Interview With Investor Robert

The following is an interview with Robert Farrington, who is an investor that also blogs at The College Investor.

1. So tell us a little bit about yourself. You don’t need to get too detailed. E.g. How old are you, what country do you live in, do you have a family, etc.
I’m Robert and I blog at The College Investor.  I started this site to highlight saving and investing for young adults and college students.  I live in California.

2. When did you start investing? What age? Year? Why did you start investing?
I started investing when I was abut 16.  I had some extra money from my first job, and investing always interested me.  I remember putting about $500 into my first brokerage account.  Its done pretty well since then!

3. So what kind of an investor are you? Are you just trading your pension fund, or are you a full time investor? Approximately how many positions do you like to have at a time? Typically, how long do you hold each investment?
I consider myself an active investor, but I have a a lot of passive index funds as well.  I keep a large portion of my portfolio in index funds, and keep a portion that I trade based on my market analysis.  For the positions I trade, I would estimate that I hold them 6 months to 2 years.  I currently have about 20 positions, which about 8 are actively traded.

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My Backup Plan

The first half of this story is totally unrelated to investing, but I promise you, I will relate the second half of this post to investing.

I was reading Pat Flynn’s recent October blog report, and he mentioned a WordPress plugin called “Limit Login Attempts”. This tool shows you the number of jerks and hackers that attempt to login to your site. It also shows you the IP address of the hackers, and allows you to lock them out. So here’s the image of the number of hackers who tried to log in to Pat’s blog.

Pretty scary, isn’t it?

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The Millionaire Fastlane Giveaway!

Hey there everyone! I recently shot MJ DeMarco an email asking about some personal stuff, and not only did he reply, but also agreed to give away 3 copies of his bestselling book for free, to my readers! In case you don’t know who he is, or what his book is about, click here, or look below at the screenshot.

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Don’t Move Your Stop Loss Orders

Stick to your stop losses! It’s better to risk the chance of giving up potential profits than to risk a more probable chance of losing money! Many experienced investors often fall into the trap where they move their stop loss orders lower, believing that the fall in market prices is only a temporary fall, and things will get better.

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Yakezie Holiday Badge Contest

The holiday season’s fast approaching!

As you probably know, this blog is a part of the Yakezie network, which is a network of personal finance blogs. I love being a part of the community! So I recently started a thread at Yakezie forums asking if they wanted to do a holiday contest (for Christmas), where Yakezie members would select the best looking (design-wise) Yakezie blog. Eventually, Aaron Hung and LaTisha came up with an even better and simpler idea: we should have a Yakezie holiday badge contest. After all, we’re fast approaching the holiday season! So in case you don’t know what  a Yakezie badge is, simply look at a few examples below. For the full list of current Yakezie badges, click here.

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If the Stock Market is a Zero Sum Game, What are the Implications?

You’ve might not have heard of this before. The stock markets are a zero sum game, no matter how much you’d like to deny this fact. Here’s the definition of a zero-sum game from Wikipedia.

In economic theory (this mainly applies to stocks), a zero-sum game is a mathematical representation of a situation in which a participant’s gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.

In other words, for every winner, there’s a lose. For every dollar made from speculating with stocks, someone else lost a dollar. It’s simple. But simply realizing that the stock markets are a zero sum game is useless. We need to take a look at the implications.

All stocks will eventually go to zero, given enough time.

Nothing stands forever, as the saying goes. No company (stock) will last forever. The big names of today, whether it be Wal-Mart, Google, Home Depot. All will one day be nothing but a memory in history books. Don’t believe me? Let’s take a look at the Dow Jones Industrial Average. The Dow Jones average was founded on May 26, 1896. Back then, there were only 12 stocks in the index (not 30 like there are now). Here’s what happened to them.

American Cotton Oil – no longer around

American Sugar – no longer around

American Tobacco – no longer around

Chicago Gas – no longer around

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Great Profits, No Stock Gains

So basically all the 2011 3rd quarter earnings are out, and not surprisingly, everyone’s been doing pretty well! Corporate America is sitting on a huge pile of cash that’s starting to be used to buy back shares and hand out dividends. However, they have not been hiring (at least nationally), because after the 2008 scare, Corporate America has realized that to survive this economy, you need cash (Cash is King!). Despite the huge profits, stocks have gone basically nowhere. Why?

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Your Greatest Enemy is Yourself

“Your greatest enemy is yourself” is an ancient Chinese piece of wisdom. The only person you need to beat and conquer is yourself. How many entrepreneurs have proclaimed that they plan on creating the next Wal-Mart, only to work a few hours a week on their “epic” business idea? How many times have you said that you won’t give up, but in reality, run away at the first sign of trouble?

Investing is no different. Without discipline (let me say this as harsh as possible), you are A NOBODY. You can subscribe to the greatest investment newsletters. You can buy a library full of investment books. You can attend every single investment seminar in town. You can probably even buy a $3 million investment system, but in the end, you’ll find that you’re no better than the average Joe Schmoe if you don’t have the courage to discipline yourself. You may have immense amounts of knowledge about “how to” invest, but without that discipline, good luck with your futile attempts to apply that knowledge into decent investment returns.

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My Monthly Blog Report – October 2011

Another month already. Wow. How time flies by. It’s been a crazy month, not really for my investment portfolio, but for my blog and personal life. I’ll get into more detail about that later in this blog post. But first, I want to show you some statistics.

Traffic stats.

  •  73 Facebook fans.
  • 66 Twitter followers.
  • 57 RSS subscribers.

Ad revenue from October 1 – October 31.


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The Biggest Ponzi Scheme in History: Pensions

This post took me a looooooong time to write, simply because it was so painful. As much as I hate to admit it (and probably you too), pensions have now turned out to be the biggest ponzi scheme in history. Although there are no exact numbers, experts estimate that there are trillions of dollars worth of unfunded pension liabilities in the U.S. alone. Let’s use a little bit of logic here, and we’ll realize that there is ABSOLUTELY no way the problem with those unfunded pension liabilities will be solved.

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