Hello Frugal Confessions Readers!

For those of you new to this series, check out the introduction here.

Here is my confession of the week:

I made my credit card company pay me this week. That’s right–$35 in my pocket thanks to Citibank. The first $5 is through a price protection program that they offer. I purchased a Coleman Queen Double High air mattress a month ago, and this week I saw an advertisement for the same one, except that it is on sale for $5 cheaper. My credit card company will credit my account the difference once I submit the ad. The other $30 is for a free trial offer on a new program they have. I get $30 just for trying it out. I love it when the credit card company has to pay me!!!

What is your Frugal Confession of the week? I’d love to hear it!

As I read Mariusz Skonieczny’s book, I couldn’t help but think back to my first job out of college. I was hired to make international sales (I was the entire department) on a grant given to this brand new start-up company by the USDA. About midway through my year there (after the one year grant was through they laid me off), I started getting these aggrandized thoughts in my head about the company truly taking off in the next 2-4 years, and me being in at the ground level of it all. In fact, while the company did not have an IPO (Initial Public Offering), they did have private investors, and I remember grumbling to the president one day about the fact that it was a shame that they had an income minimum on who could invest.

Now I am so thankful that I was unable to invest my hard earned $10,000; one of the other six employees was laid off shortly after I was, and their inactive website has finally been deleted off of the internet. Had I read Skonieczny’s book while in this first year of my post-grad employment, I probably would have gotten the idea that a lay-off was around the corner. The troubling signs I witnessed internally and that Skonieczny points out as bad business included too much debt and a very high price to earnings ratio (P/E).

In my case, it was pure dumb luck that I didn’t make that investment. But now that I am older and would like to pick some of my own stocks to invest in, I am glad that I read Skonieczny’s book for a number of reasons.

• Skonieczny made the connection for me between stocks and the actual companies behind those ticker symbols, something I have failed to do up until now
• Many times I have looked at the charts showing the rise and decline in the price of a stock, but I have always had the question of when to know you are getting a good deal (i.e. the stock will rise in the future versus sink like a sack of potatoes). Skonieczny shows how to find the value of a stock—admittedly an unwieldy thing to do—in order to determine if there will be future profit
• He reiterates the idea that you need to buy stocks at a discount in order to make the most profit; this is something that I wholeheartedly took advantage of during the recession in both my IRA and in US Steel, and the profits began coming in several months ago

While I am unsure if after reading this book I will be able to make these calculations on my own (there is still a mental block to the idea of it), knowing that these calculations exist, and knowing some key things to look for when trying to decide whether or not to purchase a stock has truly opened a slit in the curtain for me to reveal the Great Wizard of Wall Street.

Did any of you take advantage of discounted stocks during the Recession?