When my first book came out in 1997 I began working with the media -- appearing on Good Morning America, CNBC, and CNN -- and talking with reporters from the New York Times, The Washington Post, BusinessWeek, and Fortune.  The conversations often focused on stocks -- what was driving them up or down, which ones to buy, which ones to sell, and why. 

I spoke frequently with Amey Stone, then with BusinessWeek.  For years I had been accumulating a lengthening list of business contacts to whom I e-mailed my thoughts on business, stocks, the economy, and politics.  In March 2005, Amey suggested that I start my own blog where I could post these thoughts.  I named it The Informed Observer when Fortune's Andrew Serwer quoted me in his StreetLife column -- I was amused that instead of quoting me by name, he called me 'an informed observer.'

I've enjoyed blogging so when Amey approached me about working with bloggingstocks, I was very excited about the chance -- particularly since I had been participating in BusinessWeek/AOL chats for several years. 

What was the first stock you owned?
My first stock purchase was Apple Computer which I bought in the mid-1980s at around $16.  I was very impressed with the design of its products and thought that Steve Jobs was a master salesman.  I sold the stock at $24 after holding it for less than a year.  I figured it couldn't hurt to take a 50% profit.  And when I think about how volatile the stock has been over the last 20 years, it makes me less uncomfortable that I've missed out on its recent ride.

What is your worst investment ever?
My worst investment ever was Metalclad, a company that removed asbestos from pipes and was supposedly opening up toxic waste treatment facilities in Mexico.  In the early 1990s, I worked with a finance professor who was always trading stocks.  He seemed to know what he was doing and he strongly urged me to buy this stock. 

After reading the annual report, I saw that it was losing money and had no revenues from this Mexican waste treatment business.  But I bought anyway and ended up losing my entire investment when the company went bankrupt.

That was the last time you listened to anyone else's stock tip, right?
Metalclad was a tuition payment that forced me to develop a very strong investment philosophy and to view anyone's stock tip with skepticism.  Since then, if someone gives me a stock tip, I evaluate it rigorously.  It usually does not pass the test.

What is your investing success story?
My biggest investment success came from investing in a private company.  I helped finance the early rounds of an Internet software company -- at an average price of $6 -- that was acquired in 1999 by Macromedia (MACR) in a $440 million stock deal.  Macromedia's stock rose after the deal from $44 to about $80. 

In June 2000, I was still holding onto the shares but I was flying to Seoul, Korea to deliver a management training course. I was talking to my father about the stock and he suggested I put in a sell order at a set price.  I thought the stock was going to continue to rise so I set the sell order at $100.  While I was asleep in my hotel room in Seoul, Macromedia hit $100 and I locked in a profit.  Even though it continued to rise to $120, I felt good afterward because that fall it began a dive which took it into the single digits.

What is your investment philosophy?
My investment philosophy is that stock prices are hard to predict.  In the short-term, stock prices seem to move based on a beat-and-raise theory.  That is, if a company beats analysts' revenues and earnings forecasts each quarter and then raises its guidance for the future, then the stock will go up, otherwise it will tumble. 

But I can't predict whether a company will beat and raise each quarter so I focus on longer-term factors such as the profit potential of the industry, the firm's competitive position, and the stock's relative valuation.  The Technology Investment Dashboard, which I first described in my book e-Stocks, offers a good overview of how I conduct this longer-term analysis.

I also believe it's important to recognize that with each new presidential administration there will be a new industrial policy which will favor specific industries and hurt others.  Under Clinton, information technology did well.  Under the current president, energy, defense, and high-end retailing have benefited.  I developed a W-Industrial-Complex (WIC) index which highlights the investment benefits of investing in these industries.  More broadly it reinforces the opportunity to profit by identifying early the industrial policy of each new administration.

This investment philosophy has generated good results.  Between 1998 and 2005, my average stock pick was up 74% compared to a 5% return for the S&P 500.