Today's Progress

Part 1
Over the weekend I began reading 'The Dhandho Investor: The Low - Risk Value Method to High Returns' by Mohnish Pabrai. Mr. Pabrai is the managing partner of Pabrai Investment Funds. Since it's inception in 1999 the fund has returned an average of 29% annually. He is a value investing guru and considers Warren Buffet and Benjamin Graham as his mentors. You can read more about the book at Amazon if you click the picture of the book below. I had read some good reviews about the book and since I consider myself to be a value investor, I decided to pick up the book for a read. I have made it through the first several chapters and am certainly enjoying the book so far. In one of the chapter he quotes Warren Buffet. "Be fearful when others are greedy and greedy only when others are fearful" I couldn't agree more with the Oracle. I can personally relate to his thoughts. There are times I have been greedy when others in the market have been greedy and I have been burned. There are times when others are fearful and I have watched from the sidelines (enough examples here with Research in Motion (RIMM), Merck (MRCK), Corning (GLW), etc).

Is this the time to be greedy? What do you think? I think it is time to get started, time to get all of your ducks (moola) in a row. The market has corrected itself by about ~ 10%. There probably will be some more correction but I think it is time to get prepared to make those bargain bin purchases.

Part 2
One of those bargain bin stocks I have been tracking for the past several months is Limited Brands (LTD) (Google Yahoo Earnings Chart) Why Limited? Who does not know Limited? Okay, maybe some of you have not heard of them. If you haven’t heard of Limited, I am sure you have heard of Victoria Secret or maybe walked past a Bath and Body Works. Limited sells women's and men's apparel, lingerie, beauty and personal care products through retail stores, online, and catalog. The Company recorded sales of $11 billion in 2006 and currently has a 2.67% dividend yield. It certainly has had its share of troubles, like most other retailers, but some of the recent developments have made me optimistic about its future. Limited is certainly doing everything it can (in my opinion these changes are a catalyst for turnaround) to become leaner and focus on a smaller subset of brands. Limited has divested it's majority stake in both Limited and Express brands. It has also announced and initiated a $1 billion stock repurchase program. All in all, I believe LTD has the potential to show a healthy growth in the next several years.

So, I took the plunge. I logged into http://www.stockbny.com/ and opened an account for The Limited Brands. The minimum initial investment amount to open an account for LTD is $200 with an initial fee of $10. I was able to sign up for direct debit from my checking account. I also signed up for the Automatic Dividend Reinvestment option (free) and also signed up for Monthly Purchase Plan ($100 each month) for no fee.

It will take a few days for the direct debit of the initial amount and a few more days for BNY to make the stock purchase. I can now move on to tracking other DSP plans to invest into.