The Investment Vig

I'm a numbers guy at heart, a statistical process control engineer, and a poker player who likes to roll dice occassionally. The one thing I hate most are taxes. In casino speak, taxes are called "vigorish" or "the vig." The vig is what casinos take out of your winnings to keep for profits.

Analogously with investments, the vig would be called "broker fees." With that in mind, I chose to open an account with Scotttrade where each trade costs me $14.00. No...$7 you heard. But consider that the only way to get your money back is to sell the stock you bought which costs an additional $7, right? So for me, I discount any investment by $14 on the assumption I'll eventually want to sell. Scotttrade also has a nearby office and great customer service so it's worth the slightly higher vig in comparison to Trade King.

In keeping the vig on my portfolio as low as possible, I figure I need to buy at least $1000 of a single stock at a time. Why? Because buying $100 worth of stock means I gave my broker an enormous 14% of the investment value. At $1000 minimum trades, the vig is reduced to 1.4%, a tax rate I can stomach.

Recent books by Jim Jubak and Peter Schiff have introduced me to agriculture/metals commodities and foreign companies, particularly in Brazil. In starting a personal investment portfolio, I'm looking at the following candidates in no particular order:

(1) BHP Billiton: An Australian mining company heavily ingrained in China's growing infrastructure.
(2) GE: A domestic mainstay banged up by the financial crisis yet ready to support infrastructure initiatives by Obama.
(3) Petrobas Brasiliero: A Brazilian oil company doing amazing stuff with technology that's fun to read about as an engineer. Their NYSE symbol is "PBR" so a must have anyway.
(4) Central European Distribution: Largest vodka producer in Poland and a Jubak selection. Yeah, yeah I've heard it already...do the vodka company before the PBR or the portfolio may get sick.
(5) Vale: Brazilian. Large producer of iron with a great Chinese market share. Other precious metals.
(6) Schlumberger: This amazing French company is trading near it's 52-week low due to slumping oil prices. It's available for less than 9 times earnings. Unreal. I wanna buy SLB right now but I don't know enough about investing yet.

Before I start buying Brazil, there are some dangers to evaluating foreign companies that requires additional research for me. I'll share what I learn in the future. -Schlitz