Hi Folks, I just wanted to let you know, here is the site for the two textbooks I have authored: https://titles.cognella.com/catalogsearch/result/?q=moglen&x=0&y=0

And here is the info for my hip hop album:
Raven Odin’s hip hop album “Illicon Valley” is available for download at Apple iTunes, Amazon MP3, Google Music Store, GreatIndieMusic, Shazam, SoundExchange, Tradebit,
Physical CDs are also available at http://www.cdbaby.com/cd/ravenodin and http://www.audiocrats.com/the-new-album.html
Thanks to all of you for your encouragement over the years, and thank you to everyone for continuing to support South Bay underground hip hop.

www.Audiocrats.com

Raven Odin’s debut album is finally available!

Hi Friends,

Raven Odin’s debut album is finally available!

Buy your CD of the groundbreaking hip hop album “Illicon Valley” at http://www.audiocrats.com/the-new-album.html

If you prefer to download MP3’s, hear and download the tracks at http://www.cdbaby.com/cd/ravenodin

Thanks to all of you for your encouragement over the years, and everyone please continue to support South Bay underground hip hop.

In Defense of Progressive Economic Policy

To be clear, I dislike the framing of a valid policy prescription as a Defense. If a good idea is being argued on its merits, it would seem off-focus to spend time primarily defending it against opponents. But there is such a well-funded and multifaceted range of attacks against economic progressivism that I think it is worthwhile to reason with and counter some of the most common detractions.

1. Social welfare programs sap motivation to work

Like many conservative economic principles, there is a logic to this idea. If someone can get paid to not work, they will choose to do so. It makes perfect sense and has truth to it. Some mitigating factors are: increased poverty in the absence of our (relatively meager on a peer-country comparison) income security programs would make the economy more vulnerable than it already is; the economic recovery being as weak as it has been in job creation makes it harder for those who truly want to work; and a large percent of those receiving income security don’t receive nearly enough to incentivize dropping out of the labor force. Further, the programs are temporary with some exceptions like Medicaid and food stamps. Let’s also keep in mind that unemployment insurance, not to mention Social Security, Disability, and Medicare, are funded by the workers’ payroll tax (and their company’s) contributions throughout their career.
But all of these mitigating factors are backward-looking. For a policy initiative, we need to scale back, rather than cut entirely, welfare and food stamps if someone gets a job (or two or three). While Unemployment benefits do this, they do it on a dollar for dollar basis. For the most part, each dollar of work counts equally against your benefit and then you quickly lose all the benefit as most work wages exceed the benefit entirely. All of these programs need to have a sliding scale of the percent of work income they will deduct, starting from, say, 20% of the first $5,000 in income earned, with the percent deduction from benefits slowly sliding up until the benefit is entirely eliminated because they actually do earn too much money to receive it.

2. Keynesian Policy is Proven not to Work

It’s tough to fully address such a wide-ranging, ubiquitous Manichaeism. Perhaps it is best to start with the most recent historical points of controversy and work our way backward. The economic recovery has been weak. Usually they are weak for an extended time after Financial Crisis; they normally are clearly worse than normal recessions. And the (non-Financial Crisis) 2001 recession was followed by an equally, and in terms of lag in job growth pickup, actually more drawn-out wait for real recovery that finally arrived in the summer of 2003. In every previous recovery in recent years, government job growth has increased. In this recovery, (the combination of federal, state and local) government has shrunk in their number of employees. The stimulus was about one-third tax cuts, which economists from Moody’s to the CBO have long said are less effective than direct spending, especially on infrastructure. Due to the size and the structure of the 2009 stimulus relative to the enormity of the crashing economy contracting at a 10% annualized rate, it has been likened to jumping five feet to try and cross a ten-foot chasm.
Since then there have been just about zero forms of fiscal stimulus. There has only been fiscal restraint, in the form of the budget sequester cuts and severe state and local cuts due to strangling pro-cyclical state-level balanced budget requirements. The Fed admonishes Congress regularly that monetary policy and QE are powerless to create jobs compared to the expansionary fiscal policy that has taken place in (and at least helped drive) every modern recovery except this one with its do-nothing legislative branch.
FDR oversaw the US going from about 30% for the official unemployment rate to 1% in 1945. The many New Deal programs put millions of people directly to work, and the military-Keynesianism of World War II employed still more. There is a textbook case of historical revisionism going around in the writings of author Amity Shlaes who maintains that FDR worsened the recession and conservative economics would have been better. To paraphrase economics nobelist Joseph Stiglitz (on the meteoric rise of South Korea leading anti-industrial policy conservatives to say they would have done better by embracing pure market neoliberalism): that is a particularly difficult counterfactual case to make.
There was sentiment among the left that the Financial Crisis would prove deregulation and market purism were detrimental and set the stage for a Keynesian resurgence. The continued conflict between the two ideologies seems reflective of the two diametrically opposed views and narratives on the origin of the housing crises.

3. Government Involvement Caused the Subprime Mortgage Meltdown, the Financial Crisis, and the Great Recession.

One thing is right – the Subprime Mortgage Meltdown, the Financial Crisis, and the Great Recession are inextricably intertwined in just that sequence of causation. The premise that the GSEs (Government Sponsored Enterprises) Fannie Mae and Freddie Mac were the key (or even a key) cause of the crisis is a great deal less axiomatic. I go into more detail on this in an entire chapter in my book Real World Macroeconomics. Fannie Mae has been doing what they do since 1933. Only after the deregulations of 1999 and 2000 dismantled the Glass-Steagall Act and deregulated derivatives did we have the explosion in private-label MBS (mortgage backed securities), CDOs (collateralized debt obligations) and the poisonous insurance contract the CDS (credit default swaps). It seems much easier to link a problematic subprime market from 2003 to its collapse in 2007 (when the MBS market became illiquid in August of that year) to major changes in 1999 and 2000 than to a law from 1933.

4. But Fannie and Freddie had to be bailed out. Doesn’t that prove they were bankrupt?

Bankrupt and causing the crisis are two very different designations. In what may be the definitive bible of the Financial Crisis, Bethany McClain and Joe Nocera go to great lengths in their research and details to ascribe exacting blame to a wide array of culprits in their seminal book, “All the Devils are Here.” In their section on the GSE’s, the authors clarify that Fannie and Freddie were late in following the private banks into subprime lending and securitization. GSEs had an almost nonexistent presence early in the subprime bubble and a minority stake much later. They piled in so late in fact that and so near the very end of the bubble that I would almost be tempted to argue their support of the housing market in that brief time frame was meant more as a public service than a profit avenue. However, knowing they were both turned into private sector, publicly traded companies decades ago (and the public arguments of GSE leadership and advocates for expanding their portfolio) could preclude such a conclusion.
GSEs have been like a big giant MBS since their founding. But only when private investment banks got in the game did we have a crisis soon thereafter.
Finally, any mortgage that the GSEs bought or insured came with a “mortgage-putback clause.” This means that if any part of the mortgage was obtained fraudulently, that private issuer had to buy the mortgage back from the GSEs if the GSE had bought it or cover the GSE for losses if the GSE had insured the loan. So it is largely a question of whether our legal system is going to function and make the banks buy back all the junk mortgages they cut-and pasted at Ameriquist and all the undocumented loans they made at CountryWide and numerous other lenders. The closest analog to that ideal manifesting in reality is the roughly $100 Billion in settlement costs that banks have already agreed to. Sure, firms may settle to avoid frivolous lawsuits, but 100 Billion dollars is starting to talk about some real money. Clearly the banks thought they would be worse off if they went to court and had to really be swayed by the evidence of their culpability to settle for such a large and increasing amount.
By the way, if mortgage brokers had a fiduciary duty to get the borrower the best loan for which the customer qualified rather than being paid a legalized kickback bribe known as the yield-spread premium by investment banks for putting the borrower into a far worse loan than that for which they qualified, about 33% to 55% of the borrowers would have avoided difficulty repaying according to various studies cited in my book.

5. The profit motive ensures that Private Sector firms perform better than Public Sector government agencies and departments.


http://www.businessweek.com/articles/2014-07-02/why-the-government-is-struggling-to-shut-down-corinthian-colleges#r=nav-r-story

The above article is a microcosm of the privatization debate. Conventional theory says private sector firms should do a lot of things better than the government due to the profit motive. Why does that so often fail to materialize? In the for-profit education industry, the outcomes are dismal compared to public sector higher education. Half of their students drop out in the first year. They are 13% of all students and account for half of the debt. Nearly all (90%) of their revenue is from government loans. This last part reminds me of the broader extrapolation: we allow profit-making colleges, and end up supporting them with billions of taxpayer dollars that are completely lost forever. We deregulated housing in 1999 and 2000 with the Financial Services Modernization Act and the Commodity Futures Modernization Act, opening the door to the massive explosion of private-label mortgage securities and almost immediately inducing the banking sector’s dire need for multi-trillion dollar bailouts. We were not willing to fund the 1 billion dollars that the Army Corps of Engineers said was needed to prevent levee failure pre-Hurricane Katrina, and ended up incurring 150 billion dollars of economic damage as a result. We coddle to the unnecessary middleman of private health insurers despite decades of their spending 30% of revenues on non-health related overhead and other dispensations, while Medicare and Medicaid spend 1-3% on overhead. All these situations demonstrate that when we turn classic public goods over to the private sector, the situation is so worsened that the government ends up spending much more than before to avert total meltdown. Just look at all the other industrialized countries, who are not in thrall to the idea of preserving profit-making health insurers, and how their total spending on health care as a percent of GDP is less than just our government ends up spending on health. We have hundreds of thousands of military contractors, and the armed ones are paid ten times what they were making when they did the same job working for the US military, after we invested heavily in their training. If anyone can explain why paying ten times as much for the same thing is an efficient improvement compared to keeping this service strictly inside the public sector, I am very curious to know what that argument is.
From prison privatization http://www.corpwatch.org/article.php?id=868, to road/highway privateers http://www.motherjones.com/politics/2007/01/highwaymen, to firefighting privatization http://harpers.org/redirect301/?q=archive/2009/10/0082671, to private immigration detention centers, the litany of industries where the privatization experiment has led to worse (usually disastrously worse) outcomes seems never-ending. So how should we reconcile this abundance of evidence with the concept that the profit motive should always lead to greater efficiency?
To return to the for-profit colleges, should we just propose closure of all community colleges and public universities and turn the whole thing over to the for-profit colleges? After reading the college education privatization article, you might agree with me that the role they have already had in damaging students’ futures has already been far too large. One thing I did learn from this article is that, contrary to my previous viewpoint that the trades-focused for-profits like WyoTech and Heald seemed better than other for-profits, in fact they are just as bad as all the rest.
It is time to rethink the assumptions about privatization.

6. The Economy does better under Republicans

On almost every indicator, this is overwhelmingly false. See this point by point, stat by stat analysis of the research on this comparison: http://crooksandliars.com/jon-perr/gop-economy-does-better-under-dems
The economy does far better during democratic administrations in modern history on just about every conceivable measure. Job creation and unemployment rate are better, GDP growth both absolute and per-capita are better. Stock market gains are far better and even corporate profits are larger.

Conclusions: these are but a sampling of the primary counters one hears against progressive economics. There are more that I hope to address at a later time here at ProgressiveEconomist.com, along with ideal policies in both their broad strokes and specific details.

Descriptions of Mutual Funds Designed and Created by David Moglen

I promise at some point soon I will post some policy ideas that will justify the name of this blog. That said, I do think the democratization of the mutual fund industry that I have been plugging in so many posts is a progressive economic development. Until then, here is my latest update:

The David Moglen Funds are all available for purchase through your www.MotifInvesting.com
account. I can send you an invitation email that will explain how to get your cash incentive (currently $100 – I copied the details below in this posting) essentially for completing one trade. Or feel free to buy all six of the Funds I have now. It is all your investment. There is 0% management fee on your money. Feel free to email me at davidmoglen@hotmail.com if you are interested. I can also provide more info and the site’s customer service is very helpful too.

Below are the descriptions of the funds I have created. At their website www.MotifInvesting.com you can see the exact percent allocation of the stock picks within each fund. I also provide below an update including current dividend yield, performance since inception (inception date is March to August 2013 for all the funds I created), and any other interesting notes on that particular “motif” – the sectoral theme (or thematic sector) of that fund.


David Moglen Fund Descriptions and Updates:


Crack Spread Capitalists

The "Crack Spread" is the margin between crude oil prices and those of refined gasoline. And who is it that receives the gap between how much all that crude in barrels costs and the price of your gas at the station when you fill up every week? It becomes the profit of the refiners, these "Crack Spread Capitalists."

Update: These seem to be very solid companies to me like Valero and Marathon Energy. It has a surprisingly think 3.6% dividend yield.

Return since inception: 3.5%
Current dividend yield: 3.6%




Let’s Go to the Mall

The Let’s Go to the Mall portfolio includes a substantial percentage of the high quality retailers the American consumer would stroll past or stop by as they meander through their nearest shopping mall. Investors are well aware of the presentation of these stores, their ubiquity and their attention to personal customer service. Any time consumer confidence rises or gas prices fall, you might want to go to the mall.

Update: Retail has had a bad twelve months amid warning of secular (read: Amazon-induced) decline, but this is a play on the consumer. If consumer sentiment awakens, this could do even better than it has. Somehow my picks in this challenged sector are still up 16.3% since the fund was created.

Return since inception: 16.3%
Current dividend yield: 1.1%


Ultra High-Dividend Fund

The Ultra High-Dividend Fund targets a range of promising securities providing an aggressive total return via dividends and capital gains. This fund features, at one end of the spectrum, companies such as REITs, Private Equity, and pipeline stocks which have proven their ability to pay nearly double-digit (and several above ten percent) dividend yields annually. At the other end of the spectrum, selections have more moderate yields of about four percent combined with greater potential for capital gains through their market leadership, long-term track records, and/or secular growth positioning. All of these yield-based selections are additionally screened for cash-rich balance sheets, mandatory current profitability, and inexpensiveness on price-earnings and price-book bases.

Update: This was the fund idea that started it all, the original mREIT-packed motif. All my high-dividend funds were started at a peak of their sectoral share price, especially in REITs and even more especially in mREITS. Coming off that high, the dividends remain fat and these all seem to be good ideas as long as Janet Yellen plans to remain the Fed Chair.

Return since inception: -10.8%
Current dividend yield: 12.4%


Ultra High Dividend Focused

This Ultra High Dividend Focused fund applies the same objectives as the original Ultra High Dividend fund by David Moglen on Motif Investing, but contains only those securities that yield over 10% in annual dividend payouts for Real Estate Investment Trust or Private Equity, and yielding over 6% for Pipelines. Such a focused standard for dividend payouts results in all of the holdings being either REITs, Private Equity-related firms, or Pipeline's common stock. At inception, this fund has a total dividend cash payout (yield) of 11.94% at a very inexpensive Price-to-Earnings (PE) ratio of 7.4.

Update: This offshoot of the original Ultra High-Dividend Fund is meant to be its forbear, its predecessor’s doppelganger on steroids. It is the Imperial India Pale Ale or Double IPA to the original’s classic IPA. Given that its dividend of 13.7% is only 1.3% above that of its ancestor fund, and the original also had about half the capital loss since inception, it is clear the risk-to-reward calculus has been much better with the original Ultra High-Dividend Fund. However, I would never restrict a DIPA fan to an IPA, no matter how fantastic it was.

Return since inception: -19.7%
Current dividend yield: 13.7%


Ultra High Dividend Diversified

This Ultra High Dividend Diversified fund applies the same objectives as the original Ultra High Dividend fund by David Moglen on Motif Investing, but adds additional securities to provide cross-company diversification. The additional stocks still keep to the same standard of seeking the maximal balance of exceedingly high dividend cash payouts combined with reliability in terms of ability to maintain or even increase earnings and dividends.

Update: To extend the analogy, this fund is the regular pale ale to the original Ultra High-Dividend Fund’s IPA. Less adventurous, safer, but still with a significantly revved-up dividend of 9.7% which implies an edgy amount of risk and decent inclusion of mREITs.

Return since inception: -12.9%
Current dividend yield: 9.7%



Content is King

Firms such as CBS and Viacom, who make entertainment content, can expect to do very well in this era when conventional and new digital and mobile channels are both competing for their output. TV, film, music and educational materials will be increasingly accessed online and via mobile devices. This expectation is validated by the move among content delivery firms (Comcast, Netflix, Amazon etc.) to buy, own, and produce more and more of their own content. However, in keeping with the principles of value investing, this fund will only hold (upon inception) currently profitable firms with relatively inexpensive (on a price-earnings basis) stock prices. Therefore, for example, Comcast would be eligible for inclusion but not Netflix or Amazon.

Update: The clear star in returns since mid-2013 with 32.9% gain on your investment, I still think we are in the early innings of the mobile revolution and the added demand for content it will fuel.

Return since inception: 32.9%
Current dividend yield: 1.2%



Terms of conditions to receive the $100s in your account – (email me at davidmoglen@hotmail.com if you want me to send you the email invitation for this):

Eeach friend must use the link in your Motif invite to open their accounts. The link creates a unique electronic cookie as an identifier. Therefore, your friend's cookie setting must be enabled. Your friend's new funds must be posted to their new account within 10 calendar days of account opening, and must remain in the account for 45 calendar days. Once your friend's first motif trade is executed, you and your friend will each receive a $100 credit to your Motif Investing non-retirement accounts - or a $100 Amazon gift certificate via email if you, as the referrer, don't have a Motif Investing non-retirement account - within 30 calendar days after the end of the 45-calendar-day period is complete.

For your referral to quality for the offer, you and your friend must not reside at the same address. Only one friend referral and $100 bonus per address is eligible. Your friend cannot be an existing Motif member or trading account holder.

Commission fees are not reimbursable as part of this offer. This offer is not valid for retirement accounts, such as IRAs, and cannot be combined with any other offers from Motif Investing, and is not transferrable. Limit one account bonus per referred household. Motif Investing reserves the right to terminate this offer at any time and to refuse or recover any promotion award if, in Motif Investing's sole opinion, it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, or that any terms of the Account Agreement have been violated. This offer is not applicable to associates or affiliated associates (including contractors, interns, and temporary employees) of Motif Investing and their immediate family members. You and your friends must meet requirements for applying for, establishing, and maintaining a Motif Investing trading account in good standing, in order to participate. Offer valid for residents of the U.S. and must be at least 18 years of age to be eligible.

Standard pricing: $9.95 total commission per motif transaction, or pay $4.95 per stock for individual transactions within a motif. Other fees may apply. For details on fees and commissions, please click here.

Random Thoughts, Especially on mREITSs

I think it is well worthwhile to set up a (free) account at seekingalpha.com. They have in-depth articles about sectors and securities that are deeper and more inclusive than most other sites. Within my favorite play, seeking dividends, there is a category I have discussed in previous posts, the mREITSs (Mortgage Real Estate Investment Trusts). While I also like some normal REITs, the mREITSs are a different animal, to put it mildly. With more risk and more reward, they are somewhat like regular REITs on steroids. As the "Investment Notes" primer I referred to previously mentions, I don't like anything that is a recent IPO. But mREITSs have so many additional risks already that having been a recent IPO is just one more thing and a negative I can overlook while carefully monitoring share price retention and enjoying the outsized dividend. In this vein, today I started reading a few positive briefs about EARN.

One I have watched and invested in much longer is WMC. Since I wanted the big special dividend they announced, I found it interesting that the announcements all said they would send a form to allow you to opt for your payment in cash or more shares. Having never received such a form, I was concerned, but these fears were alleviated when I read the comments section of a seekingalpha.com article found via a google search about it where some investors were saying, help, where is my letter, and the response by other users was that WMC will go with whatever you selected for your dividend reinvestment preference on your trading platform. This begged the (probably forever unanswered question) of why WMC bothered to say they would send a form for you to select how you wanted your dividend if they were just going to go by what you put down for your preferences in your regular trading platform.

The day after the "pay date" for the WMC special dividend, it came through to all three of my accounts where I had tried to get it; my Traditional IRA, Roth IRA, and standard Sharebuilder account. Having requested it to be paid in all cash but knowing that they had said in their announcements on the special dividend that they would pay all cash to those who requested this form up to the extent they could, and in the (very likely, in my estimation) event that more people wanted all cash than they could afford, then at least 34% would be cash and the rest paid in more shares. As it turns out, 41% was paid in cash and the rest was received in additional WMC shares.

Also I have seen numerous accounts now that when a security pays a dividend, the exchanges "reach in" and lower the share price by the amount of the dividend. This is very disconcerting, seems improper, and a violation of free market principles. Even more arbitrary, I've seen it written that in some cases they do not make this manipulation and instead just leave the dividend-paying stock alone. I certainly agree with David Van Knapp, who is apparently one of the more acclaimed and followed authors at seekingalpha.com, that this practice (artificial manipulation of share prices by the exchanges) is unnecessary, wrong, and should stop. But since it probably won't stop, we dividend seekers will just suffer through it.

To be a Stock Picker or sit back and buy a Broad-Market Index ETF - That is the Question.

Bloomberg.com had a brief about how 2013 exemplified the conventional advice to retail investors (or even all investors) that it is incredibly unlikely to beat the market consistently (if at all) so the best thing to do is "buy the market." Buying all the stocks with one trade or a few trades may sound impossible but it is actually very easy to buy essentially all the stocks in the market with an investment as small as about $100 (or as large as you want to invest). The way one can "buy the market" is by purchasing an ETF (exchange traded fund) that tracks the market. The most popular of these broader market ETFs are:
1. To buy the S&P 500, the symbol is SPY
2. To buy the Nasdaq's largest 100 firms, the symbol is QQQ
3. To buy the New York Stock Exchange, the symbol is NYC
4. To buy the Dow Jones, the symbol is DIA
Since the broad market as a whole was up 30% in 2013, it is very hard to beat that. So all of the concepts I offer are remiss if I don't mention the simple option, to buy some or all of the four ETFs ("Index Funds") listed above, maybe add in some broad-market ETFs representing Europe (such as the IEV) and the developing world, and call it a day. But why do I share Jim Cramer's anti-conventional wisdom view that the retail investor should do their own research and try to beat the broader market? There is not really a simple answer to that unless I want to say foolish optimism so I will give it short-shrift and reply: stock picking is more fun and more interesting than buying index funds.
For what it's worth, since I'm ignoring the safer, easier index fund route, here is that blurb from Bloomberg:

http://www.bloomberg.com/news/2013-12-31/levine-on-wall-street-buy-an-index-fund-and-play-golf.html

'The Wall Street Journal has an amusing article about how the best investing strategies in 2013 were of the form 'buy all the stocks, wait,' rather than, like, time the market or pick the best stocks or mess around with gold. (Though here's another thing from the Journal about 2013's five best-performing stocks, all up more than 100 percent and all, um, stock-picker's stocks. Tesla, Netflix, Best Buy, Twitter, Herbalife.) Here is a man who is paid to invest other people's money:
'All of the sales we made this year have been mistakes,' said David Rolfe, chief investment officer of St. Louis's Wedgewood Partners, which has $7 billion of assets under management. 'If you could've just invested in one of the major indexes, and worked on your golf game the rest of the year, you would've hit a home run.'
You could have! That is totally an opportunity that is available now, for investors anyway. 'We throw your money in an index fund and play golf' is not a great ad for an asset management firm though."

So, yeah. And can I claim I was up more than 30% this year? No I cannot. All things considered, meaning change in asset values I continue to hold, dividends received or reinvested, and capital gains minus capital losses on sold securities, would total, I'm fairly sure, under 30%. I have not done the math yet and I don't know of a system that tracks all this for you in one simple number for the year. One thing I did learn is that with the ultra-high yielders (namely, mREITs) if you are willing to see a bunch of red-ink capital loss in your portfolio, the dividends will roll in. These may be the type of investment where stop-limit orders are useful to cap losses at 10% or 12%. Otherwise I got the worst of both worlds which was a roughly 20% capital loss on several of these types of securities, which I locked in by selling (aghast at the red ink bleeding out of them) thereby also foregoing their juicy dividends after a short period of receiving it.

Partly because I found that in the Merrill Lynch beneficiary IRA I did not in fact qualify for the 30 free trades per month I had been promised, I used a more loosely defined investment amount for each security than described in my last blog post. I still referred to the A, B, C, D, and E designations but the actual investment amount was more instinctual and did not adhere so closely to the categories that each stock in, say, the B category had to have the same invested amount. I also added an additional column to the spreadsheet I described in the last post, which is for the ex-dividend date. This can be found at dividend.com and tells you the day after the date you would have to buy (at the latest) to receive the next dividend. If you miss the ex-div date it's fine, but if you want that dividend you have to make sure to be in on the security by the day before the ex-div date. Some of my columns on the roughly 40 stocks and ETFs were left blank. For example, some securities which I felt more comfortable with only had the ticker symbol and dividend yield filled out. When I buy, I always use limit orders for the order type (same thing when I sell, never using market orders). Because I stated a low-ball price, not all of the 34 orders have gone through. At last check, 14 buys had gone through and since I selected "GTC" Good til cancelled on all my orders, they are still open for 6 months and will go through (execute) if the stock falls to my stated price. In fact when you do the first order (or any subsequent order) MerrillEdge lets you pre-fill out the order form so certain options are already prepared for you when you then go to place another order.

How did I arrive at this low-ball price? Simple: I placed my limit buy orders at a price that was equal to the lowest of the following three prices for each given security:
1. It's lowest price that past day (publicly available on all trading sites including MerrillEdge.com and Sharebuilder.com)
2. The bid price (viewable when you go to place the order and enter the ticker symbol)
3. An after hours trading price (seen by entering the ticker symbol at CNBC.com)

A few more strategies I have used are to search now and then for firms with big insider buying. If the company's own insiders (mainly executives) are buying the stock, and it pays a pretty big dividend, then that is a stock for me. Also, near the last few months of the year especially, I do some searches for firms announcing special dividends and if it is a really hefty percentage, I like to get in before the ex-dividend date on one or two of those selections if it makes sense, meaning I don't want to buy a dog but I will overlook some shortcomings to get a fat year-end special dividend. Finally, a strategy that may be harder than it sounds but can work and has been successful in the past with MSFT and CTXS was to locate a repeating trading range and gamble that it will continue for a while, and simply buy at the historical low price when it falls to the low end of the repeating range and sell at the high end when the stock reaches near the top of the price range.

Well that's it for now players. I know, it's not easy. When you learn one thing, it opens up ten more questions, and when you get those answered, it leads to a hundred more areas of research. That's how it is with most worthwhile disciplines. That's why people who have been at it for four decades show up to work at four in the morning and stay at their computer screens for fifteen hours a day. But did I mention that it's more fun and interesting than investing in an index fund?

My Beneficiary IRA Investment Strategy; First Take

I feel that this site is a good place to communicate and maybe even to some extent work through an investment plan I intend to execute for a Beneficiary IRA I have recently opened. This strategy is not advice, merely a transparent view as to what I intend to do; others in similar situations can do as they wish with this information. Readers are encouraged to review my investment strategy primer by clicking "Investment Notes" at http://www.foothill.edu/bss/people/moglen-david/index.php.
There are many sites from which one can draw up watchlists. Stock picks can be tracked at sites like yahoo finance or Google finance, but since I have a regular investment account at Sharebuilder.com, I like the simplicity and some other aspects of keeping watchlists there. When I frequently log in to view my watchlists, which I feel should be constructed well before buying any shares, what I am skimming the list for is any stock that has moved up or down by more than two percent, or at least moved more than 1.5%. Any daily variance less than that is probably just noise.
For the Beneficiary IRA I took the extra step of listing potential targets (all of which are already on my Sharebuilder watchlists) into an excel spreadsheet with the following columns: Ticker Symbol, Dividend Yield, Cash per share (as a %), PE Ratio, and Payout Ratio. All of these are easily available to the public even without starting an account at Sharebuilder and other investment sites.
Next I want to divide targets into (up to) five buckets, which I call A, B, C, D, and E. Bucket A is the best - high dividend and stable at a reasonable price on a PE ratio basis. There are two clear Bucket A stocks for me so far, AT&T and Verizon. Bucket B would be incrementally less ideal; most likely, based on the "blue chip" or "dividend aristocrat" large-cap and mega-cap selections I'm targeting, the shortcoming of groups B, C, D, etc. are lower yields than AT&T, and then possibly other worse metrics in other excel columns specified.
I would like to see a market pullback (which we may get around mid-to-late February or early March based on debt ceiling wrangling in DC) but whether we get one or not, at some point I have to start a position in some stocks. Here is the opening allocation. Note that everything I want to buy is not bought on the same day or in the same week. I will stagger purchase dates through several months in 2014, maybe even across the majority of the year's 12 months, for opening positions in each stock. But at some point, here is the opening allocation: Group A stocks: $500. Group B stocks: $450. Group C stocks: $400. Group D stocks: $350. Group E stocks: $300.
Scaling: when any of these solid, well-established dividend paying large- and mega-cap stocks falls 8% to 15% (the higher end of this range is for markets or securities subject to greater volatility) then I will add to that position in an amount that is $50-$150 greater than my initial buy-in for that stock. For example, let's say it was a group C stock with $400 initially bought. Whether this second buy is more like an additional $550 in shares or just $450 more in the position depends how much conviction you have about the firm's prospects. All of the scaling (buying more as it went down) is dependent on the underlying "thesis" - strength of the company - having not changed materially. In other words, it is not at apparent risk of imminent bankruptcy. This should be the case for all firms being considered (I don't think Cisco or Phizer are going bankrupt in the near future, if ever) but it is a caveat worth mentioning.
If a stock, especially one in the A or B categories, has gone up only a little (less than 10%) then I would probably buy an additional round of their shares the same as I was for those that had gone down (traditional scaling). If it had gone up more than 10%, I would have to be extremely confident in further price gains and/or dividend increases to buy more. In keeping with all this, I would probably buy a second $500 round of some or all "A" stocks within six months if they have not skyrocketed unnaturally.
This is a good start to understand my main intended strategy. A smaller, much riskier portion may involve buying a handful of mortgage REITs (mREITs) but doing so requires much more of investors - more frequent and thorough research on the sector, a strong stomach for the price roller coaster, more frequent (preferably daily) monitoring, and occasional use of stop-limit orders when price drops (capital loss) are too much to stomach. This portion of the portfolio defines reaching for dividend yield, which conventional advice says to never do, but I feel for my portfolio I can reach for a certain amount of steroidal dividend yield at the cost of more likely and more extensive capital loss as long as I take the stated actions to respect the substantial risk as I go in. As mentioned, the majority strategy (everything stated before this paragraph) constitutes what I believe is a responsible approach to my Beneficiary IRA.
Let me know what you think. I'm interested in ideas or comments. It should be an interesting ride.