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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?
Charles 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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