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Lobster Trapping For Investment Ideas
By Kemberly Wardlaw, Thu Dec 8th
Recently, my family and I took a trip to Maine to visitrelatives. During our stay, we toured the rocky shore lines andtook in the beautiful architecture of the old towns. One sunnymorning, three generations of Wardlaws boarded a boatand set out on a guided trapping excursion. We quicklylearned lobstermen lead a life of hard work and regulations.Over the course of many years, Maine's lobstermen and stateofficials have established certain criteria to protect lobstersand allow for greater development. With the rules, lobstermenlook for "keepers." A "keeper" is a that measuresbetween 3.25 and 5 inches from its eye socket to the end of itsback shell. In addition to the precise measurements, the lobstercannot carry eggs nor can it have a notch in its tail(indicating it is a breeding female). The notch is carved fromprior lobstermen who observed the lobster's breeding. If thelobster does not fit the criteria set forth, it is discarded andplaced back in the waters. As an investor, you constantly lookfor "keepers." At your disposal is a wealth of information todetermine the quality of a position. Depending on yourpredetermined goals (including risk tolerances and timehorizons), you may use a number of measurement tools. If theposition does not fit such benchmarks, you may consider movingon to a more
appropriate position. For example, among the manyrules of measurement, an investor may look toward a mutualfund's beta. Of course the fund's management, its fees, assetallocations and historical performance should play a role aswell. For bonds, an investor may consider its maturity, thecoupon, its yield to maturity (or call), price, and rating. Aninvestor must also determine the type of bond. Do you prefer amunicipal, treasury, or corporate bond? And with regards tostocks, if you have been an investor for any number of years,you know the drill. Between fundamental and technical analysis,you have several traps to pull from the waters. It is importantto know the criteria that is appropriate for your portfolio.Remember, some positions may be keepers while others may bediscarded.
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