Facebook a Business as well as Social Media platform

A common name for a company that is really under fire right now by the government and is subject to potential regulation. However, our clubs feel that the company is in a good place for a discount stock purchase. Therefore we will begin 2019 with this as our first holding.

Its sales is at 51% over the last five years. Its earnings per share are at 74% and it pays no dividend. It is ahead of its industry where it really stands alone. It started with huge debt five years ago but it is for the last three years debt free. At $133 it is below the buy zone of   $156 to $225. It is a buy.

It is down now because of the political atmosphere. It is also shifting from a younger user base to older yet the young group is moving to Instagram that is also owned by Facebook.

investor.fb.com

Check out investor relations on the Facebook web site.

We will purchase 100 shares at $133 so cost basis is $13,300. That is our start for 2019

Unlocking the Power of the Genome

Sequencing and array-based solutions for analysis of genetic variation and function, in fields ranging from cancer research to agriculture.

Illumina, Inc. is an American company incorporated in April 1998 that develops, manufactures and markets integrated systems for the analysis of genetic variation and biological function. The company provides a line of products and services that serve the sequencing, genotyping and gene expression and proteomics markets. Its headquarters are located in San Diego, California.

It is THE company that makes equipment to analyze genetic samples collected by the dna research promotions prominent today.

We will buy 100 shares @ $350.00

Check out the website www.illumina.com

100 Genome Solutions COST $35,000 CURRENT VALUE $30,070

100 HDB BANK COST $10,076 CURRENT VALUE $10,281
100 TAL EDUCATION GROUP $2,838 CURRENT VALUE $2,677
100 CBRE GROUP COST $4,448 CURRENT VALUE $3,997

100  DORMAN INCORPORATED COST $6,114 CURRENT VALUE $8,859

100  CORNING INCORPORATED COST $3,366 CURRENT VALUE $3,007
100  SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $4,678
100  UNITED PARCEL SERVICES $10,600 CURRENT VALUE $9,714

Looks like our 2018 portfolio lost $4,808.38 or 6.9% the S&P is down 6.49%. We followed the market unfortunately.

Out 2017 portfolio is at a $413.50 gain since January 1, 2017. That is less than 1%.

TAL a Chinese Exposure

TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. The company also provides tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services; personalized premium services under Izhikang name; and online courses. In addition, it operates jzb.com, an online education platform that serves as a gateway to its online courses through xueersi.com and other Websites, which offer college entrance examinations, high school entrance examinations, graduate school entrance examinations, preschool education, Chinese composition, and raising infants and toddlers. Further, the company provides educational content through mobile applications; operates mmbang.com and the Mama Bang app, an online platform focusing on children, baby, and maternity market; and provides consulting services for overseas studies and test courses preparation under the Shunshun Liuxue name. Additionally, it offers tutoring services for students aged two through twelve under the Mobby brand; education and management consulting, and investment management and consulting services; and develops and sells software and networks, as well as offers related consulting services. As of February 28, 2017, the company's educational network included 507 learning centers and 401 service centers in 30 cities. TAL Education Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

This is one of the fastest growing companies in China and has a great demand. The decline in the Chinese economy will have a small effect on this stock since education in China is valued the consume will not cut it in an attempt to adjust. My opinion of course. 

My son is a english educator and his experience in international education also plays a part in my selecting this stock for our imaginary portfolio. 

We are going to buy this company at $28.38.

100 HDB BANK COST $10,076 CURRENT VALUE $10,142
100 TAL EDUCATION GROUP $2,838 CURRENT VALUE $2,838
100 CBRE GROUP COST $4,448 CURRENT VALUE $4,368

100  DORMAN INCORPORATED COST $6,114 CURRENT VALUE $8,786

100  CORNING INCORPORATED COST $3,366 CURRENT VALUE $3,222
100  SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $5,461
100  UNITED PARCEL SERVICES $10,600 CURRENT VALUE $11,529

WE ARE UP 7.87 % COMPARED TO THE S&P UP .82% NOT BAD PROFIT OF $3,174.00
OUR CONTINUED PERFORMANCE OF OUR 2017 PORTFOLIO IS AT 14% GROWTH AND IS A PROFIT OF $9,086.00

CBRE GROUP

TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. The company also provides tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services; personalized premium services under Izhikang name; and online courses. In addition, it operates jzb.com, an online education platform that serves as a gateway to its online courses through xueersi.com and other Websites, which offer college entrance examinations, high school entrance examinations, graduate school entrance examinations, preschool education, Chinese composition, and raising infants and toddlers. Further, the company provides educational content through mobile applications; operates mmbang.com and the Mama Bang app, an online platform focusing on children, baby, and maternity market; and provides consulting services for overseas studies and test courses preparation under the Shunshun Liuxue name. Additionally, it offers tutoring services for students aged two through twelve under the Mobby brand; education and management consulting, and investment management and consulting services; and develops and sells software and networks, as well as offers related consulting services. As of February 28, 2017, the company's educational network included 507 learning centers and 401 service centers in 30 cities. TAL Education Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

This is one of the fastest growing companies in China and has a great demand. The decline in the Chinese economy will have a small effect on this stock since education in China is valued the consume will not cut it in an attempt to adjust. My opinion of course. 

My son is a english educator and his experience in international education also plays a part in my selecting this stock for our imaginary portfolio. 

We are going to buy this company at $28.38.

Portfolio to date

100 HDB BANK COST $10,076 CURRENT VALUE $10,142
100 TAL EDUCATION GROUP $2,838 CURRENT VALUE $2,838
100 CBRE GROUP COST $4,448 CURRENT VALUE $4,368

100  DORMAN INCORPORATED COST $6,114 CURRENT VALUE $8,786

100  CORNING INCORPORATED COST $3,366 CURRENT VALUE $3,222
100  SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $5,461
100  UNITED PARCEL SERVICES $10,600 CURRENT VALUE $11,520

WE HAVE A TOTAL GAIN OF 7% IN A MARKET DOWN 4% NOT BAD

HDFC INDIA BANK

This company is a long shot position and comes from my trip to India last week. It was recommended to me by my host and the leaders in his school. Sometimes the best research is to listen well. I can do that. Want to know what millineals are buying listen to them, ease drop on them, ask them questions and just look at them. What do they eat? What are they wearing? Where do they go? You will learn. The same goes for other subsets in our society. Senior Adults? Teens? Farmers? Etc.

This is their PR on what they do.

HDFC Bank Limited provides a range of banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in Treasury, Retail Banking, Wholesale Banking, and Other Banking Business segments. It accepts savings accounts, salary accounts, current accounts, fixed and recurring deposits, demat accounts, safe deposit lockers, and rural accounts, as well as offshore accounts and deposits. The company also offers personal, business, home, consumer durable, car, two wheeler, gold, educational, rural, and term loans; loans for professionals; loans against property, securities, and assets; overdrafts; government sponsored programs; and working capital, healthcare, channel, short term, structured, dealer, and vendor finance, as well as agricultural lending. In addition, it provides credit, debit, and prepaid cards; private banking services; export, import, remittance, bank guarantees, and letter of credit services, as well as merchant and cash management services; life, health, motor, travel, and home insurance products; and investment product, such as mutual funds, equities and derivatives, IPO, and bonds. Further, the company offers bill discounting, real time gross settlement, bankers to right/public issue, forex, money market, employees trusts, and tax collection services; and investment banking services in the areas of project appraisal, structured finance, loan syndication, debt capital markets, equity placement, mergers and acquisitions, corporate advisory, and capital market advisory services. Additionally, it provides correspondent banking, settlement, custodial, disbursement, clearing, and administrative and fiduciary support services, as well as online and mobile banking services. As of March 31, 2017, the company operated a network of 4,715 branches and 12,260 ATMs in 2,657 cities/towns. HDFC Bank Limited was founded in 1994 and is based in Mumbai, India.

This company has 13% growth in sales and 20% earnings per share growth. That makes it a yes in both categories. Pretax profit is 46% and that is above industry average. 16% return on equity is also an industry leading number. It has too much debt at 49%!!! We should be buying this between $51 and $75. It’s in the HOLD zone but as you know with my studies we are buying it anyway. It pays a great dividend and that has grown over the past five years every year.

So why buy? Gut feeling. I want a stock in banking. India is growing. We will see. Speculation not on value of company but on stock price.

We buy 100 shares today at $100.76 a share. Cost basis is $10,076.00

Well to this point we have three in black and one in red. Corning we have a 12% loss. However we are 25% up on Dorman, 2.5% up on Southwest Airlines and .08% on UPS. We are up $1,240.00 since January. Not bad a total return of 4.8%.

PSYCHOLOGY OF INVESTING

  THIS BOOK HAS BEEN AN INTERESTING JOURNEY FOR ME. I READ IT ON A TRIP TO INDIA RECENTLY. 

I know that just "the facts investing" is the best way to do it. However this book reminded me of the psychological factors that can enter into the journey. Here are a few take aways from this book.

1. We do not always make rational decisions in life and especially when it comes to money. 

2. Overconfidence is a major cause of irrational, un-researched decisions when investing. 

3. An illusion of control can set into an investor's thinking. They can deceive themselves into thinking that having the power of the click (internet investing), lots of information, active involvement without broker hindrances, and past successes that they "have this." Don't be self deceived. Do your homework.

4. We are motived by pride and regret. Pride when we made a good decision and regret when we have made a bad decision. The choice of good and bad can even be skewed by reference point. For example:

Investor A buys 100 shares of stock A at $50 a share. It goes up to $100 in over a year. He is a trader not an investor so he denies the temptation to see the stock. Later it goes down to $75. He chooses to sell it because management has changed and the fundamentals are in jeopardy. However, the pride in the investment he should feel is dwarfed by his reference point. His reference point became $100 once the stock hit that. He still had a 50% return on his investment plenty to have pride. 

5. Investors tend to risk more when they sell gainers or the "house money" effect. Since it is not your original money you invested then "what the heck" take a risk on a no name company. You might just hit is big. Don't do this. Stick with the fundamentals. You probably should have not sold that winner in the first place. Long term is best. 

6. When you use the words "average up your cost basis" you have just made the double down mistake in investing. You have a company that turns out to be a dog and it goes down, bad earnings report consistently for two quarters or more, and you are in a dilemma. You don't want to feel that regret. So what do you do? Ugh. Average your cost basis. Not good. Say never to this. Just buy a company that meets the criteria of good investments. 

7. Mental accounting can hurt your. Verify  your impressions, thoughts, feelings, and the like with sound fundamental analysis. You might just stay above water. 

Brown delivers. UPS is a BUY.

My investment club in Mustang, Oklahoma bought shares of this company last night. It had a couple concerns in our checklist but I don't think those are insurmountable in light of current growth and anticipated growth. It pays too much of a dividend for out blood as we seek growth not income and the sales are low for a massive company like UPS. However the earnings per share are out the top and climate in shipping is going to lean toward companies like UPS. 

See What They Say About The Company

United Parcel Service, Inc. (“UPS”) was founded in 1907 as a private messenger and delivery service in Seattle, Washington. Today, UPS is the world’s largest package delivery company, a leader in the U.S. less-than-truckload industry and the premier provider of global supply chain management solutions. We deliver packages each business day for 1.5 million shipping customers to 7.9 million receivers ("consignees") in over 220 countries and territories. In 2013, we delivered an average of 16.9 million pieces per day worldwide, or a total of 4.3 billion packages. 

We are a global leader in logistics, and we create value for our customers through solutions that lower costs, improve service and provide highly customizable supply chain control and visibility. Customers are attracted to our broad set of services that are delivered as promised through our integrated ground, air and ocean global network.

Here are the stats on this massive company. Sales growth is 3.3%. Earnings per share is at 8.4%. We estimated future sales at 4% and earnings at 8% just to be very conservative. It is barely in the buy zone which is $69 - $107. Todays price is $106.31. The market correction has given us a good entry point on this company. We will see. The dividend is impressive and I disagree with a strict rule our investment club usually holds on this issue. The dividend  has gone up the last five years and is now at $3.64 per share much higher than the 50% of the earnings per share target we use. The earnings per share is $5.62. So we would look for a dividend under $3 as more healthy. But nice when markets are volatile like now. 

They have always had lots of debt. Lots of vehicles. The debt has been excessive the last two years making the debt to capital ratio at a whopping 85%. That is huge. We think they should pay less dividends and lessen their debt. However, they are gearing up for what they perceive to be a major rush.  USPS is doing well but with Trump's lean and mean philosophy they will be forced to raise prices on parcels to match the current carriers and the tax subsidized lower shipping charges will equalize competition. My take. 

So we hopefully buy low today.

PORTFOLIO TO DATE

100  DORMAN INCORPORATED COST $6,114 CURRENT VALUE $7,136

100  CORNING INCORPORATED COST $3,366 CURRENT VALUE $2,945
100  SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $5,681
100  UNITED PARCEL SERVICES $10,600 CURRENT VALUE $10,600