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What's New? Almost Everything!

by on August 17, 2014 7:00 AM

Nearly fifty years of perspective on the investment markets leaves me breathless.

What was true when I passed my Series 7 NASD (National Association of Securities Dealers) test in 1965, allowing me to become a registered representative or a stock broker, is now largely gone.

The world is changing rapidly. Now the NASD is gone, replaced by FINRA. Many companies that are now investment mainstream did not exist even as recently as fifteen years ago. Many of the companies that were mainstream when I started no longer exist as stand-alone companies. Their technology continues, but the original companies are history.

I am sitting at my kitchen table keyboarding this article into my Sony Vaio laptop computer listening to Pandora (internet radio) play a selection of Eagles songs (for free). I am connected to the internet by a Wi-Fi hotspot in my den that is in turn connected to Comcast's high-speed internet that also handles my telephone with Vonage.

My collection of cassette tapes and my Sony Walkmans are stashed in a drawer, unused for years. I also have a turntable with a collection of vinyl LPs that I haven't played for a long time. One of these days I will transfer that music to my computer hard drive, but I still won't discard those records.

In addition, I have a collection of CDs and several CD players. Helping my sister clean out her house, I found an eight track tape player complete with AM/FM radio and speakers. I can't bring myself to throw it out. Perhaps it will be sold on Craig's List or through eBay. Someone must be collecting this stuff – it's vintage!

I remember with great fondness buying graph paper and plotting stock prices over time nearly religiously for many months and even years. I was working on understanding trend lines and moving averages in order to anticipate where a stock price might go in the future. I have discarded all that stuff and now just turn on my computer and log onto one of several charting services that allow me to see graphically everything that trades, with the attendant moving averages, trend lines and much more.

I do accounting for several non-profit organizations and note that I have moved to QuickBooks, both online (using Google Chrome as a browser) and another version of QuickBooks on my hard drive. I also use Quicken to write checks and balance my checking account. I still write checks, but my wife pays the household bills online -- no checks, no postage and no mailing anything. Maybe I'll catch up to her next year.

One organization I belong to has a treasurer who balances the organization's checkbook "old school": on paper using a pencil, which is a thorough albeit time-consuming process.

Looking at what I do every day becomes more interesting as investment opportunities are cropping up all around me. Google wasn't a public company in the 1990s but is now a major player. Pandora is a rather new company also. Intuit, creator of Quicken and QuickBooks has been around since the late 1980s. Intel, makers of the processors in my laptop, wasn't around in 1965 but is now nearly an old time company.

My old Motorola flip phone is hopelessly out of date and will soon be replaced with a smart phone of some variety because of all the stuff I cannot do with the old reliable cell phone. I like to tell people that I had the second iteration of the cell phone issued in the mid-1980s. It was actually a bag phone that resided in my truck. Motorola used to rule the cell phone sector that is now dominated by Apple and Samsung, among others.

Keeping plugged into the investment business has allowed me to (kind of) keep up with technology and what is now becoming common practice in our economy. What is a good investment in 2014 is obviously much different from those of 1965.

To keep my clients' portfolios up to date, I have to thrust myself into the developing economy every day to stay current. It is a lot of work, but it allows me to avoid becoming bored.

As I have mentioned before, there is no better way to manage money than continually paying close attention!

(Note: Nothing contained in this article should be interpreted as a recommendation for the purchase or sale of any security or sector.)

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Dan Nestlerode is the Director of Research and Portfolio Management at Nestlerode & Loy Investment Advisors in State College. A graduate of Penn State University, Nestlerode has been an investment advisor since 1965. He can be reached at danielj@nestlerode.com.
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