First stop...

So...now I'm going to write this blog with a lot less structure, and with more of a personal feel than just business/investing/what have you. Update: I have just graduated from the University of Tennessee with a degree in Finance. I am a full-time financial rep with Northwestern Mutual hoping to specialize with what I'm great with, investments. This is just one stop in the long term goal of doing wealth management. I've heard it will be challenging and engaging at the same time. More than anything, it's finally a step in the right direction.

Posted on: 22 December 2012 | 3:25 pm

Underwhelming iPhone sets records

Apple 2.0: iPhone 5 sets a sales record http://t.co/KhHyKYyC $AAPL Apparently 2million Pete weren't as underwhelmed as u was after the iPhone5 was revealed.

Posted on: 17 September 2012 | 2:05 pm

Two years later...

Two years later and I've stopped operating Cloud 9 as a job. I've been busy with school, work, and other endeavours for the last 18 months. I still give advice from time to time but only with close friends and family.  Life has become a never ending learning experience and with that has come a certain clarity with investments and finance. I loom forward to sharing my newfound ideas on personal finance, investing, and economics. God bless.

Posted on: 12 September 2012 | 4:28 pm

The Numbers Are In!!

The numbers are in and we are officially at 50.4% return for the investments that we've recommended for clients. And it's annualized 27% since I began in 2008. This is great news, I believe only one mutual fund in the country has a higher return over that time period according to Morningstar's Fund Screener tool. Now we don't operate as a mutual fund, nor do we manage money of clients. Where we get our numbers from is with our investment consulting services. With our investment consulting services we help our clients make decisions in what stocks (bonds, mutual funds, ETFs, etc) that they may want to incorporate into their investment portfolios. They either take our advice or leave it. How we got our numbers are by using the date and price of the stocks that we've recommended it and tracked the price movements by using Updown and Google Finance. So, if you're thinking pictures or it didn't happen... We announced last month that we are going to begin to offer stock recommendations on a monthly, quarterly, and yearly basis by subscription only. This feature to our site will come in the form of password protected pages for each time interval. We are currently working on how to fairly choose our price price point for the feature, as well as how to integrate passwords into the site. We are expecting our paid stock recommendation feature to go live on New Year's day.

Posted on: 11 December 2010 | 3:16 am

Strength Behind Numbers: HP's future

When we “crowd-sourced” the idea among other investment professionals and individuals that like to do their own investing, HP(Hewlett Packard) was a fools gold kind of stock. One that had all the pieces in place but given it’s industry in commoditized printers/computers as well as its late start into the smart-phone market, it doesn’t have much upside. I beg to disagree. What I see in HP, is a company that’s still beating Wall Street estimates even after it keeps acquisitions on the up and up. Better than that, the companies that they’ve been acquiring have yet to positively attribute anything to their bottom line (most notably Palm, all they are doing so far is sucking up R&D, administrative, and production dollars).  And they’ve still not come out with an webOS based product in the year of 2010.  Buying companies that currently increase expenses and not revenue, yet still beating estimates are a testament to their management’s efficiency, and their price’s undervalued potential. On the upside...and I mean UPSIDE...HP announced that they will debuting tablets, cellular devices, and printers installed with webOS in 2010.  Along with their regular numbers (which already place it as one of the largest tech companies in the world),  these added features and capabilities to their product line will allow it to stand head and shoulders above others in their competitive industry. Looking at the R&D numbers from their last three quarterly earnings reports, you can see that they are investing heavily in the development of new products.  This increase most likely deals with the Palm acquisition last year.  R&D will undoubtedly help them gear up for the new webOS releases and foray into the smartphone market. All in all we see HP taking a small piece out of the pie that is the smartphone market. We see it’s continued dominance in the printer market. Also, we see it making quite a bit of headway in the tablet market once it releases one running webOS.  As for earnings and the fundamentals, HP has a steadily rising EPS over the last four quarters, as well as a treasure chest-esque amount of cash on the balance sheet.  Even if they fell into trouble with a flop in the smartphone arena, they still have the cash to effectively counter the effects on their future operations. At revenues of $33 billion, we don’t see that happening anytime soon. We have a price target of $70 on HP by October of 2011.

Posted on: 29 November 2010 | 8:16 am

Message to the Veteran's

Hats off to everyone who has served in the armed forces. There is no possible formation of words in the English language that could tell you how much we appreciate your sacrifices to serve our country. No matter where you've served, or in what capacity you've served, we are eternally grateful.

Posted on: 11 November 2010 | 8:17 am

An Undervalued Aspect in Investing

The most undervalued aspect of investing is the area that remains shrouded in gray.  Most believe that investing (and personal finance in general) is black and white. Either you invest in risky equities, or you invest in safe, bond-like securities. Either you spend as much as you make; or you hold on to every nickel and dime that you come in contact with. But what about the gray area? Or the area that you purposely shade in gray? The gray area in investing would be asset allocation; for personal finance, the zeroed-out budgeting system. The so called “sweet spot” in either is usually identified by a financial planner (or someone of that kind of profession), or by an individual who is self-educated on what works best for their age and lifestyle mix. In our opinion the most undervalued aspect of investing is due diligence. We harp on it time and time again, because with due diligence we have found Amazon, Apple, and Netflix to have unbelievable high returns over the last 2-2.5 years.  Through due diligence you’ll see that HP(Hewlett Packard) is poised to set the investing world on fire with it’s future earnings. Take into account it’s 2010 acquisitions and you will see the breadth of its product line is about to get more intuitive than ever before. More on that later. Due diligence is what makes the world go around. And lucky for investors of the technology age, it’s easier now than ever to come across proprietary information. Sure the larger institution have their super-computer algorithms. But, people tend to have a way of adapting and adjusting in a way that an algorithm may not due to it’s mechanical nature. Always remember that when considering due diligence; management shifts, acquisitions, and financial statements can exploit some gray areas that computers themselves cannot take into account.

Posted on: 5 November 2010 | 4:44 pm

Why You Should Take Notice Of Facebook Now, and not later

News recently hit the web about Facebook setting off a chain of events that will split their stock forward 5-1and set up a $2,500 fee for any current stockholders who wish to sell their shares. On the surface this decision looks like a simple one - meant for private eyes - and not really taken seriously by the public. What we see are indicators. . . major indicators. 1) The $2,500 fee for the transference of private company stock, as well as the 5-1 split, is meant to lower the company’s stock valuation. This decision is so that when Facebook does go public, their shares will be accessible to anyone, thus enabling their price to rise even further with the more investors that will buy and sell ownership of the company.    2) The transference fee informs the company's CEO and other higher-ups how much the shares are worth to outsiders.  If someone is willing to pay $2,500 extra on top of of the already high valued stock, they can see that this investor expecting to make a return of at least the purchase price, plus the extra fee.   You can see that even the smallest things can give away a large aspect of a company's internal strategy or future earning potential.  A number of articles detail news in the tech industry, but we are not a company that is biased in towards technology related stocks...we just see it as an indicator of future trends in the global economy. More on this later.

Posted on: 20 October 2010 | 12:09 pm

Stock Twits Gets iPhone App

The Twitter equivalent to financial news and information, Stock Twits, has recently released an iPhone app for its website. The app has the same functionality of their flagship website, which uses Twitter’s API to relay financial decisions and analysis within 140 characters to the public. It will incorporate its Chart.ly web service that was specifically designed for StockTwits. Chart.ly will allow users to see screen-casts and charts streaming from traders and their investment strategies.  We really like StockTwits. We use it as a real-time crowd-sourced investment idea pool. If we see enough updates with the same symbol and trading transaction, we pay attention. This strategy usually leads us to discover a valuable company to put on our watch list.  

Posted on: 15 October 2010 | 9:30 am

Future Advisor: A new way to assess your finances

We are constantly asked, "what makes your company different than all of the other wealth managers/investment advisors/financial planners out there?" The answer to that is simple. We don't pretend like to know everything. We try to pull in as many outside resources, theories, and ideas as possible to give our clients the most well-rounded experience in our industry. That said, here's a tool we recently found that helps assess your retirement prospects by aggregating a few characteristics and performing an analysis. The name of the tool is Future Advisor, and from what we've heard, it's very useful and practical for anyone wanting a quick and fairly thorough analysis.

Posted on: 27 September 2010 | 10:48 am

Setting goals for your financial independence

There's something we don't understand. Why people choose not set goals for themselves? Furthermore, why people don't have financial goals in place? If it's hailed by all of the "experts", both self-proclaimed and acclaimed, that people with goals end up more successful than those without (the majority of the time)..why is it that the majority of people don't make tangible goals? To make this more personal our goal is to become profitable in three years. The goal of Cloud 9's founder is to have an annual salary of $100,000 before he turns 35. He turned 21 a few weeks ago. Now to the meat of this post. Establishing financial goals for your future can prove extremely beneficial as well as useful. What it does for an individual is that it puts a tangible, attainable, relevant, and time sensitive  "assignment" on their time horizon. It's a constant reminder to reach for the stars, a constant alert that you are slacking, it takes the place of a nagging wife (so-to-speak). And as human beings, setting up accountability parameters is always of the utmost importance when dealing with something as urgent as financial independence.

Posted on: 25 September 2010 | 4:30 pm

Microsoft stock splits

 Disclaimer: We pulled this post in it's entirety from an outside source. This is not our original writing. The original article from Mashable, is linked in the title.Microsoft’s Stock Has Split Nine Times Microsoft has split its stock nines times since it went public back in March 1986. Put very, very simply, a company will generally split its stock when its share price becomes too high. Since Microsoft has had six 2-for-1 splits and three 3-for-1 splits, one original Microsoft share would now be equal to 288 shares today. Interestingly the price of Microsoft’s stock at its initial public offering was $21 a share, at the time of writing a share is now around the $23 mark. One original MSFT share would now be worth over $6,000.  I bet you're wondering, "why would they post content that isn't theirs?" Well, we wanted to write a post about stock splits and how you can look past a company's stock and see how they've faired over history, just by using their history of stock splits. This is just a reference article.

Posted on: 7 September 2010 | 10:50 am

A little trick with coupons

 A few weeks ago I was helping a family friend move in Tennessee. We were talking, and somehow got on the subject of how most people overlook coupons to save money. Then she gave me an idea that as a self-proclaimed personal finance whiz (aka I can always find a way to help someone cut costs without losing quality of living), I had never even considered. Her idea was simple, yet genius. She told me to tell clients to buy a Sunday paper on Monday... Easy enough, right? On Monday the $1.50 newspaper (when purchasing on Sunday) is sold for $1.00. If you do the math, purchasing two Sunday's newspapers on Monday will save you $1.00 on newspapers. And those two dollars spent could save you up to $50 in food per week. Think about it :)

Posted on: 4 September 2010 | 9:05 am

What grinds my gears...

What grinds my gears is the "over-the-head" language that financial planners speak to their clients with. I feel like most of them have the same disease that the majority of college professors have...they believe that the client is there for them, not the other way around. How wrong they are! Clients of financial planners aren't required to employ a specific planner. The planner is there for the client, and should treat them as such. Talking over your clients' heads does make you sound smarter. Yet, it fails to accomplish the reason they are even there. Financial planners are there to teach and guide their clients. And if I remember correctly teaching and guiding requires simple explanations to complex problems. That's why if you've read this blog before, I try my best to convey certain theories and strategies in the most simplistic manner possible.

Posted on: 24 August 2010 | 12:51 pm

How the broker got rich: A cautionary tale

Story is a paraphrased excerpt from Ric Edelman's "the Truth about Money": Here's the story of a broker who attracted new clients by demonstrating his ability to pick winners every time. How did he do it? Each month, he'd mail letters to 100 prospective clients. Fifty of the prospects would receive a letter telling them to "buy" a stock; the other fifty to "sell" the same stock. He would then take the list of picks he got correct, split them and apply the same logic from the previous paragraph. He would continue this process for four rounds(four months). Afterward, he would send a letter exclaiming his ability to go 4/4 in his previous stock picks. Attempting to persuade the list's occupants to give him money to actively manage. And they would. Needless to say when the broker was exposed, he was banned from the securities industry. We wanted to post this story to detail some of the crafty plans people will design to "steal" your money.  If you ever hear of an investment deal that is too good to be true, perform extensive due diligence and research. Also, always take a stranger's claims with a grain of salt, no matter how credible they seem to be.

Posted on: 19 August 2010 | 2:33 pm

What I think about Skype...

I, the founder- Stephen Alred,  am writing this post on a whim. I see that many investors are not giving Skype much attention at the moment because of their not-so-high margins from their IPO filings. While I don't normally spotlight a company...I think I may add it into my subject matter. Mainly due to the fact people may wonder what a finance "professional" personally thinks about a specific company. I think Skype is a great company. Not because of what they've done, or because it's the only reason that my company runs for as little required overhead as it could muster. I like it because they have a user base of 500 million plus, and they've only converted 6% to paying customers. What I see in this, is a gold mine. If Skype can just use a simple adsense revenue model, the most basic of basic, they could make quite a sizable amount of cash. I stay updated with tech blogs. And from what I'm reading, Skype is configuring new features that may be only accessed by premium users. With these two simple revenue sources they could significantly increase their bottom line, which would then eventually show up in the market's evaluation of their stock price. However, Skype won't do a simple adsense model, and the model that they come up with will undoubtedly bring in even more revenue. Keep an eye on Skype, I think that they may surprise people with their five year numbers. As well as with their future financial performances.

Posted on: 13 August 2010 | 2:14 pm

One instance where quantiy over quality is a good thing (part one)

What's an investment strategy that seems to go over the heads of most investors? The concept that investing is more about how many shares you own, less about how much they are worth. For example: having one share at $100/share rise $10 is all well and dandy. But, if you have 10 shares at $10/share($100 value) rising $2/share...you end up profiting more for a lot less work. 110(or 100+10) < 120 (or [10*10]+[10*2]) If you've  invested much at all you know how easy it is for the $20 gain to be negligible (mainly due to commissions on the buy and sell execution). As you raise the scaling of the amount of shares, say quadruple it, the playing field alters dramatically. Quadrupling the shares (putting each at a value of $400) would increase the marginal difference to $40. And so on and so on until you reach a scale that will effectively render the higher stock price useless. As an investor in the market, many of you know how easy it is for a lower priced stock to jump $2; and how hard it is for a higher priced stock to jump $10. Don't worry my point is coming up. The reason for this illustration was to show how even with an unrealistic advantage (jumping $10 while lower price only jumps $2); the scenario where lower share prices are involved generally procure more earnings, even at a lower dollar return. (part deux coming soon)

Posted on: 10 August 2010 | 9:32 am

R&D: The true metric behind investing in innovation

Many investors, especially "common" investors, overlook the most important "tell" about a company's future. Cash is king This "tell" is a significant increase in R&D (research and development). R&D tells a story that most financial statements cannot share. Sure, a lack of cash may signify some spending. But, an anomaly in two or more quarters may require more attention to be paid to the cash flow statement. When looking at the cash flow statement look at what they are spending on and categorizing in the "investing" section. If they purchased a building that seems rather excessive in size, dig a little bit deeper. Follow the Expenses Whatever you do, do not forget to analyze 6-month (or two quarters) income statements. Here you may see major increases in "equipment" or "payroll" expenses. If the two correlate, don't be alarmed. It's probably just the company purchasing items for new staff. However, if they seem to be blown way out of proportion (exponentially increase)...dig way deeper. They could be hiring new product engineers or specialty types for a new product innovation push. Which brings us to the last point. Investing in HR Job boards. Career pages. If you have time, the hiring information are readily available on thousands of websites; look at the hiring of the company you wish to invest in. Two things could be the cause of hiring outside of their industry: 1) they are looking into developing new products 2) they have a lot more cash than usual. The latter reason won't show up in plain sight on financial statements (after they have hired new employees). Who a company is hiring is a major sign of what direction they are headed for the future. If a major company like HP starts posting jobs for "cellular engineers" or "wireless architects"...something is coming.  Conclusion Always stay aware of what's going on under the radar. If something odd is happening in a company for two consecutive quarters, always dig deeper for signs of internal innovation. R&D can be an investment in people (job boards/hiring push), extra cash (investing into producing for different market segments), or expenses (buying equipment so that new hires can produce new products for different market segments).

Posted on: 6 August 2010 | 8:57 am

Inflation Hedges

The following post is a direct quote from Investopedia's article on "How to prepare for rising interest rates." We wanted to feature a post on the same topic; but found the way they fleshed-out this particular paragraph  was infinitely better than we could: "Tangible assets like gold and other precious metals tend to do well when rates are low and inflation is high. Unfortunately, investments that hedge against inflation tend to perform poorly when interest rates begin to rise simply because rising rates curb inflation. The prices of other natural resources such as oil may also take a hit in a high-interest environment. This is bad news for those who invest directly in them. Investors should consider re-allocating at least a portion of their holdings in these instruments and investing in stocks of companies that consume them instead." Many investors are uninformed on how trends tend to differ with something like rising interest rates, or foreign exchange values when compared to the dollar. They believe the only circumstance that affects their investment portfolio are the consumers who buy a firm's product/service.  In reality, everything affects the potential outcome of quarterly earnings. A problem as small as the Swiss making exports more expensive could influence a company like Kraft (chocolate rates rising =Cadbury having to raise their prices= Less consumers buying Cadbury sweets= Kraft's net income suffers= shareholder value suffers). Keep an eye out on all economic news, domestic and foreign.  We live in an age where companies are providing their services on a global scale. A seemingly small glitch could severely affect their bottom line.

Posted on: 30 July 2010 | 12:26 pm

Extracting project management efficiency

We know we are a financial company. We know you're probably thinking, "why are they talking about project management?" Here's our reasoning, we're all about saving anyone as much as possible, and inefficient project management is a quick way to form a drain of cash.   There are many effective project management characteristics. We going to address a few: employee satisfaction, automated systems, and optimized database management. We have yet to master any of these. However, we believe that soon after implementing efficient project management, we will be able to optimize each of the factors. Optimization leads to significantly reducing overhead. And we love the costs saved from reducing overhead. Employees that get tasks done in a quick, excellent, and enthusiastic manner will produce great results for all parties involved. Customers will be satisfied. And even when things go horribly wrong the right employee can make it all right with attitude, actions, and words. The automated systems will help improve efficiencies all over your firm. These systems can help make transactions faster, and employee jobs easier. When jobs are easier, more tasks can be accomplished. When more tasks can be accomplished (as long as in great quality), more revenues can be generated. And everyone knows that when more revenues, everyone is happy. Lastly, data management can make receipts, invoices, proposals, tax records, bookkeeping, employee retention either work for your company or against it. Choosing the right software/system for optimizing data management is of paramount importance.  It can mark the difference between losing a lawsuit and having a case thrown out, or having the IRS breathing down your neck after misreported invoices and payroll. And no one wants an IRS audit, it lowers employee moral and doesn't look good when customers see people flipping through important records. Remember to keep up with the changes in technology. It seems like everyday that our company hears about a new firm, that has successfully exploited an untapped market and provided an excellent service to benefit entrepreneurs. And with each exploit, finds a way to make our company run more efficiently as well as with more agility.

Posted on: 26 July 2010 | 7:57 am

How investors should think vs. how they do think

Investors always believe that it's a great idea to sell sliding stocks, but they never think of true implications. When you sell investments just to save face on the principal it ends up coming back to bite you. And this is not a case where the bark is worse than the bite. If someone were to tell you that a few houses in an upscale neighborhood were on sale for 50% off, what would you do? Assuming you had the liquid capital, you would start picking off real estate lots like sitting ducks (during hunting season)! Now that we are on the same page...why is it that when stocks are cut by 50% in a "down" market; no one buys and everyone sells? Seems a bit counter-intuitive don't you think? Make sure you think about this the next time great stocks such as Apple or Amazon are on "sale"(the latter of which one of us made over $100 in four hours last fall after buying super low).

Posted on: 23 July 2010 | 8:51 am

Google Games may be a calm before the storm

With rumors swirling about Google possibly partnering up with  online-gaming company, Zynga, stockholder value may be in jeopardy. Every recent deal, from energy trading to mobile advertising has put Google on regulators' radars. Anti-trust investigations seem to come with every new venture that Google takes on. Both here and abroad. We think if their growth into other markets continue to be dominant, the government (or EU commission) may rule that it's gotten too big. So what will be the straw that breaks the camel's back? Will it be another acquisition? Or, will it be Google venturing out on its own? The answers to these questions are virtually irrelevant. How an anti-trust suit will affect stockholder portfolio, is.  If Google is ever ruled against in a suit of this caliber, stock traders will see an effect similar to when Microsoft was told to sell its assets. While, we don't see this as a problem looming over the company's head. We definitely see it as a near future possibility at the rate Google is growing. A move into the online gaming field isn't the red flag that investors should be looking for. However, if you look at the last 18 months: you'll see ventures into energy trading, mobile advertising, travel (not to mention in-house location based services as well as operating systems), and now rumors of online gaming. We don't have holdings in Google but we wanted to write an article for those of you that do. Stay alert. Google is a great and innovative company.  However, if it is deemed anti-competitive, investors may change their minds about investing in their stock for the long haul.

Posted on: 20 July 2010 | 9:46 am

The next generation of financial planners

In March, the Alpha Group was invited by Texas Tech University to speak in an open forum over the course of two days.  The Alpha Group, is a consortium made up of former financial professionals, the majority of which are ex-executives. The group was formed as sort of a round table of experts who look to research new investment and financial planning ideas. From the visit, we saw a Q&A that pretty much encompasses why Cloud 9 Financial Consulting opened its proverbial doors: Question (TTU student): "As the next generation of planners, what should we be focusing on to serve our clients best?"Answer (former T. Rowe Price executive): "Think about the technological world that we live in. None of this was available when we started out. When we communicated with clients, it was by phone or face-to-face. You have amazing technology so that you can work with your clients anywhere, anytime and anyplace. While your clients have access to anything and everything, our clients needed to work though us to get important financial information. Through technology, you will find new and innovative ways to work with middle-market clients, people who really need your advice." This is why our company was formed. We saw a large gap between how other industries leverage new innovations. and how the financial industry uses that same technology. These innovations have allowed us to provide excellent financial planning services that can reach any client, anywhere, anytime.

Posted on: 16 July 2010 | 9:44 am

Earning in Real-time

For many day traders, investing information site earningsBuzz will be an invaluable asset. The most benefited group of individuals, are those whose trading trategies stem from market-timing. The idea behind earningsBuzz is to aggregate real-time news about stocks stemming from twitter updates. You may think that this is remarkably similar to StockTwits. On the contrary, earningsBuzz makes sure that all if the updates are relevant to the task at hand. Its news aggregator only tracks news from companies with an earnings report from present day, yesterday, or tomorrow. This will help traders realize earnings potential (or shortcomings) in real-time; and allow them to adjust their trading decisions accordingly.

Posted on: 14 July 2010 | 7:25 am

The best and most underused tool for individual investors

The stop-loss. The equalizer for individuals to compete with those lightening quick super-computers a large, international brokerage firms. In a nutshell, stop-loss trading is a sell side decision that allows the investor to dictate at what price a company's share should be sold. Once the share price hits that number, the system triggers an automatic sell of those shares. The major benefit of putting a stop-loss on all shares is to curbs potential losses, or maintain present gains. For example: you buy a stock at $25.00 per share. If the share price dips, you create a stop-loss at $22.50 to keep your losses to a minimum (while also giving the stock a chance to return to the initial price). When the stock hits $22.50, the system immediately sells the number of shares that you indicated in your stop-loss for that holding. On the positive side, if a share jumps to $30.00 and you want to preserve your present earnings,  use a stop-loss at $28.00 per share.  This will ensure that you will get out ahead regardless of the share price's fluctuations. Investors that use the stop loss effectively will use a stop-loss on every trade and continue to adjust it based on how a company's share is faring. If the aforementioned stock jumps to $35.00 per share, you would adjust your stop-loss from $28.00 to $32.00. The adjustment will guarantee that you will maintain your earnings of $7.00 per share from the original price of $25.00, and not allow you to only earn $3.00 ($28-$25) from your first stop-loss order. Like everything, there is a disadvantage to stop-losses in your portfolios. The automatic trigger that is set off to sell your shares of company does not take into account market volatility.  Meaning, if you set a stop-loss at $22.50, it is very unlikely that the preferred price will be the same as the market price (you may sell at $22.00). A lot of investors, investment advisors, and stockbrokers refuse to take advantage of stop-loss orders due to pride on the loss of initial clients' investments. If they had, the losses on the majority of their clients' portfolios could have been minimized amid the financial crises. In our investment consulting sessions, we will always ask and recommend that each client put a stop loss on all of their equity accounts.

Posted on: 12 July 2010 | 11:07 am