavoring to build nuclear weapons and is publicly threatening to eradicate the nation of Israel, a key US ally in the middle east
• We are losing ground in Afghanistan while insurgents and terrorists regroup, recruit, and re-capitalize
• We are embroiled in a war in Iraq that has lasted longer then WWII
• Your home, if you own one, is worth less now than it was two years ago
• More than 1.3 million homes went into foreclosure in 2007, and
• There are still 11 months worth of houses on the market

Whether we’re technically in a recession or not, these are certainly not the happiest of economic times. However, all is not bad news. This is a great time to:

• Buy a home, since interest rates are low and housing prices are correcting themselves to more sane levels
• Invest in the stock market, since strong companies are taking a beating right along with the losers and will inevitably rise again
• Invest in your home by finishing that unfinished basement, upgrading your kitchen or improving your landscaping while labor is cheap and workers are hungry

Now, to do any of the above three things requires capital. Cash. If you don’t have it, you can’t take advantage of the current economic conditions. The good news is that sure as the sun will rise, in another 5-10 years the odds are pretty good that we’ll have another “economic setback” after we climb our way out of this one. Be prepared to take advantage of the next down-cycle by preparing today: live below your means, eliminate debt, increase your income, and invest in the stock market by buying up bargains.

I know this is supposed to be a blog about crossbows, but another thing I’m very interested in is investing…and besides it’s MY blog! So here goes:

Everybody needs to have a strong financial plan in place. You should have a savings plan, a budget, an income strategy, a retirement plan, and an investment strategy. What do I mean by each of these? I’m glad you asked! Read on, McDuff…

Savings Plan
A savings plan is simply a strategy of accumulating liquid assets (easily accessible cash) which you can use for emergencies such as unexpected bills, or to make ends meet should you lose your job. Basically any expenses that come up outside of your normal budget. Every person’s situation is unique, but a good rule of thumb is to have at least 3 months worth of net income (that’s your take-home pay after taxes and other payroll deductions) stored someplace you can get to quickly. This could be cash in a safe or money in a separate checking or savings account. In other words - don’t consider money tied up in a CD or in stocks as part of your savings plan because it’s not easy to get to, could fluctuate in value, or would impose penalties to gain access to. Personally, I would never invest in a CD anyway because rates of return are too low, generally below the rate of inflation in fact. You’re actually losing money by tying up your capital in CD’s, treasury bills, money-market funds and the like.

Budget
Everybody hates that word it seems, but it doesn’t have to be like that. For me a budget is simply a guideline to remind me what “buckets” my money is allocated to each month. For my purposes I literally created an income statement. This is something used by businesses to show income and expenses, typically on a monthly basis. I recommend using Excel or some other spreadsheet application to create your personal income statement. In one column you indicate all of your fixed monthly expenses, including house payment, car payments, utility bills, cell phone bill, food, gas, entertainment, etc. Sum the amounts in this column to arrive at your fixed monthly cost of living. In another column list all of your net income - from your job, consulting work you may do on the side, etc. The best way to calculate your monthly net income is to determine what you earn per day and multiply it by 22, as the average month has 22 work days in it. Alternatively, double the amount that you receive every two weeks. This will be a more conservative number than what the first strategy provides however. Sum these amounts as well.

Hopefully, your net income for the month exceeds your expenses. If not, you’ve got a problem, and you either need to reduce or eliminate some of your expenses or increase your income, or both. Any money you have beyond your fixed monthly expenses should go towards savings, investments, or paying down your debt.

Income Strategy
If you’ve never developed a career plan for yourself than you essentially have no income strategy. Depending on your line of work, talents, experience, goals and desires, you can have a completely unique career path that will require some effort on your part to flesh out. I encourage you to find a way to move up in your current role to a role with better pay whenever possible. If that is not possible in your current specialty, then perhaps you should pursue another opportunity.

What are you talented at? I define talent as the thing that you do over and over again with very little effort. It doesn’t have to necessarily be an obvious job skill - learn to look at your talent as a doorway of opportunity to do something that you will not only enjoy, but have a natural competitive advantage at.

Tiger Woods has talent: he has incredible focus. He brings that talent to the golf course, but not only there. He brings it to his business ventures, to the gym, even to how he raises his daughter. Golf is the primary vehicle of his success, but his focus gives him an edge in everything he does. What is your talent? Are you naturally good with numbers: do you love to play with spreadsheets and formulas? Do you love talking to people: does it energize you to mingle or speak in public? Whatever comes naturally to you is your talent. If you are good with numbers you might have a talent for accounting or a half-dozen other applications. If you love talking to people you may be great at HR or perhaps as a salesperson.

Try this exercise: write down on a sheet of paper all the things you naturally enjoy doing, no matter how absurd. Then start a new column and write down all the jobs or careers you can think of that would be a natural tie-in to the things on the first list. Then spend some time trying to find the ideal activity (from your second list) that would encompass 2-3 or more of your talents. For example, if your first list contains, among other things, the following “talents”:

* love talking to people
* love architecture
* love the feeling I get from helping people

then you might consider a career in real estate sales. Your job would be enjoyable (because you’d be doing things you love), and you would tend to excel at it naturally because of your talent and interest in it.
If you work in the corporate environment and want to move up the ladder, ask yourself what talents you possess which you can apply in order to do so. Also analyze the realities of your environment: if the only way to increase your income is to become a manager and you don’t like managing people, then you probably aren’t going to become a manager. If however, you are willing to learn how to manage people, read books on the subjects which you feel you are lacking exposure to. Talk to your superior and get his recommendations of what you should do to expand your career opportunities. I also want to point out that getting a higher paying job isn’t always the answer.  It’s better to do something that you enjoy and excel at than to make more money but be miserable.

In order to better prepare myself for increasingly more involved roles at my company, I have read books on finance, management, leadership, marketing, and more to learn everything I possibly can about areas I wasn’t previously exposed to. I have interviewed the heads of departments with which I am not familiar in order to strengthen my understanding and have a better view of how the company operates from an holistic perspective. I wouldn’t do these things if I didn’t have a passion to learn it and to grow as a leader and a manager. I have already been promoted several times at my place of work and anticipate several more promotions over the next 5-7 years.

Retirement Plan

You need to have a retirement plan, and it cannot consist solely of your hope to win the lottery, inherit money from a rich aunt, or to make do with Social Security. Your retirement plan should be separate from your investment strategy to a degree. Technically, your retirement funds should never be tapped into. They should be in an IRA or a 401(k) where your money can grow tax-deferred. Invest money in your retirement accounts with the mentality that they will never become liquid until you reach the age of 65-70. Invest consistently but not overly aggressively into your retirement accounts. If you are younger (before, at, or early post- peak earnings) invest aggressively in stocks and transfer some of your “wins” into your IRA if you have one. I like the traditional IRA for one simple reason: more money can compound into greater earnings, versus a Roth IRA where you have less money to compound. I also only recommend contributing to a 401(k) if your employer matches your contribution. A 1:1 employer match means an automatic 100% return on your money! If they don’t match your contribution, set up an IRA instead. The one drawback to an IRA is that once you are above a certain income bracket you can no longer contribute - and since it’s an IRA you can’t withdraw your money until you retire without paying heavy penalties. So if you are in a higher income bracket or expect to make a six-figure income for most of your career, don’t bother setting up an IRA. Focus instead on a traditional diversified portfolio and/or contribute to a 401(k) if your employer matches your contributions as mentioned previously.

Investment Strategy

Operate your investment portfolio the same way a mutual fund manager would manage a billion-dollar fund:
* buy and hold stocks in good companies with proven track records and about which you have some knowledge or interest
* balance your portfolio with 6 or more individual stocks. They can be in similar sectors but ideally would come from a variety of different sectors.
* have plenty of cash available in your trading account at any give time so that you can buy your favorite stocks when they drop in price. Don’t just buy more stock “every two weeks” because you got a paycheck. Look at your portfolio and buy shares of the company that is down at that particular moment.

That last point is exactly what Warren Buffet does. After he finds companies he likes, he waits for them to become undervalued so that he can pick them up on the cheap. Here’s a practical application: suppose you have 6 stocks in your portfolio. Because you are familiar with these stocks you have a good sense for their market value and where they are trading at. Suppose 4 of them are trading on the high end of their value cycle and two of them on the low end. When payday comes around and you transfer money to your online trading account, you should buy additional shares of one or both of the stocks trading on the low end of their value cycle. Since all stocks tend to go up and down throughout the day, across a given week, across a given month, and so on, it makes sense to buy additional shares when it is at a natural low. This doesn’t mean staying out of the market for months at a time - it means adding to your portfolio at regular intervals while using a strategic methodology. If your plan is to buy more stock every two weeks or every month, do so - but be smart about what you buy and when. That’s one advantage to having multiple and diverse stocks in your portfolio versus just one or two. Odds are in your favor that one or two of them will be trading at a low when buying time rolls around.

Make a plan and stick to the plan…and better yet, start today!

* Disclaimer: The above information is presented as one person’s opinion and should not provide the sole basis for your personal financial planning. Always consult with a trained wealth management specialist before making major financial decisions. Educate yourself on options, risks, and potential rewards to aid you in making sound decisions.

Excalibur, the king of recurve crossbows, has redesigned their website. First thing you’ll notice upon visiting their homepage (www.excaliburcrossbow.com) is that you have to choose between English and French languages. From a marketing perspective I don’t think this was a great idea. Instead, they should have registered a new domain using the French TLD (excaliburcrossbow.fr) or created a “subdomain” off of their main site (french.excaliburcrossbow.com), as this would have been imminently better for search engines and design/usability issues. But since they didn’t consult with me it is what it is. I get that since Excalibur is based in Canada, eh, they probably aren’t reaching out to “France,” but rather “French Canadians.” If that’s truly true, eh, then my latter recommendation of using a subdomain would have been the best route.

Once inside the site the navigation is pretty straightforward, although the taxonomy is a bit screwy in my eyes. That just means that all the nav-links aren’t apples and apples. Anyway, for most people the information you want to access is probably going to be pretty easy to find (unless you accidentally clicked on the wrong language and are now hopelessly lost. If this is you, don’t panic - just click on the back-button of your browser [top-left corner] until you can read the text again. There ya go…g’boy!).

Check out the Crossbow Video section - this is really great stuff. They have videos on how to assemble your crossbow, how to adjust your sites, and lots of other great info.

All in all, lots of good, relatively easy to find information for the Excalibur aficionado.

New for 2007, the Horton Summit HD series is the replacement for the excellent Yukon model. The new Summit features Horton’s Talon Field Grade Trigger, new Realtree HD Camo and red dot technology. It’s low price point make it an excellent value for beginning crossbow hunters without sacrificing power and accuracy.