mgedwards – Page 92

Sound Investment Principles

Some people have asked me about my investment strategy. Here are some investment principles that have paid dividends.

Buy what you know. What companies or sectors do you know? What products do you use? Are they good companies with promising futures and good growth prospects? If so, buy some of their shares. But do your homework first. Buyer beware.
Don’t try to time the market, but know the season. It’s folly to jump in and out of the market when you think it’s going up and down because sometimes you win, sometimes you lose. It’s better to look at the long term and invest accordingly. What’s in store for this year or the next few years? Do you believe the market do well this year? What do the experts say? If you have a broker, what does he or she say? Going with your gut instinct is often the best check and balance to investing. If it sounds too good to be true, it probably is. Likewise, the situation never seems to be as dire as some predict.
Don’t spread yourself too thin…concentrate. Don’t try to track too many stocks or funds. Pick a few (up to 10-12) that you like and focus on them. Study them and look at their fundamentals such as P/E ratio and EPS. Professionals don’t try to track too many stocks, and you shouldn’t either. Add or remove companies as they under- or outperform.
Don’t sell too high or too low. Since you can’t time the market, set upper and lower price limits to trigger buys and sells. Don’t ride a stock to delisting; get out while you can still recover some cash. Don’t wait for an investment to reach an unlikely price target. Better to get out while you’re ahead.
Watch those fees. If you don’t feel like a savvy investor, read the fine print before hiring a broker or buying a fund. Sometimes the fees can be in excess of 2% of the total principal, meaning that your broker would have to outperform you by at least that much to justify the fee. Sometimes doing it yourself – and employing available investing tools such as stock and fund screeners – yields better returns (or fewer losses) than hiring someone to do it for you. If you feel more comfortable using a broker, ask them for their fee structure up front. Some will charge a fee to open and close account as well as monthly wrap fees. These can be palatable if your broker offers a low fee structure (1% or less) or handles your account carefully.
Move past the basics of investing. The smartest investors don’t put all their eggs in one basket. Consider real estate, a small business, options/margin trading, micro-loans, IPOs and private equity investments to diversify your portfolio. Prosper.com lets you offer higher interest loans to Americans, and Kivu.com does the same for international micro-loans. Try the IPO market. W.R. Hambrecht offers periodic open IPOs. Try angel investing or secondary shares of privately held companies on a site such as SharesPost.com or SecondMarket.com. MergerNetwork.com offers real estate and businesses for sale around the world. Try investing in foreign markets or currency trading. InteractiveBrokers.com facilitates trades in foreign exchanges and currencies. (Disclaimer: I have investments through some of these sites but have no personal financial stake in them.)
Make investing a habit. These are several basic investment strategies you can use to improve your financial situation by investing just $50 per month (every little bit helps):

Open a Roth IRA and invest in it as an after-tax retirement benefit;
Increase your 401(k) withholding until it hits the annual ceiling;
Open 529 accounts for your children and set the money aside for future college expenses;
Set the money aside in a Health Savings Account (HAS) or Flexible Spending Account (FSA) to pay for anticipated expenses tax free; and/or
Pay an additional $50/month on any credit card debt and/or mortgage.

What you should NOT do:

Spend the money on depreciable fixed assets (aka “stuff”).
Spend it on dining out, entertainment, or any expense that offers a one-time benefit.

Kilimanjaro, Day Seven (cont.)

Morning, January 1, 2011

I reached the top of Gilman’s Point 5,685 meters up at around 8 a.m. in the morning. Weak and exhausted, I held the group back for at least 20 minutes while I gathered my breath, bearings, and body. Kay, Tom, and the guides waited patiently on the precipice for me to recover. A steady stream of climbers passed by, weaving between boulders and benches littering the top of Gilman’s. Everyone in our group was primed to reach the summit; my body was holding them back. I was embarrassed for my frailty and at the same time thankful I had made it this far. At long last I willed myself on and left Gilman’s Point like a steam engine taken out of service. Our leader August hovered nearby and assigned one of his guides, Manda, to accompany me all the way to the top. Manda had tried to help Kay but handled her quite roughly; he didn’t seem to understand the concept of “handle with care.” I was willing to overlook his unpolished behavior as long as he helped me to the summit.

I insisted on hiking unassisted to the top of Kilimanjaro. I propelled myself forward using my hiking poles like crutches. After Gilman’s steep face, the climb along the volcano rim was far more gentle but still excruciatingly difficult for me. The path wound along the ridge to Stella Point at 5,756 meters and then on up to Kilimanjaro’s highest point, Uhuru Peak, topping out at 5,895 meters (19,341 feet). Most of the snow that should have blanketed the mountain top had already melted save small patches of snow and ice clinging to the rim. The weather was abundantly pleasant as the sun cast an ethereal glow across the landscape. I was tempted to take off some winter clothing and unzip my heavy jacket but left them on out of concern that the sun’s intense rays would incinerate my skin.

Along the way to Stella Point I found a bit of a rhythm and hiked at a quicker pace that seemed slightly faster than molasses. I urged Kay and Tom to go on ahead, and they were soon out of sight. Other climbers passed me as if I were standing still. But I didn’t mind! I was lucky to be here at all and grateful that I wasn’t a victim being carried off the mountain.

I reached Stella Point after about an hour and walked into an incredible view of two large glaciers gracing the northern and southern flanks of Kilimanjaro. Their towering walls of blue ice jutted into the sky like high rises in Manhattan! So beautiful and serene, they were an awe to see rising in thick sheets above the mountain slope. Nevertheless, they looked as if they had seen better days, remnants of a bygone era when the age of ice roamed the Earth. The glaciers were dwarfed by the mountain’s sheer mass dominating the landscape as far as the eye could see. Covered in volcanic gravel, its slopes were traversed by tiny but fearless climbers who skied downhill in their hiking boots and carved makeshift routes to trails and camp sites far below.

I tried to take a photo from Stella Point with my digital camera when my clumsy hands dropped it in the dirt. Much to my dismay the camera malfunctioned and was rendered unusable. I was thankful to have had the foresight to pack an older, less powerful digital camera that I used for the rest of the trip. My error was a costly mistake; I discovered later that it would have cost as much or more to repair the camera than it did to buy a new one. Fortunately a family member repaired if for free by removing dirt from the lens – an easy enough fix.

My last bit of strength dissipated after I left Stella Point. I struggled mightily for one-and-a-half hours to the top of Uhuru Peak. The distances between stopping points grew closer and closer until I found myself starting and stopping at every oversized rock. Every rock became a minor victory. And yet I was discouraged because I never seemed to get any closer to the summit. Each time I thought I was approaching the top I was let down by the realization that Uhuru Peak was still further away. Even worse, climbers who had made it to the summit before me started to pass by heading in the opposite direction. It was a clear signal that I needed to summit soon before darkness forced me to turn around.

At long last I stood at the bottom of one final uphill slope about 50 meters from the top. It was the hardest sprint of my life. One meter, two meters, three meters, four; I ticked the steps off one by one as pain and fatigue gripped my legs and upper body. Suddenly the top of Uhuru Peak opened up before me like the gates of Olympus and Asgard. There it was! The incredibly enticing view beckoned to me. I drew on one last energy reserve and moved like never before, hobbling gingerly toward the famous crooked wood sign with yellow lettering marking the top of Uhuru Peak. Kay and Tom waited for me like angels with smiles and hugs.

I did it! I made it! Five days, four sleepless nights and an all-night hike later, I had reached the top of Africa. I was so overwhelmed with emotion that I wanted to cry but was too tired to let the tears of joy flow.

Kilimanjaro, Day Seven

Midnight, January 1, 2011

We set off on our final ascent to the Kilimanjaro summit just before midnight. A chorus of shouts and whistles from other climbers told us that the clock had struck midnight and ushered us into the New Year. The ad hoc celebration on the mountain in the dark of night and freezing cold was a far cry from the festive New Year’s parties taking place all over the world. Still, there’s no place at that moment where I would rather have been; it was surely one of the most memorable New Years of my life.

Our head lamps illuminated a pathway between the buildings and tents at Kibo Hut. We weaved our way through the camp to the base of the mountain and passed row after row of identical tents, falling in line behind a long line of climbers waiting to ascend. It seemed as if the entire camp had emptied and prepared to climb at the same time. Just after midnight, hundreds of climbers set off together up the mountain like lemmings. We passed some idle climbers and waited behind others. I hadn’t anticipated being caught in a mountain traffic jam! The constant starting and stopping to wait for others ahead of us made the climb to Gilman’s Point one of the most strenuous activities I’ve ever undertaken. Although slightly lower in elevation than Kili’s highest point, Uhuru Peak, Gilman’s Point was by far the most difficult part of our climb. Our guides made the climb easier by shouldering our daypacks, but we still needed to haul our bodies to the top.

The makeshift gravel path went straight uphill for about half an hour before it started to switchback across the mountain face. I tired after a couple hours. My heavy jacket insulated my body from the cold and muffled sound as if I were wearing a space suit. Despite the humanity teeming around me I felt strangely alone and isolated. Stealing glances up and down the mountain from time to time, I spied the twinkle of climbers’ head lamps forming a long, unbroken line from Kibo Hut below to Gilman’s Point above. I wondered what the mountainside looked like in the light of day but thanked God that I couldn’t see how steep it was. The gravity of how difficult this climb was had finally sunk in. Nothing I had done until now had prepared me mentally or physically for this. At full strength and at lower elevations I might have climbed the 1,100 or so meters to Gilman’s Point without much effort. After five consecutive day of intense hiking in the wee hours of the night, I was weary and ill prepared for this daunting challenge. It was coldly comforting to pass by other struggling climbers, not so much because I was in competition with them but because it reminded me that I still had strength to continue. At the same time it was a bit deflating when others passed me by seemingly without effort, especially a group of elderly Asian climbers who ascended as if they were on a leisurely afternoon stroll. I felt empathy for a handful of doubled-over climbers who were obviously not going to make it to the top. Young and old, men and women, age and gender – nothing mattered here as much as one’s tolerance for high altitudes, discomfort, and even pain.

Tom, Kay, the guides, and I hiked about an hour before we stopped for our first respite. Stopping turned out to be my undoing. We rested for about five minutes and consumed snacks and water. Fatigue suddenly hit me with a vengeance. Once we started hiking again, I couldn’t muster enough stamina to continue and asked to stop again after just 20 minutes. Then again after ten minutes, then five, and finally two. At long last, after 10,000 feet and five days of climbing, I ran out of steam just 200 meters below the mountain ridge! I could see Gilman’s Point not far above me, but I just couldn’t will my body to go on. I was spent. Altitude sickness had claimed another victim. My companions were worried about my health and wanted to help me feel better, but there was little they could do for me. Kay tried to feed me an energy boost, but I didn’t have the appetite to stomach it. Turning in an Oscar-worthy performance, I melodramatically urged the group to go on without me and let me rest on the mountain. After ten minutes I willed myself to move again but hiked no more than a few steps before stopping again. My legs were failing me, my breathing giving out, and finally my will conceded defeat. I was not going to make it to the summit on my own strength.

August was determined to get me to the top of Kilimanjaro. Slinging my arm around his shoulder, he helped me climb the final 200 meters to Gilman’s Point. I stumbled along the way and could barely keep my footing, but somehow we made it to the top. I remember the sensation of being carried at times by August. Half an hour later as the sunrise peered over the horizon, we hoisted ourselves over the top of Gilman’s Point. The mountain peaks and scattered clouds dotting the Serengeti below was one of the most breath taking views I’ve ever seen. Everything was a blurry haze, but I was exhilarated to have at made it to the top of the world.

I don’t know if I could have made it to the top of Gilman’s Point without August’s help but am certain that his assistance was crucial in my time of need. I don’t know if I can truly say that I climbed Kilimanjaro on my own, but then again, it’s good to know there was someone I could lean on to finish the job. We have all experienced challenges from time to time that are too difficult for us to face alone and have all needed another’s strength at some point in our lives. During times like this.