Nathan Martin

Image: Michelle Meiklejohn / FreeDigitalPhotos.net

This week I made my second stock option purchase within a month.  I subscribed to Motley Fool’s Option newsletter and followed Jeff Fischer’s advice, buying call options on Johnson & Johnson and Intel.  The risk is somewhat lessened by the fact that these are both solid companies.  Also, the calls don’t expire till 2012…plenty of time for the underlying stock prices to go up even if the market decides to dip a few times in the next year or so.  The way call options work is that I am buying the right to purchase a stock at certain price(strike price) on a certain date.  If the stock is trading below that price on the expiration date, I will not exercise the right to buy the stock and the option will expire worthless.  In that case, I lose the amount of money that I paid for the option.  If the stock is trading above the strike price on the expiration date, I can exercise my right to purchase the stock at the strike price.  What will most likely happen though is that sometime in the next two years I will choose to sell my options to someone else, hopefully at a hefty profit.  Options can be traded through your brokerage account much like stocks.  When the underlying stock goes up, the option typically goes up as well depending on the length of time remaining on the option as well as the proximity of the stock price to the strike price.

So that’s my latest stock market adventure.  More to come…

I recently finished Brian Tracy’s book, Flight Plan: The Real Secret of Success.  It wasn’t my favorite Tracy book, but I definitely found it useful as it is loaded with some of Brian’s simple truths.  The basic premise is that you can chart a course to a goal then follow the “flight plan” to said goal.  Probably any analogy breaks down if you carry it too far.  The weakness I saw in this book was that keeping the flight plan analogy the whole way through the book felt forced at times.  That said, the content is solid.  And timely since I read it at year end when, like many others, I was taking stock of my own plans and progress.

Here are a handful of Tracyisms from the book:

• “For you to change your outer world, you must change your inner world.”
• “You have more talent than you could use in a hundred lifetimes.”
• “The most valuable asset you have in achieving your goals and reaching your destination in life is your mind.”
• “Fear is , and always has been, the greatest enemy of mankind.”

At the beginning, Tracy guides the reader through choosing a destination and formulating a plan.  Expecting turbulence and making continual course corrections were two parts of the airplane analogy that were especially insightful.

Overall, Flight Plan is well worth the fifteen bucks.  In fact, I believe there is a paperback available now.

I started blogging about this time last year.  Blogging has been a fun experience so far.  Why Blog? Click Here to find out.

In no particular order, here a few of my favorite things from the past year.

1.  Registered my first domain name and moved my blog.

2.  Joined Toastmasters International in October…met some great people and made three speeches so far.

3.  Helped my friends Bob and Ronda set up a website for Bob.

4.  Traded my first stock option.

5.  Began organizing an internet department for the company I work for.

6.  Sad to hear of Jim Rohn’s death this month.  Saw Zig Ziglar speak this year.  He wasn’t healthy.  Attended Charlie “Tremendous” Jones’ memorial service last year.  Brian Tracy and Les Brown are starting to age.  Began contemplating how to be part of the next generation of motivators and personal development encouragers.

7.  Celebrated my 15th wedding anniversary with Becky.

8.  Traveled to New Mexico, New York City, Michigan, California, Ohio, Colorado, and unintentionally…Chicago.

9.  Bought my first kayak and used it as much as possible!

2010 will be even more eventful…starting tomorrow.

Don’t be thrown off by the bland cover and unimaginative title… Steve Chandler and Sam Beckford’s book is a fun fictional story about an entrepreneur and his daughter figuring out how to revive their restaurant from the brink of bankruptcy.  The Small Business Millionaire helped them achieve an unprecedented level of success in the business.  Throughout the process dad and daughter also found meaning and joy in their lives.

This quick read will give readers plenty of food for thought and some good reminders.  Here are some of the highlights I picked out:

• “Advertising is salesmanship in print.”  All salespeople should yield measurable results.
• DECIDE to make the business succeed.
• Sell the experience, not just a meal, book, or service.
• Don’t be afraid to ask for help.
• People want to see you succeed.
• Win over your local market and watch word of mouth spread.

Go read The Small Business Millionaire.  I have more Chandler books to talk about in future posts.

One of my most recent personal development forays was joining the Chambersburg chapter of Toastmasters International in November.  Toastmasters is like speech class except that instead of a teacher you have a group of like-minded individuals each working at his/her own pace through various workbooks and critiquing one another’s speeches along the way.  I’m certainly not Brian Tracy, Jim Rohn, or Tony Robbins yet, but I am having fun and improving in the process.  In case you’re curious, you can see my presentations on YouTube…I put them up so I can see what I need to improve on.

In 10-10-10: A Life-Transforming Idea, Suzy Welch shares a strategy for decision making.  When faced with a decision, Suzy asks:

1.  If I choose to do this, what will the outcome be in 10 minutes?

2.  If I choose to do this, what does the result look like in 10 months?

3.  If I choose to do this, how does my life change in 10 years?

As Suzy explains, don’t get hung up on exactly 10 minutes, 10 months, and 10 years.  That’s just meant to be a catchy way to remember to determine the immediate, short-term, and long-term effects of our decisions.  I found 10-10-10 to be a great reminder of the Law of Cause and Effect.  Suzy puts her journalism background to excellent use as she fills the book with real-life examples of people from various walks of life that have used 10-10-10 in all sorts of decisions large and small.

The concept of 10-10-10 is simple and very practical.  You’ll pick that up quickly in the book.  Suzy’s storytelling makes the rest of the book worth reading.

Enjoy.

Tis the season for holiday TV specials.  And yes, many of them are sappy.  This weekend I saw one I really enjoyed.  On ABC Family, George Lopez was in a TV movie called Naughty or Nice.  Lopez’ character, Hank Ramiro,  is a sports radio shock jock in Chicago who makes his living as a sort of heckler.  After a young caller gets in his head, Ramiro begins to see the influence he has on the city and has a choice to make…continue his popular though negative radio show or risk his job to explore the positive effects he is seeing from his new “niceness”.

Takeaways:

1.  We truly do influence others through our words, attitude, and actions.

2.  Like Mom used to say: “If you don’t have something nice to say, say nothing at all.”

IBM may be underpriced at $120; while Ford might be overpriced at $7.  I once bought Cisco Systems for around $20 thinking that since it had fallen from $80 it was cheap.  Guess what, it fell further.  In fact, here we are almost nine years later and CSCO is just under $23.

Learn from my mistake, pay attention to fundamentals…P/E, Div Yield, growth rate, free cash flow, etc.  Your research should give you a number that the stock is worth to you.  Prices rise and fall.  Sometimes without a good reason.  Don’t get fooled by a “sale”.  Only buy or sell if the price matches your investment goals.  Not because a stock looks cheap.

I’m planning to share more of my lessons learned in upcoming posts.  Feel free to add your own stories in the comments below.

One of the most important considerations if you are beginning a stock portfolio is to figure out what your goals are.  Why are you setting this account up?  What do you hope to gain by putting your hard earned money into the stock market?

Examples of situations that call for different investment goals:

1.  A 70 year old on social security may need that investment to earn a good dividend that she can use for monthly living expenses.

2.  A 25 year old may be starting his retirement account.  He doesn’t plan on taking money out for 30+ years.

3.  A couple in their thirties might open an account to save money for their children’s future college tuition.  They’ll need to withdraw that money in large chunks in 15 years.

4.  A 45 year old earns six figures a year and wants to build as large a nest egg as possible, possibly setting up an inheritance.

Each of these examples requires a different strategy.  Various types of accounts(401k, 529, IRA, etc.) allow tax savings for the appropriate strategy.

You will also choose your stocks or mutual funds according to your goals.  McDonalds is a stable company that pays almost 4% in dividends.  Google is a company (and stock) that has been growing like gang busters but doesn’t pay any dividends.

Finally, your goals dictate which broker you should choose.  An online brokerage account is inexpensive, but provides little to no guidance.  A broker at a full service firm like Edward Jones may cost more, but can guide your investment decisions to match your investment goals.

Have fun and know what you want out of your stock market investments.

The Andy Stanley Leadership Podcast is excellent.  He pastors a large church, but his observations are applicable to any organization…certainly any business.  One of the key points Andy made in his last podcast is that “To reach people no one else is reaching, we need to do things no one else is doing.”  Think about that for a while as it relates to your business or organization.  It is certainly a challenge in the publishing world where I spend most of my days.  The old ways of doing things are often not working as well now.  What are you doing to reach people differently?

Click on Andy’s picture to listen to the rest of the podcast.