How would I play those?
I think ultimately the market cannot allow them to go under so they will be saved and not stripped of their triple A rating. Which of course means I think the stocks are going up long term, but the risk is that if I am wrong you could easily lose 50% of your investment.
Smart play:
Long Straddle this thing, its not going to stay stable, these stocks are up and down 10% everyday. This means there is money to be made everyday, follow the news closely and jump on them or short them when the time is right.
Easy Money
Thursday, January 31, 2008
To answer some questions and some advice
This will probably be my last post at least until Sunday so let me answer a few things:
1. Why I handicap myself with prices in my portfolio.
- This is what I do, I only so far have bought stocks at the end of the day and it will stay this way unless I feel the need to in the middle of the day but then only under extreme circumstances(30% drop coming). I take the closing price and if the stock is UP in afterhours then I take the closed price, and if the stock is DOWN in After Hours I take the after hours price. This is just so no one can accuse me of taking stock that are up in after hours and claiming I get the price it closed at. This I am sure hurts my overall return by a couple % but its worth it. This thing is as fair as I can get it.
2. Why no Shorting, ETF, Currency trading, futures, ect?
- How many people who invest 5,000 dollars understand those things? This is not meant so I can make a bunch of money off things no one would undrstand. I just buy and sell stocks and buy the simpliest of options(naked puts and calls). I am sure I will do shorting since it is pretty easy and anyone can do it but going into currency trading is pretty unrealistic for most of the people who read this site I think.
3. Why no Penny stocks?
- I don't think advising people to buy penny stocks is a smart move.
4. You suck, your gay, your the best, ect.
- I love the feedback, positive and negative. Trust me, none of you are harder on me than myself. I don't get them all right but I do my best. Here is the advice.
My Report Card:
Earnings:
Amazon +4.7%, MA + 9.52%(was 15% and is up 2% after hours), BA +1.25%, MO - 1.05%
Of the four I said to buy the average next day return was 3.6%
The one I said to stay way from is Up 15%
The one I said to take a bearish position on but be careful down 7%
How to Play Fed Cut:
LULU +13.5%, ETFC +20.8%, IFC +55.54%, JRJC + 9.2%, DE up 1.5%
Average return on these stocks is 20.11%
Every other stock mentioned in retail/finance/industrial is also up since tuesday night, and most by 5-15%.
So what does this all mean?
To some its holy shit, great job but you can't look at it that way if you want to succeed. The wins/gains will always come, you don't worry about them, you worry about where things went wrong.
MO missed earnigns, it shocked me and the stock still should be going up with the higher dividend and splitting of company but it is not. I really could not tell you why but I wish I could.
ISRG I missed bad, I told you to stay away and at best just own it till close today. You would have missed out on 15% at least, maybe 23% if you owned all day. I should have known by looking at more of the news and headlines and earning reports that they would beat. This was a mistake that should not have been made.
And how bout my biggest errors yet?
Selling WCI(Now over 6 dollars, we sold at 4.50) and selling OCNW which is now at 5 dollars and we sold at 4.12.
Both were original buys for our portfolio. It is stuff like this that drives me nuts.
My point in this tangent? Forget about the wins, just get better on the mistakes
1. Why I handicap myself with prices in my portfolio.
- This is what I do, I only so far have bought stocks at the end of the day and it will stay this way unless I feel the need to in the middle of the day but then only under extreme circumstances(30% drop coming). I take the closing price and if the stock is UP in afterhours then I take the closed price, and if the stock is DOWN in After Hours I take the after hours price. This is just so no one can accuse me of taking stock that are up in after hours and claiming I get the price it closed at. This I am sure hurts my overall return by a couple % but its worth it. This thing is as fair as I can get it.
2. Why no Shorting, ETF, Currency trading, futures, ect?
- How many people who invest 5,000 dollars understand those things? This is not meant so I can make a bunch of money off things no one would undrstand. I just buy and sell stocks and buy the simpliest of options(naked puts and calls). I am sure I will do shorting since it is pretty easy and anyone can do it but going into currency trading is pretty unrealistic for most of the people who read this site I think.
3. Why no Penny stocks?
- I don't think advising people to buy penny stocks is a smart move.
4. You suck, your gay, your the best, ect.
- I love the feedback, positive and negative. Trust me, none of you are harder on me than myself. I don't get them all right but I do my best. Here is the advice.
My Report Card:
Earnings:
Amazon +4.7%, MA + 9.52%(was 15% and is up 2% after hours), BA +1.25%, MO - 1.05%
Of the four I said to buy the average next day return was 3.6%
The one I said to stay way from is Up 15%
The one I said to take a bearish position on but be careful down 7%
How to Play Fed Cut:
LULU +13.5%, ETFC +20.8%, IFC +55.54%, JRJC + 9.2%, DE up 1.5%
Average return on these stocks is 20.11%
Every other stock mentioned in retail/finance/industrial is also up since tuesday night, and most by 5-15%.
So what does this all mean?
To some its holy shit, great job but you can't look at it that way if you want to succeed. The wins/gains will always come, you don't worry about them, you worry about where things went wrong.
MO missed earnigns, it shocked me and the stock still should be going up with the higher dividend and splitting of company but it is not. I really could not tell you why but I wish I could.
ISRG I missed bad, I told you to stay away and at best just own it till close today. You would have missed out on 15% at least, maybe 23% if you owned all day. I should have known by looking at more of the news and headlines and earning reports that they would beat. This was a mistake that should not have been made.
And how bout my biggest errors yet?
Selling WCI(Now over 6 dollars, we sold at 4.50) and selling OCNW which is now at 5 dollars and we sold at 4.12.
Both were original buys for our portfolio. It is stuff like this that drives me nuts.
My point in this tangent? Forget about the wins, just get better on the mistakes
MOTOROLA NEWS!!??
Motorola(MOT) was just halted in after hours trading. Could this be the news that Ichan has been calling for? Could they be re-aligning the company. Lets pray so, this stock has plummeted but if they realign watch out.
Tuesday, January 29, 2008
Google and Earnings
Many important earning reports come out in the next few days. Here is my opinion on some.
1. Altira(MO) - Altria(which is really Phillip Morris) makes most of its money on smoking. Smoking is known as one of the three sins(Smoke, Drink, Gamble). These stocks tend to stay strong(drinking goes up) in times of recession/depression because smoking is an addiction, drinking is a feel good substance and gambling is a way to make your money back. Now, there is no such thing as a gambling stock because they are all resorts now that depend on tourism and obviously tourism is getting hammered(look at Las Vegas as proof), but I think smoking and Altria beat estimates. More important they should be highering their dividend and announcing the splitting of the company into domestic and international. A good stock to own before tomorrow.
2. Mastercard (MA) - Yes American Express was HAMMERED yesterday but the estimates for Mastercard have sandbagging written all over them. This is the easiest call in my life. Mastercard will DESTROY earnings and will give a better forecast of numbers then expected.
3. Amazon(AMZN)- Amazon has been hammered the last few months and I think any news will be good news. The estimates are low when compared to ebay and other similiary businesses. I think they will give good guidance as well. I would Own this stock.
4. Boeing (BA) - Boeing has won three major contracts in just the last two months, while the total revenue off those contracts will be spread out throughout the next year they will be enough to push them past estimates and should give them reason for a good forecast. I like this stock to jump 3-5% only.
5. Intuitive Surgical (ISRG) - Stock was the number one stock on the SP500 last year and has been hammered so far this year. Current price is 236.78 dollars. There is a good chance you will see a short squeeze before earnings but I think ISRG falls short. Stay away
And then there was Google
It is awfully hard to bet against Google but if there was ever a time it is now. I am not confident enough in their missing to say short the company but I would do something called long straddle or bearish put spread. Here is how they work,
1 Long Straddle - You pick a call option and a put option with the same strike price and expiration date. If the stock rises you just use the call and lose the put, if it drops you use the put and not the call. The only way to lose money is for the stock to stay pretty stable which Google won't do.
2. Bearish Put spread(This is what I am doing) - To do this you purchase higher striking in-the-money put options and selling the same number of lower striking out-of-the-money put options on the same underlying security and the same expiration month.
The thing with Google is that matching or beating estimates by a small amount is not good enough and thats what I see happening. The stock will drop but it could be a great time to buy if it enters the 400's on Friday intra-day.
1. Altira(MO) - Altria(which is really Phillip Morris) makes most of its money on smoking. Smoking is known as one of the three sins(Smoke, Drink, Gamble). These stocks tend to stay strong(drinking goes up) in times of recession/depression because smoking is an addiction, drinking is a feel good substance and gambling is a way to make your money back. Now, there is no such thing as a gambling stock because they are all resorts now that depend on tourism and obviously tourism is getting hammered(look at Las Vegas as proof), but I think smoking and Altria beat estimates. More important they should be highering their dividend and announcing the splitting of the company into domestic and international. A good stock to own before tomorrow.
2. Mastercard (MA) - Yes American Express was HAMMERED yesterday but the estimates for Mastercard have sandbagging written all over them. This is the easiest call in my life. Mastercard will DESTROY earnings and will give a better forecast of numbers then expected.
3. Amazon(AMZN)- Amazon has been hammered the last few months and I think any news will be good news. The estimates are low when compared to ebay and other similiary businesses. I think they will give good guidance as well. I would Own this stock.
4. Boeing (BA) - Boeing has won three major contracts in just the last two months, while the total revenue off those contracts will be spread out throughout the next year they will be enough to push them past estimates and should give them reason for a good forecast. I like this stock to jump 3-5% only.
5. Intuitive Surgical (ISRG) - Stock was the number one stock on the SP500 last year and has been hammered so far this year. Current price is 236.78 dollars. There is a good chance you will see a short squeeze before earnings but I think ISRG falls short. Stay away
And then there was Google
It is awfully hard to bet against Google but if there was ever a time it is now. I am not confident enough in their missing to say short the company but I would do something called long straddle or bearish put spread. Here is how they work,
1 Long Straddle - You pick a call option and a put option with the same strike price and expiration date. If the stock rises you just use the call and lose the put, if it drops you use the put and not the call. The only way to lose money is for the stock to stay pretty stable which Google won't do.
2. Bearish Put spread(This is what I am doing) - To do this you purchase higher striking in-the-money put options and selling the same number of lower striking out-of-the-money put options on the same underlying security and the same expiration month.
The thing with Google is that matching or beating estimates by a small amount is not good enough and thats what I see happening. The stock will drop but it could be a great time to buy if it enters the 400's on Friday intra-day.
New Purchases for Portfolio
Alright after taking a day off and missing out on a 100 point swing and fucking up on selling WCI and its options lets do some buying.
We have 20,245.40 dollars.
We own SIRI for 947.76 and we own call options on EJ still. Besides that its time to make some purchases.
I will follow my gut and go with some of our "Top Plays for Fed Cut"(post below).
1. ETFC - 3.97 dollars per share. Invest 3,000 dollars so we have 756 shares.
2. IFC - 7.42 dollars per share. Invest 3,000 dollars so we have 404 shares.
3. Tivo - Law is my first love and from what I am reading it looks like they might win their lawsuit with Dish tv for violating copyright laws. If they win the case, the stock should surge. I think its a good bet.
6.85 dollare per share. Invest 3,000 dollars so we have 438 shares.
4. CROX - Got to credit Fast money for pointing out the amount of people short in this stock. With the fed cut coming, the retail will climb and shorts will be squeezed. This is to easy of a short term play.
29.12 dollars per share. Invest 3,000 dollar so we have 103 shares.
This leave us with 8363.64 dollars but we must take out 16 dollar(4 trades, 4 dollars each) so we are left with 8347.64 dollars left.
Now lets go option hunting:
1. WCI - We messed up by selling the option at 2.85 cents per share. It has since gone to 3.00 dollars even per share. We are buying back in for 2100 dollars, so 3 dollar per share is 300 dollar per contract, so we own 7 contracts on WCI.
2. ETFC - March 08, 6 dollar strike price call option. Valued at 10 cents at this moment(would need 50% stock rise). We are buying in for 2,000 dollars, so 10 cents per share means 10 dollar per contract, so we own 200 contacts on ETFC.
3. CMC - Optionmonster.com has shown me this one. The option activity on this stock is unreal. There are few times I invest in a company I don't know everything about but there is something going on here. The stock is at 25.98 as we speak(down to 25.67 in after hours) but people are thinking this thing is jumping so lets get in on it. All the action is in June so we will go there as well. We will buy the June 08 Strike Price of 35 dollars call option at 80 cents per share(80 per contract) for 2000 dollars which means 25 contacts, and will also follow the herd and buy the June 08 Strike Price of 40 dollars Call option at 30 cents per share(30 dollars per contract) for 2,100 dollars which means 70 contracts.
Total expense on options will be 8200 dollars worth but the total cost of the transactions will be 24 dollars.
We are left with in the bank 139.64 dollars.
We have 20,245.40 dollars.
We own SIRI for 947.76 and we own call options on EJ still. Besides that its time to make some purchases.
I will follow my gut and go with some of our "Top Plays for Fed Cut"(post below).
1. ETFC - 3.97 dollars per share. Invest 3,000 dollars so we have 756 shares.
2. IFC - 7.42 dollars per share. Invest 3,000 dollars so we have 404 shares.
3. Tivo - Law is my first love and from what I am reading it looks like they might win their lawsuit with Dish tv for violating copyright laws. If they win the case, the stock should surge. I think its a good bet.
6.85 dollare per share. Invest 3,000 dollars so we have 438 shares.
4. CROX - Got to credit Fast money for pointing out the amount of people short in this stock. With the fed cut coming, the retail will climb and shorts will be squeezed. This is to easy of a short term play.
29.12 dollars per share. Invest 3,000 dollar so we have 103 shares.
This leave us with 8363.64 dollars but we must take out 16 dollar(4 trades, 4 dollars each) so we are left with 8347.64 dollars left.
Now lets go option hunting:
1. WCI - We messed up by selling the option at 2.85 cents per share. It has since gone to 3.00 dollars even per share. We are buying back in for 2100 dollars, so 3 dollar per share is 300 dollar per contract, so we own 7 contracts on WCI.
2. ETFC - March 08, 6 dollar strike price call option. Valued at 10 cents at this moment(would need 50% stock rise). We are buying in for 2,000 dollars, so 10 cents per share means 10 dollar per contract, so we own 200 contacts on ETFC.
3. CMC - Optionmonster.com has shown me this one. The option activity on this stock is unreal. There are few times I invest in a company I don't know everything about but there is something going on here. The stock is at 25.98 as we speak(down to 25.67 in after hours) but people are thinking this thing is jumping so lets get in on it. All the action is in June so we will go there as well. We will buy the June 08 Strike Price of 35 dollars call option at 80 cents per share(80 per contract) for 2000 dollars which means 25 contacts, and will also follow the herd and buy the June 08 Strike Price of 40 dollars Call option at 30 cents per share(30 dollars per contract) for 2,100 dollars which means 70 contracts.
Total expense on options will be 8200 dollars worth but the total cost of the transactions will be 24 dollars.
We are left with in the bank 139.64 dollars.
Top 5 Stocks to Play into Fed Rate Cut of 50 Points
I see the Fed cutting tomorrow by 50 Basis points. My worries is that the 50 basis points are already factored into the market so we will not experience some sort of huge push up. We will most likely be anywhere from 30 down to 30 up come 1:15 Central time and we will go up to 100 after the announcement. IF hell freezes over and the fed cuts by 25 points this market will plunge to 300 down at least and if they didn't cut at all we would be looking a 500-600 point drop right in the eye.
Let me say this: With any fed cut the places to be are FINANCIAL, RETAIL, INDUSTRIAL!
This means Financial stocks like ETFC, IFC, CFC, GS, C, BAC,BBX, WFC, CS, and WM. This means Retail stocks like UA, LULU, ZQK(quick silver), DELT, and ICON and Industrial stocks like BA, NSC, and PLPC.
With all this being said. Here are my top 5 picks to play for a 50 point cut tomorrow:
1. ETFC - This stock seems poised to come back, I have doubted it every step of the way but I am starting to believe slowly. One thing for sure is that investors are banking on a 50 point cut for Etrade. If they get it this stock could storm upwards to maybe 10%, without it, they are looking the low 3 dollar range again.
2. IFC - As ETFC, this one was mentioned above. IFC is a company who has taken a huge hit in the subprime mortgage mess, and has been fighting to come back. A healthy fed cut of 50 basis points will make this thing rise over 10% I believe. It is up 2% after hours so get in early. This stock is also heavily shorted, 26% of total shares out, which means if the fed cuts there should be a short squeeze which could push this stock WAY WAY up.
3. LULU - The stock has been beaten up for the last 4 months but with a fed cut, people spend more money and LULU makes more money. LULU is undervalued and is oversold, they deserve to be around the 35 dollar price mark and with a fed cut they might get there.
4. JRJC - If you don't know what JRJC is, it is a Chinese online bank which has lost a fortune and recently made back a fortune in the sub prime mess. This is a risky pick but if the fed cuts and keeps on cutting this stock is going to keep coming back. It scares me it has come back so fast so far, but I am holding out faith that it can keep on coming.
5. DE - This is my top Industrial/Ag pick for the Fed Cut. If and when the Fed Cuts I expect the stock to jump 6%.
Let me say this: With any fed cut the places to be are FINANCIAL, RETAIL, INDUSTRIAL!
This means Financial stocks like ETFC, IFC, CFC, GS, C, BAC,BBX, WFC, CS, and WM. This means Retail stocks like UA, LULU, ZQK(quick silver), DELT, and ICON and Industrial stocks like BA, NSC, and PLPC.
With all this being said. Here are my top 5 picks to play for a 50 point cut tomorrow:
1. ETFC - This stock seems poised to come back, I have doubted it every step of the way but I am starting to believe slowly. One thing for sure is that investors are banking on a 50 point cut for Etrade. If they get it this stock could storm upwards to maybe 10%, without it, they are looking the low 3 dollar range again.
2. IFC - As ETFC, this one was mentioned above. IFC is a company who has taken a huge hit in the subprime mortgage mess, and has been fighting to come back. A healthy fed cut of 50 basis points will make this thing rise over 10% I believe. It is up 2% after hours so get in early. This stock is also heavily shorted, 26% of total shares out, which means if the fed cuts there should be a short squeeze which could push this stock WAY WAY up.
3. LULU - The stock has been beaten up for the last 4 months but with a fed cut, people spend more money and LULU makes more money. LULU is undervalued and is oversold, they deserve to be around the 35 dollar price mark and with a fed cut they might get there.
4. JRJC - If you don't know what JRJC is, it is a Chinese online bank which has lost a fortune and recently made back a fortune in the sub prime mess. This is a risky pick but if the fed cuts and keeps on cutting this stock is going to keep coming back. It scares me it has come back so fast so far, but I am holding out faith that it can keep on coming.
5. DE - This is my top Industrial/Ag pick for the Fed Cut. If and when the Fed Cuts I expect the stock to jump 6%.
Monday, January 28, 2008
Transactions for the Portfolio
As usual, I will make this as straight forward as possible. I will now round up to the nearest cent.
I still believe in WCI but I think it is due for a short term down spiral due to its rapid rise.
Sell WCI: Closed at 4.50. We own 622.25 shares. Value = 2800.13 dollars
Sell SCSC: Closed at 31.74. We own 100.67 shares. Value = 3195.27 dollars
Sell WCI Options: Own 50 contacts(5000 shares) at 10 cents per share. Shares are now a staggering 2.85 dollars. 5000 shares x 2.85 = 14,250 dollars(not bad for a 500 dollar investment).
Holding: EJ Options: 12 contracts at 40 cents per shares, now price per share is 27 cents(very strange number for option price). Value = 324 dollars
Holding SIRI stock: 947.76 shares x 3.08 dollars = 2919.10 dollars.
Cash: 124.24 dollars.
Cost of trades: Selling WCI options is 6 dollars. Selling 2 stocks puts at us our limit for the month for free stocks.
Cash revised: 118.24 dollars.
Holdings equity: 3243.10 dollars
Cash pending in trades: 20245.40 dollars
Total Net worth: 23,606.74 or 372.13% up
I still believe in WCI but I think it is due for a short term down spiral due to its rapid rise.
Sell WCI: Closed at 4.50. We own 622.25 shares. Value = 2800.13 dollars
Sell SCSC: Closed at 31.74. We own 100.67 shares. Value = 3195.27 dollars
Sell WCI Options: Own 50 contacts(5000 shares) at 10 cents per share. Shares are now a staggering 2.85 dollars. 5000 shares x 2.85 = 14,250 dollars(not bad for a 500 dollar investment).
Holding: EJ Options: 12 contracts at 40 cents per shares, now price per share is 27 cents(very strange number for option price). Value = 324 dollars
Holding SIRI stock: 947.76 shares x 3.08 dollars = 2919.10 dollars.
Cash: 124.24 dollars.
Cost of trades: Selling WCI options is 6 dollars. Selling 2 stocks puts at us our limit for the month for free stocks.
Cash revised: 118.24 dollars.
Holdings equity: 3243.10 dollars
Cash pending in trades: 20245.40 dollars
Total Net worth: 23,606.74 or 372.13% up
Sunday, January 27, 2008
The Case for SIRI
To answer the people wishing to know why I purchased SIRI(Sirus Radio) here are my reasons:
1. I believe the merger between SIRI and XMSR will be done in the next couple weeks. This is because it’s just not an antitrust violation. Satellite radio makes up less than 5% of all radio, and neither XM nor Sirius is profitable. What sort of monopoly would that be? Current market conditions are so bad that it would be hard for the Feds to turn away this merger, especially given all the negativity and the huge decline in M&A.
If not Merger:
2. It’s adding more subscribers and is expected to grow sales faster than its rival/partner, XM, even though it has greater operating losses. It’s also better prepared to expand outside of the players built into cars, where XM leads. Both are small and unprofitable, but Sirius’ higher sales growth makes it the clear winner to myself.
1. I believe the merger between SIRI and XMSR will be done in the next couple weeks. This is because it’s just not an antitrust violation. Satellite radio makes up less than 5% of all radio, and neither XM nor Sirius is profitable. What sort of monopoly would that be? Current market conditions are so bad that it would be hard for the Feds to turn away this merger, especially given all the negativity and the huge decline in M&A.
If not Merger:
2. It’s adding more subscribers and is expected to grow sales faster than its rival/partner, XM, even though it has greater operating losses. It’s also better prepared to expand outside of the players built into cars, where XM leads. Both are small and unprofitable, but Sirius’ higher sales growth makes it the clear winner to myself.
Thursday, January 24, 2008
Backing up the Truck on RMG
RMG Ipo tomorrow was just priced at 17.50 per share. The last IPO to be up was December 18th. There are 7 IPO's tomorrow and all are easy to get due to low demand. I have picked RMG and have put 300k in. Here is why:
RiskMetrics has been in the business of quantifying risk since its inception in 1992 as an internal risk methodology at JPMorgan. In the years since, as global financial institutions have developed increasingly complex and diverse portfolios, RiskMetrics established its position as the premier provider of multi-asset class risk management analytics. Utilizing a broad database of global securities and a comprehensive set of analytical models, the RiskManager platform allows clients to evaluate their portfolio risk through a variety of simulations, sensitivity analyses and stress tests. In 2007, RiskMetrics acquired ISS, an industry leader in proxy voting services and corporate governance research. The company hopes to leverage its existing technological and service platform while introducing a qualitative dimension to its risk analysis offering. The planned offering is 14 million shares at a range of $17 - $19. Credit Suisse, Goldman Sachs, and Banc of America are the joint book runners on the deal.
1. A market leader
Following its combination with ISS, RiskMetrics has a diversified base of 3,500 clients including 70 of the top 100 investment managers, 41 of the top 50 hedge funds, 16 of the 30 OECD central banks and all of the top 10 investment banks, demonstrating the leadership position of its two core brands. Its RiskMetrics business consists mainly of its RiskManager platform, which is considered to be the market’s most comprehensive solution for managing multi-asset class risk. Its ISS business is the largest provider of outsourced proxy research, voting and notification services to institutional shareholders and corporations. The company also offers fundamental research and analytics, social and governance solutions, M&A proxy analysis, compensation modeling tools and forensic accounting research, the latter stemming from its acquisition of CFRA in August 2007.
2. Strong business model
The company generates 93% of revenue from subscription-based contracts with a historical renewal rate of 88-91%, which provides the company with exceptional visibility, and no single client accounts for more than 1% of sales. Profit margins for the business are impressive with gross margins in the 67% range and operating cash flow margins nearing 30%. The model also generates incredibly strong free cash flow, since most contracts are paid up front and required capital expenditures are minimal. Pro forma for the acquisition of ISS, revenues grew 16% in the first nine months of 2007 to $176 million, while operating cash flow or EBITDA increased 23% to $52 million.
3. risk profile
The company faces execution risk in integrating sales forces and information systems after the ISS acquisition. In addition, there has been attrition of key ISS personnel, including the former CEO. Although recent troubles in financial markets may not necessarily mean trouble for the company’s growth prospects, launching the IPO in a sluggish market may be a drag on the stock’s performance. Having said that, I would point out that many of the best IPO investment opportunities present themselves in periods of broader market duress.
4. Outlook
RiskMetrics’ publicly traded peers, which include data solutions providers with strong growth and cash flow characteristics, have held up well despite the broader market downturn. This peer group includes recent IPO MSCI (MXB) which is up over 60% since its November debut. Because RiskMetrics focuses on larger, multi-strategy clients, the company should be insulated from fund closures among smaller managers. Its business should be able to whether any economic downturn due to the strong secular demand for its products, which is benefiting from increasing requirements among shareholders and regulators for portfolio risk transparency. With its strong fundamentals, attractive growth prospects and a valuation that leaves room for upside, we expect RiskMetrics’ to measure up well in the current environment.
RiskMetrics has been in the business of quantifying risk since its inception in 1992 as an internal risk methodology at JPMorgan. In the years since, as global financial institutions have developed increasingly complex and diverse portfolios, RiskMetrics established its position as the premier provider of multi-asset class risk management analytics. Utilizing a broad database of global securities and a comprehensive set of analytical models, the RiskManager platform allows clients to evaluate their portfolio risk through a variety of simulations, sensitivity analyses and stress tests. In 2007, RiskMetrics acquired ISS, an industry leader in proxy voting services and corporate governance research. The company hopes to leverage its existing technological and service platform while introducing a qualitative dimension to its risk analysis offering. The planned offering is 14 million shares at a range of $17 - $19. Credit Suisse, Goldman Sachs, and Banc of America are the joint book runners on the deal.
1. A market leader
Following its combination with ISS, RiskMetrics has a diversified base of 3,500 clients including 70 of the top 100 investment managers, 41 of the top 50 hedge funds, 16 of the 30 OECD central banks and all of the top 10 investment banks, demonstrating the leadership position of its two core brands. Its RiskMetrics business consists mainly of its RiskManager platform, which is considered to be the market’s most comprehensive solution for managing multi-asset class risk. Its ISS business is the largest provider of outsourced proxy research, voting and notification services to institutional shareholders and corporations. The company also offers fundamental research and analytics, social and governance solutions, M&A proxy analysis, compensation modeling tools and forensic accounting research, the latter stemming from its acquisition of CFRA in August 2007.
2. Strong business model
The company generates 93% of revenue from subscription-based contracts with a historical renewal rate of 88-91%, which provides the company with exceptional visibility, and no single client accounts for more than 1% of sales. Profit margins for the business are impressive with gross margins in the 67% range and operating cash flow margins nearing 30%. The model also generates incredibly strong free cash flow, since most contracts are paid up front and required capital expenditures are minimal. Pro forma for the acquisition of ISS, revenues grew 16% in the first nine months of 2007 to $176 million, while operating cash flow or EBITDA increased 23% to $52 million.
3. risk profile
The company faces execution risk in integrating sales forces and information systems after the ISS acquisition. In addition, there has been attrition of key ISS personnel, including the former CEO. Although recent troubles in financial markets may not necessarily mean trouble for the company’s growth prospects, launching the IPO in a sluggish market may be a drag on the stock’s performance. Having said that, I would point out that many of the best IPO investment opportunities present themselves in periods of broader market duress.
4. Outlook
RiskMetrics’ publicly traded peers, which include data solutions providers with strong growth and cash flow characteristics, have held up well despite the broader market downturn. This peer group includes recent IPO MSCI (MXB) which is up over 60% since its November debut. Because RiskMetrics focuses on larger, multi-strategy clients, the company should be insulated from fund closures among smaller managers. Its business should be able to whether any economic downturn due to the strong secular demand for its products, which is benefiting from increasing requirements among shareholders and regulators for portfolio risk transparency. With its strong fundamentals, attractive growth prospects and a valuation that leaves room for upside, we expect RiskMetrics’ to measure up well in the current environment.
Wednesday, January 23, 2008
Update and Transactions of the Portfolio
Let me start off by saying, I was wrong about the Fed, I can't believe they came to their senses and cut rates. I hope they cut again next thursday by another 75 basis points.
Anyway, here is an update on the 5,000 dollar portfolio and some moves.
1. WCI - Jumped even higher. Closed at 3.78. 622.25 shares = 2352.105
2. ABK - Fed cut and gov interest has made it sky rocket. At 13.94 and 195.7 shares = 2728.058
3. OCNW - Has risen a tad. At 4.12. 331.125 shares = 1364.235
4. ICE - Keep slow rise upwards. At 143.37 and 7.7 shares = 1103.949
Stocks: 7548.347
Options:
1. WCI continues to make money. The 50 contacts we have which were at 10 cents per share(5000 shares) are now at 1.45 per share(5000 shares) = 7250
2. EJ continues to slide: 12 contacts(1200 shares) at 40 cents/per share that are now down to 20 cents(50% drop). Leaves us with 240 dollars.
Stocks:7548.347 or 88.71% up
Options:7490 664.285%
Cash:8
Total: 15,046.347 or 200.926%
Transactions:
Sell: ABK for 2728.058 dollars.
Sell: ICE for 1103.95 dollars.
Sell: OCNW for 1364.235 dollars
Money from selling: 5196.243 dollars
Buy: SIRI for 2540 dollars at 2.68 a share that is 947.76 shares
Buy: SCSC at 25.23 for 2540 dollars which means 100.67 shares.
4 more trades, almost to our limit of 10 free trades a month(have 2 left, but will get 10 more come Feb 1st).
Keeping WCI Option because I think the stock continues to climb, EJ is not chasing losses, the stock will come back to the Mid 20's.
Money now left over has gone from 8 to 124.243 dollars in reserve
Would buy RMG but it is not offered through Zecco and therefore I will not buy.
The Bull
Anyway, here is an update on the 5,000 dollar portfolio and some moves.
1. WCI - Jumped even higher. Closed at 3.78. 622.25 shares = 2352.105
2. ABK - Fed cut and gov interest has made it sky rocket. At 13.94 and 195.7 shares = 2728.058
3. OCNW - Has risen a tad. At 4.12. 331.125 shares = 1364.235
4. ICE - Keep slow rise upwards. At 143.37 and 7.7 shares = 1103.949
Stocks: 7548.347
Options:
1. WCI continues to make money. The 50 contacts we have which were at 10 cents per share(5000 shares) are now at 1.45 per share(5000 shares) = 7250
2. EJ continues to slide: 12 contacts(1200 shares) at 40 cents/per share that are now down to 20 cents(50% drop). Leaves us with 240 dollars.
Stocks:7548.347 or 88.71% up
Options:7490 664.285%
Cash:8
Total: 15,046.347 or 200.926%
Transactions:
Sell: ABK for 2728.058 dollars.
Sell: ICE for 1103.95 dollars.
Sell: OCNW for 1364.235 dollars
Money from selling: 5196.243 dollars
Buy: SIRI for 2540 dollars at 2.68 a share that is 947.76 shares
Buy: SCSC at 25.23 for 2540 dollars which means 100.67 shares.
4 more trades, almost to our limit of 10 free trades a month(have 2 left, but will get 10 more come Feb 1st).
Keeping WCI Option because I think the stock continues to climb, EJ is not chasing losses, the stock will come back to the Mid 20's.
Money now left over has gone from 8 to 124.243 dollars in reserve
Would buy RMG but it is not offered through Zecco and therefore I will not buy.
The Bull
Tuesday, January 22, 2008
What is shorting?
A lot of my friends who are new investors are asking what is "shorting", so here it is, as best I can explain it.
When you short, you borrow the shares from your broker. Your broker will get them from it's customers who are holding shares long term. You can only short specific companies that your broker can definitively borrow. Anyway, you sell these on the open market. You don't get any cash yet, because it is held as collateral for the shares you borrow. Later on, if the price falls you can buy them back, and you get to pocket the difference.
There's no time limit, but shorting for extended periods means margin interest is eating further and further into your theoretical profits (Or putting you further into the hole if you made a bad bet.) What's more, if the company pays a dividend, you have to pay this out of your pocket, since you have created "phantom shares" that don't actually exist.
Yes, your broker will make a margin call if the margin interest or a sudden rise in the stocks price drives your used margin past your limit. This often puts you in what's known as a "short squeeze" - you and everyone else who shorted have to cover their positions at once, which quickly drives up the price even further, worsening the situation.
A more general danger is that stocks as a whole have a tendency to rise in value over time - when you short you're betting against the general trend. I know the trend is downwards right now, but it will reverse at some point, and if you're new, you are least likely to have a grasp on when that could happen.
If you're new I strongly recommend you not try it till you've had a few years experience.
When you short, you borrow the shares from your broker. Your broker will get them from it's customers who are holding shares long term. You can only short specific companies that your broker can definitively borrow. Anyway, you sell these on the open market. You don't get any cash yet, because it is held as collateral for the shares you borrow. Later on, if the price falls you can buy them back, and you get to pocket the difference.
There's no time limit, but shorting for extended periods means margin interest is eating further and further into your theoretical profits (Or putting you further into the hole if you made a bad bet.) What's more, if the company pays a dividend, you have to pay this out of your pocket, since you have created "phantom shares" that don't actually exist.
Yes, your broker will make a margin call if the margin interest or a sudden rise in the stocks price drives your used margin past your limit. This often puts you in what's known as a "short squeeze" - you and everyone else who shorted have to cover their positions at once, which quickly drives up the price even further, worsening the situation.
A more general danger is that stocks as a whole have a tendency to rise in value over time - when you short you're betting against the general trend. I know the trend is downwards right now, but it will reverse at some point, and if you're new, you are least likely to have a grasp on when that could happen.
If you're new I strongly recommend you not try it till you've had a few years experience.
Monday, January 21, 2008
DOOMSDAY
I got a bad feeling about tomorrow. The world markets are down significantly today and if they drop tomorrow watch out. Yes, I know the world markets respond to the US but there is a reason tomorrow could be terrible.
Investors are holding much less put protection in their portfolios than they were just one day ago - and that could send the market lower. Here's why:
Friday January 18th was an expirations day in the options market and consequently, January options aren’t available anymore – they’ve expired.
For whatever reason, traders haven’t purchased nearly as many “puts” (a bet a stock will move lower) or “calls” (a bet a stock will move higher) for February, March or the outlying months.
What concerns me is the lack of “put” buying because if there are now fewer “puts” on the downside – protection isn't as prevalent. (Remember some institutional investors will buy stock and puts together. That way they benefit if share price moves higher and they also hedge their losses if it moves lower.)
That could mean we're set up for the perfect storm Tuesday, With less put protection, negative news could spark fear more easily and send stocks down fast and sharply.
The only thing that stops us from a 750+ down day is a 75-100 basis point cut by the Fed, but I have lost all faith in the Fed. I fear the worse, get out and short.
Investors are holding much less put protection in their portfolios than they were just one day ago - and that could send the market lower. Here's why:
Friday January 18th was an expirations day in the options market and consequently, January options aren’t available anymore – they’ve expired.
For whatever reason, traders haven’t purchased nearly as many “puts” (a bet a stock will move lower) or “calls” (a bet a stock will move higher) for February, March or the outlying months.
What concerns me is the lack of “put” buying because if there are now fewer “puts” on the downside – protection isn't as prevalent. (Remember some institutional investors will buy stock and puts together. That way they benefit if share price moves higher and they also hedge their losses if it moves lower.)
That could mean we're set up for the perfect storm Tuesday, With less put protection, negative news could spark fear more easily and send stocks down fast and sharply.
The only thing that stops us from a 750+ down day is a 75-100 basis point cut by the Fed, but I have lost all faith in the Fed. I fear the worse, get out and short.
Tech Earnings
This entry is in response to a comment about how I see earnings going with the Tech giants.
Let me first say I think Microsoft is the smart tech play. Last quarter, MSFT beat earnings expectations by 6 cents, sales estimates by a billion and they offered upside guidance – a “perfect quarter” you might say. And on top of the fundamentals and pristine balance sheet – that boasts $21.57 billion in cash – there are some upcoming catalysts that could boost the stock: Windows Server 2008, Service Pack 1 for Vista and maybe even a bigger buyback with that pool of money Microsoft has.I would get in here before they report earnings on Jan 24th(Thursday).
Verdict: Beat earnings, goes to 35 at least.
Apple: Apple has way to low of expectations but this is from their usual misguiding forecasts. I think the Ipods miss and miss big but poeople are overworrying about the I-phone numbers that were released at mac world, those numbers are spread out among 3 quarters and the last two quarters were both great. The key is that the MAC has done very well during christmas and will guide Apple into thrashing earnings. What scares me is their innate ability to sandbag when it comes to forecasting, Jobs likes to play conservative and then have an average quarter and feel good about himself.
Verdict: Ability for After hours: Buy in if down on the day, sell on good numbers before forecast is relseased, No After hours: stay way.
Ebay: Release earnings on the 23rd. I think they report anywhere from 45-48 cents per share(estimates are 41), but guidance scares me again.
Verdict: With CEO stepping down and market in recession, I would stay away.
Microsoft: Release earnings on Thursday the 24th, I believe Vista and X-box sales will be up but more importantly I think that international sales will sky rocket.
Verdict: Get in before earnings. The MDM believes in this stock and therefore so do I.
Let me first say I think Microsoft is the smart tech play. Last quarter, MSFT beat earnings expectations by 6 cents, sales estimates by a billion and they offered upside guidance – a “perfect quarter” you might say. And on top of the fundamentals and pristine balance sheet – that boasts $21.57 billion in cash – there are some upcoming catalysts that could boost the stock: Windows Server 2008, Service Pack 1 for Vista and maybe even a bigger buyback with that pool of money Microsoft has.I would get in here before they report earnings on Jan 24th(Thursday).
Verdict: Beat earnings, goes to 35 at least.
Apple: Apple has way to low of expectations but this is from their usual misguiding forecasts. I think the Ipods miss and miss big but poeople are overworrying about the I-phone numbers that were released at mac world, those numbers are spread out among 3 quarters and the last two quarters were both great. The key is that the MAC has done very well during christmas and will guide Apple into thrashing earnings. What scares me is their innate ability to sandbag when it comes to forecasting, Jobs likes to play conservative and then have an average quarter and feel good about himself.
Verdict: Ability for After hours: Buy in if down on the day, sell on good numbers before forecast is relseased, No After hours: stay way.
Ebay: Release earnings on the 23rd. I think they report anywhere from 45-48 cents per share(estimates are 41), but guidance scares me again.
Verdict: With CEO stepping down and market in recession, I would stay away.
Microsoft: Release earnings on Thursday the 24th, I believe Vista and X-box sales will be up but more importantly I think that international sales will sky rocket.
Verdict: Get in before earnings. The MDM believes in this stock and therefore so do I.
Sunday, January 20, 2008
E-Trade (Long Blog entry)
E*Trade (ETFC) is both bank and brokerage; as such, it has at times enjoyed successes from both market trading volume and banking sector gains. It’s sad, as both a customer and sometime shareholder, to see it currently under attack from many sides.
For one, there is security; they offer an RSA hardware dongle to generate a pseudo-random number once per minute to enhance my password security. You need to request it, but it’s worth it, and it may be free depending how much money you have across your accounts. There was a story released Wednesday stating customer accounts at E*Trade, Ameritrade (AMTD) and elsewhere had been compromised for an options scam; I very much doubt the E*Trade customer(s?) that was compromised had this dongle. Let me digress and say that individuals frequently create passwords that are not secure; further, if they happen to mistype a password at a web site and get an error they often try a password that may belong to another institution before they get it correct -- at that point a password somewhere is compromised. With this dongle I have my base password plus 6 more digits of security. If the base password is compromised, they don’t have the physical dongle and if they’ve got the physical dongle they still shouldn’t have my base password. In either case, it is more difficult for someone else to get in. (I know there are some bright people out there; I acknowledge you – please don’t try to hack me.)
I see one bank wants you to choose a picture to add “security” to your account login – cute, but it’s the equivalent of adding one extra fixed letter to your password. Apparently they include the picture if they ever email you – tip: don’t ever respond to an email correspondence from your bank unless it’s by calling the number on your account statement (not one contained in the email). Since the bank has a limited number of pictures to choose from and everyone chooses the cute picture that touches them, then someone just sends that cute picture to a few thousand addresses and a few of them will see their picture – not what I call secure.
Everything under one roof at E*Trade means only one secure login to handle everything financial. I can receive a direct deposit in my checking account, perform an immediate transfer to my margin account and then invest it immediately. I can likewise perform a direct transfer from checking to pay my VISA bill, or use the free online bill pay to pay any other bill in moments. I can move non-invested cash from my margin account to my savings account and make over 5% APR interest. No other company or site ever has to have access to any of my financial accounts; I can link external accounts if I wish for direct transfer from or to them, but I’d initiate those transfers only from within E*Trade. I receive alerts to my phone when transactions are processed, so I know quickly if something odd is occurring. I also appreciate the unlimited reimbursement of ATM transaction fees; E*Trade did (and may still) have the 3rd largest ATM network in the U.S. which gives them bartering clout to do this and I doubt it incurs cost to them.
What E*Trade did wrong
E*Trade followed the herd of banks trading in CDO paper. Had E*Trade limited their mortgage exposure to their existing customer base, to whom they do offer a small discount in rate by the way, and had they then maintained servicing for those loans while only seeking a reasonable percentage of outside mortgages, there would be no problem whatsoever. They did, however, follow many other banks. That being said, I believe they saw what was happening and were already exploring ways to divest themselves of the CDO line when, in early November, an analyst from a competing company said they faced the possibility of bankruptcy; further, he suggested a percentage possibility, which at 15% was near the 16.7% probability of throwing a number or a six-sided die. I believe they were already investigating ways to rid themselves of CDO paper because of the timing of the Citadel “vote of confidence” deal; it was too soon after the bankruptcy comment. Not too soon to complete the negotiations which were probably then expedited, but too soon not to have been researching their potential options to begin with.
The bankruptcy comment must have forced management to take quick action, and possibly not get as favorable an outcome as may have been possible otherwise. Still I don’t feel they did that bad. While Citigroup (C) has announced layoffs of over 13,000 employees within a year's time, is cutting dividends, accepting foreign investments, offering excess tenders (hmm) and still holding CDOs, E*Trade has (so far) only cut one section which was underperforming and under review anyway affecting fewer than 100 employees, yet has fully divested itself of its primary CDO problem.
I’ve heard an analyst recently reiterate his downgrade of E*Trade saying it was paying more in customer enticements and advertising to gain back customers. I can say they paid near 5% savings interest for nearly all of last year, so that hasn’t increased. I do see a lot of advertising, but that must be to counter some early defections after the bankruptcy comment. Strangely enough, I think it’s the same analyst, hmm… and he works for the competition and about the biggest losing financial services juggernaut to announce this quarter, hmm…
I guess we’ll see what develops next week during E*Trade’s earnings announcement, but I believe they tried to do the right thing. They’d already announced expected write-downs and that should have been built into their price at mid $8s before the bankruptcy comment. Their price should have been considerably higher coming into earnings next week. The bankruptcy comment also had other results…
It would be nice to say that buying a company’s stock shows support for that company, but since the shares you own can be borrowed and sold short, devaluing both your holdings and the company’s market capitalization, this is a fanciful illusion. Still, I love the company and have faith that it will find its way successfully through its troubles; it has often shown itself more nimble than its competition in the past, so when I realized where E*Trade was trading after the bankruptcy comment I bought in, mostly at mid fours. Before the projected annual earnings numbers were updated, the forward PE ratio was somewhere around 1.5; given that it is now trading closer to three (even if you do count a full 20% Citadel dilution)... well you figure it out. I’m pretty confident that I’ll get close to the returns I’ve made holding ETFC/ET/ETRD in the past, and probably at some point before the end of this year. I know people who are still opening accounts with them, and I know my trading volume was up last quarter and it will be increasing again this quarter. I have no affiliation with E*Trade other than being a loyal customer and holding a few shares, down and long.
With the poor opening to the year, I wish all a healthy recovery.
For one, there is security; they offer an RSA hardware dongle to generate a pseudo-random number once per minute to enhance my password security. You need to request it, but it’s worth it, and it may be free depending how much money you have across your accounts. There was a story released Wednesday stating customer accounts at E*Trade, Ameritrade (AMTD) and elsewhere had been compromised for an options scam; I very much doubt the E*Trade customer(s?) that was compromised had this dongle. Let me digress and say that individuals frequently create passwords that are not secure; further, if they happen to mistype a password at a web site and get an error they often try a password that may belong to another institution before they get it correct -- at that point a password somewhere is compromised. With this dongle I have my base password plus 6 more digits of security. If the base password is compromised, they don’t have the physical dongle and if they’ve got the physical dongle they still shouldn’t have my base password. In either case, it is more difficult for someone else to get in. (I know there are some bright people out there; I acknowledge you – please don’t try to hack me.)
I see one bank wants you to choose a picture to add “security” to your account login – cute, but it’s the equivalent of adding one extra fixed letter to your password. Apparently they include the picture if they ever email you – tip: don’t ever respond to an email correspondence from your bank unless it’s by calling the number on your account statement (not one contained in the email). Since the bank has a limited number of pictures to choose from and everyone chooses the cute picture that touches them, then someone just sends that cute picture to a few thousand addresses and a few of them will see their picture – not what I call secure.
Everything under one roof at E*Trade means only one secure login to handle everything financial. I can receive a direct deposit in my checking account, perform an immediate transfer to my margin account and then invest it immediately. I can likewise perform a direct transfer from checking to pay my VISA bill, or use the free online bill pay to pay any other bill in moments. I can move non-invested cash from my margin account to my savings account and make over 5% APR interest. No other company or site ever has to have access to any of my financial accounts; I can link external accounts if I wish for direct transfer from or to them, but I’d initiate those transfers only from within E*Trade. I receive alerts to my phone when transactions are processed, so I know quickly if something odd is occurring. I also appreciate the unlimited reimbursement of ATM transaction fees; E*Trade did (and may still) have the 3rd largest ATM network in the U.S. which gives them bartering clout to do this and I doubt it incurs cost to them.
What E*Trade did wrong
E*Trade followed the herd of banks trading in CDO paper. Had E*Trade limited their mortgage exposure to their existing customer base, to whom they do offer a small discount in rate by the way, and had they then maintained servicing for those loans while only seeking a reasonable percentage of outside mortgages, there would be no problem whatsoever. They did, however, follow many other banks. That being said, I believe they saw what was happening and were already exploring ways to divest themselves of the CDO line when, in early November, an analyst from a competing company said they faced the possibility of bankruptcy; further, he suggested a percentage possibility, which at 15% was near the 16.7% probability of throwing a number or a six-sided die. I believe they were already investigating ways to rid themselves of CDO paper because of the timing of the Citadel “vote of confidence” deal; it was too soon after the bankruptcy comment. Not too soon to complete the negotiations which were probably then expedited, but too soon not to have been researching their potential options to begin with.
The bankruptcy comment must have forced management to take quick action, and possibly not get as favorable an outcome as may have been possible otherwise. Still I don’t feel they did that bad. While Citigroup (C) has announced layoffs of over 13,000 employees within a year's time, is cutting dividends, accepting foreign investments, offering excess tenders (hmm) and still holding CDOs, E*Trade has (so far) only cut one section which was underperforming and under review anyway affecting fewer than 100 employees, yet has fully divested itself of its primary CDO problem.
I’ve heard an analyst recently reiterate his downgrade of E*Trade saying it was paying more in customer enticements and advertising to gain back customers. I can say they paid near 5% savings interest for nearly all of last year, so that hasn’t increased. I do see a lot of advertising, but that must be to counter some early defections after the bankruptcy comment. Strangely enough, I think it’s the same analyst, hmm… and he works for the competition and about the biggest losing financial services juggernaut to announce this quarter, hmm…
I guess we’ll see what develops next week during E*Trade’s earnings announcement, but I believe they tried to do the right thing. They’d already announced expected write-downs and that should have been built into their price at mid $8s before the bankruptcy comment. Their price should have been considerably higher coming into earnings next week. The bankruptcy comment also had other results…
It would be nice to say that buying a company’s stock shows support for that company, but since the shares you own can be borrowed and sold short, devaluing both your holdings and the company’s market capitalization, this is a fanciful illusion. Still, I love the company and have faith that it will find its way successfully through its troubles; it has often shown itself more nimble than its competition in the past, so when I realized where E*Trade was trading after the bankruptcy comment I bought in, mostly at mid fours. Before the projected annual earnings numbers were updated, the forward PE ratio was somewhere around 1.5; given that it is now trading closer to three (even if you do count a full 20% Citadel dilution)... well you figure it out. I’m pretty confident that I’ll get close to the returns I’ve made holding ETFC/ET/ETRD in the past, and probably at some point before the end of this year. I know people who are still opening accounts with them, and I know my trading volume was up last quarter and it will be increasing again this quarter. I have no affiliation with E*Trade other than being a loyal customer and holding a few shares, down and long.
With the poor opening to the year, I wish all a healthy recovery.
The 5,000 Dollar Portfolio update
Well, so far our 5,000 dollar portfolio is off to a great start after less than one week of trading. Here is what we have in detail:
Stocks:
1. WCI - Ichan came through on this one. The stock which we bought 622.25 shares of at $1.51 has jumped all the way up to 3.00 dollars even. This stock as profited almost 100% or 927.15 dollars for the fund.
2. OCNW - The "Newhope Network" came through for us on this one. The stock went from 3.02 to 3.93 this past week and netted a gain of 301.32 dollars for the fund.
3. ABK: Had 197.5 shares, stock did fall initially down to 4.50 but has recently went up to 6.10(from our price of 5.11). We have netted a gain of 195.52 dollars.
4. ICE - Had 7.7 shares worth 130.02 dollars a peice. Current stock price is 138.60. So we have netted a gain of 66.07 dollars.
Options;
1. WCI - Share price was 10 cents or 10 dollar for a contract(100 shares = 1 contract). With the stock doubling in price the option is now worth 80 cents per share or 80 dollars per contract. We own 50 contracts which were worth a total of 500 dollars but that are now worth 4,000 dollars.
2. EJ - This option has gone the other way for us. We own 12 contracts(1200 shares) at 40 cents a pop for a value of 480 dollars. EJ dropped 7% on us since we bought in and now the calls are worth only 25 cents a pop so we are down 180 dollars on these sets of options(300 dollar net value).
Totals:
Stocks: 5,490.06 dollars. Up 37.2515%
Options: 4,300 dollars. Up 438.7755%
Cash holding: 8 dollars.
Net Worth: 9798.06 dollars. Up 95.9612%
Stocks:
1. WCI - Ichan came through on this one. The stock which we bought 622.25 shares of at $1.51 has jumped all the way up to 3.00 dollars even. This stock as profited almost 100% or 927.15 dollars for the fund.
2. OCNW - The "Newhope Network" came through for us on this one. The stock went from 3.02 to 3.93 this past week and netted a gain of 301.32 dollars for the fund.
3. ABK: Had 197.5 shares, stock did fall initially down to 4.50 but has recently went up to 6.10(from our price of 5.11). We have netted a gain of 195.52 dollars.
4. ICE - Had 7.7 shares worth 130.02 dollars a peice. Current stock price is 138.60. So we have netted a gain of 66.07 dollars.
Options;
1. WCI - Share price was 10 cents or 10 dollar for a contract(100 shares = 1 contract). With the stock doubling in price the option is now worth 80 cents per share or 80 dollars per contract. We own 50 contracts which were worth a total of 500 dollars but that are now worth 4,000 dollars.
2. EJ - This option has gone the other way for us. We own 12 contracts(1200 shares) at 40 cents a pop for a value of 480 dollars. EJ dropped 7% on us since we bought in and now the calls are worth only 25 cents a pop so we are down 180 dollars on these sets of options(300 dollar net value).
Totals:
Stocks: 5,490.06 dollars. Up 37.2515%
Options: 4,300 dollars. Up 438.7755%
Cash holding: 8 dollars.
Net Worth: 9798.06 dollars. Up 95.9612%
Thursday, January 17, 2008
Myths about blackjack
I am amazed how my friends who play blackjack many times a week can believe many things about blackjack. I will talk about one weekly. Here is the first:
1. Player A screwed me since he hit on a 16 against a dealer 6, drew a 10, dealer got a 5. Idiot's like him cost me money, only play with good players, then you all win.
- How do you respond to something so illogical. A player who makes a bad play(by odds) will hurt you sometimes and help you other times, in the end its a total wash. The odds never change because of how one person plays. Whether you are a perfect player(which my friends are far from) at a table with 5 idiots who always make the wrong play or playing with 5 other perfect players your average return rate does not move at all. Is that so hard to understand?
1. Player A screwed me since he hit on a 16 against a dealer 6, drew a 10, dealer got a 5. Idiot's like him cost me money, only play with good players, then you all win.
- How do you respond to something so illogical. A player who makes a bad play(by odds) will hurt you sometimes and help you other times, in the end its a total wash. The odds never change because of how one person plays. Whether you are a perfect player(which my friends are far from) at a table with 5 idiots who always make the wrong play or playing with 5 other perfect players your average return rate does not move at all. Is that so hard to understand?
Poker and the Stock Market
The stock market and poker seem to be two different world’s that are mutually exclusive but in truth they are very much alike.
Admittingly, the stock market and poker do have their distinct differences. The World Series of Poker typically has a 60 million dollar pool while the S&P 500 has a market capitalization of 11.4 trillion dollars; there is no bigger game than the stock market. The most important difference, is that poker is a zero-sum game, what the winners win in aggregate the losers must lose (for the sake of simplicity of those who don't play poker, leaving out the rake here), yet the stock market is not anything like a zero-sum game, it is mathematically possible for every single person to make money in the stock market and over time the average person tends to make 8-12% per year on their investments.
However, when it comes to the skills one must have to be successful in these two fields they grow increasingly similar.
1. Leave your emotions at the door - Both these games cannot be played with emotions but rather MUST be played with a rational and logical sound mind. In poker when a player plays with his emotions it is typically called playing on "tilt". Just because one might get rivered does not mean they should play the next hand any differently than had they won the hand. When emotions become part of your game in poker, you will almost always lose. In the stock market it is the same way, you have to know when to be able to take a loss and run, you can't let your emotions get in way of reason. Chasing losses is just a way of guaranteeing more and more losses.
2. Rake/Commission: Both games cost money to play in, from what I know about poker, the rake is usually 10% of the pot up until the rake capped off. To get in tournaments one pays a entry fee(a form of a rake) which is typically 10% for small stake tournaments and less for big stake tournaments. In the stock market, it is not free to buy and sell stocks/options, etf's ect. The commission may come as low as four dollars and as large as 50 dollars depending on the broker, stock, amount of shares, foreign/domestic. Both games have a price of playing.
3. Skill and luck: Admittingly, poker has a larger reliance on luck than the stock market but both have luck involved. However, even in poker, luck is just a short term thing and with variance will always disappear over time. Someone could have the Ace of spades and Ace of diamonds and be against the 7 of spades and 2 of diamonds and could lose, of course that is a bad break and some might say bad luck, but if you run that 10 times the chances are the player with aces is going to win almost 90% of the time (88.74%). It is even remotely possible for the 7 2 to win the first five times it happens, but over time, that player will only win about 10.78% of the time. Luck is truly a short term thing. In stocks, I whole-heartily believe that there is always a reason why a stock goes up and goes down which one could take to mean there is no luck, but the luck becomes a dimension in the stock market because people are not always privy to the information of why a stock might go up and go down. I had a friend who owned a stock USBE with no idea that it might be bought out and double in price but that is what happened, this may be called luck. I have two friends who do daily research 4-5 hours a day on stocks and could tell you all sorts of information on why one stock should go up and one down but they have yet to be able to amass great gains(its only been a short time), is this bad luck?
4. Professionals v. Amateurs: One of the draws of the WSOP is that any person who is 21 years old and has 10,000 dollars can compete against the worlds greatest players, what other sport can the average Joe with no talent go against the worlds best, off the top of my head I can't think of any. The amateurs watch the ESPN highlights and believe that cards are cards, and can always tell when someone is bluffing while watching on tv(even thought they are able to see the cards), why couldn't they take down Phil Ivey, for all we know I get pocket aces, he gets kings, and see ya later Ivey. The stock market is the same way, the professionals love to have amateurs in the game because its easy money for them to take, people always look at stocks and say "I KNEW Google was the next big thing, or that I owned Wal-Mart and Microsoft as IPO's(with splits one share of Microsoft would now be worth over 3 million dollars). People believe that Warren Buffet is no smarter than themselves. Arrogance and Ignorance might be the common theme here.
5. It is not the Amount of Money: I have a friend who plays poker professionally, he refuses to talk poker in dollar amounts, choosing instead to talk in Buy in amounts, and this is because poker is a game of bankroll management. It’s not the amount of money you lose it’s the percent that you lose. Stocks are the same way, whether you make 500 dollars or 50,000 dollars this year in the market it means nothing without knowing how much % that is. If you had 1000 dollars and made 500 you made 50% gains, but if you had 1,000,000 dollars and made 50,000 you made only 5% gains.Finally: "Listen, here is the thing, If you can't spot the sucker in your first half hour at the table,then you are the sucker!"(Rounder’s): I think this one speaks for itself about poker, but it means the same things in stocks. There is a loser on every stock, there are bears and bulls and if the stock goes up or down, one wins and one loses. You have to do your homework and gain every small edge you can because if you don't know why the opponent thinks you are wrong, and then know why he is wrong for thinking you are wrong, you are the sucker.
If anyone has any other similarities feel free to comment
Admittingly, the stock market and poker do have their distinct differences. The World Series of Poker typically has a 60 million dollar pool while the S&P 500 has a market capitalization of 11.4 trillion dollars; there is no bigger game than the stock market. The most important difference, is that poker is a zero-sum game, what the winners win in aggregate the losers must lose (for the sake of simplicity of those who don't play poker, leaving out the rake here), yet the stock market is not anything like a zero-sum game, it is mathematically possible for every single person to make money in the stock market and over time the average person tends to make 8-12% per year on their investments.
However, when it comes to the skills one must have to be successful in these two fields they grow increasingly similar.
1. Leave your emotions at the door - Both these games cannot be played with emotions but rather MUST be played with a rational and logical sound mind. In poker when a player plays with his emotions it is typically called playing on "tilt". Just because one might get rivered does not mean they should play the next hand any differently than had they won the hand. When emotions become part of your game in poker, you will almost always lose. In the stock market it is the same way, you have to know when to be able to take a loss and run, you can't let your emotions get in way of reason. Chasing losses is just a way of guaranteeing more and more losses.
2. Rake/Commission: Both games cost money to play in, from what I know about poker, the rake is usually 10% of the pot up until the rake capped off. To get in tournaments one pays a entry fee(a form of a rake) which is typically 10% for small stake tournaments and less for big stake tournaments. In the stock market, it is not free to buy and sell stocks/options, etf's ect. The commission may come as low as four dollars and as large as 50 dollars depending on the broker, stock, amount of shares, foreign/domestic. Both games have a price of playing.
3. Skill and luck: Admittingly, poker has a larger reliance on luck than the stock market but both have luck involved. However, even in poker, luck is just a short term thing and with variance will always disappear over time. Someone could have the Ace of spades and Ace of diamonds and be against the 7 of spades and 2 of diamonds and could lose, of course that is a bad break and some might say bad luck, but if you run that 10 times the chances are the player with aces is going to win almost 90% of the time (88.74%). It is even remotely possible for the 7 2 to win the first five times it happens, but over time, that player will only win about 10.78% of the time. Luck is truly a short term thing. In stocks, I whole-heartily believe that there is always a reason why a stock goes up and goes down which one could take to mean there is no luck, but the luck becomes a dimension in the stock market because people are not always privy to the information of why a stock might go up and go down. I had a friend who owned a stock USBE with no idea that it might be bought out and double in price but that is what happened, this may be called luck. I have two friends who do daily research 4-5 hours a day on stocks and could tell you all sorts of information on why one stock should go up and one down but they have yet to be able to amass great gains(its only been a short time), is this bad luck?
4. Professionals v. Amateurs: One of the draws of the WSOP is that any person who is 21 years old and has 10,000 dollars can compete against the worlds greatest players, what other sport can the average Joe with no talent go against the worlds best, off the top of my head I can't think of any. The amateurs watch the ESPN highlights and believe that cards are cards, and can always tell when someone is bluffing while watching on tv(even thought they are able to see the cards), why couldn't they take down Phil Ivey, for all we know I get pocket aces, he gets kings, and see ya later Ivey. The stock market is the same way, the professionals love to have amateurs in the game because its easy money for them to take, people always look at stocks and say "I KNEW Google was the next big thing, or that I owned Wal-Mart and Microsoft as IPO's(with splits one share of Microsoft would now be worth over 3 million dollars). People believe that Warren Buffet is no smarter than themselves. Arrogance and Ignorance might be the common theme here.
5. It is not the Amount of Money: I have a friend who plays poker professionally, he refuses to talk poker in dollar amounts, choosing instead to talk in Buy in amounts, and this is because poker is a game of bankroll management. It’s not the amount of money you lose it’s the percent that you lose. Stocks are the same way, whether you make 500 dollars or 50,000 dollars this year in the market it means nothing without knowing how much % that is. If you had 1000 dollars and made 500 you made 50% gains, but if you had 1,000,000 dollars and made 50,000 you made only 5% gains.Finally: "Listen, here is the thing, If you can't spot the sucker in your first half hour at the table,then you are the sucker!"(Rounder’s): I think this one speaks for itself about poker, but it means the same things in stocks. There is a loser on every stock, there are bears and bulls and if the stock goes up or down, one wins and one loses. You have to do your homework and gain every small edge you can because if you don't know why the opponent thinks you are wrong, and then know why he is wrong for thinking you are wrong, you are the sucker.
If anyone has any other similarities feel free to comment
5,000 Dollar Portfolio
A lot of my friends have been asking me what would I do with 5,000 dollars in this volatile stock market. The answer is complex I suppose, but only because they expect 30-100% gains and want them fast. One thing I have learned is that the market never owes you anything and that you are NEVER above the market.
With that being said, if I were to invest 5,000 dollars here is what I would do for a low risk, high reward portfolio.
4 stocks(1 grand each), 2 options(around 500 a piece).
Stocks:
1. WCI: "In Ichan we Trust" one might say. Ichan bought into this stock at 5.34 and with the subprime mess the stock has fallen to 1.51(as low of 1.35). WCI Communities, Inc., together with its subsidiaries, operates as an integrated homebuilding and real estate services company. The company's activities primarily include single- and multi-family (traditional) homebuilding, and mid- and high-rise (tower) homebuilding, as well as the provision of real estate services primarily in Florida. It designs, constructs, and operates leisure-oriented and master-planned communities; and designs, builds, and sells traditional homes serving primary, second, and retirement home buyers. WCI Communities also designs, builds, and sells luxury residential towers and condominium hotels targeted to primary and affluent, leisure-oriented home purchasers. Its real estate services include realty brokerage, title insurance and closing services, and mortgage banking services. In addition, the company develops and operates amenity facilities, sells selected land parcels, and enters into real estate joint ventures. WCI Communities also has operations in New York, New Jersey, Connecticut, Massachusetts, Virginia, and Maryland. As of December 31, 2006, it had 79 locations where it builds single-family and multi-family homes or mid-rise and high-rise residential units, or operating amenity facilities. Ihcan has strongly been advocating the restructuring of loans for WCI, and I hope to see progress in the next week. I think this is a strong short side and alongside stock.
1000/1.51 = 622.25 shares.
2. ABK: Ambac Financial Group, Inc., through its subsidiaries, provides financial guarantee products and other financial services to clients in the public and private sectors worldwide. It operates in two segments: Financial Guarantee and Financial Services. The Financial Guarantee segment offers financial guarantee insurance and other credit enhancement products, such as credit derivatives for public finance and structured finance obligations. It also provides financial guarantees for bond issues and other forms of debt financing. This segment sells its products in the U.S. public finance market, the U.S. structured finance and asset-backed market, and the international finance market. The Financial Services segment provides financial and investment products comprising investment agreements, funding conduits, interest rate, currency, and total return swaps, principally to clients of the financial guarantee business, which includes municipalities and other public entities, health care organizations, investor-owned utilities, and asset-backed issuers. Two things we are looking for here, A huge rate cut(75 basis points at least), and a possible takeover from either (A) the gov, or (B) a wealthy individual investor. Both could happen by end of month.
1000/5.11 = 195.7 shares
3. OCNW: I would usually pick a google/apple/ or Rim as my tech play but all our very costly compared to 1,000 dollars so lets go with Occam Networks, Inc. who develops, markets, and supports broadband access products that enable telecom service providers to offer bundled voice, video, and data, or triple play services over copper and fiber optic networks in the United States. Its broadband loop carrier (BLC) is an integrated hardware and software platform that uses Internet protocol and Ethernet technologies enabling its customers to deliver advanced services, including voice-over-IP, Websurfing, and other high speed data communications services, IP-based television, and high-definition television. The company primarily offers BLC 6000 System product line, which allows telecom service providers to deliver triple play services to their subscribers. BLC 6000 System includes blades, which transmit traffic upstream and downstream, interconnect various networks, and convert circuit-switched voice traffic to VoIP; chassis that houses blades, and performs cooling, power, and cable distribution; OccamView, which manages triple play services from any secure Web-browser; optical network terminals that terminate active gigabit Ethernet FTTP services delivered by the BLC platform; and a series of remote terminal cabinets that house BLC platform and protect the system. Occam Networks markets its products through direct sales force, strategic relationships with third parties, and value added resellers. It has strategic reseller relationship with Tellabs, Inc. This company has short term and long term potential becuase they have recently upgraded their "New Hope Network" in hopes of being picked up by someone else. I expect this to happen relatively soon.
1000/3.02 = 331. 125 shares
ICE: ntercontinentalExchange, Inc., through its subsidiaries, owns and operates an Internet-based global electronic marketplace for trading in futures and over-the-counter (OTC) commodities, and derivative financial products in the United States and internationally. Its products include contracts based on crude and refined oil products, natural gas and power, and emissions, as well as sugar, cotton, coffee, cocoa, and orange juice along with foreign exchange and index products. The company operates in four segments: Energy Futures and Options Markets, Global OTC Markets, Market Data, and Soft Commodity Futures and Options Markets. Energy Futures and Options Markets segment consist of trade execution in futures contracts and options on futures contracts. Global OTC Markets segment comprise trade execution in OTC energy contracts and provision of trading-related services, including OTC electronic trade confirmation and OTC risk management functionality services. Its products include derivative contracts and contracts that provide for physical delivery of the underlying commodity principally relating to natural gas, power, and oil. Market Data segment distributes electronically generated energy market data primarily derived from actual trades executed in its marketplace, as well as provides information services, which publication of daily indices, access to historical pricing data, view only access to the platform, end of day settlements, and pricing data sets, as well as a service that involves the validation of participants' own mark valuations. Soft Commodity Futures and Options Markets segment offers financial products in the currency markets, equity index, and commodity index markets.ICE has taken a recent nosedive but I value the company anywhere from 165-210 dollars per share.
1000/130.02 = 7.7 shares
Options:
WCI: 10 cent per share Call option for Feb 15th 2008 at strike price of 2.50, 100 options make that 10 bucks a contract. So 500/10 equals 50 contracts of WCI at 10 cents per share for Feb 08.
EJ: Volatile stock I have long been a fan of. The stock has been hit hard this past week and I think it comes back to the upper 20's. Feb 15th 08 Call option at 40 cents a pop with a strike price of 30 dollars. 40 cents per share means 40 dollars per options. 500/40= 12 options and leaves us with 20 dollars.
The cost of the four stock trades are free(using account on zecco), but the option costs for these two would be 12 dollars total which leaves us with a surplus of 8 dollars at this time.
I will not be conducting inter day trading on this portfolio unless under extreme circumstances, while this surely will lower the overall gain of this portfolio I realize most people with 5,000 dollars are more in a "buy and hold" methodolgy than they are a interday trading one.
With that being said, if I were to invest 5,000 dollars here is what I would do for a low risk, high reward portfolio.
4 stocks(1 grand each), 2 options(around 500 a piece).
Stocks:
1. WCI: "In Ichan we Trust" one might say. Ichan bought into this stock at 5.34 and with the subprime mess the stock has fallen to 1.51(as low of 1.35). WCI Communities, Inc., together with its subsidiaries, operates as an integrated homebuilding and real estate services company. The company's activities primarily include single- and multi-family (traditional) homebuilding, and mid- and high-rise (tower) homebuilding, as well as the provision of real estate services primarily in Florida. It designs, constructs, and operates leisure-oriented and master-planned communities; and designs, builds, and sells traditional homes serving primary, second, and retirement home buyers. WCI Communities also designs, builds, and sells luxury residential towers and condominium hotels targeted to primary and affluent, leisure-oriented home purchasers. Its real estate services include realty brokerage, title insurance and closing services, and mortgage banking services. In addition, the company develops and operates amenity facilities, sells selected land parcels, and enters into real estate joint ventures. WCI Communities also has operations in New York, New Jersey, Connecticut, Massachusetts, Virginia, and Maryland. As of December 31, 2006, it had 79 locations where it builds single-family and multi-family homes or mid-rise and high-rise residential units, or operating amenity facilities. Ihcan has strongly been advocating the restructuring of loans for WCI, and I hope to see progress in the next week. I think this is a strong short side and alongside stock.
1000/1.51 = 622.25 shares.
2. ABK: Ambac Financial Group, Inc., through its subsidiaries, provides financial guarantee products and other financial services to clients in the public and private sectors worldwide. It operates in two segments: Financial Guarantee and Financial Services. The Financial Guarantee segment offers financial guarantee insurance and other credit enhancement products, such as credit derivatives for public finance and structured finance obligations. It also provides financial guarantees for bond issues and other forms of debt financing. This segment sells its products in the U.S. public finance market, the U.S. structured finance and asset-backed market, and the international finance market. The Financial Services segment provides financial and investment products comprising investment agreements, funding conduits, interest rate, currency, and total return swaps, principally to clients of the financial guarantee business, which includes municipalities and other public entities, health care organizations, investor-owned utilities, and asset-backed issuers. Two things we are looking for here, A huge rate cut(75 basis points at least), and a possible takeover from either (A) the gov, or (B) a wealthy individual investor. Both could happen by end of month.
1000/5.11 = 195.7 shares
3. OCNW: I would usually pick a google/apple/ or Rim as my tech play but all our very costly compared to 1,000 dollars so lets go with Occam Networks, Inc. who develops, markets, and supports broadband access products that enable telecom service providers to offer bundled voice, video, and data, or triple play services over copper and fiber optic networks in the United States. Its broadband loop carrier (BLC) is an integrated hardware and software platform that uses Internet protocol and Ethernet technologies enabling its customers to deliver advanced services, including voice-over-IP, Websurfing, and other high speed data communications services, IP-based television, and high-definition television. The company primarily offers BLC 6000 System product line, which allows telecom service providers to deliver triple play services to their subscribers. BLC 6000 System includes blades, which transmit traffic upstream and downstream, interconnect various networks, and convert circuit-switched voice traffic to VoIP; chassis that houses blades, and performs cooling, power, and cable distribution; OccamView, which manages triple play services from any secure Web-browser; optical network terminals that terminate active gigabit Ethernet FTTP services delivered by the BLC platform; and a series of remote terminal cabinets that house BLC platform and protect the system. Occam Networks markets its products through direct sales force, strategic relationships with third parties, and value added resellers. It has strategic reseller relationship with Tellabs, Inc. This company has short term and long term potential becuase they have recently upgraded their "New Hope Network" in hopes of being picked up by someone else. I expect this to happen relatively soon.
1000/3.02 = 331. 125 shares
ICE: ntercontinentalExchange, Inc., through its subsidiaries, owns and operates an Internet-based global electronic marketplace for trading in futures and over-the-counter (OTC) commodities, and derivative financial products in the United States and internationally. Its products include contracts based on crude and refined oil products, natural gas and power, and emissions, as well as sugar, cotton, coffee, cocoa, and orange juice along with foreign exchange and index products. The company operates in four segments: Energy Futures and Options Markets, Global OTC Markets, Market Data, and Soft Commodity Futures and Options Markets. Energy Futures and Options Markets segment consist of trade execution in futures contracts and options on futures contracts. Global OTC Markets segment comprise trade execution in OTC energy contracts and provision of trading-related services, including OTC electronic trade confirmation and OTC risk management functionality services. Its products include derivative contracts and contracts that provide for physical delivery of the underlying commodity principally relating to natural gas, power, and oil. Market Data segment distributes electronically generated energy market data primarily derived from actual trades executed in its marketplace, as well as provides information services, which publication of daily indices, access to historical pricing data, view only access to the platform, end of day settlements, and pricing data sets, as well as a service that involves the validation of participants' own mark valuations. Soft Commodity Futures and Options Markets segment offers financial products in the currency markets, equity index, and commodity index markets.ICE has taken a recent nosedive but I value the company anywhere from 165-210 dollars per share.
1000/130.02 = 7.7 shares
Options:
WCI: 10 cent per share Call option for Feb 15th 2008 at strike price of 2.50, 100 options make that 10 bucks a contract. So 500/10 equals 50 contracts of WCI at 10 cents per share for Feb 08.
EJ: Volatile stock I have long been a fan of. The stock has been hit hard this past week and I think it comes back to the upper 20's. Feb 15th 08 Call option at 40 cents a pop with a strike price of 30 dollars. 40 cents per share means 40 dollars per options. 500/40= 12 options and leaves us with 20 dollars.
The cost of the four stock trades are free(using account on zecco), but the option costs for these two would be 12 dollars total which leaves us with a surplus of 8 dollars at this time.
I will not be conducting inter day trading on this portfolio unless under extreme circumstances, while this surely will lower the overall gain of this portfolio I realize most people with 5,000 dollars are more in a "buy and hold" methodolgy than they are a interday trading one.
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