market thoughts

Wall Street Stock Market

2007-10-22T05:32:00.000-07:00

Its third quarter earnings before the market opens, and analysts are expecting to see the company show 64 cents per share. The Wall Street Company last reported earnings on July 23 when it beat estimates by reporting 60 cents a share, 4 cents higher than the 56 cents analysts were expecting to see. The stock fell over 5 percent last Friday in anticipation.
The Company obtained approximately 47% and 44% of its total revenue from the wafer testing and IC testing services, respectively. The Company distributes its products in the domestic market and to overseas market as the year 2006 ends.
Many folks put off buying life until they are older which could be considering it takes instance to feel confident about finances, an expert has claimed.

banking
finance
finance
credit card
trust, insurance
securities
futures
venture capital investment business.

Banks show signs of a rocking

2007-10-19T09:20:00.000-07:00

What’s better than the Sensex at 19,000? Well. The Sensex at 25,000! The situation is similar when it comes to the results in the banking sector. Bumper profits last year have ignited hopes of strong results this year as well. This is despite the fact that growth in credit has slowed.

Early results from banks have not disappointed. Profits at private sector HDFC Bank and Axis Bank have risen an unprecedented 40% and 60%, respectively.

HDFC Bank’s rise in profits is more surprising as it comes on the back of a 34% rise in the first quarter. Moreover, the bank has posted a 45% rise in interest income at a time when banks are paying high rates for deposits and not getting enough customers owing to the high lending rates.

Axis Bank has benefited from a surge in non-interest income, or returns from selling insurance and mutual fund products.

banking analyst said, “Both these results are exceptional. HDFC Bank had been sluggish last year (FY07) but it has bounced back this year. Axis has always been doing well. And now with the busy season for loans kicking in, FY08 could be even better.”

Traditionally, the busy season starts with the festivals in October. Corporate India is also known to go into a borrowing overdrive in the last quarter, helping banks to accelerate loan growth and hence profits.
The growth in loan disbursals has been slow so far this year — at 21.9% compared with a 32% growth registered in the same period last year — as the Reserve Bank of India has stepped in with interest rate hikes to curb inflation.

Private sector banks have outperformed their public sector peers in terms of profits for the last few years. However, analysts said banking profits would be much better this year even if PSU banks continue record a modest 18-20% rise in profits.

Ashvin Parekh, partner and national leader, global financial services, Ernst & Young, expects public sector banks to continue the good work in this quarter. “Public sector banks will continue to do well, especially on the low-cost current account savings account (CASA) front. Banking margins will also get a lift because of treasury gains as international interest rates are moving southward after the recent US Federal Reserve interest rate cut.”

An analyst from a private brokerage firm is betting on public sector banks doing well due to treasury income.

“Public sector banks will see huge profits flowing in by way of their treasury income. On the core operations front, Union Bank of India and Bank of India will do well while OBC and Canara Bank may suffer. However, the banking sector as a whole looks positive.”

However, increasing bad loans are a worrying factor, especially for private sector banks.

High interest rates in retail loans have lead to some bad loans, which could take the wind out of the sector.

www.hindu.com

China Market Situation

2007-10-19T03:38:00.000-07:00

China May Use More, Bigger Rate Moves to Curb Cash (Update1)
By Li Yanping and Zhang Dingmin
Oct. 18 (Bloomberg) — China will step up measures to curb excess cash in the economy and may use more or bigger rate increases to prevent overheating, central bank chief Zhou Xiaochuan said.
“We don’t rule out steeper or more frequent moves if necessary,” Zhou, governor of the People’s Bank of China, said during an interview with reporters today at the Communist Party Congress in Beijing. Controls so far “haven’t been very effective.”
The bank will keCommunist Partyep using a mix of policy tools including rate increases, higher reserve ratios and more bill sales, he said. The central bank is concerned with rising asset prices though that isn’t the sole driver of monetary policy, he said.
The world’s fastest-growing major economy has doubled in size since President Hu Jintao succeeded Jiang Zemin five years ago. A surge in exports that helped drive growth now threaten to derail the expansion by flooding the economy with cash, stoking inflation and a possible stock market bubble.
“The spike in headline inflation is hurting bank depositors, and this may encourage the People’s Bank to raise rates once more this year,” Mark Williams, an economist at Capital Economics Ltd. in London, said in a research report dated today. “However, the authorities are walking a tightrope.”
Gross domestic product grew 11.9 percent in the second quarter, the fastest pace in 12 years. Five benchmark interest rate increases by the central bank this year have failed to rein in inflation, which reached a 10-year high of 6.5 percent in August and prompted more households to pour money into stocks and property.
Multiple Targets
The National Development and Reform Commission, China’s top economic planning agency, said today at a separate briefing that fighting inflation remains a priority, and warned the rate will stay high “for a few months.” The September rate was 6.2 percent, the NDRC said today.
China isn’t ready to adopt an inflation target when setting interest rates, and places a higher priority on growth. The bank considers growth, inflation, employment and international balance of payments in setting monetary policy, Zhou said.
To soak up excess liquidity and limit loan growth, the central bank has instructed lenders to set aside larger reserves eight times this year, sold more bills to bigger banks, and this week required smaller lenders to put special deposits with the central bank.
The required reserve ratio on banks was raised to 13 percent on Oct. 13, the highest in a decade, and the benchmark one-year lending rate is at a nine-year high of 7.29 percent.
The bank has also raised interest rates on some mortgages and increased the minimum deposit on second homes to curb speculation and cool prices.
Yuan, Capital Account
Zhou, 59, as central bank governor since December 2002 presided over the nation’s first change in currency policy in a decade. He ended the yuan’s peg to the U.S. dollar and revalued it by 2.1 percent in 2005. The change was partly a response to major trading partners including the U.S., where politicians assert the currency is kept artificially low to boost exports.
“The yuan will eventually become a freely convertible currency and China will open its capital account, even if we haven’t set a clear timetable,” Zhou said. “China had agreed in principle to make the yuan convertible in the 1990s, but we halted the plan during the 1997 Asian Financial Crisis.”
China will discuss the currency with the European Union during the International Monetary Fund meeting, he added.
Separately Zhou reiterated that the government has agreed, in principle, to allow Chinese individual investors to trade Hong Kong stocks. There’s also no timetable for that.
“The direction is set” for the plan, known in China as a “through-train” to the Hong Kong market, he said without elaborating.
To contact the reporter on this story: Li Yanping in Beijing at yli16@bloomberg.net

Random Market Thoughts

2007-10-19T03:26:00.000-07:00

Here’s another asset class where you really don’t need a neural net to tell you the trend is up. All you need is an understanding on how governmental policy drives currency depreciation.

It’s old news now but the EURUSD currency pair traded above $1.43 for the first time (it’s at $1.4280 right now) yesterday. Weak earnings from Bank of America yesterday drove speculation that the Fed would cut interest rates one more time at their Oct 31st meeting.

A weak economic recovery (IMHO), massive deficits, an unpopular war, a misgiuded administration, and a former sellout of a Federal Reserve Chairman, have all contributed to a bleak outlook for the dollar. Sure we’ll have short term fluctuation’s where the USD might strengthen but in the longterm I would remain long the Euro and short the Dollar.

How can a previously low rate of 5.25% (now 4.75%) derail this fantastic economic expansion we are having?

Stock market sees new fever of securities company’s shares

2007-10-19T03:20:00.000-07:00

As many securities investors are busy hunting bank shares, they do not realise that securities company’s share prices have soared considerably.

After saying goodbye to the Hanoi Securities Trading Centre on October 29 to list at the HCM City Stock Exchange, Saigon Securities Incorporated (SSI) saw its price increase for one month. SSI was traded at VND160,000/share in August, and the price rose to VND260,000/share on October 12.

Investors pay high for SSI because they believe the company can get high profit when the stock market bounces back at the end of the year. It reported the post tax profit of VND668bil in the first half of the year, though it was the gloomiest period of the stock market.

Bao Viet Securities Company’s share price (BVS) has nearly reached VND600,000/share, an increase of VND120,000/share over the October 2 trading session, remaining the most expensive share item on both Hanoi and HCM City trading floors.

BVS also had very high pre-tax profit in the first 8 months of the year: VND202bil/VND150bil of chartered capital.

Meanwhile, the price of Hai Phong Securities Company’s shares has also unexpectedly soared to VND140,000/share after a long time of staying below VND100,000/share.

The three share items all are the hottest securities items on official trading floors.

Dao Thi Xuan, a freelance securities broker on Nguyen Cong Tru securities market in district 1, HCM City, said that the price increases of securities companies’ shares had been anticipated. Investors well understand that securities companies can make high profit from the warmed up stock market, and it would be wise to bank on these companies.

The warm stock market will bring fat profit to securities companies, as an investor on the market. Moreover, the companies can also pocket big sums of money from transaction fees. SSI, for example, can collect VND2bil worth of fees every day, ACBS VND800mil, while VIS, which has just begun operating, can collect VND200mil.

According to Tran Ngoc Nam, an analyst, investors believe that securities companies’ prices now are very ‘soft’ if compared to the price levels in March 2007, just equal to 50-60%.

However, Bui Ngoc Tuoc, another analyst, has warned that investors should think carefully before injecting money in securities company’s shares. He recalled the story of the Chinese stock market in 2001-2005, when many securities companies went bankrupt when the securities index plunged from 2,245 to 998 points.

He said that only 10 of the 62 licenced securities companies had good business results. Those have earned attractive profit and hold 85% of the market share. It is understandable why some securities items are selling well, while Thien Viet, APEC’s, KBS’s are selling at VND30,000/share only, and APS cannot find investors to buy at VND25,000/share.

via:vietstocknews.blogspot.com

Does MOT have a moat ?

2007-09-11T09:11:00.000-07:00

I bought MOT on a momentum, earnings were good, good news of an Ipod phone were inundating the TV stations and newspapers, Ed Zander was the Man.

The thing is, the RokR is a bit of a disappointement, what the RazR did a few months ago, the RokR almost undo in just a few week. The RazR was slick and designish, the RockR is bulky and not up to the latest trend (flip phones, trend which has partly been initiated by Motorola themselves).

But worst of all, the RockR is a lameduck music player, transfet rates between your PC and the phone are 20x slower than the Ipod, (by the way, who got the idea to launch it the very same day as the nano???) the storage of 100 songs is less than what early adopters (the target audience) had 5 years ago on their mp3 players, you can't even download songs directly from your phone, and let's face it Nokia, Samsumg et al won't take too long to market better products...

So, MOT Buy, hold, Sell.... I'm going to hold because dividends and future RazR-like model should bring the stock up, along with news from third world country (where Motorola is about to roll out cheap handset to built brand awareness and gain public markets). But if you are like I was a few months ago, wondering whether to buy or not, I would say one thing:

Despite first impression MOT doesn't have a deep moat around its castle

Value vs Growth

2007-09-11T05:36:00.001-07:00

Of course this is not really a value vs growth post, both are two great investment philosophy and depending on what you look at (and for) both work very well (if you're into day trading or short term you might want to stay away from value though)

Nope, this is still my thoughts about what I should do with my extra cash siting on the cash account...

I explored the growth part last post (TINY, EXEL, TASR...) and today I was thinking about value plays that could prove better investment

The market has been bad, even nasty in the recent week (at least for me, my portfolio shrunk from +14% to +3.75%) and some stocks have taken a serious beating since the summer, here are my favorites :

* MRK : yes, still watching it, I suspect it could drop a bit more on one last bad news so I'll wait on that, pays dividends
* FNM : Fannie May is on its way to pull a Tyco... what does Tyco stocks sell for today... (like...a good price, to be vague)
* LXK : I don't know how they came up with such numbers, but I don't know why the market overreacted so badly either (easy 20% here...I think)
* MCD : About to IPO the Chipotle chain, pays dividends
* MSFT : yes, Microsoft, Fortune has a great article arguing that MSFT is undervalued, I am a frim believer of that

I'm still pondering which one to buy though...

Long-Term Thinking in a Short-Term World - A Motley Fool Article

2007-09-11T05:35:00.000-07:00

Long-Term Thinking in a Short-Term World

http://tinyurl.com/c3gfj

By Jim Gillies10/20/2005

"WAKE UP! They are all about you; all around you!" --

Street Preacher, John Carpenter's They Live

In John Carpenter's 1988 cult classic They Live, society has been subliminally subverted by profit-minded aliens bent on fostering a culture of conspicuous consumption. Stimulation to mindlessly consume is hidden on every billboard, every magazine cover, every television program, and even on the dollar bill.
Perhaps I'm being paranoid, but I see parallels with the investing world, and, unlike the movie, there's nothing subliminal about it. In fact, it's bloody near everywhere.
Just breathe Look at the overwhelming and increasingly short-term focus of our investing world. It's there in multiple 24-hour business television channels. It's present in Jim Cramer and his "Lightning Round." It exists on the Fool message boards, or the much maligned (often with good reason) Yahoo!(Nasdaq: YHOO) boards. Heck, it's implicit in every quote service disclaimer: "Quotes delayed 20 minutes." Can someone explain to me why we should care about 20-minute delayed quotes? What investment-thesis-altering event are we going to miss in that delay?

In the introduction to Hewitt Heiserman's excellent book, It's Earnings That Count, Vanguard Group founder John Bogle cites the turnover of the average fund as being 110% in 2002. That's a mean holding time of 11 months. Have the mutual funds with a long-term outlook disappeared?

Ignore the market I live in Canada, where the market index is heavily weighted to high-flying energy stocks. The Toronto Stock Exchange is up nearly 15% year to date, versus a flat S&P 500. Yet, despite this performance, I've had two close family members in the past two days call me to ask, as falling oil prices provoked a 4% market retreat, "What's going on with the market?" Who cares? Seriously, if you'd been told at the beginning of the year that the market would be up 15% after nine months, wouldn't that have been cause for celebration? Yet the focus is on short-term worries.

Look at a company like Garmin(Nasdaq: GRMN), which I've written about in glowing terms before. After going public in December 2000, imagine an investor who bought soon after and only looked at year-end prices:

Date Price One-year return CAGR* S&P 500 one-year return S&P 500 CAGR

Dec. 31, 2000 $19.75 N/A N/A N/A N/A

Dec. 31, 2001 $21.32 7.9% 7.9% (13.0%) (13.0%)
Dec. 31, 2002 $29.30 37.4% 21.8% (23.4%) (18.4%)
Dec. 31, 2003 $54.48 85.9% 40.2% 26.4% (5.6%)
Dec. 31, 2004 $60.84 11.7% 32.5% 9.0% (2.1%)
Oct. 12, 2005* $62.51 2.7% 27.2% (2.8%) (2.4%)

*Compound annual growth rate. **Year to date.

Looking simply at the table above, would our hypothetical investor be satisfied with beating the market by an annualized 30 percentage points? Would she, ex post facto, agonize over the 48% stock price decline in the spring of 2004 or the 36% decline in the spring of 2005?
Sure, Garmin is a sample of one, but carefully analyzing the underlying business of all our potential investments -- and then ignoring short-term worries -- would have spared us ulcers in any number of companies.

The truth is out there Admonitions to listen to and emulate the masters by having a long-term focus are everywhere. Warren Buffett has advised investors to act as if their investing careers were limited to a lifetime decision card with just 20 punches on it, and has expounded that Berkshire Hathaway makes investments in businesses, caring not a whit if the market closed for 10 years. Phil Fisher advocated a philosophy of selling almost never. Peter Lynch has said that most of the good things that happened to the stocks he bought took two or three years to develop. Fool co-founder Tom Gardner has adopted this philosophy in Motley Fool Hidden Gems, urging investors to hold recommendations for at least three to five years.
The masters have the success to back up their methods, and yet every day the collective "we" ignores received wisdom. You can see it every time a message board posting says something along the lines of: "Stock X has gone down 5% today, WHAT'S HAPPENING?" Take a look at the returns of some selected Motley Fool Stock Advisor and Hidden Gems picks:

Company Initial pick date Price on day of pick Returns to date CAGR to date Declines of more than 15% Largest decline

CNS(Nasdaq: CNXS) Aug. 28, 2003 $11.18 106.9% 40.8% 2 (35%)
Electronic Arts(Nasdaq: ERTS) April 12, 2002 $29.95 71.8% 16.7% 5 (34%)
Pixar(Nasdaq: PIXR) March 7, 2003 $26.56 81.9% 25.8% 2 (24%)

Those are outstanding returns, to be sure. Yet, a visit to their respective message boards will find posts just like the one above, even with the rising share prices. The messages around us suggest that the masters' words are too often falling on deaf ears.

The Foolish bottom line A professor friend of mine laughed at the behavior of the financial set, particularly with respect to the technology bubble and subsequent bursting. To paraphrase, he said that an entire industry forgot its root principles in its quest to justify ever-higher stock prices, making up new metrics when the old ones didn't give the desired answers. In one sense, he's right; ever-crazier justifications were put forth. But in another sense, he's wrong. Those preaching that valuation mattered -- that Cisco(Nasdaq: CSCO) at 184 times earnings was illogical and that stock ownership was business ownership -- never ceased their message. We just stopped listening.

*** Copyright The Motley Fool www.fool.com ***

This article is in the spirit of the book -the number- that I recommended few weeks ago. This is an article to think about.

I myself fell into the short term trap with my stupid sale of URBN, so I just hope that one day investors will realize how stupid that is to look a intraday graph when you should buy a company for its long term opportunities instead of short term stock movements.

Earning Season

2007-09-11T05:34:00.001-07:00

Today two of my holdings are reporting, ERTS and MOT.

While I do not like to focus on earnings (The book -the number- is a really good explanation why) since I'm a long run guy, I have to admit that as a daily market-watcher I'd love to see my favored companies post nice numbers.

I am hoping for disapointing numbers from some value giants (MSFT or WMT or MRK) to jump on the BUY occasion. Or more likely from some long shot growth stocks like TASR , EXEL or TINY, to eventually invest that 10% of my account held in cash (since the worst move ever, aka the sale of URBN for $25)

Let's wait for the one digit, two decimals number to do its magic and drive the market crazy tonight

The investor's dilemma

2007-09-11T05:32:00.001-07:00

I have $1,500 to invest, eventually, one day I will buy TINY and TASR. These two things are for sure.

However I do believe that (1) TASR is not done drowning and (2) TINY is not anywhere close to the day it'll rise.

Should I invest into something else, and then when cows are falling from the sky sell and reinvest (hopefully with some extra greens made in the time span) in TINY and/or TASR? Or should I just wait (since nothing looks too attractive to me right now for a mid term holding) and keep the cash in the piggy?

I've been thinking about it for weeks now, my potential value plays (WMT, FNM, MSFT etc.) are probably the worst place to invest if the objective is to withdraw in a few months and I don't see much other opportunity that I like, understand and am confident with.

... So I guess buying time will be postponed for some more time, until I make up my mind

Bought BOT today

2007-09-11T05:31:00.001-07:00

Bought BOT @ 114.51

Out of the blue I bought BOT, the Chicago Board of Trade this morning. It went public a few days ago and like CBOU before I totally missed the news of the IPO (Note: I'm glad I missed CBOU, not that I would have bought it, but I grew curious of it in spite of the fact that it's quite a worthless stock, IMHO).

Now as a Chicagoan I may have faith in the CBOT a little too much, but the CME Chicago Mercantile Exchange that went public 3 years ago has been doint tremendously good (+800%), the Nasdaq (NDAQ) is on the rise too, so I briefly pondered, gathered some crucial informations (there are pros and cons that I'm about to list) and hit the "place order" button on my broker's website.

Now is that a value play, a growth play, something else?

As far as I can see it, I would call it a good valugrowth play, trading is on the rise (who doesn't have at least an IRA or 401k in today's world) and will probably be for a while, as younger generation are more familiar with it (and as costs of trading goes down). Warren Buffet explains he bought G (Gilette) because the population is increasing, therefore there will be more people to shave. I think there will be more traders in the future, I think individual investors will grow interested in options (what the CBOT mostly trades, along with futures) therefore I think BOT will rise in the long run and prosper.

For those who don't know, the CBOT is on of the last place on earth where brokers are still gesticulating to place their orders, making it somewhat of a museum, but especially giving it some room to improve whenever it flips to the electronic marketplace type of organization. This I believe will be a big pro for the stock. The Con is mostly that trading prices are decreasing every other day, making it harder to squeeze out extra fees.

Anyway, this is where I eventually put my free cash, I am convinced this is a good quite safe place to put it, and if anything happens, I'll at least have a place to seek revenge two blocks away from my office.

Uncle Warren likes his Coca Cola

2007-09-11T05:30:00.001-07:00

There's at least one live person in the investing world that every single investors, even the arrogant edge fund managers do respect. No, that person is not Jim Cramer (on the cover of BusinessWeek recently, on TV and radio every day), that person is obviously Warren Buffet.

Therefore, and because I don't have that many things to mumble about today, I would like to disclose BRK.A holdings and rant about them, the list comes this way from Morningstar.com

Coca-Cola KO: Wide Moat, 5 Stars
American Express AXP: Wide Moat, 3 Stars
Procter & Gamble PG: Wide Moat, 3 Stars
Wells Fargo WFC: Wide Moat, 5 Stars
Moody's MCO: Wide Moat, 3 Stars
Wesco Financial WSC: Narrow Moat, 5 Stars
Washington Post WPO: Wide Moat, 5 Stars
M&T Bank MTB: Narrow Moat, 3 Stars
Shaw Communications SJR: Not Rated
American Standard ASD: Narrow Moat, 3 Stars
First Data FDC: Wide Moat, 4 Stars
Gap GPS: Narrow Moat, 5 Stars
Comcast CMCSA: Wide Moat, 4 Stars
USG Corporation USG: Not Rated
Gannett GCI: Narrow Moat, 5 Stars
Costco COST: Narrow Moat, 3 Stars
SunTrust Bank STI: Narrow Moat, 3 Stars
Nike NKE: Narrow Moat, 3 Stars
Iron Mountain IRM: Wide Moat, 3 Stars
Tyco International TYC: Narrow Moat, 4 Stars
Pier 1 Imports PIR: No Moat, 5 Stars
Outback Steakhouse OSI: No Moat, 5 Stars
ServiceMaster SVM: Narrow Moat, 2 Stars
Lexmark International LXK: Narrow Moat, 5 Stars
Sealed Air SEE: Narrow Moat, 5 Stars
PetroChina PTR: Narrow Moat, 1 Star
Home Depot HD: Wide Moat, 4 Stars
Mueller Industries MLI: Not Rated
Comdisco Holding CDCO: Not Rated
Lowe's Companies LOW: Wide Moat, 3 Stars
Dean Foods DF: Narrow Moat, 3 Stars
Anheuser-Busch BUD: Wide Moat, 5 Stars
Kingfisher KGFHY: Not Rated

Not very high tech and fancy, but it works wonders (I by the way own IRM).

I have to say I am skeptical about a couple of those (PIR especially) but who am I.

What always amazes me is how betting on those household names companies, Buffet managed to produce such results. You would not expect such a blue chip portofolio to behave the way it did, but once again, the man has nothing to prove anymore.

Finding a hidden gem is one thing, finding a whole portfolio of big names that rises faster than the much hyped trendy stock is another one.

Haliburton files for KBR IPO

2007-09-11T05:27:00.001-07:00

HAL

I've been abnormally quiet these days on this blog because of my workload and my travel log getting clogged.

But this week-end I read an article in the WSJ that I think is worth mentioning, if you haven't read it yet.

HAL filed for a $500 mil IPO of its KBR unit, you probably all know that already. But the point of the author was to stress that besides the fact that KBR will likely be a hot IPO, it will free HAL from its diversified image.

Investors have preferred pure plays like Schlumberger in the past because of the complexity of HAL, making it trade at a lower multiple compared to its more focused peers.

Just like an introduction to an index (GOOG in the S&P 500 recently), becoming a pure play draws massive amounts of cash to your stock via the institutionnal investors looking to diversify.

Another point made by the author was that people associate KBR and HAL with military contract, but in reality it amounts to only a slight percentage of the companies income (although a bigger chunk of revenue, which means that a decline in military contract will improve the margins number) therefore the company isn't at the mercy of wars and conflicts, but rather merely uses them to generate some extra income.

That being said, I look for HAL to go past the par level at $100. I'll do some more research on HAL and will post further info when possible

Bought MOT @ 22.31

2007-09-11T05:26:00.001-07:00

MOT

I snatched 25 more shares of MOT
today to increase my position to 100 shares.

Earnings have been really good for MOT
and yet the stock sold off on lowering margins on the Razr and in emerging markets, bottoming at more than 7% below yesterday's close.

My new average cost is now 21.17, so I'm still sitting on a profit today and hope to benefit to a return to common sense as early as tomorrow. I'll also concede that I've pushed my stakes to 100 shares so as to collect more revenues through dividends and covered calls.

I've been in and out of love with MOT
and still don't really know what to expect, but I have faith in Ed Zander and with dividends, margin of safety thanks to my average cost and covered calls this is not a risky play and should pay for itself in no time.

Bought HAL @ $83.67

2007-09-11T05:25:00.001-07:00

HAL

I jumped on the HAL bandwagon today, with the stock gently rising since the announce of the KBR IPO.
Promoted by Cramer and touted by all parts, HAL should reach $100 within a couple of months if not weeks.

I've detailled a bit more what I like about the IPO and why I think HAL will benefit from it as a stock (as a company there are also some pluses but they're not worthy of a $20 rise by themselves.

I admit I haven't gotten a chance to do much research on HAL and bought mostly on a gut feeling and on the hype. We'll see where that takes me.

The stock might be a little over extended but once again, this is a buy on the news and fundamentals and technicals have little to do with this trade.

Trapped by my covered call on AKAM

2007-09-11T05:24:00.001-07:00

AKAM

A while ago, when AKAM was in the low 20's, I sold a covered call on my stocks at a strike price of $30, way out the money and for a measly .90

Then one day AKAM popped above $32 from something like $28 within 5 minutes and never went back.

Now I can assume that comes August, somebody is going to pick up my shares for $30 (nice profit for me, but nowhere near what I'd make without that call). If I want to buy back the call, it would now cost me around 5.60.

I've been sitting on that decision for too long and everyday it seems like AKAM rises higher.

I cannot wait any longer and will take action either today of tomorrow. What action? I don't know yet, but I'll do something.

New ATEX regulations to benefit motors and industrials electric equipment manufacturers (ABB)

2007-09-11T05:22:00.001-07:00

ABB

New regulations imposing ATEX certification are being imposed this summer on vast segments of the industrial process. That means new orders and/or maintenance for industrial suppliers.

This is the type of news that doesn't make the headlines, but for following the sector for work, I guarantee you that companies like ABB (which I own calls on), SPX, Illinois Tool Works ITW
, Stanley, GE
(althought this is not significant for GE because of their size), Siemens SI, etc...

Watch out for one or two good quarter by these glamourless stocks

My first short sell ever...no shares available (TZOO)

2007-09-11T05:21:00.001-07:00

TZOO
Travelzoo ran up 160% in 5 days, after having lingered around $20 for a couple of weeks. I wanted to short the stock (my first time ever) but my order wasn't filled as there aren't any shares to borrow...

I guess I'll wait for another time to do my first short selling, potential targets :
GM which I believe will file for chapter 11 sooner than later
OSTK I can't believe this website still has traffic, neither can Mark Cuban
AAPL I'm just waiting for the Ipod killer to hit the market (whatever that think will be)

Palomar Medical (PMTI)

2007-09-11T05:20:00.001-07:00

PMTI reported better than expected earning this morning and the stock is up 9% on the news.

I've been holding some Palomar Medical PMTI for a little over 4 months and was deep in the red for the most part because of bad news on rivals such as CUTR. But I've always kept a positive expectation of PMTI, especially as we come closer to the mass marketization of their hair removal product with Gilette G, and their other deals with JNJ

In a Peter Lynchian way, you don't even need to look at the numbers to see potential in PMTI, just imagine how huge the market is going to be for hair/tatto/skin treatment in this coming age of ageing hip population. And PMTI is poised to score big on that trend, with a toughness in court where the company fought its way through competitors stealing technology, and with partners like Gilette and Jonhson and Johnson, PMTI has the opportunity to leave the dermatologists offices and sit on Target TGT or Wal Mart's shelves.

I almost bought some more shares when I was 20 percentage points below my average cost, but didn't. Today I'm back in the green zone with 3% and would recommend PMTI to any patient investor willing to wait just a year or two for serious dough

Indian Play (TTM)

2007-09-01T15:59:00.000-07:00

Tata Motors (TTM) ADR

According to everybody at the watercoolers around the globe, China is the next superpower. According to me, India is the real deal. Inheriting of some anglosaxon traits due to its past colony status, fluent in english for the most part, growing as fast as China, and most important of all, less regulated than China.

I have trouble thinking that a country that forbids Yahoo and Google to display certain websites, that has people in the far lands dying of hunger while Beijing hosts the Olympics, that is basing its rise on manufacturing rather than services, can be a world leader of some sort.

India on the other hand is certainly not as glamourous, but I expect it to emerge as the real leader of teh far east. Their Focus is on services rather than manufacturing, which places them closer to the 21st century than 19th century style chinese manufacturing.

One indian stock I like is TTM, Tata could be poised to become a dominant force if the big3 and the japanese leave the indian market alone too long, or fail to seduce local customers.
ETFs could be a good andsafest way to play on India, but for some reason I'm still buying individual stocks only. Results achieved by some fellow bloggers with some funds could eventually lead me to consider some of them.

Sold Jul 30 Call for WDC @ $.40

2007-07-02T10:39:00.000-07:00

WDC

I have a long in the money position on WDC via a Jul 20 call. I do expect to generate a good profit from that position and I wouldn't mind selling at $30 (for a $10 profit per share, minus the premium).
So I figured that I could write a call to create a spread on my position.

I would like to do the same on TRADbut the higher strike price isn't too far out the money and I prefer to write call that won't be exercised.

I am starting to get a good fell on certain of my holdings and to be able to anticipate their near term move so I wish I had enough shares to cover a call writing on stock such asIRM or MSFT

As it isn't the case yet, I will stay out of trouble and avoid naked call writing for now.

Options Strategy

2007-02-02T01:28:00.000-08:00

I just received level II clearance from my broker www.izone.com (Ameritrade Izone) to trade options.

Before that I only had level I clearance which allowed me to trade long and covered short options, but not to create spreads.

I intend to start bullish spreads on two positions I already have, WDC
and TRAD and maybe use the proceeds from the short positions (the longs are already open) to open a new long in BBBB or my two favorites CRM and/or PRAA

I believe that options should be used by even conservative investors, selling a put against your long stock position in one company is a great way to generate income, plus if you sell out of the money you likely won't have to sell (but you reduce your income potential from the premium)

As I don't have enough shares of most of my holdings to cover the 100 included in one option contract, I wrote just one covered call so far (for Akamai AKAM) but I'm even tempted to load up some position just to be able to write calls.

Besides investing in options for the underlying securities, trading options offers far more volatility for a quick bang (or a quick loss) with lots of leverage and limited risk.

If you don't want to invest in options, you should at least pay attention to the option market for it denotes the confidence level in one particular stock. www.scaheffersresearch.com shows Put/Call ratio that often lead to identifying great opportunity.

Sold Aug 30 Call for AKAM

2006-12-01T14:47:00.000-08:00

Akamai (AKAM)

I've sold a covered call on 100 shares of AKAM for $90

I plan to hold on AKAM but $30 is almost a 30% increase in price and I don't think that increase is likely within the next 7 months.
If AKAM does increase to reach 30 and the call is exercised, I'll still have some shares left and would probably buy some more on the way up to 30.

I am evaluating the option of writing covered calls on PDLI as well

Options

2006-12-01T05:06:00.000-08:00

Interestingly enough, about 30 minutes after my first ever option transaction (a conservative sell of out of the money Aug 30 call on AKAM for less than a hundred dollars), the Motley Fool is running an article on Options.

In that article, two authors explore a pro and a con view on options.

It's pretty basic and I believe there is actually a typo in the bullish case (buy Call and sell Put, where the author means buy call and seel call) but definitely worth reading.

I believe the Fool.com is a good website for stock ideas, their newsletters have good results, but overall the papers are superficial and they're trying really hard to sell their stuff. Half of the article are just apetizers bragging about former top performers that end up with ...Suscribe to our -whatever- Newsletter to read other other stock picks

Zacks Performance Tracking Halt

2006-10-04T15:09:00.000-07:00

I've been tracking the "bull of the day" picks at www.zacks.com for 6+ months and 150 stocks, and I consider the current pool of 150 picks to be enough of a database to work on.
Therefore I am halting the long and time consuming process of collecting data on the picks and will only continue to upgrade the +1week, +1month, +3months and +6 months columns of the spreadsheet until everyone of the 150 stocks has data for 6 months (the time frame given by Zacks to reach the price objective)

So far it's been fairly average, with a handful of great picks, some miserable ones and a bunch of average (read performing like the index), but some of their analysts are sticking out.

I'll crunch some numbers and post the file soon, but I'm skeptical that following the advices of professionals yield wowing results. If you do your homework you should be able to beat the index by yourself and should not need someone to tell you what to buy.

Sold some ERTS @ $55.65, looking for Jun calls elsewhere

2006-10-01T10:48:00.000-07:00

Electronic Arts (ERTS)

I lightened up on ERTS today, sold 1/3 of my position to get some money off the table and off that sideway trading stock.

SOLD ERTS @ $55.65

I'm losing around 5% on that trade, but I just don't like ERTS that much anymore.
On the other hand the videogame market is about to boom and I don't want to miss the train, so I'm keeping some until I find out a better play or I fall back in love with the stock.

Besides, I'm looking to buy several June Calls for a couple of stocks, I do want to trade options that I expect to exercise, so I'm looking for comapnies with a sound base.

In my shortlist : GOOG, PCU, CKCM, ENG, SPIL, MRVL (down 7% today but it should be back in the spring) or maybe my left apart from the Xmas buying spree CRM, PRAA, ADEX, JOYG

Looking at new Buys (CRM, PRAA, GILD, TIBX)

2006-06-02T17:22:00.000-07:00

AAPL

Before thinking about long positions, I am considering shorting (via buying some puts) some AAPL, I've been bearish on the stock for some time (see earlier posts) and don't see it coming up with anything as big as the Ipod for some time.

Recently AAPL has been trending lower and a quick look at the chart above doesn't look make you think of a beloved and hyped company. The MACD is dipping below 0 and the RSI is way off.

Other than that, I'm keen on buying a new position (since my WDC Aug 20 is likely to make me some money) into a hot stock. I'm thinking on-demand with CRM (salesforce.com), I'm thinking RFID with TIBX (Tibco), I'm thinking consumer paying off their credit card debt with PRAA (Portfolio Recovery Associates) and I'm fancying a midcap biotech that could have the kind of year PDLI had me in 2005 with GILD (Gilead Sciences).

At any rate I probably will implement a long position through options rather than stocks as I don't want to expand my account size too much, should these trade prove right I'll free up some cash to exercise and sell, or I'll just sell for higher premiums.

Among the technology that are going to be tremendous in the next 5 years I expect RFID (CKCM might actually be a good play too besides TIBX), RSS (although I don't really know how it can generate revenue, it should be huge soon), and nanotech (I put TINY off the side for too long and it grew almost 50 behind my back, but I'm still considering getting into it, or on a less pure play MMM)

Looking back at my sales (BOT, URBN, ENCY, ERTS)

2006-06-02T17:12:00.000-07:00

BOT is up a little over 5% since I sold it, it would still be a loss from my buy point and I don't see it going past $120 anytime soon

ENCY is up more than $2 (more than 20%) since I got out on a 30% dip (after a competitor's drug, Actelion, got good news ahead of ENCY) and since the stock seems very resilient, I am tempted to get back into it with summer expriring options and play a wait and see game with the FDA approval supposedly coming this spring for the respiratory drug from Encysive.

ERTS is down a couple points since I shed one third of my position. I expect 2006 to be flat or so, but ERTS should be a powerhouse when the transition to new console is fully done.

URBN has been bouncing up and down since I sold it, as of today it's higher that my selling price but lower than my initial Buy, this stock got me weary of retail stocks and I still avoid them like the plague

Time to shed some ERTS ?

2006-05-01T10:12:00.000-07:00

Electronics Arts have been a disapointment so far in my portfolio, Madden is the best selling football game ever, the stock doesn't tick, jamdat is bought for more exposure on the growing portable market, nothing happens. Recently it's been trending up (despite all technical indicators down, see below) a bit, and my loss on it is reduced to roughly 5%. I believe ERTS will continue to lead the videogame market for eternity, but it looks like that fact is already discounted into the price of the shares, no good news is good enough.

On the other hand the market for videogames is in a transition form generation 2 to generation 3 consoles. Gamers are buying new systems with a huge price tag so they don't have money for games yet, or they're saving up for the PS3 and still don't spend.

Whatever it is that is happening, the stock isn't anywhere near where I expect it to be. I will probably hold on until the next or next next quarter, but I might shed 30% of my position to free up some cash, maybe a good bet on video game would be Gamestop (GME)?

On the technical side, the MACD just crossed over, but as it happens below 0 the move shouldn't be that huge, I hope it'll be big enough to shed at a profit, but the long term technicals are so bad that it will take great news and a bit of luck to be on the long winning side.

From a long term perspective, I am confident that ERTS is great company and possibly great stock, but I am trying to maximise mid term profits and could certainly find another stock with similar if not higher odds of making me some dollars.

Also, there is a bit of risk in the fact that EA's games are mostly franchise and repeats, and somehow at some point you can't expect NBA street 7, NFL street 6, NBA live 2011, The sims 5, and NHL 24 to create a "growth" image around the company.

Zacks "Bull of the day" Performance Report 3

2006-01-02T15:08:00.000-08:00

I digged into the zacks archives and tracked the performance of the "Bull of the day" for the past months.

I love to look at that file and it's very interesting to see how certain analysts fare at stock picking.

You should be able to download the file here : Reco.xls otherwise email me and I'll gladly send the xls file to you

So far the list goes includes the following stocks :

PTR TEX LLTC CHK ZRAN WMB JOYG WSSI JOE HW AGIX PKTR EOG TSO ECA WHQ XOMA RNVS BNI TXCO CHK SAP XLNX PLXS AMLN ATHR AHR DNR CTRX BRP KOMG CUTR YHOO APH VRSN ORB EBAY JOE KOMG DO NFX KYPH HRS NTES MAA TRMM RACK DB NVDA CTRX BAY GME DF CRM UPL INFY EBAY MFC MXIM PALM GILD
CYMI MDRX AMGN SPIL SPG PRU CVTX BHI NSM LEXG TRID KIM RACK SCSS TXU CEO
COGN ACAD JOYG AGIX VIP BF TLM VRSN PCU FMX APH IVAC ALTR CAI NNDS WAG DVAX MOT EBAY CRM NETC SAP LLY CX BGC

Down market

2005-05-10T15:31:00.000-07:00

The market plummeted seriously today, my portfolio lost 2% in a single day (pretty ugly to look at) and not a single stock in it is up for the day.

But if we look at the bright side of the road, it might be a good time to buy. I've been pondering recently about some stocks (like TASR, EXEL, TINY to name some) and today's hard beating makes me think that with tons of good company taking a 3-5% hammer hit (UPL, CHK, XTO, NVDA, PDLI, TASR etc.) there might be room for some picks.

I'm really bad at market timing though (URBN is the perfect exemple but not the only one) and I bet that if I buy tomorrow this is going to be black thursday all over again, whereas if I sit and watch there might be some sunlight on the Dow and the Nadaq within days.

So since I hadn't had time to research my potential buys and since I don't want to be the origin of an economic disaster (remember, I buy = the market sinks) I will keep my pile of cash in the cash account.

It's so tempting though, luckily earnings season should start soon and most of my holding should meet or exceed expectations.

Next big boost up (hopefully) = Earnings
Next in line (hopefully again) = Xbox 360 (MSFT + ERTS)