Sunday, June 26, 2011

Some Recent Changes in My Portfolio

Finally got some time to update my trading history page.  Bought some Google and First Solar since end of April.

Is there any indication that Google's business is declining?  There's one answer to that question: No.  The main reason is that the Internet is still growing.  According to Internet World Stats, the Internet's penetration of the world is still only at around 30%.  That's a long way to go to get to probably around 85%, where I think saturation will take place.

What's more important is that the Internet is reshaping the way the world operates.  Not only will the number of users increase over time, the amount of money to be made on the Internet will continue to grow.  For example, online video streaming is only in its infancy.  Think Netflix and Youtube.  They have been around for less than 10 years, and Blockbuster has become the first casualty.  I have no doubt that cable TV as it is will disappear in about 20 years.  People will still need to be entertained, but likely through some form of Internet service.  This is the megatrend of the 21st century, ladies and gentlemen.  By owning Google, you will be able to participate in this mega-growth!

First Solar
Renewable energy, another megatrend in the making.  First Solar is the lowest cost solar panel maker, and also one of the largest in the world.  Lots of profits and lots of cash, what more can you ask?  Thanks to the Japanese Tsunami, nuclear has lost its popularity as an alternative to fossil fuel power generation.  There will always be naysayers, but solar energy has already reached critical mass.  Again, own this company and you will ride the wave.

Do You Have the Guts?
Half of the battle is finding the courage to buy the right stock.  Anyone can feel good buying a stock that has just gone up 50%.  But those who make money are the ones who have the guts to buy a stock after it has gone down 50%.  Of course, you need to know that it's a good stock in the first place.  Warren Buffet opens his wallet most often during times of calamity, when stock prices are driven down.  You should learn to do the same.  In order to have the guts, you need to have the conviction that your picks are good.  Rule #1 Investing can help you do that.  Start your journey here.