Saturday, August 27, 2005

Google the ultimate Deflator...

from Om Malik's blog. Seems like you could almost have a blog dedicated to just Google, Google news, speculations, stock offerings, stock chart, business model, philosophy and art - all things Google. Just like the name suggests, there's really a "google" number of possibilities.

Anyway, here's the link. The Guest post by Robert Young is more interesting.

Google - the ultimate Deflator

Friday, August 26, 2005

Business 2.0 - Magazine Article - Printable Version - The $50 Million Giveaway

Want to write a business plan for over a million dollars? How about one of these ideas!!

The $50 Million Giveaway

PS: I have some thoughts on the "$2M CUSTOMER SERVICE OVER IP" contest paid for by Shanda Bahles, El Dorado Ventures. I am currently in the business of VoIP for call centers.

Wednesday, August 24, 2005

Is Google Shopping?

Just going through Google's interest in voice messaging and webphone, and the fact that they are getting into the IM world (VOIP also) - and the recent money raised through the $4 billion secondary offering, I am thinking they are going to buy somebody out...
I have been trying to play the guessing game and here is my shortlist
1. Skype
2. Vonage
3. Avaya
LVLT has a good backbone infrastructure, but I dont know if they would pay 4 bil for it.

Speculatively Yours,

Tuesday, August 23, 2005

Barron's Online - Surviving the Recession

Another article underlining Sector wise investment. Click here to read.

Monday, August 22, 2005

NY Times: The Breaking Point

MUST READ if you are concerned/curious about risingoil prices. Very interesting brief on Ras Tanura, the largest oil terminal of the world from where 10 percent of the worlds oil is shipped. Also goes into OPEC, oil reserves, etc and the Saudi domination.

The Breaking Point

Friday, August 19, 2005

The numbers behind Google's secondary offering

From an article in WSJ -

"...Amid all the mystery, the tech company seemed to leave a clue that suggests the size of the offering wasn't arbitrary by stipulating that the number of shares Google plans to sell is 14,159,265. Those are the first eight digits that follow the decimal in the value of pi (which is 3.14159265), a number representing the ratio of the circumference of a circle to its diameter."

Damn, these guys are so geeky, I would fit right in if I had the smarts!

Thursday, August 18, 2005

Barron's Online - Superior Energy Insiders Sell Near High

Energy insiders selling at high's. A look further shows Exxon Mobil insiders are also selling and so are Sunoco (SUN) insiders. Take a look at the article linked to the title of this post.

Some trader's take

In Barron's...

PPI Results Increase Inflationary Fears

Alfstad Capital
1420 Fifth Ave, Suite 2200
Seattle, WA 98101
(206) 274-5160

WITHOUT DOUBT, at long last some might say, energy prices are starting to have a real impact on the monthly data releases and it is only a matter of time until they influence prices across all sectors of the economy.

The markets aren't ready or willing to adjust to that fact quite yet. Instead many traders remain convinced that the US economy will soon roll over and growth will die allowing the inflationary pressures to subside.

So, although the headline number this morning for July -- that jumped 1% instead of the 0.5% rise called for -- we see the markets virtually unchanged after an initial drop.

The core rate surged by 0.4%, light years ahead of the 0.1% forecast, yet the street is dismissing that news as a one-off event.

Year-over-year, the the headline report is up 4.6% and the core is up 2.8%. The core rise is the largest seen in 10 years! Yowzer Batman, those are big jumps.

Wednesday, August 17, 2005 - Panic ensues in rush for�cheap laptops - Aug 16, 2005

More on Buy-n-Hold

On the issue of Buy-n-Hold, I agree with Gadda. I see why he mentioned the 401(K) exception now. True, in 401(K) accounts and IRA's investors may tend to get more complacent (and hence that effectively results in a buy-n-hold strategy).

The managed mutual funds mostly recommend this strategy to reduce turnover and redemptions. They are just trying to lock in customers for a long long period. They go one step further and lock you in for a few years when you buy class A or class B funds (i think).

The "advisers" recommend it because they have already made their sale once and will be earning on that sale for years to come (read mutual fund load). This means they have no incentive to refer their client to switch to another mutual fund or stock. Besides "advisers" are mostly dumb - at least the ones I met in Utah. They are just a little more than glamorous "car salesmen" peddling insurance, stocks and funds to unsuspecting "investors". We are far more smarter than to trust a fin. adviser.

My rants and cynicism aside, buy-n-hold truly has no evidence of beating the market. At least not to the extent that it is purported to be. Diversification does. But as soon as you mention Diversification - people jump to mutual funds! Managed mutual funds are a scam. Under the name of diversification they turn into these behemoths - its a lot like putting your chips on every number on the Roulette table in case you were to miss the winner. Many of them are simply pointless. Picking a good managed mutual fund is just as (or maybe more) difficult than a stock. Its almost like trying to hire a good stock picker (very few of these around, Peter Lynch, Bill Nygren, Buffet, ?Tom Gardner?, etc.).

Finally, the strategy recommended by the author, of owning just four sector funds in which sectors are picked on intermediate-to-long term demographic trends, economic activity, etc (macro stuff) does seem appealing. I actually think the strategy used with ETF's would actually have some merit (he recommends 4 matching ETFs in his article at the end). It would be interesting to find out if this has been previously employed by a money manager on a large scale and what the returns have been. The Macro trends are not easy to pick either. Besides, its yet another buy-n-hold variant.

IMO, the individual investor, i.e. people like us, can never be a successful buy-n-hold investor. There are a couple of reasons for that:

1) One person alone cannot track more than a handful of stocks, not consistently over years and years. Its just not our job - we are busy with our "paying" jobs, our lives, etc. So Diversification goes out of the window. Even with just a handful of stocks (say 8 stocks) it is a lot of hard work to keep up with the research, competetion, etc.

2) The individual investor does not have the resources available to him/her that fund managers have. This is a slightly falacious argument. The internet is perhaps the biggest resource and if you are willing to shell out the money you can read almost any report that is also available to a fund manager. The true resource shortage though is time. The fund manager has assistants and interns and employees at his/her disposal to read stock reports, industry competetion, etc. It may be possible for an individual investor to perform these activities for a limited time until he/she has enthusiasm or anxiety about a stock they own, but to keep up with the research over years and years and not have your judgement be affected by market volatility is a very hard feat to accomplish.

Market volatility, media noise and impetuous decision making are more likely to affect the judgement of the individual investor. There are few of us who have that detached, scientific almost surgical attitude towards what we own. This results in more than average failed attempts at buy and hold by mom-n-pop individual investors. What do they do when they realize this is just not working? They buy and hold a managed mutual fund!! After all, the experts know what they are doing, right?

What does this say about investment clubs? I think a lot. For investment clubs run by amateurs, like us, we are a lot like the impetuous individual investor that gives up after some failed attempts. The difference is that we hope to level out our anxiety by relying on each other's judgements from time to time. Its a very effective model - but it has nothing to do with buy-n-hold!? There is nothing about an investment club that makes them a better buy and hold investor than the managed mutual fund. And we know that the managed mutual funds aren't doing great anyway. So from a performance point of view, we are just slightly better than the mom-n-pop impetuous individual investor. Thats hardly a worthy goal to achieve.

Should we really put so much emphasis on buy and hold in our club?? What do you guys think?

Tuesday, August 16, 2005

Kindred Healthcare (KND)

Healthcare in general is beating the S&P and with healthcare inflation growing twice the rate of core CPI, the profits should continue to grow higher. The stock has pulled back significantly but fundamentals and technicals are pointing to positive outlook, presenting a good buying opportunity.

1 year chart with 10day, 50day MA, Volume, Volume Oscillator, Exponential MA and RS:

Click for Chart.

Schaeffer's Score Summary

Yahoo Finance Company Key Statistics

Insider Transactions (on Yahoo Finance)

You want to buy and hold?

"Buy and hold what?"....

Nice article on fallacies of buy-n-hold, importance of demographic trends, and some fund recommendations.

MSN Money - A 4-fund portfolio you can buy and hold

Friday, August 12, 2005

Street Chatter: GameStop, and Cendant

More Charts: This time GME. Game Stop has been a good performer on earnings. This is a bullish outlook on GME.


Schaeffer on Charts: More Bearish Blue-Chip Banter

Take a look at these charts on blue-chip stocks and read Bernie's analysis. We hold a couple of these big-boarders (C, PFE). We need to look carefully at these before our conference call. Also, the 10 yr T-bill is seeing a bit of a rally. Would this be a harbinger of times to come? At some point the T-bill yields are going to reach low enough to spark an upward move, which would mean good income at zero risk compared to the stock market nowadays. One more thing to think about before the conference call - rotate some money into risk-free investments.

Schaeffer on Charts: More Bearish Blue-Chip Banter

Stealing your neighbor's Internet? Experts urge caution - Aug. 10, 2005


Very off topic, but had to share this with you guys. I just stopped by at Harmon's this morning and I read this on the World News (Something) [I think it was a tabloid :-)]
Garden of Eden Found!
Original Apple Recovered!!
U.S. Grows Tree From Seed.

I googled it and found that News Corp has a stake in almost all tabloids!

'Nuff said. Made my day!

Thursday, August 11, 2005

Hidden Gems Qtrly Review

Quarterly Reviews August 11, 2005

Dear Hidden Gems Member,

Your Hidden Gems mid-month update is now available. In it, we cover the most recent news for our companies as earnings season winds down. Also, following on the success of our first Hidden Gems Haiku Contest, we offer a new contest and another chance for you to win a free year's subscription to our newsletter. Enjoy!

The Hidden Gems Team

Get Update

A contrarians take on PFE

Bernie Schaeffer takes on PFE pointing out that while the shares could trade in a narrow range for a while, the possibility of a breakout is high on the negative side.

Wednesday, August 10, 2005

The CSCO Debacle - On the Money, Mr. Schaeffer!!

If you would have read Bernie Schaeffer's commentary on the CSCO pre-earnings backdrop yesterday (posted at 12:55 ET) you might have been pursuaded to purchase some CSCO October 20 Put Options (they were going at a little over a dollar - closed at $1.05). Bernie was right on the money on his sentiment reading. Today the CSCO stock plunged almost 7%. The Options are worth 1.80 and the correction is under way - A whopping 76% from yesterdays close. Even if you didn't move your ass upon reading Bernie's article, and waited for the CSCO earnings release after market close, you may have observed that the market did not even budge at the more than expected earnings report from CSCO. Noticing the complacency you would have rushed to your computer to put in a trade at market open to buy some Puts. You would have still bought them at around 1.40 (yes they opened over 40% up today) and still made over 50% in one day! If you did nothing at all, you're just like me - another coulda-been.

Schaeffer on Charts: Cisco Systems: A Pre-Earnings Backdrop

Tuesday, August 09, 2005

Closing Bell: BULL vs BEAR

Happened to catch the Closing Bell (oooh Maria Maria...) on CNBC when I went home for lunch today. On the heels of the Fed move and more significantly their comments, Maria asked two investment talking heads to take sides on what the market's going to do by year end. Legendary BULL, Joe Battipaglia predicts the market is going up 5% by the end of year 2005. Schaeffer Investments' Todd Salomone was the BEAR predicting a 10% pull back in the market by year end. Very interesting (sometimes convincing) arguments on both sides. What I don't get is why does CNBC not hold their guests on One-on-One pieces like this accountable for their past record. A simple Google Search on Joe Battipaglia reveals that he was Bullish even during the heydays of the DotCom boom and never let up. Todd's record on the other hand is less public - after he is not a star like Battipaglia. Anyways, thought I'd share it with you since both the 5% and 10% figures seemed quite interesting.

Friday, August 05, 2005

Index - Index Funds Investing

For those of you looking for a good resource for investing yourself in Funds, Index Funds Online seems to be a great resource.

Index Funds Online

Tuesday, August 02, 2005

Cnooc Withdraws Unocol Bid

Cnooc Withdraws Unocal Bid
Amid Heat From Washington

The Cnooc saga has fueled more general skepticism in China about U.S. motives. "Free trade for the U.S. isn't really free and fair, it's just what's best for the U.S.," said Xing Houyuan, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, a think tank related to China's Ministry of Commerce. Ms. Xing, speaking after Cnooc had signaled its withdrawal, added: "This isn't going to have any positive impact for the U.S."