While I consider myself largely a centrist Democrat in terms of my political leanings, the way I approach my finances couldn’t be any different. I’m conservative in that sense, probably to a fault.
In sitting down over the last few weeks and looking at our financial picture from 35,000 feet, though, we decided that we really haven’t been following the advice they’ve been telling us forever – diversify, diversify, diversify. Which isn’t to say all our money is piled under our mattress or in a hole out in the back yard. We’re pretty diverse – probably just not enough.
So, it was with a little bit of strange excitement and a lot of terror that I decided to move some ducats into the stock market. At 34, this was my first foray into buying stocks on the open market and it made me as nervous as an eighth grader trying to get up the courage to ask a girl to dance. I’ve been lucky enough to be a part of an IPO (MP3.com) and I have stock options in the company who pays me (Interactive Corp), but I’ve never gone out straight through a brokerage and gave it the old college try.
Until now. Last week, after much reading and heavy breathing, I made my first two purchases. Other than doing what I felt was my proper due diligence on the companies (a must for any stock purchase), I tried to set some rules for myself. First and foremost, invest in companies that either do something good for the world or indirectly provide some kind of product or service that contributes to the greater good. Additionally, at my age we can afford risk, so another guiding light for me was to actually find something quite risky.
It ended up being a fairly easy decision: renewable energy. I’ve been harping here on-and-off now for months about the state of the energy economy and when I first posted my interview with author Paul Roberts back in May, the price of oil was nearing $50. It is now hovering around $65 and while I found great delight in seeing our President finally say that we have to conserve (how painful must that have been for him?), I can’t imagine any scenario where the price of oil is going down too much. It seems painfully obvious that other forms of energy are going to have to be utilized sooner than later.
That said, I had been keeping an eye on Evergreen Solar for a few months, a company based right here in our backyard in Marlborough, MA and doing some interesting things – namely producing photovoltaic solar using less silicon than almost any other company offering solar products. Having already read that there’s a silicon shortage coming over the next few years, it seems this might be a good buy and informative piece in Barron’s made me a bit more comfortable. I’d found my first stock.
The second one may appear to fly in the face of what I’ve written above: MEMC, Inc is one of the world’s largest producers of silicon wafers. According to Barron’s, however:
Unlike some of its rivals, MEMC produces most of its own silicon feedstock, and in fact sells some excess supply back into the market. The result is that MEMC benefits from soaring wafer pricing without suffering the associated increase in raw-material pricing. MEMC shares have doubled over the past year, to a recent $19.79, boosting the company’s market capitalization to about $4 billion. That makes MEMC the largest-cap play on solar growth.
So there you go. Two risky stocks, which I bought about a week and a half ago. How are they doing? Well, I was quite surprised and extremely happy when my investments netted me a gain of 14% at the close of the market on Monday. As much as I try to not look at it every day (I’m long on both barring disaster), when it’s a fresh investment, I just can’t help it. So yesterday when I checked at the close of market, I was a little taken aback at what I saw:
Recent ear candy:
Velvet Underground – “Femme Fatale”
Lucinda Williams – “Concrete & Barbed Wire”
Elliot Smith – “A Question Mark”
Led Zeppelin – “That’s The Way”
Clarence Frogman Henry – “I Ain’t Got No Home”
Pavement – “Kennel District”
The Clash – “Wrong ‘Em Boyo”
Teenage Fanclub – “Star Sign”
Joe Henry – “Trampoline”
Todd Rundgren – “Piss Aaron”
Grandaddy – “El Caminos In The West”
Spoon – “Was It You?”