Shotzy.com

Since June was a bit of a down month across the markets, I did pick up a few more holdings that seemed to be at an attractive price point. Here is what I purchased in the last 10 days:

ADM - Archer-Daniels-Midland Company is involved in handling various agricultural products. Basically they process, distribute, sell, etc. corn, oilseed, soybeans and other crops. I was previously familiar with the name as they are headquartered close to my hometown and have a location in my hometown. I purchased the stock at $33.89 and it took a dip after I bought it but I see today that Bank of America just upgraded it. I also purchased this because of all the recent news detailing the rising cost of various groceries, milk, and all things related to corn. I figure if we are going to get shafted at the grocery store - I might as well buy some stock of a company that is going to reap the profits (alot like owning XOM while going thru these high oil prices). ADM also pays a nice little dividend.

USB - I picked up shares of US Bancorp as the company has dropped about $3/share over the last 6 months. US Bank is an obviously recognizable bank along the lines of Bank of America but a bit smaller. What attracted me (other than the seemingly good price) is the nice 4.8% dividend payout. Take that, on top of the stability of the stock, and it seems like a smart buy at this price.

IRFAX - An international real estate fund offered by Cohen and Steers. I like the idea that the fund invests a majority of its money in international real estate equities. This was a move to help me extend more into international holdings and looked like a good time to buy if you check out the graph over the last 6 months. If you check out its main holdings you will see some familiar names.

All 3 of these fit into my strategy of offering regular dividend payouts at a current attractive price.

I have been promoting affiliate programs for the last 5 years. Over that time, I have tried and tested hundreds of different affiliate programs - pay per lead, pay per sale, you name it. I have tested lots of different industries, some super-competitive and some with very little monetization. I have had success in some and failed in others. In one particular competitive industry, I have had my “cash cow”. Sites driving PPC traffic that have made me a lot of cash, every month, for over 55 months.

I have milked this cash cow for as long as I possibly could. I have promoted just about every offer in this industry, gone thru companies going out of business, companies not paying me, competitors copying my promotions, dealt with the evolution of the PPC search engines from GoTo to Google’s quality scores. Over 5 years, a lot of shit has happened, and each time it did, after initially being pissed off and ready to give in, I learned from things, adapted, and became better at what I was doing. Going through the ups and downs as an online marketer is hard, especially if you go thru them on your own as a one man band. Very few of my friends or family even know what I do for a living except to know it is (internet stuff). You can’t really vent much to someone working a regular 9-5, bitching about how you just lost $20k/month because you got slapped by a quality score update. However, through all these ups and downs, I have maintained focus and continued to have success.

Well, my cash cow has died. The industry didn’t dry up, it still exists, but it is getting smarter. I have been promoting the very low hanging fruit, very successfully, for many years. But, the companies in the industry have evolved over that time, growth is not the focus as much as maximizing profits, and with that maturation, some opportunities are disappearing. Sure, there is still alot of opportunity in the industry, but now there is more competition and less profits. I will still promote what I have left and squeeze every last penny I can out of it, I just won’t put too much energy into it. Sometimes you just have to call it what it is, count your earnings, look at the lessons learned, and the opportunity that you had, move on and don’t look back.

It is never easy to lose a significant amount of monthly income, but hey, shit happens. If you had a nice run and didn’t piss what you made away, it was a success. That’s why I will never let myself be dependant upon 1 niche, 1 merchant, 1 check, or 1 type of online marketing. When you put yourself in a position to be able to withstand all the shit that happens, it makes life as an online marketer more of a game, a competition, than a job. When stuff like this happens, it should only motivate you. One door closes and many more open and don’t forget the field you are in.

If you follow your online investments closely, your mood is probably aligned with the stock market, or the specific holdings you have invested in. When the market is up, the sky is blue, you’ve made some money, feel good about yourself, and everything is working as it should. The last 18 months has been a nice run for the blue chip stocks. People have realized the bigger companies have been undervalued, and, the economy has so far withstood a housing slump and high oil prices. There have been some hiccups, but the Dow has had a nice run. During this period, it has seemingly seemed “too easy” to pick a stock and see a gain.

The thing is, history tells us that the run won’t last. The economy may slow more than anticipated, housing may be in worse shape than expected, oil prices may continue to rise, a crisis may send shock through the financial markets - you know any of these things are possible, some maybe probably. Do we know exactly when? Nobody can predict when or if these things will happen exactly - but, something will that will turn things south for a lengthy period of time. So, are you prepared?

The famous four words in investing “buy low, sell high” - yet why is it, you mostly hear about great stock picks, unbelievable mutual funds, etc. when the market is running well? It seems the majority of newbie investors “hear” about how well the stock market is doing and get in, they buy into stocks or funds that are going good - in other words, they buy high. Isn’t this the opposite of common sense investing? I mean, aren’t you buying at a time when valuations are the highest? Aren’t the odds stacked against continuing high returns if you buy in at a time of optimism and gains?

Think about it, if you have an investment portfolio, and we experience a lengthy downturn, isn’t it human nature to get bummed out, check out how much money you have lost in your portfolio, and just stay away from investing for a while or even consider selling what you have in fear of losing more? Human nature is to “buy high, sell low”. This is a very hard concept to grasp as human emotion plays a vital role in our ability to invest successfully.

I know things have been going well for the last 18 months, my portfolio value is at its peak. However, I am also preparing that things are going to turn south sooner or later. Good bargains have been hard to find. But, I have put myself in a position to have plenty of cash on hand to capitalize on the market, if/when it does pull back. I am going to maintain my investment strategy, look for those established, blue chip dividend paying companies, whose valuation is brought down from investor panic. Maintaining this long-term view, is what makes a successful investor. Understanding the peaks and valleys, and being in a position to buy in a valley, when most people are running for cover.

In early-March, when the Dow dropped over 300 points in one day, followed by another triple-digit loss day, I remember reading an article that kinda put things in perspective because it asked - Do you think Warren Buffet was selling off or was he looking for good buys?

As an online marketer, it is very easy to get tunnel vision and only focus on the industries and marketing methods you are familiar with. There is always something new to learn, something new to test, some changes to make with what you are already doing. It still amazes me sometimes to think of how big the internet is. I mean, to grasp the concept that, as you focus on the areas that you are involved with, there are millions of other lucrative niches out there. They are created every day. And, with each niche, there is many different ways of promotion - ppc, seo, blogging, content writing, ecommerce, auctions - to name a few of the most popular.

I mean think about that. The combination of ideas and opportunities is overwhelming. But, if you have experience and business sense, the opportunity to make money is endless. Even if you are new to online marketing, knowledge is everywhere. Spend time on forums and industry blogs, actually read what is being said and try to identify forum posters that know what they are talking about. Don’t get sold on the get rich quick methodology. Every day, ideas are shared, hints are dropped, failures and successes are discussed. A free online marketing education exists. Want to learn SEO? Read seo forums/blogs in depth for a time to grasp the basic principles. Those that “get it” will succeed, those that don’t want to put the time into learning, won’t.

I have built a pretty solid portfolio of stocks over the last 7 years. The majority of my portfolio is established, dividend-paying companies that have solid balance sheets and years of successful growth. This strategy has worked fairly well, as the stocks have gained value and the dividends add-up. A long-term investor watches their holdings gain in value over time. You may trim some stocks, add some new ones, etc. but if you are buying long-term established companies, you expect them to grow over time and build value in your portfolio. However, this also presents a challenge.

This makes it harder for me to double-up on stocks that I already own. I hate the idea that I purchased X amount of shares of a quality stock at $43, but now, the stock price is at $60, but it still looks attractive. I have a hard time pulling the trigger and buying more of the company’s stock at the higher price. Even though I feel the stock is still attractive, knowing that I will pay substantially more than I previously did per share is a concept I have to struggle to overcome.

This is a good challenge that exists because I have been accruing more cash with which I want to invest. If I only had a set amount of cash and I invested 100% of it in stocks, the opportunity to buy more wouldn’t be there, unless I sold some holdings to acquire others. But, since I have been lucky enough to continually add cash to my investment portfolio, it is the challenge I am faced with.

I need to remember that I am not competing against my initial stock purchase, but rather investing in the company as it stands at the current price. And actually, for any of these situations, you have a track record of knowing how the company has already performed for you. You expect long-term growth stocks to do just that, grow. A buy decision shouldn’t be made because of previous price point purchases, but rather, where you feel the stock stands today.

The last few months have made it hard to find some attractive stock buys. However, the pullback the last few days have brought some stocks back down a bit. I just purchased more shares of Harley-Davidson, HOG. Harley is the most recognizable motorcycle brand there is, everyone knows what a Harley-Davidson motorcycle is, down to the sound the bike makes.

I originally purchased shares around 18 months ago when the stock was sitting around $48. It made this purchase a bit harder, as sometimes I have trouble pulling the trigger and purchasing stocks that I already own with nice gains. But, after a nice runup to over $75, the stock has come back down around the $60 mark. An attractive P/E of 15.5 or so and a 1.6% dividend make the current price still attractive. Of course I would rather be able to buy more at the $48 price, but I think at $60, HOG still is a quality, proven company that offers upside.

I have just purchased some shares of JSM. This is a preferred stock of the Sallie Mae corporation. I have owned shares of Sallie Mae, SLM, for a while. Sallie Mae is probably pretty familiar to many people, as they are the company that has handled many a college loan. SLM shot up about $15/share in early April as rumors were swirling about a buyout for a nice premium over the then stock price. That was very nice to see as it had been lagging a bit as there was some earlier investigation news swirling around SLM.

Well, JSM is the preferred stock version that pays around a 6% dividend. When SLM shot up, the preferred stock, JSM, shot down. Opening at $25 in Jan. ‘04, JSM has been lingering in the $21 range. At that discount, I figured purchasing it now is a good idea. It pays a flat $1.50 dividend. So, the dividend at the $25 price was 6%, but now since the price is around $21, it makes the dividend over 7%, the discount on the price makes it pretty attractive. I love to find high-dividend payers at a discounted price, and I think this fits. Even if JSN lingers at this price, the 7% quarterly dividend and potential upside make it look better than any money market or cds.

Disclaimer: I do have Smoltzee on my fantasy squad, so he is helping me lead my league right now.

John Smoltz might be my favorite pitcher in the bigs right now. First, I gotta say congrats to him for winning his 200th game last night, beating the division leaders. I mean, the guy has 200 wins, 150 saves, he is 40 years old and I would take the over if you told me he will pitch for at least 3 more years. He has a mid-90’s fast ball, and one of the nastiest sliders around. He is just filthy.

But, every interview I hear from him, the guy just seems like an all-around good guy. He is a great athlete, buddies with Tiger Woods, but he seems like an all-around good guy that could beat your ass in anything sports-related, but then sit down and have a beer with you afterwards. I don’t quite think he gets the hype he should. I mean, he only has 1 Cy Young award, but he is awesome in the post season. I think it has something to do with the fact that he has played for the best team nobody seems to care about. Could you imagine if this guy pitched in Boston or New York?

Keep dealin’ Smoltzee

I would guess many affiliate marketers have one or a few cash cows - niches/industries/offers that are making them a significant portion of their revenue. For many, finding a niche that can be exploited may be the hardest part. I have tested alot of offers and sites in alot of different industries. Often, the success rate on finding a profitable area is low, but once you find a profitable niche, I think the next challenge is exploiting it.

As affiliates, distractions are everywhere: blogs, forums, new offers, new ideas, life, etc. If you build up a niche that is making you very nice money (whatever that may be for you) the challenge can become devoting the time to maximize the potential of that niche. As I said in this post, new ideas can be exciting and distracting. Once you have a successful niche making you good money, it becomes easy to get “fat and happy” with the results and start focusing on other things to promote. There are alot of reasons for this - the desire to diversify, the excitement of new ideas, etc. However, in most cases, I would bet that initial successful niche has not been maximized to its potential.

Have you exhausted all keyword areas to target? Have you tested all landing pages, content, designs, etc.? Have you tested other merchants/offers to promote? Have you identified and learned from all competitors in the same niche? Can you get a bigger payout from the merchant/network? Have you tested all PPC and Advertising mediums? Are you missing out on some reachable SEO rankings?

I think it might be impossible to say “I have maximized the potential” in a successful niche. However, I think the difference between a successful affiliate marketer and an ultra-successful one, may be the extent to which they squeeze every last dollar out of every single aspect of a profitable niche. It may be easy to be satisfied making $10k/month out of a niche as that cash satisfies all your needs, however, what if you knew you could be making $50K/month out of the same niche if you exploited every inch?

I think in the end, this boils down to each individual’s mindset - are you satisfied with the success you have built in the particular area? Everyone can have different answers and excuses. But the ultra-successful online marketers probably would answer “Never”.

I tell ya, I thought when Jason Giambi initially made his comments - essentially saying that everyone in baseball should apologize for the entire steroids mess, including himself - I thought that was pretty cool of him. At least someone, just saying it was all a mistake and some apologies needed to be made.

But then, it gets leaked that he failed an amphetamines test within the last year, unreal. First off, I gotta think the “leaked” failed test result was made by MLB, I mean, if a player is calling out the entire league, well, one way to stop any sympathy for the player is to leak the test. However, did Giambi know this would get leaked, so he tried to save face in the media by making those comments? You know, who really knows. This thing will get spun every different angle. Regardless, if the Giambino was really terribly sorry after he did ‘roids, would you go an flunk an amphetamines test to show how sorry you are?

I mean seriously, Giambi man, just keep quiet, take some fungos and work on that swing. If you need to get amp’d up, how about a Jolt?