World Adventurers

Occasionally I chat with others about investment principles and strategies.  Here are some of my investment philosophies.  They’re not original ideas, but they work for me.  They continue to evolve.

1. Buy what you know.

What do you know? What products do you use? Are they good companies with promising futures and good growth prospects? If so, buy some of their shares. But do your homework first.

2. Don’t try to time the market, but know the season.

It’s folly to jump in and out of the market when you think it’s going up and down. It’s better to look at the long term and invest accordingly. What’s in store for 2010? Will the market do as well in 2010 as it did in 2009? Not likely. The January swoon will get better in February or March, but with all the structural issues the U.S. is dealing with now, it’s better to either put money in conservative investments or look to the global markets for gains. Although I could be wrong in the short term, my long-term view has a much better chance of being correct.

3. Don’t spread yourself too thin…concentrate.

Don’t try to track too many stocks or funds. Pick a few (up to 10-12) that you like and focus on them. Study them and look at their fundamentals. Professionals don’t try to track too many stocks, and you shouldn’t either. Add or remove companies as they under- or outperform.

4. Watch those fees.

If you don’t feel like a savvy investor, be sure to read the fine print before hiring a broker or buying a fund. Sometimes the fees can be in excess of 2% of the total principal, meaning that your broker would have to outperform you by at least that much. Sometimes doing it yourself – and employing available investing tools such as stock and fund screeners – yields better returns (or fewer losses) than hiring someone to do it for you.

5. Move past the basics of investing.

The smartest investors don’t put all their eggs in one basket. Consider real estate – the next two years will be a good time to buy a rental property. Consider options/margin trading. Consider micro-loans. Prosper.com lets you offer higher interest loans to Americans, and Kivu.com does the same for international micro-loans. Try the IPO market. W.R. Hambrecht offers periodic open IPOs. Try angel investing or secondary shares of privately held companies. Try investing in foreign markets or currency trading. Interactive Brokers facilitates trades in foreign exchanges and currencies.

Investment Strategies

These are several basic investment strategies you can use to improve your financial situation on $50 per month:

1. Open a Roth IRA and invest in it as an after-tax retirement benefit;

2. Increase your 401(k) withholding until it hits the $15,000/year ceiling;

3. Open 529 accounts for your children and set the money aside for future college expenses;

4. Set the money aside in a Health Savings Account; and/or

5. Pay an additional $50/month on any credit card debt and/or mortgage.

What you should NOT do:

1. Spend the money on depreciable fixed assets (aka “stuff”).

2. Spend it on dining out, entertainment, or any expense that offers a one-time benefit.

Punxsutawney Phil saw his shadow today and foreshadowed six more weeks of winter in the Northern Hemisphere.  Phil is an interesting meteorological barometer, and I would enjoy spending February 2 someday in Phil’s home, Punxsutawney, Pennsylvania, watching him predict the change of season.  Watching the Bill Murray film “Groundhog Day,” one of my favorite comedies, convinced me that it would be worthwhile making a pilgrimage to rural Pennsylvania in the middle of winter to see an overgrown rodent tell the future.

To my knowledge, the Southern Hemisphere does not observe the tradition of looking to a larger-than-life animal to predict future weather patterns.  Animals play an important role in foretelling a change in season (e.g. the opening of hunting season), but Punxsutawney Phil doesn’t have a counterpart in the other half of the world.  Perhaps it’s time for a country, town, or village south of the Equator to anthropomorphize a prescient creature that signals a significant event and popularize it in order to attract tourists who want to gawk at its predictive prowess.

If Zambia were to adopt this tradition, the termite might be the most fitting creature because it appears whenever the rainy season starts (in late October/early November).  Unfortunately, termites aren’t loveable like groundhogs and would not be popular with termites.  Watching termites appear with the first rain would not draw in significant numbers of tourists.  Rather, the animal or insect would have to be adorable and irresistible to those who are attracted to odd traditions for the sake of superstition or curiosity.

Zambia might do well to adopt the snake as a national weather barometer and cash in on its newfound fame.  As they are often temperamental, and sometimes lethal to farmers, farm animals, and bystanders who cross their paths, snakes are not popular here.  Many Zambians differ from Americans in that their natural inclination is to kill snakes rather than to avoid them.  Nevertheless, snakes are good predictors of weather changes here because of their reptilian nature.  Whenever the weather changes from hot to cold or dry to wet, snakes often move to warmer places such as road surfaces.  Zambians could turn local logic on its head and emulate one type of snake – a more beautiful, “less” dangerous variety such as the boomslang – as a harbinger of meteorological changes.  A town or village could establish a festival signaling the beginning or end of rainy season and adopt one snake that can publicly announce the season change in front of throngs of tourists.  Boomslang Barry, perhaps?

I just bought a new computer with the Windows 7 operating system pre-installed.  I like it so far.  As many critics have pointed out, Windows 7 is a much better OS than Windows Vista.  Windows 7 runs faster than Vista and has some improved GUI features that enhance the user experience.  The little touches count, and the layman can tell that Microsoft spent considerable time, effort, and money to make Windows more user-friendly.  Gone is the bootup DOS screen, and instead of using ALT-Tab to scroll through open screens, Windows 7’s taskbar has a dynamic feature that allows you to see the Windows when the mouse pointer passes over icons.  I do wish that Microsoft would consider replacing CTRL-ALT-DELETE in a future OS with some other easier to use method of bringing up the intro screen and make it easier to find certain settings it changed from previous OS such as the “Show Desktop” feature on the taskbar (now hidden to the far right).  Despite these mild critiques, I’m impressed.  As my contacts at Microsoft know, that’s not easy to do.  Microsoft will be happy to know that at least one user prefers its latest operating system to Apple’s Snow Leopard OS, which left me feeling as if I were driving on the wrong side of the road.

Flat Stanley traveled half way around the world from his home in North Idaho to Zambia, a country in southern Africa.  He joined us on an adventure this weekend on the lower Zambezi River, an area north of Victoria Falls.  We had a memorable time staying at Zambezi Breezers, a camp located near Chirindu on the Zambian-Zimbabwean border. 

Flat Stanley enjoyed his very first safari river boat cruise down the Zambezi River.  Flanked on one side of the river by Zambia and the other by Zimbabwe, he cruised down river and encountered beautiful terrain and exotic wildlife.  He passed several islands as we navigated the river.  Mountains rose in the distance on each side of the river valley.  Subtropical plants and trees dotted the landscape, and long wild grasses covered the land except where the earth crumbled along the river bank, exposing the rich red soil. 

During the river cruise Flat Stanley saw all sorts of wild animals, from elephants that grazed along the river and crocodiles lounging on the river banks to hippos soaking themselves in the water like a chain of floating islands.  Flat Stanley observed many types of birds, including eagles and cranes, and he even saw an impala in a distant meadow.  His favorite moment was taking a photo with a young elephant watching our boat curiously from the river bank.

Flat Stanley saw storm clouds brewing in all directions, a common occurrence during the rainy season.  He saw brilliant lightning flash, heard bellowing thunder roar and surveyed the beautiful and volatile cloud formations painting the sky.  He saw a couple of particularly dark storm clouds brewing not far from us.  One of the storms barreled toward us quickly from the south.  Although we had turned around and were heading back to our camp, we met the storm with our boat in the middle of the river.  We battled fierce winds, hail, and lightning.  We were absolutely soaking wet, but we made it back to the camp safely. 

Flat Stanley survived but was discolored from our memorable experience.  He enjoyed his adventure on the Zambezi River and will never forget it.  It changed his life forever.

One of the joys and frustrations of overseas life is waiting for mail to arrive.  Receiving mail, especially packages, is usually a pleasant experience.  It symbolizes a physical link to one’s home country and often contains items you’ve been waiting to receive.  It can seem like Christmas at any given moment receiving that box or envelope you’ve waited for with great expectation.  At the same time, the anticipation can be difficult.  If you’re waiting for something you ordered awhile ago, you may experience frustration waiting a month or more for it to arrive.  The moment it’s in your hands you might feel a rush of excitement, but the waiting is a grind. 

Living overseas, experiencing the haphazard nature of the mail service, makes one appreciate the convenience and reliability of the U.S. Postal Service (or domestic postal service in many other countries, for that matter).  While not perfect, it’s easy to forget how good it really is.  When you’re overseas, unless you’re lucky to have access to a U.S. military post office (APO), you’re usually subjected to the following inconveniences:

• Mail that never arrives or arrives months after mailing via the local postal service;
• Mail that is pilfered and plundered;
• Mail that arrives broken, battered, or damp; and
• Mail that costs a fortune to send.

It’s a constant reminder that although living overseas may seem exciting and exotic, it also has its fair share of challenges that are particularly noticeable in little ways such as the mail.

Many expats living in places without extensive entertainment options love playing games for fun.  Poker and other card games are especially popular, as well as trivia nights at public places, board game nights hosted at expats’ homes, golf outings, and video game marathons.  They’re fun diversions from the norm, particularly when “fun” activities such as the theater, sporting events, or (jazz/disco) clubs are few and far between.

Game nights are a great way to get together with your friends and colleagues and socialize in a competitive atmosphere.  Still, I’m a contrarian when it comes to competitive game playing.  I would rather channel my competitive energy and enthusiasm into something more financially lucrative.  While I enjoy socializing and joining acquaintances at an occasional get together, I’ve never really had much of an interest in playing games on a recurring basis.  I often prefer to take the money and time I would have spent on the activity and invest or donate it.  I once suggested starting an investment club with someone who enjoyed playing poker.  They liked the idea but opted to put down $40 a night on a chance to rake in $200 or lose it all.  Personally, I would rather spend the four hours and $40 I would have spent gambling and invest it in the stock market.  The odds of success are better, and the returns tend to outperform those of game nights.

Although I do enjoy socializing and occasionally participating in a game night, I usually weigh the cost and benefit and then decide whether I want to spend an evening’s worth of precious time playing games.  Other activities often take priority and have a much higher return.

I spent some time this weekend updating an old Choose Your Own Adventure (CYOA) book I wrote when I was younger.  Over two decades ago I entered the book manuscript entitled “The Two Sides of Africa” in a CYOA publishing contest.  Although my manuscript wasn’t selected, I received a personalized letter from the publisher, Bantam Books, Inc. letting me know that my story was a serious contender.  After the contest ended, I shelved the manuscript and didn’t touch it again for another two decades.  This weekend I pulled it off the shelf, dusted it off (literally) and started updating it.  It’s a great story that needed some grammar and stylistic updates.

I loved the CYOA series as a kid and bought the first 75 books (I still have them).  Back then, Bantam Books published the books almost monthly for $1.99.  I was pleasantly surprised to find out that one of the original CYOA authors, R. A. Montgomery, bought the rights to the series from Bantam in the early 2000’s and revived it.  Montgomery founded a company called Chooseco to publish and market the series.  He also reissued some of his old CYOA books and published a few new ones.  I noticed that the price per book has gone up considerably since the 1980’s – they now cost $6.99 a book.  That’s probably because Chooseco has higher overhead than a mega-publisher like Bantam (now owned by Random House).

CYOA books were the first ones to employ rudimentary hyperlinks, a common feature on today’s web pages, to carry the story.  The books feature several different stories and endings and force the reader to choose between two or three divergent story options as it progresses.  The series spawned several knock-offs and was quite popular in the 1980’s.  It faded as a genre after the Internet took off in the mid-1990’s.  That’s a shame, because the books are tailor made for the Internet.  While Chooseco has helped revived the genre, it’s unlikely that it will make a significant comeback unless they become popular on Amazon’s Kindle or another electronic book reader.

I learned about Chooseco after I started updating my manuscript (now called “Adventures in Africa”).  Although the company states that it does not accept unsolicited manuscripts, I’m planning to contact them after I update the story and tell them about my story.  Perhaps nostalgia will persuade them to take a second look at my manuscript…two decades later.

I wish you a happy and prosperous 2010.  I hope 2009 treated you well and that the new year will be even better.  What do you have planned for the new year? 

I’m one of those people who believe in making and achieving goals, and I consider New Year’s resolutions worthwhile.  Resolutions help one think about what needs to change and how to change it.  Unfortunately, it’s very easy to break resolutions because they usually focus on aspects of our lives that we continually struggle to improve.  Hence, “resolve” is a key aspect of resolutions, and one must have the resolve to achieve the resolutions they make. 

I’m as guilty as anyone in making and breaking my resolutions for the new year, so I have made three personal commitments this year that I hope will help me achieve my resolutions for 2010.  One, I chose goals that I am already pursuing and have already made some progress in achieving.  Two, I chose incremental targets for my goals rather than “pie-in-the-sky” aims that I know I will never achieve.  Third, I pledged to prioritize these goals, focus more on achieving them, and balance them with other responsibilities so they’re not superseded by life’s daily demands.  With these three commitments I hope to accomplish these resolutions by year’s end. 

Here are my personal goals for 2010:

1. Make a major life change
2. Lose weight (10 percent)
3. Climb Mt. Kilimanjaro
4. Run (not walk) a 10-kilometer race
5. Read half the Bible
6. Stop one bad habit
7. Write or update 25 short stories
8. Go golfing three times
9. Read ten books
10. Increase our net worth by ten percent

If you haven’t made any New Year’s resolutions, I encourage you to try making some and make the commitment to follow through with them.  If you achieve even one, you increase your chances that you’ll end this year happier than you started it.

I browsed my blog statistics and history to see what people have been reading on World Adventurers.  The blog has had over 295,000 hits since its inception in December 2004.  Although readership declined precipitously over the past couple of years after I neglected to update it frequently, the blog still received about 100 hits per week.  Most were archive searches on entries posted about Korea.  Readership has climbed a bit since I started posting again.

I blogged very little while I was in Paraguay; I’m back to blogging in Zambia but am not focusing much (yet) on topics related to Zambia or Africa.  Blogging here can be a hazardous endeavor.  A couple foreigners living in Zambia were scrutinized this year for what some of their postings.  It’s a shame but the reality here.  I will post some thoughts and insights on Zambia and Africa soon…after I determine what I can blog about without raising the ire of the Luddites.