Deja Vu All Over Again and Credit Card Stock Picking…

Another month, another churn.

The Dividend family completed another seven Card churn last week (this time in my wife’s name.)

And the results are in, so why not do a bit of a review?

Below are seven cards that we applied for.

If the cards look familiar its because they are identical to the “highroller Churn,” that I concocted for my friend months ago.

We were looking for a big bang in terms of miles and weren’t afraid to drop a little cash in order to get it.  (Flying a family of 5 to Japan every year takes miles and lots of them)

Below you will find the seven cards that we applied for along with hyperlinks to the application pages for them. (Feel free to play along should you so choose.)

Chase Southwest Business Card

and

Chase Southwest Personal Card   

(Note this offer is dead since I applied, so no link.  Sad, but it should come back in the coming months.)  Also the Ink card has a limited time 60,000 Ultimate Rewards point bonus right now, so feel free to work that in, in place of the SWA business card.)

Bonus: 50,000 Southwest rapid rewards miles on each.

Annual fee: $99 not waived. (X 2 cards)

Spending requirements: $2000 on each within three months.

(With an additional $6000 worth of spending on either of these two cards we will become eligible for our second the Southwest companion pass, the blue ribbon prize of the miles game. which essentially kicks up the value of the 100,000 bonus miles to 200,000 miles.  For more on the companion pass see here.

Result: approved for both after reconsideration calls. We moved some credit line over from her united personal card to close the deal on the personal card.

Citi Executive Advantage World Elite Mastercard From American Airlines

Bonus: 100,000 Aadvantage miles plus the $200 statement credit.

Bonus bonus: access to all American Airlines admirals clubs and some partner clubs for The cardholder and a guest.

Fee: $450 annual fee not waved. (Though this is essentially a $250 annual fee given the above statement credit)

Spending requirement: $10,000 in three months!

Result: Approved after a reconsideration call.

Citi Aadvantage Visa Business Card from American Airlines

Bonus: 50,000 AAdvantage miles.

Fee: Waived the first year.

Spending requirement: $3000 in three months.

Result: Approved after reconsideration call.

Starwood Preferred Guest Business Card

and

Starwood Preferred Guest Personal Card

Bonus: 25,000 Starwood preferred Guest points (X 2) +10,000 Starwood points for referring her from my account!  (And I would be obviously be happy to do the same for you if you wish to contribute more Starpoints to our account, just leave a comment and I’ll email you an invite)

Fee: waived the first year.

Spending requirement: $5000 in six months (X 2)

Result: Approved after reconsideration call for business card. Instant approval for personal card.

Barclays Usair Mastercard. (I applied for this card first, to avoid being rejected.)

Bonus: 40,000 US Air miles after first purchase.

AnnualFee: $89, not waived.

Result: rejected, Again! Sad, but true.

So all in all we are looking at a haul of 310,000 Southwest, American, and Starwood miles.

With the companion pass our effective miles will be boosted another hundred thousand miles for a grand total of 410,000 miles, from which we will get conservatively $6000 worth of value.

For this we will have to pay $540 in annual fees.

And of course we will have to “spend” $27,000 in six months.

Which shouldn’t be too hard.  (Honestly…)

$10,000 a month can be spent on mortgage, bills, etc., via Bluebird and Visa gift cards.

$1000 a month can be spent for free with Amazon payments.

And I will probably spend $5-$10,000 a month “investing” in stocks with loyal3. (I may make some money with this and I may lose some money. )

That’s an easy $60,000 per 3 months in spending, without really depleting our bank account beyond the yearly fees and costs of gift card purchasing..

Speaking of loyal3, I already completed my first $2500 invested in Berkshire Hathaway last week. I cashed it out after four days having made $50 (of which 25 will go to the taxman if I don’t accrue some capital losses later on this year. )

This is a lovely technique for meeting minimum spending requirements for credit card bonuses. In my gut I suspect it’s a little bit too lovely. There’s no way it can last. So I will partake in this while the getting is good.

Even if the Loyal3 angle proves fleeting, it’s been interesting reading up on individual stock investing and stock valuation. I learned 3 main Lessons from that reading which I would be happy to share with you.

1. There are no great values to be had in the loyal3 portfolio. I haven’t found one stock that’s trading below 100% of its intrinsic value by my calculations.

Because of this, I Have no interest in buying and holding any of these stocks.

2. I’m glad I’m a passive index fund investor. Buying the whole haystack is easier than reading the tea leaves when it comes to individual stock selection. That passive index fund investing is statistically more profitable is a nice little bonus.

3. I’ve developed a strange screening criteria for Loyal3 purchases.  Since I don’t really want to own any of these stocks, I’ve decided to focus on a strategy of buying and selling stocks with lower beta (because I’d like to avoid big gains and losses as much as possible), and no dividend yield (because I’d like to avoid paying taxes unnecessarily). And if possible I’ll try to avoid companies with significant debt (as they may be more vulnerable to rapid devaluation should the market suddenly turn bearish.) The stocks that I have decided to focus on are for “invesment” are :

Berkshire Hathaway, Electronic Arts, and Monster Beverage Corporation.

It’s a funny collection of stocks, but as best as I can tell it suits my purposes for short-term investments.

Which is to say, you should probably not copy my investment style in this arena because these do not really represent investments to me at all. Furthermore I admit that I lack any credibility when it comes to stockpicking, and frankly don’t even really believe in it for most investors. For me this really is all about the credit card spending.