Unlike a Larry King interview, I wanted my chat with Derek Foster to be real, not staged.   Sorry Larry.

I’d like to say Derek shared many personal experiences with me over the phone a few weeks back but I’m not that naive.  Derek has shared his investment experiences (and some failures too) in many National Bestselling Books:

• Stop Working: Here’s How You Can!
• The Lazy Investor: Start with $50 and no Investment Knowledge
• Money for Nothing: And You Stocks for FREE
• Stop Working Too: You Still Can!  AND
• *The Idoit Millionaire (*Latest book, Fall 2010)

However, I think you’ll find a few nuggets from Derek that his books don’t cover by reading Part 2 below.  Even CTV missed some of the goodies I was able to get from Derek.  Now that I’ve got you curious about this TV interview, a link will follow.  Onto Part 2; more from Derek Foster, millionaire dividend investor and early retiree from the rat race…

* * * * * * * * *
My Own Advisor: Thanks again for the interview Derek.  It’s great to finally chat with you.  Ready for the long list of questions?

Derek:   Ready Mark.

My Own Advisor:  We talked before about your investment strategy, you’re still a dividend investor.  I’m curious to know what your portfolio allocation looks like?  I mean, do you have any bond component?

Derek:  Im 100% stocks, both Canadian and U.S. dividend-paying stocks. I have no bond component. Not that I think bonds are bad, simply, Im a forty year old Derek Foster and I dont see why I need bonds right now with my multiple income sources. The empirical evidence is overwhelming about how stocks beat bonds over the long-run, Im talking 20 or 30 years. Im working on growing my dividend portfolio over the next 30-some years so this is why I dont personally follow any conventional bond allocation protocol. Ask the seventy-five year old Derek Foster and hell probably give you a different answer about his bond allocation. Im just not there yet.

My Own Advisor:  Whats your take on index investing?

Derek:  I think index investing is very safe way to go. The problem I have with index investing personally (and maybe you can help me on this since I read your blog, you own some ETFs dont you?) is the cap weighting associated with some index funds or index ETFs. At one time, Nortel and JDS made up something like 30% or more of the TSX, thats major over-representation if you ask me.

My Own Advisor Yes, but you can invest in index funds or an index ETF like XIC whereby each constituent of the fund is capped at 10%, avoiding the overemphasis.

Derek – True, I know about those products but you are still overweighted in the hot sectors. But let me ask you this. Do you think your dividend-payers with your dividends reinvested, compounding over time, dividend increases plus stock price growth, stock splits, etc. will do better in the long-run than those capped index products or worse?

My Own Advisor I think my index ETFs will never hit the proverbial home run but I also know Im always going get market returns, on the equity side of between five to seven percent over time. Thats good. If my dividends get reinvested, dividends increase over time and I hold my dividend-paying stocks long enough I should get at least that. Thats provided I own the right companies though.

Derek – Thats precisely my point. Investors can. Not to discredit index investing, I think its a good strategy. I think its good for those who dont have or want to take any time to analyze stocks, but I like my strategy. Its worked out pretty well for me so far.

My Own Advisor:  Tell me your top three all-time favourite investing or personal finance books.

Derek:  Good question, wow, there are so many. Can I tell you my three favourite authors?

OK, well I love the Peter Lynch ones, his One Up on Wall Street and Beating the Street two of my all-time favourites and he pretty much covers everything in those books.

I also really liked The Future for Investors by Jeremy Siegel (who also wrote Stocks for the Long Run). I mean he says so many great things that just make sense and he backs it up with loads of empirical data. Have you read it?

My Own Advisor Uh, no.

Derek You should. I think its a must.  I guess the last one would be The Warren Buffet Way. What else can I say? Hes the greatest investor of them all.

My Own Advisor:  Have you learned more about investing from your successes or failures and why?

Derek:  Thats a good question.  For me, failures because I think I question myself so much more. As an investor you can take failure as an opportunity to reflect on what didnt work and what could be better next time. I think sometimes many investors are blinded by their success because they fail to recognize the degree that luck was involved with their result. That mindset can have painful consequences.

This interview was originally published on December 17, 2010 at thekirkreport.com

Charles Kirk: It is with tremendous pleasure that I offer my last interview of 2010 with Mark Minervini.

As with many traders I interview, Mark requires no introduction as he is one of the most highly-respected independent traders of our generation. His blog in recent years has instantly become one of the must reads out there as he often shares market commentary and analysis which shows why the respect so many have for Mark is so well-deserved.

Moreover, his experience and past history of savvy market calls is legendary. It is with little doubt that we can all learn a lot from him! We hope you enjoy and find this focus interview helpful in your own journey toward more success in the markets.

Kirk: Hi, Mark. First of all, thank you for taking the time to answer our questions. I speak for many members who have a great deal of respect for you and we sincerely welcome you to this interview series.

Mark Minervini: You do a great job, Charles, and Im honored to be a part of it.

Kirk: Please tell us a little bit about how you got interested and started in trading.

Mark Minervini: I dropped out of school in the eighth grade in pursuit of a career as a drummer. From the money I made working as musician, I bought my first stock in 1983, which was a few hundred shares of Allis Chalmer. Shortly after, I read Richard Loves book, Superperformance Stocks: An Investment Strategy for the Individual Investor Based on the 4-Year Political Cycle. Everything Ive created with regard to my trading approach since stems from Loves initial impression on me, specifically from his writings in chapter 7.

Kirk: What was one of the most important lessons you learned early on?

Mark Minervini: That no one was going to do it for me; no one was going to make me rich except me. I learned that you must take responsibility for your results in the market and in life if you want to be exceptional. Secondly, I learned that in order to do well in the market you must be consistent; consistency is what separates the pro form the amateur. In order to have consistent success, risk must be managed in relation to potential reward as standard operating procedure. Youre not going to make just one trade, rather hundreds or even thousands of trades; its all about how much you make on average versus how much you lose on average over time. Lastly, I realized that I simply had to get to the bottom of what actually worked in the marketplace and ignore all the opinions and theories.

Kirk: Was there anyone out there who helped you greatly during your initial learning curve? If so, what did you learn most from them?

Mark Minervini: My Mother and my Father. I learned it was ok to do what I love; to go after my dream. I also learned it was ok to be unconventional. I was given the room to be creative. My parents trusted me. I always knew I was supported emotionally. Financially, we were poor but my parents supported my dreams.

Kirk: Indeed, it is so important to have a strong support structure in place. In a nutshell how do you currently approach the market and what is your primary trading strategy?

Mark Minervini: I approach the market from a risk first approach. My trading strategy is called Specific Entry Point Analysis or SEPA. We look to enter trades at low risk entry points relative to potential reward. Primary focus is not to lose money. Secondary focus is not to lose money. And, the final focus is to make more on average than I lose.

Kirk: You remind me of Buffett who said he had only two rules: 1) Never lose money and 2) see rule number 1! What do you see as the primary benefits from employing a strategy that focuses on both fundamentals and technicals?

Mark Minervini: The benefits are having all the pertinent information that is consistent with big winning stocks. We know what to look for both fundamentally and technically. I have seen stocks bought on pure technicals and the guy buying the stock doesnt even know that there was a cash offer or a proposed merger right at the price he paid. Refusing to look at fundamentals or any information that gives you an edge is usually because the individual just doesnt know how to use the info, or has some bias based on personal opinion or tradition.

Kirk: Why is this kind of trading best for you and, more importantly, why do you think it works so well?

Mark Minervini: My strategy works well because its my strategy. I know the strengths and, more importantly, the weaknesses of what it is I do. It also works well because I allow it to work and stick with it even when it runs into difficult times. Nothing works well if you keep changing your approach. To be a master you must be a specialist, not a jack of all trades.

Kirk: What do you trade mostly? Equities, options, futures, ETFs, currencies, etc.?

Mark Minervini: Only equities.

Kirk: In an average week how many trades do you make? What is your average hold time and how many positions do you have open at any given time?

Mark Minervini: During an average year I may make 400-500 trades. About half of that turnover is a result of taking small losses, which Im out of pretty quickly.

Kirk: What would you say are your primary strengths and weaknesses as a trader?

Mark Minervini: Discipline is my primary strength. And the willingness to admit when Im wrong and move on. My weakness is I usually sell early and often leave money on the table. But I dont really view that as a weakness, just something that could be improved upon. When you move in size you have to get out when the getting is good.

Kirk: In my experience it is often better to sell too early than too late Mark! How have you learned to mitigate your weaknesses and focus more on your strengths?

Mark Minervini: By not focusing too much on my strengths. If youre good at buying and bad at selling I would focus on selling; if you improve your selling you will have a complete game. Focus on making your weaknesses strengths and then you will have no weaknesses. Exploit your strengths and improve your weaknesses.

Kirk: What have been some of the most challenging lessons you have learned?

Mark Minervini: That you cant be everything. You must commit to a strategy and sacrifice other strategies. The problem with the market is its like playing poker however; you always get to see the next cards even though the hand is over. You always see what would have happened. This is very difficult to deal with for many people. To be successful, you have to understand that trading is NOT about picking highs and lows, its about making money.

Kirk: Very good. What are some of the key rules that you consider before selecting any potential trading opportunity?

Mark Minervini: How much am I risking is the very first concern. Also, does the stock meet all the necessary criteria? If the risk is acceptable and all the entry criteria are met, I enter the trade.

Kirk: What would you say is your average win: loss ratio for your trades?

Mark Minervini: I average 2 to 1.

Kirk: How has your overall performance been recently, as well as over the past few years?

Mark Minervini: Its been about the same as always. Im a consistent 2:1 trader.

Kirk: What would you say are your favorite kinds of technical and fundamental set-ups?

Mark Minervini: The ideal set-up is a stock emerging from a constructive consolidation with strong accelerating earnings and sales.

Kirk: Can you give us a recent example of a set-up you found to be very attractive and worked well in this market?

Mark Minervini: CML. Bought it on 11/24. Sold it on 12/7 for a quick profit.

Kirk: Have you noticed any trading set-ups more prone to failure than they have been in the past?

Mark Minervini: No. Not much has changed. Contrary to what many believe, its not different this time. LOL

Kirk: To help us understand your trading approach, can you talk about a recent successful trade from start to finish?

Mark Minervini: LULU. Supported by excellent fundamentals, the stock emerged from a double bottom pattern that formed from 4/15 11/04. I bought the stock on 11/05 the day the market topped just before a pullback of about 5% in the major averages. The stock was held through that market pullback because it acted normal and held above our stop. This gave me the conviction to add to the position as it emerged through its next buy point in November. I sold the stock (most likely too early) on 12/09 when they reported earnings up about +50% from the initial purchase from about a month earlier.

Kirk: Now please tell us about a recent unsuccessful trade.

Mark Minervini: Shorted GMCR; shorted the rally in October and November after the big break on SEC news. Stock rallied and stopped us out

Kirk: One of the things I most appreciate about you is how much you stress proper risk management. If we can, lets talk a little bit about position sizing. Can you provide an example of a recent trade and explain your method for determining the size relative to your own trading portfolio?

Mark Minervini: I want to own as much as I can but generally no more than 25% of my portfolio (as liquidity permits). You are not going to make huge returns being too diversified. However, I only risk what I can get out of safely based on liquidity.

Kirk: Thats interesting. I think many would be surprised at the idea of having any position anywhere near 25% of an entire portfolio. Besides over diversification and liquidity concerns, what common mistakes do you think many traders make concerning position sizing?

Mark Minervini: They dont know what an optimal position size should be based on their own risk/reward and risk tolerance. For instance, if youre a 2:1 trader, your optimal position size is 25%.

Kirk: Ok. I think I understand what you mean, but please explain this position sizing formula more in detail so others can perhaps apply it in their own trading. Can you offer another example?

Mark Minervini: Ok. First, its important to understand that you are not going to achieve huge returns consistently being overly diversified or by relying on diversification for protection. You will only get a smoothing effect. When you own a bunch of stocks you end up with two problems: the first being that you just cant watch and know all you need to know about each of them. The second problem is that you will have a difficult time getting fully invested quickly when opportunity presents itself and more importantly, getting liquid if you need to raise cash in a hurry. In addition, the math just doesnt support it. Depending on the size and risk tolerance of your portfolio you should typically have between 4 or 8 stocks and for large portfolios maybe up to as many as 10 or 12 stocks. This would provide sufficient diversification but not too much. The Optimal-f formula can act as a starting place for you to understand optimal position sizing based on expectation. If Ken Heebner of CGM Funds can move around billions of dollars in just twenty names and still manage to beat the market, then a personal portfolio can surely manage sufficiently with 4-5 or 10-12 stocks. If you lose 5-6% on average and even if your position size is at 25% exposure, youre still only be risking about 1.25% of your capital per trade. Of course, if you dont have an edge, then you will lose no matter what your position sizing is.

Kirk: Good, thats helpful. So, do you use and set stops, Mark? If so, whats your stop loss method?

Mark Minervini: I always know where Im going to get out of a trade before I get in. I aim to lose no more than 5-6% on average over time on my losers.

Kirk: Do you ever average down into a losing trade?

Mark Minervini: Theres a reason Paul Tudor Jones had a sign posted on his wall that read Losers average losers, and that reason is because its true. I almost always only add to a position if it proves itself and then I may add to my position at a higher price, not lower.

Kirk: Do you scale up and into winning positions? If so, how do you know when to increase a position size relative to your overall portfolio?

Mark Minervini: Yes. I generally move money into the better performing names at subsequent pivot points or set-ups.

Kirk: All good traders dedicate a lot of time and effort to improvement and reducing mistakes. How has your trading method evolved and improved over the years?

Mark Minervini: It just becomes more and more crystallized because I continue to focus on the same timeless principles, which allows me to become more and more of a specialist. The power of a narrow focus is amazing. The key is to be a real pro at something. Know all you can about a style or a tactic. Then you can build on that foundation. Traders give up too easily and jump around too much when things get difficult. How good do you think Kobe Bryant would be if while he was developing his skills growing up every time he had a really tough game he changed to a different sport or played a different position?

Kirk: I couldnt agree with you more Mark. I see this problem among many. Can you provide an example of something you thought was true when trading early in your career and now believe is just completely wrong?

Mark Minervini: Yeah, everything. But I learned very quickly sound principles. It just took me many years to master the application.

Kirk: Why do you think most traders fail?

Mark Minervini: Here are 6 reasons:

1. Poor selection criteria; usually based on personal opinion, theory or tips and bad advice
2. They dont stick to and commit to an approach; style drift
3. Dont cut losses (#1 mistake made by virtually all investors)
4. Dont know the truth about their trading they fail to conduct in-depth post analysis
5. Treat trading as a hobby not a business
6. Want too much too fast; learning a skill takes time

Kirk: Please describe a typical trading day for you. How do you organize and dedicate your time?

Mark Minervini: Most of my work is done the night before. I already know what Im going to trade before the open. I watch the market all day long, never leaving my desk for more than a few minutes during trading hours.

Kirk: How much time and attention do you pay to others opinions about the market and/or stocks you are trading?

Mark Minervini: Zero. I avoid outside opinions like the plague!

Kirk: Are there any tricks of the trade that you use to help maintain a consistent successful approach over a long period of time?

Mark Minervini: Yeah, long hours, hard work, a sound approach and discipline. There are no tricks or big secrets. Again, is there a secret to having a good basketball shot? It starts with a good coach, proper practice, plenty of hard work, discipline and sacrifice.

Kirk: Amen. However, most traders I know have a set of rules that they have learned from past mistakes. What are a few of yours that you think most traders would benefit from?

Mark Minervini: Hard work alone wont cut if you dont have a sound approach and if youre not doing the right things. You must be facing west if youre looking for a sun set. Approach each trade from risk first; ask how much can I lose. Dont risk more than you can expect to gain on average. Know the truth about your trading; study your results carefully. Never average down. Always cut your losses; keep your losses small. These are fundamental rules that should never be compromised.

Kirk: I suspect like all good traders you are working on improving your performance in some manner. Can you share what youre specifically working on right now?

Mark Minervini: Sticking to the rules. Always making sure we stick to the rules. We have a great approach, I dont like to get to tricky and over complicate something that requires a straight forward approach.

Kirk: Youve been trading for some time now. What would you say are the biggest changes in the markets and trading in general youve seen during your career, both good and bad?

Mark Minervini: The order handling rule change in 1997 has changed the way stocks move short-term because Market Makers dont really keep inventory anymore. Its a topic that would require a lengthy discussion; maybe we could talk about it another time. Other than that, not much has changed except more information moves faster than before.

Kirk: What advice would you give a person just now beginning to trade the markets?

Mark Minervini: Find a good mentor. Commit to a strategy. Cut your losses. Tune out the media. Take full responsibility for your results.
Kirk: What do you think are the greatest misconceptions beginning traders have about trading the markets and about trading systems?

Mark Minervini: Way too many to mention. Just about everything a beginner thinks is a misconception.

Kirk: A number of people who read my website desire to trade for a living and I receive a lot of questions concerning capital requirements needed to start and how to make the transition to trade full-time. Do you have any words of wisdom or rules of thumb to share along these lines?

Mark Minervini: I started with a very small sum of money and turned it into a fortune. Capital is not the challenge. Mastering yourself is the challenge. Discipline is the challenge. Persistence is the challenge.

Kirk: Do you think trading for a living is getting more difficult or easier for the average individual investor? Why?

Mark Minervini: Much easier. Tools for pros and amateurs are virtually identical. The pro has no edge. The individual has the advantage. No real liquidity concerns for the small trader versus the big fund manager. Its a fantastic time to be a stock trader!

Kirk: When all is said and done, in your experience, what is the best way to learn how to trade?

Mark Minervini: Trade. As Ralph Waldo Emerson said: Do the thing and you shall have the power. And then conduct post analysis. Learn to be objective. You could try and find a mentor. However, the chances of getting great advice are slim at best. Trading is just like any other profession, there are only a handful of really outstanding practitioners.

Kirk: Do you have any books, websites, etc. that you highly recommend beyond your own website?

Mark Minervini: The Kirk Report. Why is there anything else? LOL!!!

Kirk: You are too kind Mark. Although I know both of us share a love for the markets and trading, what are your long-term career plans and future for your website?

Mark Minervini: I honestly dont know for sure. My long-term plans are too stay healthy and be a good father to my daughter. This past year I started a pilot training program. Also, we now offer my research to the individual investor not just exclusively to the institution anymore. It feels good to help others achieve their goals. I think I may continue to develop that. Why hog all the good trades for myself? LOL!

Kirk: What are some of your personal passions beyond the market?

Mark Minervini: Ive been a drummer since I was 6 years old and I continue to play. I play tennis, train boxing and lift weights to stay in shape, and I play an occasional round of golf.

Kirk: Finally, if you had only one piece of advice to share with all traders, what would it be?

Mark Minervini: Believe in yourself and never give up. Persistence is more important than knowledge. Make an unconditional commitment to trading and you will not fail.

Kirk: Thank you so much Mark. I really enjoyed this interview and Im sure others will find it helpful.

According to the list of water purification and desalination stocks at WallStreetNewsNetwork.com, there are over twenty companies involved in the treatment of water, and several of them have specifically targeted desalination.

Consolidated Water Co. Ltd (CWCO) is one of the purest plays in the sector. It operates seawater desalination plants and other water services in the Cayman Islands, the Bahamas, Belize, the British Virgin Islands, and Bermuda, using reverse osmosis technology to convert seawater to drinkable water. The stock trades at 17 times forward earnings and provides a nice yield of 3.2%. The company has raised its dividend in eight of the last ten years.

Tetra Tech (TTEK) designs and builds desalination systems that use seawater, brackish water, and reclaimed wastewater sources to help increase water supply, and has been designing desalination plants in Florida since the 1990s. It also designed the first California desalination plant, the Corona Temescal Desalter. The stock has a forward price to earnings ratio of 15.

To see an Excel list of all the stocks involved in desalination and purification, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Ken Fisher Interview Part 6
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: In regards to Congress, in your book, you do show the analysis of a change in parties and how it can affect the market, but have you done research on Congressional changes from one party to another?

Fisher: Those don’t matter much. What matters is do they have power to pass or not.

It’s really not whether the Republicans are better or the Democrats are better. When you move from one party has got the power to nobody’s got the power, the market likes it better.

Let me put it this way. Markets really don’t like political change. They don’t like having legislation. It doesn’t matter if it’s legislation that the Democrats would prefer or legislation that the Republicans would prefer.

So if you take the time period like the 1994 midterms with the Republican revolution, that worked really well because the Republicans didn’t have big margins when they won, in 1994. They had a big election to get there but they didn’t have big margins, and then they had a Democratic president who could veto. So not much got done after that.

This time we’ll have the same thing. Almost certainly, the Republicans will take the House of Representatives. (ed. note: interview took place Oct. 27) The Democrats won’t have any margin and won’t be able to pass anything, and the Republicans will pick up steam, and while its very unlikely they will take control of the Senate, with one House in one party and another house in another party, it’s like what Ronald Reagan had in 1983.

Stockerblog: Now Bunk Number 36, I think most investors, obviously incorrectly, fear higher taxes. This is the one about stocks love lower taxes.

Fisher: We kind of talked about this before. Those fears are already priced into the markets.

This can be done one of two ways. The one people are worried about now is the sun-setting of the so-called Bush tax cuts. Everybody knows that’s fair and have had a lot of time to react to it.

Let’s step back for a minute. The United States is part of the world is important, but it’s not the only part of the world, and of the United States, more money than not isn’t taxable than is. Most of the money that’s taxable doesn’t get sold anyway, like Bill Gates owning shares in Microsoft or me owning Fisher Investments. It’s not like a stock that you’re going to turn around and sell right away. And then the people that are taxable investors, if you think about it now after what we’ve been through in the last few years, not that many of them have a lot of capital gains to take. If they wanted to take them and realize the gains, they have had all this time to do it before the tax change occurs. So it’s not like they didn’t have lots of lead time.

So you can say, who in their right mind if they’ve got a thousand shares of stock X at a big capital gain, and they want the lower rate, who in their right mind is holding off until after the change. The selling’s all done in the here and now. The odds are that the market doesn’t have a problem with that moving forward.

There’s this part that I find amazing, which is the arrogance of presuming that an investor sees something that pretty much every other investor ought to be able to see, and from that, you continue to see that its a smart economic decision. That might be true outside of the world’s capital markets but the whole role of capital markets makes that impossible.

End of Part 6

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

Part 3 of this interview is available HERE.

Part 4 of this interview is available HERE.

Part 5 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the articles were written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

However, for the really high yields, investors have to turn to the oil income royalty trusts and the oil master limited partnerships or MLPs. In both cases, income generated avoids double taxation; virtually all earnings are passed through to the shareholders without being taxed at the company level.

Of these options, the royalty trusts have many advantages over the partnerships. Limited partnerships don’t send out 1099 forms, they send out a Schedule K-1 Form, and the income is reported on your tax return differently from regular dividends, with additional forms and preparation time involved. In addition, you should never put an MLP into a retirement plan because of the UBTI or Unrelated Business Taxable Income problem, which could put the tax deferred status of your retirement plan in jeopardy, based on my understanding. However, since I am not an accountant, I am not giving tax advice so please discuss MLP’s with your accountant or CPA for clarification, before investing in MLPs.

The royalty trusts don’t have this problem as they send out 1099′s on their income distributions, similar to dividends. According to a list just developed at WallStreetNewsNetwork.com, there are nine different oil royalty income trusts with yields ranging from 5.7% to 13%. For example, Cross Timbers Royalty Trust (CRT), with a price to earnings ratio of 15, sports a yield of 8.1%. This trust owns 90% net profits interests in many royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico. Distributions have been paid monthly since 1992.

Sabine Royalty Trust (SBR), founded in 1982, receives royalties from oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. The stock has a PE ratio of 17 and a yield of 7.3%. This trust also pays monthly.

When you check out the free list of oil income investments at WallStreetNewsNetwork.com, pay close attention to the last column, which shows the company structure, either limited partnership, trust, or LLC.

Disclosure: Author does not own any of the above.

By Stockerblog.com

After waiting for ten minutes, my mother finally asked one of the tellers what was taking so long. The teller went to check and came back with the clerk who told my mother that they had no record of her having a safe deposit box there. My mother told her that was ridiculous, showed the woman her key and driver’s license, and said that she had been going into her box regularly for years. Then the clerk asked her if she was in the right branch, and she replied that of course she was in the right branch, she never used any other branches.

Finally the branch manager came over, and asked what the problem was. When my mother told him, he went in the back. After a very long wait, he came out and said that he couldn’t find any record of her having a safebox. My mother said that she had to get into her box. The manager said “I’m sorry, there is nothing I can do.”

Apparently, there has been a recent turnover of employees at the branch. One of the tellers who did know my mother said that she saw that the safebox signature cards were moved from a drawer to a metal box, and maybe her signature card got lost in the transfer.

Anyway, my mother finally left, completely stunned, stressed, and devastated, without being able to get access to her safety deposit box. My questions to you, dear readers, is:

1. What would you do if this happened to you?

2. What would you do if this happened to your mother who lives 500 miles away, and asks you what she should do?

At least the U.S. based utilities don’t have that problem … yet. But many have plenty of benefits, including high yields and reasonable price earnings to growth ratios. As an example, Hawaiian Electric Industries (HE) trades at thirteen times forward earnings and pays a CD beating yield of 5.4%. Hawaiian Electric is known for is use of green electrical generation including wind, solar, geothermal, wave, hydroelectric, sugarcane waste, and other biofuels. Latest reported earnings were up 89%.

American Electric Power Co., Inc. (AEP) pays 4.6% and trades at eleven times forward earnings. The company serves Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia, and West Virginia.

For a free list of all the top yielding electric utilities, which can be downloaded, sorted, and added to, check out the list at WallStreetNewsNetwork.com.

Disclosure: Author didn’t own any of the above at the time the article was written.

By Stockerblog.com

In one of my more recent posts I informed you my wife and I were considering moving. Our conversations about moving started in June and since then, have really picked up. Since July, we talk about it daily. (Most times Im engaged in the dialogue

All kidding aside, our kitchen table conversations are about:

If we really want to move, why?
Where do we want to move?
What (specifically) are we looking for?
Can we afford to move?
What is our long-term or short-term plan for this next home?

For this post, Ill share our top-3 reasons why we want to move…

1)We currently live in a semi-detached home. We have ample interior space but very limited outdoor/backyard space. In our neighbourhood, we feel a little cramped, although we knew this could be an issue when we bought the home. We have little privacy (close to our neighbours; attached on one-side) and weve realized this is something wed like to change. Close proximity to our neighbours (although they are great) makes outdoor life a little louder than wed like; challenging to entertain family and friends, so were looking for some more outdoor space a slightly larger piece of earth to own to gain more privacy. Our preference is for a single-family home on a larger lot.

2)Our semi-detached home only has one parking spot, beyond our garage. We have no problem fitting one car in our garage, and the other car in our driveway, but there is no room left for any visitors to park. When family and friends visit, they must park on the street. In the spring, summer and fall months, this is no problem there is lots of room on the streets. In the winter months, not so much. Parking becomes a challenge. Narrow, snow-filled streets must be manoeuvred with care and, you must abide by the citys winter-parking restrictions or risk getting your car towed when there is anything more than a dusting on the ground. This isnt just a challenge for us living in our community, but for tens of thousands of others in other newly developed Ottawa communities. Our preference is for a driveway/garage with space for at least two cars.

3)Weve recognized we want a large, spacious, great room on our main floor. Sounds simple enough, but its tough to find. Our semi-detached home has some great features and upgrades, but it lacks that fully open-flow you can easily cook, eat and relax in one large, inviting space. Our current home is quite open on the main floor and we tend to have a “good room” not a “great room”. Our preference is to find a spacious bungalow or two-storey home with this feature.

None of these reasons are forcing us from our current place by any means, so were not rushing our decision. Weve looked at hundreds of homes online over the last few months, and almost a dozen in person, since they were legitimate considerations. In the end, none of them felt right. We know passing on “potentials” is part of the house-hunting process. It’s a big decision, for us, for anyone, so we want to be excited about the home, not just OK with it. Hopefully some patience and a dab of luck with land us our new home.

Does the subject of moving come up in your household?
Have you moved recently? Why did you move?

Wish us luck!

Cheers,
Financial Cents

There are a number of essential factors that should be taken into consideration regarding gold and is financial value. First, gold is both a commodity and a currency unto itself. Gold along with silver are both currencies that are beyond government control. (At least gold is currently legal to own in the US.) All the currencies currently used, such as the Euro, dollar, pound, and yen, are all forms of fiat currencies, which means that their value is intangible, and their worth is merely set by their governments declaration.

The problem with fiat currencies is that governments in the past have had a tendency to over-create, which subsequently leads to hyperinflation and an inevitable collapse of the countrys economy. Several years ago, many world currencies could be converted to gold. Not anymore.

Some theorists believe that during the last fifteen years, governments and world banks have been trying to keep down the price of both gold and silver. They believe that once governments stop trying to suppress the price of gold by lending and selling their gold, the price of both commodities will rise substantially.

The best way for most investors to invest in gold is through ETFs (Exchange Traded Funds), a financial tool that works much like a mutual fund except that instead of holding a basket of stocks, they own gold. For example, SPDR Gold Shares (GLD) holds gold bullion and is up over 23% for the year. The five year average annual return is 19.8%.

For investors who think that silver may be a better buy, there is the PowerShares DB Silver (DBS) ETF, which owns futures contracts on silver. The ETF is up 48% for the year.

One of the main reasons why investing in gold through ETFs is a wise option is that it is much easier to hold: no storage costs, no safe deposit box, no risk of being taken by burglary.

Many investors believe that gold is a great hedge to counter inflation, and given the risks evident in the condition of the global market, gold stands as a solid asset that can withstand all financial tides. Gold remains in constant demand regardless of the fluctuations of global markets.

To find more information about gold and silver ETFs, check out the free list at the WallStreetNewsNetwork.com site.

Author does not own any of the above.

By Stockerblog.com

The question remains whether or not this is a preview of more volatility to come or can the market hold up and produce buyable bases?

In early July, the major market indexes were oversold and due for a rally. We got that expected rally and now face the opposite scenario; an overbought condition. The rally has moved the major market indexes into a confluence area around 1131 on the S&P 500. A very encouraging sign would be if the market could move decidedly through this level on volume over the near-term.

As I pointed out in my market commentary – posted Sunday July 25, 2010:

While the recent market action is encouraging, Im still suspicious that this could be a rally within an on-going bear trend; a tradable rally up into the 1131.23 area on the S&P 500 Index at best perhaps The problem with bear market rallies is they often suck you in on the long side and then reverse course shortly after. The coming week could provide enticement to reenter on the long side if the market rallies further.

Oversold, snap-back rallies are to be expected during a primary downtrend. During the bear market in 2008, on occasion, those rallies carried the indexes up more than 23%; all within the context of a bear market that led to additional downside. Many attempt to trade these rallies, some successful, some not.

To be perfectly clear, we are not interested in getting too involved with short-term rallies that may prove to be just minor up moves within the context of an existing bear market. Before committing significant capital to this market we need to see additional evidence that a bottom is indeed in place. We are interested in staying in sync with the markets primary trend.

For those of us who trade with relatively tight stops, a trendless or volatile market can actually cause more damage to a portfolio than a strong down trending market; a whipsaw type market environment can lead to a death by a thousand cuts.

One tactic we employ to avoid such a situation is the “pilot buy”; smaller than normal positions to pyramid on our successes. Once we become profitable on our pilot buys, then and only then do we step up our trading rhythm. This ensures that we’re trading our largest when we’re trading our best and smallest when we’re trading our worst.

We currently have a toe in the water with some pilot buys however; still waiting for additional confirmation to dive in or at least put in a foot or two. That confirmation comes to us via the components that make up our risk model. Currently, we are on the verge of an outright buy signal however; we wait for the green light patiently.

A few items we look to as evidence a market bottom is in place include:

1. Leadership stocks emerging and holding up relatively well with the emergence of post-leadership, or what we would define as a second wave of leadership. This helps minimize whipsaws.

2. The intermediate-term trend in the broad indices in an uptrend. This also helps avoid the many short term snap-back rallies that occur during bear markets.

3. The major market averages advancing on increased overall volume with a lack of meaningful distribution. We have seen such accumulation and would now like to see the market follow-through once again on a broadening of market participation.

We are currently long:
DDIC, PAY, AKRX, USNA, AAP, NUTR and TSN

We are currently short:
FCN

Notable names on our buy alert list include: PANL, SEAC, LSCC, LXK, PACR, PCYC, NBIX, BIDU, MNTA, IRBT, LTM, HAS, DFZ, HMIN, UCTT, SUMR, DDIC, SIMG, INCY, WPRT, PAY, NTAP, NZ, PEET, RMD, CREE, ROVI, CYBX, CRVL, WRLD, WYNN, EMC, BRCM, PSMT, ATSG, AVGO, XLNX, USNA, ADTN, ALG, DLTR, ZUMZ and BJRI.

Mark Minervini

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