Planning For Retirement

The very moment a working person crosses 40 years of his life, he or she starts panicking about the retirement and starts retirement planning. Though retirement should be planned long before, may be when the person first started working. This is for the reason nobody knows what comes up next in life and one should always have contingency plans made up a head. Anyhow going back to the main point of discussion that is retirement, it is very essential to evaluate your investment options accurately. There are number of investment plans designed for retirement purpose by many investment firms. Their investment portfolio is mainly focused on ensuring financial soundness of the investor after retirement. Advertising sessions are packed with retirement commercials, offering range of investment options by different financial institution. Financial Institutions come up with variety of packages suiting to investors need for return and appetite for risk and all of them have their own competitive advantages which makes it difficult to choose one. But in the end retiring person is the one who is supposed to make decision for his future.

There are certain factors which may help designing your own or selecting a retirement plan for yourself. These factors are how much money is required post-retirement, what is current income, tax slab, expenditures, etc. Though circumstances could change and there should always be Plan B for it. The second step towards retirement planning is deciding in which assets to invest in or in other words asset allocation. One can select from fixed income, equities, instruments or cash, or may have a chunk of every security pertaining to their risk and return, hence driving a retirement portfolio.

General rule of thumb for retirement investing is that one subtracts his age from 100 and put it in the equity while remainder should be used to invest in fixed income and cash. Mostly retirement plans like 401 (K) are mutual fund based whereas ETFs are also better options as they a broader focus on the industry. There are numbers of top performing mutual funds, bonds, stocks, etc, which would be discussed in the next post.

FirsTrade Securities Is Really First One To Go For Trade!

Firstrade Securities was established in New York with the name of First Flushing Securities in 1985. Founded by John C, it is one of the best discount brokerages which offer investors with range of products to choose from. There are no minimum deposit requirements by the company which makes its better option for beginners. Company first offered online brokerage service in 1997 and its services have been revised five times over this period of time.

Firstrade trading accounts has two different types of trading accounts, investment and retirement. Investment accounts include Individual, Joint, Custodian, Investment Club, etc, and Retirement accounts include various types of IRA accounts, Money Purchase Plan, Profit Sharing, etc.

Firstrade trading platform has variety of products and services for investors so they may choose from stocks, ETFs, Certificate Deposits, Bonds, mutual funds, fixed income securities, options, dividend investment plans and margin investment, which ever suits investor’s need. Investor has a facility to trade online or through mobile device or use Firstrade online broker as a medium.

Company has lowest commission charges on stocks and options when compared to other discount brokerages. Firstrade securities products charge $6.95 per trade on trade of stocks and options through online market orders and limit orders. Fixed income securities excluding CDs of primary market are charged their yield as commission whereas CDs are charged $30 per trade.  Mutual funds have zero commission for no transactional and load funds, however no-load funds are charged &9.95. There is zero commission for trade of 10 ETFs with 10 shares.

Company also specializes in techy apps which allow investors to keep track of twenty stocks at one time. Firstrade securities services provides time saving facilities like real-time quotes, real-time technical analysis, etc. mobile applications are also available for android and iOS users who wants to trade via mobile.

According to Firstrade securities review, it is rated among best online brokerages by many publications in the industry. Firstrade was named “best deal” by the SmartMoney Magazine in 2005. It is also named as “top clean-hands firm” and “clear winner in the mutual funds category” by the Finance Magazine.

Life of Walt Disney

Ever imagine what it would have been like if there was no comic in life. No comedy characters like Charlie Chaplin and no animations like Mickey Mouse. Thanks to the iconic personality of Walt Disney who made the dream come true to entertain people for years, decades and centuries. This man had a charismatic personality with ability to preserve past and foresee future. Walt had visualized the future of technology, therefore used his imaginations, creativity and optimism to transform the world of entertainment by presenting series over series of successful comic and cartoon characters.

On December 5, 1901, Elias Disney and Flora Call Disney were blessed with a child named Walt Disney. He had three brothers and one sister. Born in Chicago, Walt and his family migrated to Marceline Missouri where he spent his time coloring his childhood. He had keen interest in nature and his entrepreneurial skills were activated at the age of seven when he used to sell his drawing and paintings in his neighborhood.  Walt had gone to McKinley High School with his core subjects drawing and photography. His drawing abilities were polished in Academy of Fine Arts.

Drawing had not been his only hobby; in his school life he had acquired the skills of acting and performing. He used to imitate his silent screen character Charlie Chaplin in front of his friends. He would also involve in storytelling with the chalk illustration on the blackboard. He used to also perform comical skits at night by sneaking out of the house as he was not permitted by his father.

One of the facts which are not known to many is that he tried to be part of the military in First World War but got rejected as he was underage. He was though appointed as an ambulance driver by the Red Cross and guess what? His ambulance was covered with Disney cartoons.

He started out his career in commercial arts lead by animation, where he would produce short films for the locals. The Alice Comedies was Walt’s first series of a real girl adventure in animated world and after that the company Laugh-O-Grams got bankrupt. He then went to Hollywood, despite only $40 in his pockets, carefree of his past failure, to explore the city of entertainment. His brother was settled in California awaiting him with $250 only, with the brothers’ combined effort $500 were further raised through debts. $750 was used to establish a production house in their uncle’s garage. With his effort, courage and positivity, Walt Disney became one of the top-notch of Hollywood society.

Walt got married on July 13, 1925 to his employee, Lillian Bounds and instead of socializing with the Hollywood society he preferred spending time with his wife and his two daughters, Diane and Sharon. He did not used to speak much but when he did he used to leave the company spell-bounded with his dreams and ventures.  

When Technicolor was invented, Walt Disney owned the patent for it for two years where only he was authorized to make color pictures. The first award won by the Disney movies was for Flowers and Trees in 1932 by the Academy Awards. Walt Disney kept giving one after another hit movies named Snow White and the Seven Dwarfs, Pinocchio, Dumbo, Fantasia and Bambi.

By 1940 Walt Disney Company (DIS) was grown to above thousand employees and in Second World War, 945 of company’s resources were busy in Government Work. Walt Disney has always supported US government with his immense support by producing military art works for motivating armed men.

The dream of Walt Disney of Organized Amusement Park came into realization in 1955 with name of Disneyland Park. This $17 million investment had multiplied in very short time and it has entertained countless people up till now including Kings, Royals, and Princess.

Out of 81 movies produced by the Walt Disney Studio, 32 won Academy Awards. The charismatic character of Walt Disney was diagnosed with lung cancer caused by chain smoking for decades. He died at the age of 65 in 1966. Initially it was believed that his body was preserved through cryogenics. But rumor proved to be false years later, he was cremated after death.

R.I.P Joseph Dear, CIO of CalPERS

                                   

Joseph Dear, Chief investment officer of CalPERS (California Public Employees’ Retirement System), has a very successful tenure by raising fund’s asset value from recession level of $164.7 billion to $283.5 billion. CalPERS’ CIO, Dear was trusted by 1.7 million people of US who had invested in CalPERS to maximize their returns. The great man born in 1951, died recently on February 26, 2014, after struggling prostate cancer for so long.

Dear has his work experience trailing back to managing worker’s compensation insurance fund as a Director of Washington State Department of Labors and Industries. Before that he was appointed by Bill Clinton in 1993 as the Administrator of Occupational Safety and Health Administration OSHA till 1997. He also served as the Chief of Staff to Washington Governor Gary Locke. Prior to taking charge of CalPERS he worked as Executive Director of Washington State Investment Bond.

In 2009, Dear took the reins of CalPERS in his hand when agency was on its lowest due to recession that is $164.7 billion. Pre-recession asset value was around $260.6 billion. The drop was of 28% with in just one year. He started off with changing the investment strategy of the fund which had 2197 companies. Dear had 220 investment professionals working for him.

He tweaked with the strategy by investing in risky investments which ensures high return such as high risks hedge funds, real estate of California, junk bonds with high returns and private equities. Dear is focused on long-term results instead of short-term. CalPERS fund had recorded highest gains of 16.2% in 2013 which was highest in last ten years.

The great fund manager lost his life recently and on the day of his death his fund was worth $283.5 billion, recovered from recession drop. 

Jeff Bezos, Man Behind the Success of Amazon.com

Jeff Bezos, full name Jeffery Preston Jorgenson, was born in Mexico in 1964. He turned out to be the most inquisitive child who turned the garage of the house in to a laboratory where he experimented all his queries. And as a toddler he dismantled his own crib with a screwdriver. This intelligent kid turned out to be the valedictorian in high school. He also started his first business in 1982 in High school with the name of Dream Institute. It was a summer camp for fifth and sixth grader. Jeff graduated with majors in computer science and electrical engineering with highest grades.

His work life started with computer science field in Wall Street in 1986 and in 1992 he became the youngest Vice President of D.E. Shaw & Co. In next two years he established his own business of Amazon.com and become one of the best entrepreneurs. Jeff Bezos success begins when he devised the business plan of Amazon.com on his way from New York to Seattle’s. Amazon.com, Inc. (AMZN) was launched in 1995 and its first months it generated sales from over 30 countries. In further five years various things were added to Amazon for the diversification such as CD, Clothes, etc. the first profit of Amazon was realized in 2011 and company’s market cap reached $100 billion. Almost 73 orders per second are received in Amazon during Christmas season.

Other business formed by the Jeff Bezos is Blue Origin, which is an aerospace company. He also acquired Washington Post in 2013 for $250 million.

This Valedictorian of High School graduated with 4.3 GPA out of 4 and was named “Person of the year” by Time Magazine in 1999. According to Bloomberg Jeff Bezos’ net worth is $36 billion.

Chevron- Still Up Despite Missing the Earnings Estimates

According to Stock market news, Chevron Corp (CVX) exhibited the decline in its stock price by 4% and is being traded at a stock price of $112.41. The reason attributed was the low earnings reported by the company for its fourth quarter ended Dec, 2013. Chevron announced its result for the fourth quarter on January 31^st 2014 which suddenly sparked World stock markets news due to decline in stock market price of the company.

Company Overview

Chevron (CVX) is one of the major players of US energy sector with reputable name in the Oil, Gas and consumable fuel industry. Company was formulated from ongoing acquisitions and mergers of oil companies with most famous name to be Standard Oil of California merged with Gulf Oil in 1984 which was later rebranded as Chevron. Chevron presents its self as integrated oil company to provide value at every level of supply chain by its two main segments of upstream and downstream. Earnings and revenues contributed for the two segments are inversely related as upstream segment, responsible for oil exploration and production, generates low revenues but high earnings whereas downstream segment, related to refining and petroleum products, generates low  revenues but high earnings.

The company has been generating lucrative revenues from 2010 and has become one of the best stocks to invest in. Investors looking for value investing in stock market shares could consider Chevron as one of the investment options.

Industry Analyses

Chevron belongs to the sub-industry, Integrated Oil and Gas which in terms of market capitalization is the largest. Company makes to the list of Super majors or Big Oil with other essential players like Exxon Mobil Corp. and Royal Dutch Shell Plc. Revenues of the industry for the fiscal year ending 2012 was $4 trillion with sub industry market capitalization of $2.7 trillion.

Big Four super majors of industry are Chevron, Exxon, BP PLC and Royal Dutch Shell with the total reserves in terms of barrel oil equivalents till 2012 to be 11.3 bn, 25.2 bn, 17.0 bn and 13.6 bn, respectively.

Financial Performance for fourth quarter 2014

Earnings for the fourth quarter plunged 32% as revenues for the company dropped by $56.25 billion to $53.95 billion showing YoY decline of 4.26% in revenues. The net income for the company showed year over year decline of 4.70%, down from $7.25 billion to $4.93 billion. Earnings per share announced for the fourth quarter is $2.47 down from last year EPS of $3.78, which has missed the analysts’ estimate of $2.58.

Chevron can accuse its oil and gas production for the downward trend shown in earnings and revenues as oil and gas production segment has plunged 3.5% from its preceding year production of 2576000 oil-equivalents barrel per day. The domestic production dropped by 3% where international oil and gas production exhibited 4% decline. This could be taken as bigger hit as international market generates around 75% of total revenues. The effect was doubled due to the hike in natural gas prices which further narrowed the company’s gross margin.

Investment Perspective

Despite company missed the analysts’ estimate of earnings it is still recommended as ‘Buy’ by The Street Rating Teams. The reason given for recommending it as best investment stock is the company’s ability to outperform the industry in terms of growth as industry average stands to be 5.7%. Moreover the last quarter revenues are still up by 1.6% and though the issues for the low revenues were faced by all the industry players, Chevron managed to increase its revenues.

The fact that debt to equity ratio for the company is lower compared to the industry average and the 33.45% increase shown in cash flows from operations, both indicates that company has ability to generate enough cash reserves for the capital expenditure as well as for the dividend payment thus not to worry the dividend investors.

As far as stock market price is considered company has the same closing price compared to the previous year even though the earnings are low. The impact of low stock price due to earnings is just the effect of overall declining trend in stock market.

CISCO is flourishing in its current CEO regime

What do you expect of an organization which is run by the World’s best CEO and counted as 100 most influential leaders? Yes indeed CISCO System Inc. (CSCO) has been providing quality performance in the Internet world by providing excellent networking products. Company had been established in 1984 by the two lab support staff of the Stanford University, Leonard Bosack and Sandy Lerner. However CISCO has shown a tremendous growth in supervision of its current CEO John Chambers. In his regime, CISCO’s revenues have been pushed from $1.2 billion in 1995 to $48.6 billion in 2013.

Company has Excellency in designing, manufacturing and selling the tools associated with communication and networking which helps in data and voice transfer. CISCO operates in Data Networking Equipment which has total annual revenue generation of $52.6 billion. The industry comprises of switching, routing, LAN, IP telephony and application delivery industry. These segments hold 44%, 26%, 15%, 13% and 2% of total industry. The growth of this industry is derived from certain factors associated with overall Information Technology Industry. The most recent factors which could make difference are Cloud computing, Big Data, Bring your own device and Software Defined Industry.

Cisco’s share in the router industry is 53%, highest in the market whereas it holds 59% of Switches Industry, yet again being the market leader. CISCO’s main competitors are Hewlett-Packard, Juniper and Alcatel Lucent. Cisco has the market capitalization of $114.2 billion which almost twice its competitors market caps. Company generated $48.61 billion revenues which is lower than HP’s revenues but greater than Alcatel and Juniper. However revenue growth for the company has been highest among its peers.

Moving on to the Business segments of the CISCO, there are five major segments in terms of revenue generation, namely, Switches, Services, Routers, Service Provider Video and Collaboration which has percentage share of revenues 30%, 22%, 17%, 10% and 8% respectively. Rest of the four segments is low contributor in terms of revenue earning. Data Center, Wireless, Security and Other segment contributes 4%, 4%, 3% and 2% revenues, respectively.

Cisco’s customers belong to Public sector representing government and educational institutes, Enterprise which has more than 1000 employees, Service providers to such enterprises and Commercial-those who have less than 1000 employees.

Financial Highlights

Cisco has just reported its financial performance for the complete fiscal year of 2013. Company recorded revenue of $48.6 billion with a growth of compound annual rate of 4.22% in last six years. Net Income for FY13 reported to be $9.98 billion with operating margin to be 23%. Cisco stock’s dividend yield for the year is 2.8% and price to earnings multiple for the next year will remain to be 11.5x. Earnings per share have grown at 24% for past twelve months.

Summary

Cisco was founded in 1984 and is being led by the world’s best leader, John Chambers. During his regime company is growing exponentially. Cisco has acting as a nest for the internet world by providing various network and communications tool which help in voice and data transfer. Company has various business segments including Switches, routers, LAN, IP telephony and so on. Most of the revenues are generated from US and the highest revenue contributor from business segment is switches. Hewlett Packard (HPQ), AlcaTel Lucent and Juniper are the major competitors of the company and CISCO holds the largest market share in the industry. Company has posted reputable earnings for fiscal year 2013 with revenues to be nearly $48 billion and stock trades at one year forward PE ratio of 11.5x.