Small Time Blog

Final Piece of Smalltime Model Portfolio in Place

by Bradley Voight on 04/11/14

We have looked to the east for the final stock purchase in the Smalltime Model Portfolio to find China Ming Yang Windpower (MY). The logic behind this purchase is that China is super polluted and they will be moving aggressively in the direction of renewables over the next 20 years. Ming Yang wind power is securing multiple revenue streams through sales, leasing, and design and contracting. The Smalltime Model Portfolio has a long term investment horizon of 3-7 years and possibly longer. We fully accept the possibility that we have been wrong on at least one but as many as three of our picks.

That would make us 40% correct. Think of stock picking like baseball. The best of the best hitters in baseball bat something like .350 or hit safe 35% of the time. Let's play a little math game with stocks.

Let's say I lose everything on two stocks, 50% on one, and triple my money on two. with $100 in each stock that is $500 total invested.

Stock Value

A 0

B 0

C 50

D 300

E 300

Total $650 or a gain of 30%

The Smalltime Model Portfolio is now complete with 5 well diversified companies that have absolutely nothing to do with each other one of which is a 10% dividend payer. Lets let the CEO's of theses companies work for us now and see where they can take these companies over the next 3-7 years. Remember, company profits attract investors which in turn drives up the value of each share as the company grows it's revenues and profits. The profits drive the charts, not the other way around, so if profits continue to rise you can be assured the value of the company will increase and the shares will go up and that will be reflected on the chart.

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Bull Powering Through Global Tensions

by Bradley Voight on 04/02/14

I said in my 2014 economic forecast that the S&P would finish the year at 2110 along with some other bold predictions. I also said my bullish forecast was only to come true if global tensions remained in check. Well la-ti-da we are right back in the cold war, Egypt is in chaos along with Turkey and Argentina, and lest we forget our nuclear nemesis in North Korea rattling his saber. What about Syria? It's out of the headlines but far from being solved. So the markets are tanking right? Incredibly the S&P hit yet another record high of 1885.52. I am sticking with my number of 2110 by years end again, contingent on the hot spots not kindling into full fledged firestorms.

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2008-2009 Manufacturing Lull was 2nd Worst on Record

by Bradley Voight on 02/26/14

From September 2008 to June 2009 American factories shifted into neutral in a slowdown not seen since 1982. The Institute for Supply Management's PMI number is a measure of industrial output from American manufacturers dating back to January of 1948. The 10 month slowdown in production during the financial crisis and subsequent stock market free fall was the 2nd worst on record and the evidence was on the highway at night where freight was not moving and rest areas were ghost towns. My night job is in transportation and I was a firsthand witness to a utter disappearance of tractor trailers from I-70 and I-65 in Indiana border to border north and south, two of the busiest freight corridors in the nation. In 2005 and 2006 there were so many trucks on the road that they were lining all rest stops and exit ramps. Well it looks like those days are back. All rest stops are packed and spilling out on to the shoulder of the highway every night including weekends and the exit ramps are starting to fill up again.

I think that the production downturn, a technology shift happening in so many industries, historically low interest rates, and hoards of cash in the banking sector (and on corporate balance sheets) is setting us up for a boom time. Each day in China and India a family moves further from poverty towards a higher standard of living (I won't call it middle class just yet). I know the apocalypse is supposed to be coming and WWIII is shaping up but I have faith in humanity and if we can keep our tempers down we can lift an entire generation out of poverty and sickness.

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Why There is a 1% and then the Rest of Us

by Bradley Voight on 02/17/14

I know why there is a one percent and then the rest of us. It is stated very simply by Jesus in the parable of the talents; to him who has, more will be given and to him who has very little, even what little he has will be taken away. Sounds unfair on the surface but upon closer inspection it is not only very true, but also ethically correct.

In the parable of the talents a wealthy landowner goes off on a business trip and leaves three servants 5, 2, and 1 talent respectively. The servant who got 5 talents invested and made a 100% profit and now had 10 talents. The one with 2 made 2 more to give him 4. The servant who was given 1 talent buried it out of fear he would lose it and was left with just the 1 talent that was given to him. When the landowner returned the servant with 5 made 5 more and the landowner said 'you were faithful over a few things so I will appoint you over many'. The same was said for the one who received 2. When the servant who got 1 came to the master he said he was scared of him so he hid his talent and did not invest it. The master said 'give me your talent which the master in turn gave to the one who now had 10.

You see the people who invest and take risks usually make a profit which they can invest in other things and the cycle repeats over and over. People who don't invest never supercharge their money and never gain the capital to put towards new investments. It takes money to make money is actually true but how much money it takes to make money can be a very small amount. The 99% choose not to take risks that the 1% will take. So use your small capital as bait and cast your line into the markets and learn how to invest.

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Marijuana Industry: Once in a Lifetime Opportunity Missed? (Or Not)

by Bradley Voight on 02/14/14

MWIP 42,000 shares @ .395 = $16,590

HEMP 10,000 shares @ .17 = $1,700

MJNA 17,000 shares @ .31 = $5,270

GRNH 22,050 shares @ .47 = $10,363

RFMK 100,000 shares @ .0034 = $340

ERBB 68,000 shares @ .0279 = $1,897

PHOT 5,000 shares @ .377 = $1,885

Total $38,045

Total Investment $4,500

I SOLD ALL OF THOSE SHARES LAST SPRING AND LOST $2,990. Prices as of 3:30pm 2/14/14 are what I would have today if I still had the shares. No one stole them from me, I gave them away! So big bad Wall Street is not to blame, sorry 99%'ers.

I knew I was right when I bought them but a string of bad news and a prolonged downturn in price shook me out. My wife and my mother both told me to hold them and I cracked. My impatience was duly rewarded with a modest loss instead of a $33,545 marijuana profit. Very hard to swallow and not only is it hard to swallow but I told EVERYONE I KNEW that this was coming and was almost universally ignored. Only one friend bought some shares and he too was shaken out at a low point. I had not yet read Peter Lynch's books in which he says, "Just because you buy a stock and the price goes down, it does not make that a bad investment." "PATIENCE!", says Philip Cabot in this you tube interview at the ripe old age of 98, that is the #1 lesson the markets have taught him in all those years. I'd be wise to listen to that kind of experience although two people who hate the markets and totally ignore them told me the same thing....sit on them. It turns out that I have a couple more marijuana stocks that I did not sell....I'm sitting on them. Let me say that the Marijuana industry is like a 9 inning baseball game, except this game has no outs in the first inning with the bases loaded. Huge profits are still to come in this industry.

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