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Hi. Welcome to the second issue of the Rogue Investing Report. If you missed the first issue, our archive is available at investing report. As always, please provide any feedback you may have so that I can better serve you in the future.

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Feature Article: Louis Rukeyser
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A recent injustice occurred. Louis Rukeyser, long time host of Wall Street Week on PBS, was fired. Rukeyser responded to news of his departure by stating, "They decided unilaterally not to proceed with me as the host of the show I created, wrote and maintained for 32 years." Apparently Maryland Public Television, the producer of Wall Street Week and a PBS affiliate, decided that Louis was too old for the show. Maryland Public Television has decided to create a new show that will include substantial involvement by Fortune Magazine. Now we can look forward to a biased financial program that is tied directly to the purse strings of Corporate America.

The announcement was made right after a nationwide PBS pledge drive. Fans of Wall Street Week are typically big PBS donors and PBS was afraid some fans might not get out their pocketbooks if they knew Rukeyser was going to be fired. Sadly, this is exactly the type of behavior one expects from network television stations and not PBS.

It is hard to imagine how anyone could fire the creator and host of the most popular financial program on television. For 32 years, Louis Rukeyser created one of the most unbiased, informative and accurate programs on financial matters. An entire generation of investors has benefited from the efforts of Rukeyser. Join me in protesting this poor decision by writing to your local PBS affiliate or by sending an email to Maryland Public Television at comments@mpt.org.

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Company Profile: Starbucks (SBUX)
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Many people drink coffee, but few people realize that a good investment could be right in front of their faces. Starbucks has a unique brand name, strong market position, and a high quality product in a growing market. While most companies are struggling to stay alive, Starbucks is projected to grow its earnings at an average rate of approximately 25 percent per year over the next five years. Starbucks also represents a way to invest in one of the few legal drugs that is not under attack. Heck, corporations actually like coffee because consumed in moderation it stimulates productivity. Recognizing a good investment opportunity and a way to diverse my investments outside of technology, I purchased stock in Starbucks about five years ago and have not been disappointed with the results. The only drawback to Starbucks is that at current prices its stock is a little expensive.

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Tip of the Month
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Look for investments where you have direct knowledge of the product or service that the company provides.

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Questions and Answers
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Last month I asked: What is your biggest financial frustration?

Mike Williams of Prairie Village, Kansas, responded: "I do not want to spend huge amounts of time researching stocks. Nothing seems safe in today's market, however. When I purchased Xerox, Ford and AT&T stock a few years ago, I thought these were safe, blue chip investments. I could not have been more wrong." 

Investing is not a sure thing. Superstar investors Warren Buffett and Peter Lynch preach that you should only expect about 30 to 40 percent of your investments to succeed. In fact, Buffett often uses the analogy of a great baseball hitter. In baseball, a great hitter only succeeds about 30 percent of the time. Unfortunately, this concept is difficult for most of us to understand. We are taught in life that a 30 to 40 percent success rate normally constitutes failure. Get 30 percent of the answers correct on an exam and you have failed.

Fortunately, this is not the case in investing. As I discuss in Rogue Investor, even a 20 percent success rate can outperform frequent trading or low yielding, low risk investments. I also point out in Rogue Investor that diversification is highly important. Numerous well-documented studies demonstrate that you should own, at a minimum, stock in at least 10 to 12 different companies in different industries. Owning mutual funds further diversifies your risk, because mutual funds are required to own multiple companies or other investments. A combination of diversification, knowledge and patience will help you succeed over the long haul.

Next month I'll address the following question: How should one's age factor into creating an investment portfolio?

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Disclaimer: There are no guarantees in investing. I make no assurances regarding the investment information presented in the Rogue Investing Report.

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