The price of postage will go up from 41 to 42 cents on May 12, but you can stave off the penny increase for a little longer if you buy Forever Stamps.

Foxbusiness.com:

"The Postal Service developed the Forever Stamp for consumers to ease the transition during price changes," said Postmaster General John Potter. "We encourage Americans to buy Forever Stamps now for 41 cents, because like the name suggests, they are good forever."

When will we see $1 or more to snail mail something? I did a little poking around and learned that the price of a stamp has doubled over the last 27 years (20 cents on November 1, 1981) and quadrupled over the last 33 years (10 cents on September 14, 1975). How much did postage cost some 50 years ago? On August 1, 1958 it cost 4 cents to mail a letter.

News of a postage increase is not good news for snail mail spammers, nor is it for businesses who mail documents and letters as a course of normal business. In our business offline we’ve tried to transition to email for as many correspondences as we can, but ink signatures are still required for many documents. 

The companies we deal with are getting better about allowing digital signature and maybe within the next 5-10 years we will be able to collect signatures digitally as the rule rather than the exception. We used to include a return envelope with postage paid by us, but that cost has risen to well over a $1 for each piece, making it much more cost-effective to include a self addressed stamped envelope.

If history repeats itself, could we see $1 postage stamps by 2035? Sooner? Later?

Merlene wants to know when you plan to retire?

What’s the pot of gold for you? What are you working towards? When do you plan to retire? We work hard. We save. We invest. We worry about our portfolios and our retirement savings. We spend hours with our financial planners and run our spreadsheets and worry will we have enough. But what is enough? What’s your goal?

I’ve written a few times here and told plenty of friends directly that I’d like to retire in my 50s. Being 39 now, that could give me anywhere from 11-20 years.

‘Retirement’ is subjective. Retirement to me doesn’t necessarily mean we sell our businesses and/or stop working completely. I would like to travel more in our retirement years, sure, but I suspect even travel to exotic destinations will lose its luster at some point. Also, if you enjoy your work and are physically and mentally able to complete the duties, why would you ever quit?

Is retirement more applicable to those who aren’t self-employed?

One of my greatest retirement concerns at this points has less to do with money than physical health. I’m healthy now, but who knows what my health will be like in 30 years? I think from 55-65 I’ll still have enough energy to travel. Perhaps more importantly is my wife’s health which has deteriorated somewhat since she was hit by a car back in 2003. She is in a lot of pain in the winter months, even after surgery, so this could cause us to consider moving to a warmer year round climate.

If I wait until 70-75 to retire, I doubt I’ll be as willing to do the worldwide travel I’d like to do someday and I doubt at that age my wife will want to or be able to travel that much. I’m not interested in traveling alone.

My other retirement activity will center heavily around writing. I want to get back into writing fiction and have at least one fiction novel published. This blog helps to keep the saw sharpened, but it’s not enough.

It’s your turn. How would you answer Merlene’s questions? What’s your pot of gold? When do you plan to retire?

When we started an experiment to cancel all our credit cards 232 days ago several people warned that this could negatively impact our FICO credit scores. This seemed like a reasonable concern and now that some time has passed it’s time for a status check.

With the declining interest rates we decided to see if we could get a better interest rate for our existing credit line. Didn’t want to borrow any new money, just went fishing for a better rate. We were able to get almost two full percentage points lower and found out that my credit score has gone up 38 points since the last check before we canceled the plastic demons. Nice!

Before getting too excited, I don’t know if this positive change was because we canceled the credit cards or a normal fluctuation in credit score calculation. I do know, whatever the cause, the direction it’s going is the right one.

An October 2007 article in Kiplinger strongly refutes that there is any benefit to your credit score by closing credit card accounts:

There are two key reasons why closing old credit-card accounts can hurt your credit score: The move affects your credit utilization ratio and your credit history.

Credit utilization ratio is how much of the available credit you are actually using. The lower the better, but less than 10% doesn’t really help you, according to the article. So if you have a credit card with $10,000 credit line spending $1,000 (10%) would be better than spending $8,000 (80%).

Before checking the score I reopened my Bill Me Later account. Why? I’m seeing a number of 12 months no interest deals through Bill Me Later while looking for a computer to replace the one that was stolen and might want to take advantage of that deal. Also, I wanted to see by reopening the established account what impact that would have in the future. Several different sources have pointed out that the age of credit accounts is important. If this is true, while we’re saving 2% by canceling old credit line in favor of a new one with better interest rates, we could be hurting our credit scores.

If I do use Bill Me Later my plan is to keep the money in my money market account, earning interest for me instead of some third party, and before the 12 months is up payoff the total balance so I don’t incur any finance charges. Seems like a good plan, although the downside is we needed to have the account open with them. Bill Me Later isn’t a credit card, so not going to stop the canceled credit card counter on the home page, but this got me thinking about how spending the credit even if I never pay any finance charges might be impacting my credit score.

source: myfico.com

According the pie chart pictured above, simply paying your bills on time, every time, can have a huge impact on your credit score (35% of overall score). What have you done to improve your credit score?

A break from my unannounced blog vacation to share financial analyst Jim Cramer’s comments on the tech sector:

Reluctantly I have to conclude that this is a group that on strength has to be sold. Anything I own that has tech has been killing me for Action Alerts PLUS.

Looking at my own tech portfolio holdings I’m seeing the following results lately:

AAPL (Apple) - down from high of $202 at end of 2007 to $129 today

GOOG (Google) - down from $747 near Halloween 2007 to $506

IACI (ask.com) - down from $30 in October 2007 to $24
VCLK (Valueclick) - down from $28 in October 2007 to $22

YHOO (Yahoo!) - UP from $19 to $31 on possible Microsoft acquisition, but down from $34 in October 2007.

Ironic that Cramer is famous for saying ‘bOOyah!’ and yet many of these tech stocks receive a ghostly boo since Halloween time. Google is among the worst performers since cresting the 666.66 mark. If I was more supernatural inclined, I’d say the big G was cursed, but a lot of the market has been miserable lately.

Despite the performance, I’m holding all my technology stocks for the time being.

What stock sectors to invest in during these troubled times?
I’ve been listening to CNBC on Sirius a lot more lately and reading a ton of information online trying to get educated on good buys and companies and markets to stay away from.

If tech isn’t any good, then what else? The million dollar question. Some gurus are suggesting the financial markets could be one good place to look. I sold NLY (Annaly Capital Management, Inc.) yesterday at a decent profit and am trying to decide what to buy next. I might go back and buy more NLY because this is a company that benefits when the feds cut the rates. If more cuts are on the way as some are speculating, NLY could continue to be a good stock to have.

What about new money to invest?
When the insurance money for my stolen tablet PC was received recently, I stuck it in our money market account which is currently paying 3.97%. Briefly considered adding to my Zecco account and buying some more stocks with it in the interim while deciding what computer to buy as a replacement, but the market is too uncertain for me to invest any new money at this time. Also considered putting in our mutual funds but those accounts are down too.

Where are you investing new money these days? In a holding pattern while the market corrects? Using your savings and money market accounts more?

Yesterday, news that Terry Semel was even further out than he was when he was replaced as CEO by Jerry Yang and today the news that battered Yahoo shareholders have been waiting for: Microsoft wants to buy them. Keep your eye on Yahoo stock price today (disclaimer: I own YHOO stock) as Microsoft has broken out their love ahead of Valentine’s Day.

Microsoft put an offer to the Yahoo Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31, which rings the deal in at $44.6 billion.

“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”

A combined Microsoft-Yahoo would definitely stir the Google Giants because of the sheer amount of web eyeballs between the two properties. There are some in the tech community that said this acquisition would never happen, and it wasn’t until the Yahoo stock price started imploding that a reality for this deal came to fruition.

The deal isn’t done, but Microsoft believes the transaction could be completed by the second half of 2008. I’m excited by the possibilities of seeing my favorite Yahoo properties on places like Xbox Live and the Zune. Imagine Flickr integration on the Xbox Live blade. How about Zune social with delicious bookmarking (artist website tie-in)? And then there’s Microsoft AdCenter, the real belly of the beast that could rain on Google’s parade if only we could put it on our websites. Yahoo already has YPN so maybe AdCenter could shoehorn into that and voila, something that could seriously compete against Adwords/Adsense.

In December 2006 I wrote the one reason Microsoft might acquire Yahoo would be a defensive move to Google. This is even more true in 2008. I’m sure the tech pubs will be dominating TechMeme with this story today. For those who think this is a bad move for Microsoft or Yahoo, keep in mind that Microsoft + Yahoo = better competition against Google. If Google has no serious competition it will get lazy.

I think this is a good move for Microsoft if they don’t squander the assets. Whether they will or not assuming the deal goes through only time will tell. Exciting news heading into a weekend. Can’t wait to read what others have to say. Where did I first hear about this? On Twitter.

While Microsoft is in the buying mood, they should buy Twitter too. They have the engineering firepower to handle Twitter’s scaling woes.

Update 4:41am PST: Microsoft’s official statement. They are having a live webcast at 5:30am PST. Thanks for the head’s up ParisLemon, who also pointed out that YHOO stock price has jumped 60% in pre-market trading already. Google it’s ON.

It’s been fascinating, at times dismaying, watching what’s happening in in the financial markets since Summer 2007. The subprime lending meltdown which has spurred the Feds to lower the interest rates several times, and possibly once more again tomorrow making two rate changes in the last week alone.

Meanwhile, there’s a government sponsored stimulus package in the works that passed 385-35 in the House today and is on it’s way to the Senate.

Under the House plan, most workers would receive $600 from the government, $1,200 for couples, plus $300 per child. Eligibility for the full check would be capped at $75,000 in adjusted gross income for individuals, $150,000 for couples. Workers with at least $3,000 in earned income last year but too little earnings to pay income taxes would receive $300, along with $300 per child.

These checks could be in the mail as soon as May this year. Of the 35 no votes, 10 were Democrats and 25 Republicans.

Speaking of the subprime mess, it got messier today as the FBI announced it is investigating 14 companies for accounting fraud relating to subprime loans:

[Neil Power, chief of the FBI’s Economic Crimes Unit] indicated that some people knew about the subprime crisis well ahead of time.

Ouch.

The Zecco UI and account screens continue to be unclear. I didn’t see anywhere in the trade section where these $4.50 trade commissions are being applied which prompted this post. In the account activity area it shows “principal amount” and then the “net amount” shows $4.50 less, so this must be where we are supposed to see the commission fees reflected (?). If you know of a better place to track the commissions than this, please reply in the comments.

How to locate the commission fees in Zecco
STEP 1. inside the Trading area choose “Account Records” along the left column.
STEP 2. choose “all activity” beneath the section.
STEP 3. select the “From Date” and “To Date” and click on “go” button in the account table cell.
STEP 4. you should see something like the snipped screenshot pictured above.

Why not just have a commission column that shows the amount charged for each buy/sell? Maybe Zecco will add that going forward. That would make more sense.

Recognizing a stock loss
As you can also see above, I just took my first stock loss trade at Zecco by selling Zarlink (ZL) which I bought 60 shares back on July 20 at $1.69 and sold today at a dismal $0.64/share. To add insult to injury, I paid my first $4.50 commission for the trade bringing the grand total of the loss to $66.90. Like buying a video game that is played once and shelved. Like filling up somebody else’s tank of gas.

I lost money.

Why did I take this loss instead of waiting for it (hopefully) to bounce back? I’d waited nearly six months already for ZL to do something besides go down and there is a looming threat of them being delisted. I’d rather suck up the loss and move onto something else. I turned right around and bought 6 shares of Shortel (SHOR) paying a second Zecco $4.50 commission. I already own SHOR shares through Sharebuilder (and paid $15.95 commission there, ouch!), so this adds to my holdings, only at a different online broker.

The impact of commissions in 2008 versus 2007
We’ve known the Zecco free ride on trades for those with balances under $2,500 was going to end in 2008 so this doesn’t come as a surprise.

I added a “fees” section to our stock competition Google Finance shared spreadsheet to reflect these $4.50 commissions per trade throughout the year. Even with the ZL loss and $9 in commissions, overall my stock competition portfolio is still +2.96%. I sold seven stocks in 2007 at a profit (GMO, BQI, ATAR, RSTO, MCZ, SIRI and SAPE) and 0 stocks at a loss, but I could (and time will tell if I should) have taken the ZL loss in 2007.

Of those stocks sold, 2 of 7 are currently showing higher than the amount sold: GMO which is at $11.50 and was sold at $8.05 and BQI which is at $4.19 and was sold at $3.67. On a percentage basis (5 of 7 = 71.4%), I’m happy to have sold when I did. This is a real world example of the uncertainty in the market that everybody is trying to time; buy low, sell high.

The last six months on the market have been rocky, so I’m not disappointed with the performance. If $4.50 commissions would have to have been paid on all of the 2007 trades, I’d be looking at an overall portfolio loss, so this will continue adding an additional wrinkle in 2008.

I covered some of this in my 2007 stock competition recap post, but at the time hadn’t done the following:

1. paid any commissions to Zecco
2. taken any losses on trades

Now I can clear both those off the table. Let’s hope #2 doesn’t happen very often in 2008. As I’m about to publish this, SHOR has lost 27 cents from what I paid for it already (dropping from $6.17 to $5.90). Argh, isn’t the stock market fun?

If news that 11 spammers have been indicted over pump-and-dump stock schemes doesn’t make you even more skeptical of financial tips from strangers, maybe the following story will.

I received this message from TC through Zecco this morning:

Hi, new to investing and was wondering if you would give some tips which would be a good newsletter to subscribe to for my short and long term trading? Is this robot Bull**** or does it work. Thanks for your time.

The “robot” TC is describing is advertised as a Google contextual ad showing at Zecco (pictured atop) and a clickthru leads to the site along the right DayTradingCoach.com (sorry, no link).

I had never heard of this program but am immediately skeptical of any deal which is presented like this on a web page. It’s in the whole get rich quick format which you see on thousands of different one page pitches. Too many sites which use this format have gotten rich off selling information that can usually be found with some specific internet searches, not rich from the information itself.

Being a geeky guy, I was intrigued if I could find this “robot” for sale anywhere. Can you actually buy the “robot?” It doesn’t appear from my searches that you can, but hey, you can buy a newsletter.

Surprise, surprise, all that Michael and Carl want is your email address and name. There’s a “don’t worry we won’t sell your name and address” disclaimer at the bottom of the page. I decided on TC’s behalf to enter in a specially tagged email address and see what their email autoresponder sent my way.

The first email was a validation link from somebody named “Jens Clever.” This isn’t the Beav’s mom (June Cleaver), and was coming from the following address:

Trading Coach LLC
100 Wall Street, New York, NY 10005, USA

Before clicking the validation I would be giving this organization permission to send me information, I wanted to sniff around a bit more. I was on a mission to find this stock robot promised in the Google served ad, not be sent in a circle buying into newsletter offers. I perform some Google searches for “Trading Coach LLC” and see what others on the web were saying. I was led to the site spamstocktrader.com which tracks a fictitious portfolio of buying and selling spam stocks. Now check out the email disclaimer reposted by spamstocktrader (emphasis mine):

You are hereby advised that Daytradingcoach.com / Trading Coach LLC / Jens Clever is receiving a cash fee of two thousand and thirty two dollars from the company shown above (or its agent) as compensation for the distribution of this email.

$2,032 for distributing information about a stock trade in an email. TC, are you paying attention to this? You don’t need to be a farmer to smell this manure. No thanks, Jens Clever, I passed on giving you my email address so you could send me stock tips that you were being paid to put in emails.

The spider web of email finance newsletters
Now back to the original web page. Page two was another web page going on and on about a (second?) newsletter. Imagine that, another page with another sales spiel for, yes, a newsletter selling hot stock tips.

But where is this amazing “robot” that the ad teased? Apparently the “robot” is just used by the people who write these emails? Is it a “robot” that must only output information when money is scanned into it?

Sorry there is no bot for sale, only a newsletter with “468 spots left” so act quick! I wonder if the next prospect who comes along sees 468 spots left too or is this some random number for each prospect? Are you kidding? A newsletter with a limited number of subscribers? I’ve never heard of any email newsletter that was only allowed to a limited number of subscribers, have you? Digital limited, I guess, just don’t expect any of those subscribers to forward to their friends and family.

And then another request for a name and email, only this time no disclaimer that my name and email address wouldn’t be whored out:

Still only interested in the robot, not subscribing to some newsletter. I passed on filling out the second email. Ironically enough, Michael’s office is in downtown Seattle “across from City Hall” according to the web page at the following address:

Global Marketing Company LTD
93 S. Jackson Street #56595
Seattle, WASHINGTON 98104-2818, UNITED STATES

Oddly, the phone number offered isn’t a Seattle-based 206 area code number, it’s a number from the UK. . Here’s a link to a Google hybrid map of the area or embed below for those with readers that allow IFRAME:

View Larger Map

Michael offers availability of his physical address to the lifetime subscribers of his newsletter. Pay only $47 and you can stop by and see him during office hours any time. I should go down to 93 S. Jackson Street #56595 and see what’s actually there. Being it’s Sunday, it would have to be a work day. Maybe someday when I’m down that direction I’ll drop in and see if Michael is available.

Moral of the story for TC and others
I’m sure by now TC who I’ll be pointing to this post in a response will see what you need to do with advertisements and offers: verify the information and sources are credible. Perform Google searches and see what others are saying about the service. Due diligence.

I’m not suggesting there aren’t any stock newsletters or that the ones mentioned above might occasionally offer stocks you can actually make money by following their tips but you have to ask yourself if those tips were so great overall, so irresistibly financially attractive, why would they be selling the information? Wouldn’t they would be using those tips to make themselves a fortune and not be focusing on the very profitable business of getting paid to share these stocks in paid newsletters?

In our ongoing stock competition between my wife and I, both our portfolios are available for the world to see for zero, nadda, nothing, not even one penny. Open, transparent and including dollar amounts, # of shares when we bought and when we sold, and even notes about each trade. I’m far and away no stock expert and don’t write or sell newsletters offering stock tips, but I’m happy to offer three common sense guidelines for those new to stock investing: research, research, research.

Yes, that’s the same word repeated, but it’s the truth. TC, and friendly readers, if I was to trust somebody online that I didn’t know with making financial decisions, I’d look for a similar level of transparency about what stocks are being bought and sold. I’d examine the history and compare that to the information being shared in his/her/their newsletter. I’d perform Google searches and see what others who bought these newsletters are saying and how transparent they’re being about their own results from following the advice. Research, research, research.

Let’s close by going back to TC’s questions at the top of this post. I don’t subscribe to any paid stock newsletters so I’m not a good source to ask for what the best ones out there are for short term and/or long term trading. I do most my research through the search engines, analyzing companies including both past and recent news articles. In some cases my direct customer experience will compel me to buy or sell a stock.

As for if the “robot” mentioned in the ad is BS? Draw your own conclusions from the information available. Speaking purely for myself, if I could buy this bot somewhere and it wasn’t prohibitively expensive, I’d try it out and share the results — for free — not in any paid newsletter.

Maybe some readers have had positive experiences with paid newsletters? I understand Fool.com has a paid newsletter. At least that’s a name that’s been around awhile, TC, but no clue as to how good or bad the performance has been there. Just be careful out there. That’s the best advice any stranger or friend can give you involving any financial tip on the web.

Congratulations to Kara for turning her $500 deposited in July 2007 into $544.93, a 8.99% return in our 2007 stock competition. She had better performance than me that ended 2007 with $522.78, a 4.36% return. Here is Kara’s competition portfolio:

Here is my competition portfolio:

We both traded 11 stocks during the time, with her still holding one (JOSB) and me holding two (ZL which is way down and NLY which is up). Since our balance is under $2,500 per the new Zecco rules any trades we make now will incur a $4 commission.

Hypothetical: if we had paid $4 Zecco commissions on each trade
To illustrate how much commissions can negatively impact a portfolio, paying $4 commissions on all our 2007 trades would have resulted in an overall loss for both portfolios. Since the commission applies to both buy and sell: I had 11 buys and 9 sells = 20 total trades. Kara had 11 buys and 10 sells = 21 trades.

Me: 20 trades x $4 = $80
K: 21 trades x $4 = $84
= $164 commissions divided into total of both portfolios: $1067.71 (15.36% commissions)

And instead of a balance of $1,067.71 we’d only have $903.70 and be sitting on two of three stocks that are currently in losing positions. Using that scenario it would have been better to put the $1,000 in a savings account than play the stock market. Although this is on a smaller money scale, it shows how difficult the stock market can be to make money. With the addition of the commission in 2008, it’s going to be even more challenging.

The 2007 prize
When asked what she wanted as a prize for beating me in the 2007 competition Kara replied, “take our kids shoe shopping.” Man, I got off easy. I was willing to buy her something for at least the difference between our portfolios. (Note: I still will).

Speaking of the kids, they don’t go back to school until tomorrow? Strange. Why aren’t they going back today? Is there an assumption this is an after New Year’s travel (or recuperation for those who partied) day?

2008 competition begins
We’re going to continue our competition into 2008 with the same setup. As for prizes, same deal: if she wins again, I’ll buy her something using the value of the difference in our portfolios or vice versa.

You are welcome to and encouraged to follow along with the trades we’re making on our Google Finance shared page. The quotes are delayed 20 minutes.

I also am sharing my competition trade activity through Zecco social (my wife currently is not), which provides third party verification that, yes, I am buying and selling the stocks listed on the Google Finance shared page. Zecco doesn’t actually show the dollar amounts or number of shares.

With my permission, they picked me as one of their featured investors (pictured above), thanks Zecco! You can add me as a friend, if you like, from my Zecco profile page.

While on the transparency front, as of this writing I also own the following stocks that are not part of our ongoing competition and are not traded through Zecco: AAPL, EXPE, GOOG, IACI, IGT, SHOR, VCLK and YHOO. For newer readers, I do disclose in each blog post where relevant when writing about these companies.

Free real time stock quotes
If you wanted to see a more real time view of either a real or fantasy stock portfolio you could use something like freerealtime.com.

I used Free Real Time with the Apple Web Clip function in Safari to make a dashboard widget and just have to hit the Apple key + R to refresh to see how the portfolio is doing during trade days. Since my main machine is Vista, I wonder if there’s a Vista gadget that does something similar? If you know of one please let me know in the comments.

Overall I’m satisfied with the results in 2007, especially with the instability of the market the last six months, but I’d like to see at least either my wife, I or both get over $1,000 by the end of 2008. If our portfolios combined a year from now could reach the $2,500 minimum, even better.

How did your portfolio(s) perform in 2007? No need to share dollars, but percentages would be nice. Happy, unhappy or satisfied?

The day after Christmas is as good a time as any to go over the $200 mark for the first time and now Apple (AAPL, disclaimer: I own stock) is part of the 200 club. I’ve been watching here and there this morning waiting to see this happen.

Apparently news that Apple cut a deal to get to the Apple rumor site Think Secret shutdown has had no bearing on the stock price, nor the fact that Leopard crashes more than Vista (for me anyway, YMMV).

2007 has been an outstanding year for AAPL stock performance, making the list of top tech performers for the year at +116%. Apple was beaten by Amazon +120% and Gamestop +121%.