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ChartWatchCentral - Financial Interviews







A Financial Interview with Author/Investor Charles M. O’Melia



Rare is the chance for modern investor's to glean knowledge and understanding from an investor who's investment strategy has withstood the test of time to the tune of four decades. Rarer still is when a vault of wisdom such as that is distilled for the enrichment of the individual investor. ChartWatchCentral recently conducted an interview with author and long-term investor, Charles M. O’Melia, we are pleased to provide this financial interview for the benefit or our readers.

ChartWatchCentral: What has been the biggest change you have noticed in the stock market during your investment career of almost four decades?

Charles M. O’Melia: There have been so many changes! Today’s technology offers the individual investor instant breaking news on any company and the technology offers the ability to research any company, right at your fingertips. The research on a stock that use to take me weekends to do using a library’s microfiche machine I can now do in minutes right from my living room.

But, I would have to say, the biggest change in the stock market of old has been the proliferation of mutual funds. There are now over 8,200 mutual funds. For a person like me
who believes an individual investor should not own more than 12 to 15 stocks, I find this simply incredible.



ChartWatchCentral: Where do you think the stock market is headed over the next five years?

C
harles M. O’Melia: No one knows! There is an old Chinese proverb that goes something like this:  “He, who could foresee events 3 days in advance, would be rich for thousands of years.” On a long-term basis I have only witnessed expansion and progress. I believe that to be the nature of our American economy and our American way of life. And as our economy goes, so does the stock market and I see no reason to change that belief.

Who would have thought the expansion in China would generate 5 billion dollars of business for GE? The US companies listed on the New York stock exchange have the ability to profit throughout the global expansion of business around the world. And, an investor can profit without the necessity of having to own an overseas fund or companies to profit.



ChartWatchCentral: Your book, 'The Stockopoly Plan' has recently become available to the public. Briefly explain to our readers, please - what is Stockopoly?

Charles M. O’Melia: Stockopoly is an opportunistic investment plan that will profit the investor and no one else – not a stockbroker (you won’t need one, there are no commission fees!), a mutual fund or a financial advisor. It is a stock market investment strategy that helps you realize cash dividend income for the rest of your life. Each company you purchase using Stockopoly’s direct dividend investment strategy have been tested by the rigors of time and have been proven to be as safe an investment as the stock market can offer. Stockopoly will give you all the information needed to locate all the ready-available tools necessary for you to develop a concrete, definite plan of investing that will benefit you and your family for years to come.



ChartWatchCentral: Investing for retirement is the major theme of your book. What are some of the key factors an investor must take into account when investing for retirement?

Charles M. O’Melia: Simply this – securities should be purchased with the intent of providing dividend income to help ends-meet during retirement, with the understanding that no one can successfully retire without financial freedom.  So every investment in every company’s stock should be purchased with the intent of holding those securities (and adding to them during the years) until the dividend income from those securities are ample enough to ease the loss of income from retiring from your job. A well-diversified portfolio with no more than twelve stocks is all that is needed, coupled with a systematic and opportunistic investment strategy.



ChartWatchCentral: How effective do you think the stock market is for creating wealth?

Charles M. O’Melia: Owning companies that have a long-term history of raising their dividend every year, coupled with stock appreciation is a very powerful and effective wealth creating formula!  The effectiveness of the stock market to create wealth is not in question.  The ‘learning curve’ of the individual investor, well, therein lays the rub!



ChartWatchCentral: Do you think there is too much emphasis on 'quick riches' in today's market, as opposed to the longer view of wealth creation? Is there room for both in the typical investor's strategy?

Charles M. O’Melia: In my opinion, you should only concentrate on doing one thing at a time, and if it is worth doing at all, do it well. For me, all those ratings of stocks, you know, buy, sell, hold, unattractive, market-underweight, market-outperform, 1 star, 2 stars, etc. are nonsense, and have no room for those who are serious about creating wealth from the stock market. They are ‘quick riches’ schemes, giving employment to thousands and thousands – supported by those looking for the fast buck.

There is no room for such nonsense!  And in my opinion, those ratings given to a stock have no meaning what-so-ever for the long-term, dollar-cost averaging, buying investor of company’s shares, free of commission charges, whose companies raise their dividend every year, with the investor’s idea or purpose being to provide an 85% tax-free income, through ever-increasing cash dividends for the rest of their lives, no matter what the price of the stock at any given time in the market place may be.



ChartWatchCentral: Back to your book for a moment, if we could. What key points in the book should the investor pay particular heed?

Charles M. O’Melia: As strange as this may sound, forget making a profit! Instead begin to focus on the amount of money your holdings are providing in dividends. In my book the selected stocks will provide an income every week of the year (and I show you how to find and research your own). Every share of stock, in every company you own, should provide you with an ever-increasing cash dividend every quarter.

When you start to invest in those companies that have a history of raising their dividends each year (instead of trying to make a buck) – a lower stock price allows the dividends that are being rolled back into the stock to accelerate your income. The total value of your portfolio may go lower, but your income from that lower priced portfolio would increase dramatically. Profit by income! Twelve companies = a dividend check every week of the year. And each dividend from each company will be higher than the previous dividend received from that company (as long as that company, at least, maintains their dividend). The Stockopoly Plan only focuses on those companies that have a historical record of raising their dividend every year.



ChartWatchCentral: Your investment career has encompassed almost 40 years. Has the face of investment theory changed during that time? How so?

Charles M. O’Melia: Somehow, the theory of diversification in the stock market has gone overboard. My friend owns over 20 mutual funds (I do not own one!). Diversity, by its very nature, denotes mediocrity. If you put $5,000.00 into the S&P 500 Index Fund, you would end up owning $10.00 worth of 500 stocks.  Isn’t that spreading your money a bit too thin? The individual has been oversold or brainwashed on over-diversification by those who profit; witness the plethora of mutual funds.   



ChartWatchCentral: What are the biggest hurdles facing investors in today's market place?

Charles M. O’Melia: The biggest hurdle facing investors today is the same as it was yesterday – Risk and Uncertainty. That is one constant in the stock market. But it is because of the risk and uncertainty in the stock market that propels the return of investment far beyond the returns of a passbook savings account, CD’s or Bonds. Learning to use the risk and uncertainty of the stock market to your advantage, in my opinion, is the key to successful investing. 



ChartWatchCentral: Your experience as an investor is proof of concept regarding your investment philosophy and premise of the book. What advice would you give to the novice investor? Seasoned investor?

Charles M. O’Melia: My advice to the novice and seasoned investor alike is that life is just too short to learn everything you need to learn, without the help of others. 



ChartWatchCentral: Have you any parting words for our readers?

Charles M. O’Melia: The Stockopoly Plan is not a ‘get rich-quick scheme.’ The whole plan is proven to you through the examples in the book. It is a blue-print for creating wealth in the stock market, using a plan and a goal. Whether you know the difference between a P/E ratio and potato doesn’t make a difference. The Stockopoly Plan will give you a priceless education, which includes the prescription for successful investing. All the how-to, when, where’s and why‘s are there for your perusal.

“Employ your time in improving yourself by other man’s writings so that you shall come easily by what others have labored hard for.” 
-- Socrates


ChartWatchCentral: Thank you for your insight and time, Mr. O’Melia

Charles M. O’Melia is an individual investor with almost 40 years of experience and passion for the stock market.  The author of the book ‘The Stockopoly Plan – Investing for Retirement; published by American-Book Publishing. The book can be purchased at
http://www.pdbookstore.com/comfiles/pages/CharlesMOMelia.shtml



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