Wrapping up the month and year

Well it's time for me to call it quits for 2005. I won't be posting over the weekend and I'll use today as my net worth review.

The good news is that I hit my year end goal! I'm assuming tomorrow is going to be a quiet day in the markets, so my portfolio shouldn't fluctuate too much. My 2005 year end goal was $32,000 and I ended the year with: $32,424
It was a bit closer than I liked, but the important thing is that I hit the goal.
This represents an increase of almost $1,400 from November, which is pretty good considering I had to pay for Christmas things, New Years event, and a half month's worth of rent.

January should be an expensive month because of a few trips, full months rent, and I have to pay a deposit.

The Dow ended almost perfectly flat for the year (well there's tomorrow) and the S&P managed to gain 3.5%
My current portfolio (existing positions) finished the year up 8.2%.
For the year, my total gains are more than this because of some trades I did during the year. For instance I had one position (LB) that was a +15 or 20% gain. I need to go through my statements to figure the end result, but I'm confident the total number is over 10% for the year.
I'm glad I beat the S&P, but this years results were lower than my historic average. I've been averaging over 20%/year and this year will bring down that average to around 17%.
There's always next year, and I think I can do a lot better.

I hope everyone has a great New Years and I'll be back next week!

Choppy Market

The market action has been a bit choppy lately. I'm also seeing many more opinions and some are bullish while others are bearish. Normally you can get a sense of the overall opinion about the market, but not during these times. So far I've read one opinion that 2006 will be an average year, and another said 2006 will be a bad year (but you see opposite opinions). We subscribe to a few technical analysis reports and those are iffy on the market outlook as well. Some indicators seem bearish, while others seem bullish. For instance:
The indices are holding up above their moving averages, yet the put/call ratio is bearish. The market sentiment readings (what money managers think) is bearish since the ratio is high (it's a contrarian indicator). The different sectors all appear to be mildly bullish, but there are no cash inflows into mutual funds (there might have been more outflows I think). Two weeks ago the M2 (money supply) increased less than the inflation rate, which is bearish. There's a correlation between M2 growth and stock increases. Last week the reverse happened, M2 outpaced the inflation rate.

I think, from the technical journals I've read this week, the consensus from those managers seem to be that January may be pretty good, but then the rest of the year will be average.
If the year ends up this way, I think I should be able to beat the S&P again.


I have no opinions about Robert Kiyosaki (the author of Rich Dad, Poor Dad). I did see him briefly on PBS and he wasn't very impressive, but this was only for a few minutes so I can't form an opinion. I did come across this website/article where the author is against Kiyosaki and basically says he's close to a fraud. I thought it was an interesting read and the author spent a lot of time on it (maybe a little too much...)!

Non-monetary Goals

My last post dealt with my financial goal for 2006: having a year-end net worth of $50,000
I'll be dealing with my portfolio more in the near future because I have enough cash to add a few more positions. I'm slowly making a list of stocks to look through and hopefully I'll get a chance soon. The size of my net worth limits me when looking for stocks. I want to own at least 100 shares. If the stock price is around $32, this would make up roughly 10% of my entire net worth.
I have a few positions north of $32 because of appreciation, but I might be a little uneasy adding more 10% positions. This drastically limits my universe of stocks to choose from, but I should be able to manage.

Now it's time to take a look at my non-monetary goals for 2006. I think it's definitely going to be an exciting year and I want to use my time as efficiently as possible. If I put my mind to it, I should be able to accomplish my goals.

* Start my third degree. I already have degrees in finance and economics, but I really want to work on my math skills. This is an area where it might be hard to teach myself through books, so I want to take classes. I'll be taking classes at a junior college (cheaper!), but I still need to talk to someone. This should happen next week, since the offices are closed. I might be able to finish the degree in 2.5 years

* Travel more. I'm not sure if this is really a goal, but it's something I want to do. After I graduated I did take a short trip to Tokyo, but I wished I went to a few more places (like a road trip across the U.S.).

* Greatly increase my knowledge on options. I'm starting to go through Options as a Strategic Investment (good book) and I want to take this year to really strengthen my option knowledge.

* Play more poker. I've been a fan of poker for awhile, but it has taken a backseat during the past year. I want to study and play more over this next year and sharpen my skills.


I also have to start thinking about my career. I know I'm young and still new at my job (5 months), but it's time I step it up and try to show them other things I can do. I don't want to be a trading/operations assistant forever! The good thing is that I have a great boss who is willing to take time and teach me things.
Looking back at the last five months, I think I've done okay. I've been picking up on the technical analysis materials, I made one good trade so far (the one they bought is up 5%), and I think I showed my ability to grasp different subjects. Now it's time to build on this.




On a different note, Free Money Finance has a Festival of Frugality on the FMF site. Check it out for some good frugal tips.

2006 Goals

It's almost the end of the year and time to look forward to 2006. I've started to set various types of goals: financial, personal, and educational. For this post I'm going to concentrate on some of my financial goals, and I'll get to the rest in future posts.

My base assumption is that I'm going to hit my 2005 year-end goal of $32,000
I'm almost there and I think it's within reach. It's always nice to hit a goal and this was my hardest one to date.
My next assumption that I made is that I'm going to save 40% of my monthly income. This seems like a high rate, but I have a modest amount of expenses and I'll have enough money left for other things (going out, buying things, etc.) So I'll start with the 40% target and see how it goes from there. Using this target results in saving about $1,140/month, which breaks down to $285/week.

Next, I want to increase my net worth by 10%. This growth rate is for my entire net worth, so cash is included and not just stocks. I think this is a decent growth rate, but if anyone has a better idea I'm open to suggestions. A 10% growth rate translates into roughly 0.83%/month.
There's a reason I'm breaking things done into monthly figures.

These are the inputs I put into my calculator: n = 12 (months); i = .83 (growth rate/month); PV = 32,000 (my starting point); PMT = 1140 (savings per month) and I solve for FV (future value, the end amount).
I come up with an end amount of $49,658
We all like round numbers, so my 2006 goal is $50,000

It seems like a long way off, but the important part is to take it step by step. If I can hit my goals one month at a time, I'll be sure to hit my year end goal.

If for some reason things change (if I get a raise, or another source of income), I'll change the goal. The point of setting up the year end goal is to set up a figure that is slightly out of reach. There's no sense setting a goal of $40,000 when I'll hit that with no problem. Likewise there's no sense in setting a goal of $1 million because the chances of that are small.
As of right now, $50,000 seems a little out of reach- which is why that's my goal.

You Need a Budget review

Time to review a site/software. I've come across it before and I think it will be useful for some (but not all). The site and software is called You Need a Budget and there should be a link on the right hand side. Before I continue, I just want to point out that I'm not receiving any referral fees or anything like that. So I have no interest if you buy the software or not, I'm just writing about it.

The first thing to mention (besides the cost, under $20) is that you're not only buying some software, but also a budgeting method. The software consists of various Excel spreadsheets that make it easy to follow the method and rules.
The first step is to save one month's expenses and this is a good starting point. This will lead into a zero based budget where all your cash inflows go to a specific category (the second step).

The last two steps deal with unexpected expenses/shortfalls and these are crucial. I've seen a good amount of people who seem to be on a budget, but when something unexpected happens they don't know what to do or where to get the money from. I've (and many other blogs) have stressed the importance of an emergency fund. I do like the last step because it forces you to adjust your budget. If you over-spend in one category, that excess amount is taken away from the amount available next month.

Who is this for? If you're looking for something more complex (taxes, portfolio reviews, etc.) then I would suggest getting Quicken. If you're just looking to start from scratch, learn how to prepare a budget, and stick with it- then it would be worth the time to check out the site. It is a very simple program to use and this could be an advantage for some compared to Quicken (which can get a bit confusing).
So I would say this is for someone who wants something basic and easy to understand. You definitely need to follow the rules and this will be beneficial for those who don't even know where to start. This is one other key advantage. Quicken basically keeps track of everything and assumes you know what you're doing. If you don't know what to do, this software will show you a way.

Smart Money review

I just received the year-end Smart Money magazine and I usually like to skim through before I read it. This issue recaps their 2005 picks and those apparently beat the market by 114%- not too shabby.

A small article on the Japanese market highlighted: Orix (IX), Nikko Cordial (NIKOY)

A railroad, Genesee & Wyoming (GWR), was highlighted and it seems they are growing through acquisition. This made me want to re-check that Chinese railroad (GSH).

Bill Gross (the Bond King) is a huge stamp collector. This was a small story, but he's a major stamp collector who recently paid a few million for the one stamp missing from his collection. He notes that stamps are good inflation hedges.

Their 2005 guide had some good picks, so I might as well jot down some of their 2006 picks.
In banks they like: Bank of America (BAC) and UBS (UBS)
Biotech: Amgen (AMGN) and Gilead Sciences (GILD)
Healthcare: HCA (HCA) and UnitedHealth (UNH)
Conglomerates: General Electric (GE) and Tyco (TYC)
Energy: ConocoPhillips (COP) and Devon Energy (DVN)
Telecom: Nokia (NOK- which is also on my list to look into) and Qualcomm (QCOM)

The magazine also had a roundtable and here are the picks from that: Bear Stearns (BSC), Burlingto Resources (BR), Murphy Oil (MUR), Phelps Dodge (PD), BG Group (BRG), GOL (GOL), Petrobras (PBR), Rinker (RIN), Anadarko (APC), Centex (CTX), Merrill Lynch (MER), Microsoft (MSFT), and Wal Mart (WMT)


If you have some shopping to do, someone sent me this link with coupons you can print out. There were a few good ones like 30% off any regular priced item from Borders (that one expired today though), and a few other good ones.

So close to the year end goal

I just spent another $275 on gifts and I still have a few more to buy. All the big gifts are done with and now I just need to get a few gift certificates and a few smaller items. I normally calculate my net worth at the end of the month, but since I thought I was close to my year end goal I had to check it mid-month.

I was glad to see that I'm only $500 away from my year end goal of $32,000. I have one more check coming in for $1440 at the end of the month and I don't think I have any more big expenses. I've bought all the big gifts, bought all the stuff for the apartment, and there's only 16 more days to go to end the year. I just somehow need to not spend $935 for the next few weeks and hope that the stock market rallies a bit.

It might be a little close, but I think I can make it. I also wrote up my 2006 goals, and I'll write about those next week.

Another rate hike

Well, this one was expected and the stock market rallied on the news. Now it's the time when everyone start saying the rate hikes will slow down. I read this article stating that financial stocks may be a good buy because of that reason. The financials definitely had a stronger rally than most stocks. I noticed a good number of them posting strong gains late in the day. If the article is right, you may be able to find some bank stocks now that are trading on the low end of historic valuations and/or have high (and sustainable) yields. For instance, Bank of America (BAC) is yielding about 4.4%.

I'm starting to gather a list of stocks I want to look into because now I think I'll have more time. For some reason a lot of food related stocks are on my list so far. I'm also looking at a few consumer products companies and tech (I think Nokia was on the list, but that has had a big run-up). I also have a couple in mind that are small caps with low volume. I don't want to be over-weight in this sector, but I might be able to find a few.

The other thing I want to start doing is maybe (I've already pointed this out I think) buying a stock based on charts. I have my spreadsheet where I keep track of my longs/shorts. The list is made up of stocks I look through and also stocks that I send to the head trader. I try to go through the list everyday and if I don't like how the chart is shaping I'll "sell" it by putting a dash next to the name. Then I don't keep track of the price anymore. My Long list is doing rather well, with a straight average gain of over 9% since the end of October. The better part is that my profitable "trades" are over 90%. This is mainly due because I started the majority of the list right before the rally. My short list is okay compared to the market. I would expect to be down a few percent, but it's only down about half a percent.
So maybe I'll take a chance and buy a stock every now and then with a shorter time-frame. The risky part is that I won't be able to look deeper into the stock till after I buy it, but it might be a risk worth taking.

One last note: my first options trade resulted in a 1% gain in three days. This was basically my goal, but I haven't made another one yet. I'm re-defining my game plan and reading more on option strategies. I'm currently getting through Options as a Strategic Investment, which is an excellent book.

My plan for next Christmas!

I know it's incredibly early to think about next Christmas, but I did this weekend. I spent a lot of money on presents and also apartment things and I realized I didn't prepare for these cash outflows. I'm still not done with Christmas shopping and hopefully I'll find some deals online.

So my plan for Christmas 2006: ING lets you separate your account into different sub-accounts. For instance, some people have a vacation account within their savings account. This makes it easier to plan things out. Starting in January I'm going to set up a Christmas account in my ING account. Then I'm going to set up a weekly transfer of $10/week to this account. By the end of the year I'll have over $520 (because of interest) ready for the holidays. I know some work places have these types of accounts set up where it will take a little money out of your paycheck. It's worth looking into because they you will be a little more prepared for the end of the year.

I also added a new blog: Market Rider

Also, for some reason my blog template is not working correctly. I might change things later, and possibly move the blog.

Quick Post

I finally received my reimbursement check for a little over $200. It was lower than I expected, but the rest rolls over to the next month. I already spent $45 from there on car maintenance...

The big things left to purchase are Christmas gifts. I'm not exactly budgeting anything (but I plan to shop online for a few items). If I had to put a figure on it, I think the total will be under $700. This still seems like an outrageous number, so I'm hoping the total amount comes in less.

I also paid for December rent ($300) and I need to buy some things for the apartment (bed, dresser, a few other items). My year-end goal is going to be hard to hit with all of these incoming expenses!

*I received some emails lately and I haven't got back to them. I will try over the weekend, sorry!

3 more weeks in 2005

There are three more weeks in 2005 and lately the market is having a hard time ending on a good note. We got our little end year rally that everyone wanted, but now it looks like the markets are giving some of that back. It's been a choppy week or so, and what's going to happen in three weeks to push the markets up? The majority of earnings reports are out, trading (and speculation) will begin to slow as the holidays approach, and things are starting to calm down. Maybe a big news report dealing with a stock (Ford? Time Warner? GM?) although some of those would be negative stories.

One stock I bought a few months ago has been doing rather well lately. TCHC increased their dividends by 50%, sending the stock from about $12 to $15 within the last month. I bought the shares in the $11 range, but my cost basis is less due to dividends.

The Personal Finance Advice blog recently updated a net worth list of finance blogs. I personally think PFA is one of the best blogs out there, so definitely bookmark the site. I'm thinking of a few ways to increase my net worth, we'll see what happens.
Also, Neo's Nest Egg updated a net worth list of bloggers, but this one is in chart form. It's definitely interesting to see how other financial bloggers are improving their net worth; it's also a motivating factor as well.

CFA Test Recap

It's finally over with, well for now at least.
After I walked out of the testing center my mind literally felt numb and I really didn't know how I did on the test. Normally after a test I have at least a feeling about how I did, but not for this one.
I got there at 8am and I honestly can't remember the first half of the test. The entire test is 6 hours long split up into two sections. After the first part I felt so-so. Some of the parts I did well on, while other parts were a little cloudy.

We had a lunch break and then the second part started. I started off fairly well, then hit a few tough ethics questions, and then ran into the financial ratios/analysis part. I think I did really well in this part and I felt pretty confident. The last part of the test was okay, a few tricky fixed income questions.

I still don't know how well I did. I'm not sure if I passed or failed, but I do know that if I did fail then I can definitely pass in June.
If you're thinking about taking the test here are my tips

1. Don't do what I did and buy the books. It will take up too much of your time reading and finding the specific parts to read/take notes on. Buy the already made notes from one of the programs.
2. Take the ethics/GIPS (global standards) seriously. Read the entire ethics questions and especially the examples because a few of these were on the test. The GIPS section doesn't seem too bad, but the test had a bunch of questions on it! I was definitely surprised.
3. Buy one of those online packages. From what I'm hearing Schwesser is the best out there. They have notes and the toughest practice tests. If you study well and you're able to pass those exams, you should have no problem for the Level 1.
4. Realize that you do have to know the material, but the test won't cover everything. For instance in the test I took there were zero questions on t & z-stats parts.
5. Get your timing in control. Time rushes by and I barely finished the first section with about five minutes to spare, but you could tell others were not going to finish. I finished the second with about 20 minutes to go, but time flies by!
6. The make up of the test will correspond by section. The first 20 or so questions are on ethics, then quant, then econ, and it continues in the order of the study guide.

Results come out at the end of January...

End of Month Update

Time to do another end of month update to see how things are going.
This month I did manage to keep my expenses in line. It's a little less than what's showing on my bank statement because I'm getting some money back. For instance, this month I bought probably $400 worth of concert tickets (because I bought tickets for friends at the same time) so I will get the majority of that back.

I'm definitely getting ready for December, because of some planned purchases (I'll get to that below)

November '05 Net Worth: $31,030
This represents a little over a 7% gain from last month due to lower expenses and increases in my brokerage account. Overall I'm pretty happy with that figure, since it's a little higher than I expected. Psychologically, it's also nice to finally get past the 20 digits mark.

December: I don't think the market will continue to rally, but rather cool off a bit. So I'm expecting a slight decline in my brokerage account (although normally December is a good month for the market). I should bring in close to $2900 from work, but I will have extra expenses. I'm also still waiting for my reimbursement check for $280.
The big one is that I'm moving into an apartment in the middle of the month. I'll need to pay half the monthly rent, so $300. Deposit for my room is 1/3 of the total rent, so that will be another $667. I'm not sure if I'll count this against me, since it's technically still my money.
Then Christmas is near so I'm going to do some shopping. I'm not too sure how much I'll end up spending, but it will include a few big items. For instance I'm buying my parents a digital camera/printer, but I should be able to find a deal online.

Overall things are going okay, but they could be better. I'm $970 away from my year end goal with just a month to go. Monthly inflows should be $3100, which leaves me with $2130 to spare. Then probably $1200 for rent/expenses, fluctuations in my account, and Christmas shopping- my year end goal might be in jeopardy (but it won't be the end of the world).

Some nice work news

I've been slacking with my personal finance or stock market posts, and well I'm going to slack on that once again (although an end of the month net worth should be coming soon).

I received some good news today at work. The head trader told me that we're going to try something new. Previously I've been using technical analysis to find stocks/industries that look interesting either on the long or short side. I did okay and I picked up on some of the technical analysis parts. I'm also starting to form a basis for that side of investing. For instance, I like to stick to RSI, MACD, and trends within these as well as moving averages.

Now the new part: previously everything was just paper trades. I would put down some stocks and give a few reasons. Now my picks might go into the real portfolio! Of course, he's going to make me start small (but I'm not exactly sure how much that means). Anyways now I'm looking for one or two good ideas that I can back-up with some strong reasons. If I'm able to do that and he thinks my reasonings are sound, we'll (okay he will) buy/short them.
I was pretty excited to hear the news and hopefully I find something good.

CFA Update

I'm taking the CFA test this Saturday and I think I'm on the border in terms of being prepared.
Looking back I should have bought the notes from the start, rather than buying the books. I tend to do better by reading the material myself and then writing my own notes, but for this test there is just way too much information to cover! I think if I had bought the notes to begin with, I would be feeling really confident right now.

Now I'm a little shaky. There are 18 sections of different weightings and I'm good with some of them. I'm spending this week reviewing the harder sections and making sure I know how to use the specific type of calculator (some of the keys are different).

The sections I need to work on: Ethics (just because this is probably worth the most), the second part of the math section (I still hate hypothesis tests!), and the financial accounting parts.
I want to read through the econ sections and make sure I know the equations. I think I'm ready in the corporate, equity, securities markets, and fixed income sections. It's definitely going to be a challenge, but I'm going to try my best. I figured if I don't pass it might be better in the long run because then I will put an extra 6 months of studying into these topics and form a strong foundation.
But I rather pass!

Happy Thanksgiving

I'll just make a quick comment first. So far, Quicken is a really cool piece of software. I'm still updating my info and getting things organized, but it is really easy to use. When you first set it up, it basically does everything for you. I think it took me literally five minutes and I was able to have my credit card info, bank info, ING, and brokerage transactions downloaded into the program.
I'll write more on it as I learn more, but so far it looks to be a good buy.

I just wanted to wish anyone reading this a happy thanksgiving. Use this time to forget about your stocks, savings, put your frugality aside, and spend some time with family (and in my case I plan on sleeping in).

I'll be back on Monday!

End of Year Rally

The markets had another good day today and as you can see here the S&P has been fantastic recently. So can it continue? I don't think it will continue at this pace and based on a few technicals you could argue that it will settle down a bit (possibly over-bought). It has been a tough year and it does look like the indexes will end in the positive territory. It's always good to remember these types of years because then you realize that it's hard to end up positive. During the bubble people were taking these double digit returns for granted. It's definitely important to realize that we'll go through tough years. Sometime in the future the markets will end in negative territory, so be prepared.


ENR finally stabilized and then rose quite a bit. It has gained about 9% in the last five days.
I'm still looking at consumer stocks: Campbell's Soup (but then it went up), SLE (maybe stabilizing a bit), HNZ (but the trading is really choppy), and a few others that are at work and have slipped my mind.

One last note
I figured if I have to read/study this stuff, then I'm going to put it here too
CFA tidbit of the day: An impairment writedown decreases assets, deferred taxes, shareholders equity (retained earnings), current net income, ROA/ROE, and depreciation expense. Assets carried at more than their recoverable value are considered impairs.
Fun stuff right?....

An expensive weekend and a day of green

This weekend I went a little overboard in the spending category by buying a good amount of things (the biggest item was concert tickets, which set me back about $120). I ended up selling two other concert tickets, so that helped out a bit. I definitely like saving my money, but I also want to have fun. That's the balance I need to perform. My savings would definitely be a lot higher if I was incredibly frugal, but how much fun is that? Basically, I don't want to miss out on certain fun things just to save a few bucks.

Everything on my screen ended up in the green except for three stocks. It was a pretty wild day with a few of the tickers. I glance at a few of them throughout the day and today I noticed Google down all the way to $393 and then it finished the day up to almost $410.

Also Jones Soda was approved to be on the Nasdaq Small Cap, and hopefully this brings a little more liquidity. It ended the day up 2.45%

Inverted Yield Curves

I read an interesting article in today's journal about bonds.
The difference between the yield of the 2 year Treasury note and 10 year Treasury note is less than 0.09 percent. Historically the average is around 0.75 percentage points, but now we're closer to an inverted yield curve when the short term yields become higher than the long term rates.
Here's a quote from the article: "In the past three decades, the Fed has tightened eight times and inverted the curve five of those times. And of those five, all landed the economy in recession a year later." This, along with a possible peak in the housing market, Americans not saving, and rising costs (example: packaging costs are going up so Kraft will pass those higher prices to the consumer), may bring hard times according to some.


I think I'm going to subscribe to Barron's. I just got a note in the mail and I can get a 1 year subscription for only $72. I'm fairly sure this is the cheapest I've ever seen the subscription and it's a good newspaper. I figured I'll start it in this month since November expenses are actually really low so far.

Quicken Premier

One of my side goals for 2005 was to get myself a little more organized. I don't have a file system set up and my desktop is cluttered with icons. Normally when I start something I might try a few different ways before ending up with something I like. For instance, when I started calculating my net worth I made up three different spreadsheets: one was basic, the other two were more detailed. I ended up keeping all three, but I only update one monthly.
My brokerage statements? I used to download and save them, but I stopped doing that awhile back. So now I have various months on my laptop and everything else is online.

Well hopefully I'm taking a step in the right direction by my purchase of Quicken Premier. I chose premier over deluxe because this one has more investment features. I bought the software off eBay for around $25. I thought this was a great deal considering I saw it online for $40+
I figured that by actually spending a little money it will force me to actually use the program.
Once I get it and learn how to use it, I'll try to post a review.

TCHC is up about 10% for me and they came out with a pretty good report. They guided EPS of $4/share next year. That doesn't sound incredibly special until you notice that the stock price is $12. This basically translates into a forward p/e of 3 with a 2.6% dividend yield.
The catch? They based the $4 EPS on *zero* hurricanes next year (they are based in Florida).
They did note that for every hurricane EPS will drop by 36 cents or so. Some of the analysts seemed bullish and it seems people think this is a $20 stock. It is insurance, which I don't know too much about, so I might ask one of the analysts at work for some tips on how to evaluate an insurance company.

ENR, Article, and a Screen

First thing: keeping track of what my expenses actually are is working out great. I only bought my lunch for work one time and I think I can keep it up. We'll see how it goes this weekend, which is when I normally spend the most.

ENR: Check ou the chart
I keep watching this one and I'm waiting for it to stabilize. The only thing that has interest me so far is the graph because I find it pretty interesting. Is it a good company? I have no clue. It's the company that makes batteries, energizer, so you would think it would be relatively stable. Depending on the economic environment, it could be a safer stock to own. I haven't looked any of the financials, and I don't even know if I will, but I'm watching the chart.
If you have any opinions on the fundamentals of ENR, email them my way.

Interesting article on Spin-offs. Quick article and I think it's worth a read.

I keep reading articles about another hedge fund fraud. Today was about a small one where the so called mathematical model genius manager was actually lying about performance. When investors thought he had over $40 million, the fund was actually down to around $14 million.
I'm glad I work for a good one!

I haven't had any time to look through stocks, but I went through a quick MSN screen the other day. I might not have any time, but I figured someone out there may want to check out some of these stocks.
The screen was based on: market cap between 125 and 450 million, ROE >10%, revenue growth year vs year >15%, debt/equity <1.0,>15%
I tried to set it up looking for growth stocks that are small in terms or market cap
MTLG
NARA
NVTL
ARDI
CMN
MTEX
NGPS
FARO
BRLI
VSEC

Wall Street Bonuses

In the Wall Street Journal they had a piece about upcoming bonuses.
Some of these (okay all of them) bonuses are incredible!

Here are the ones they listed (based on the averages from top-tier banks)
Global Head of Commodities Trading: $6-8 Million
Head of Swaps Trading: $3.3-4 Million
Investment banking, managing director: $2.2-3.3 Million
Global head of emerging markets debt trading: $2 million
Head of IT, Asia: $1.2 Million
Municipal derivatives trader w/ 3 years of experience: $170,000-215,000
Investment banking, first year associate: $105,000-125,000

Can you believe some of these numbers?
Of course there was no mention of the bonus figure for the people straight out of college who's on the bottom step of the ladder. I would be happy with 10% of what the investment bankers get!
I'm still amazed about how much money some of these people make for one year of working. Plus it makes you wonder how much the top guy is keeping for himself. It pays to be the top guy.

Other news: I might be getting $30 from selling a concert ticket and I should get a reimbursement check for about $240 for transportation. I'll keep chipping away at my year end goal, and hopefully I can hit it. In terms of monetary goals I have accomplished each goal set (and some were hard), but this year end one might be a stretch.

Tracking Expenses

I'm entering my third month of tracking my expenses (as long as the rest of the financial stuff) and I'm going to change my tracking method a bit. When I first started I decided to just keep a list of expenses, but without any descriptions. Then, after the month had passed, I found myself wondering "I don't remembering spending all that money, where did it go?" so starting with this month I'm going to track expenses and keep a description. I think it will work out better this way when I see that I spent $25 last week on lunches at work (I took my own today).

The markets have been rebounding a bit lately, and I'm hearing more talk about an upbeat fourth quarter. I'll definitely be happy with that and I can't wait for December to come around. I think I will be able to use that month to actually look into more stocks. Things still seem shaky; people want to believe a late year rebound is on the way, but then they are hesistant as well. I've been reading more technical analysis reports that we subscribe to, and they are back-and-forth as well. One week some of the indicators turn positive, but some remain negative. The next week things look good followed by a bad week.

Technical Analysis update: I think I'm doing pretty well with picking short-term longs (earlier I did mention that I would post the picks with prices but then I don't want to get into any trouble with compliance reasons if the firm actually buys/shorts any of the picks).
I can say that my long position has gained about 5.2% in five days. I'm happy with that number, but I'm more aware of the percentage of winners (84%).
On the short side I'm having a little trouble. My short list is positive, but not by much. I think my problem is, is that I focus on stocks that I think are way overbought (based on RSI and MACD), but they have yet to break down. I keep thinking "this is bound to drop back a bit", but they continue to show strength. I think I need to focus on stocks that have already started to break down.
More on this later...

GSH and some comments

First the comments, I miss sleeping in!
I bought a few hundred shares of JSDA yesterday and the spread was incredibly high (around 14 cents or so). Of course there was barely any volume. I put in my order and it took about 30 seconds to fill, and then I looked at the Time and Sales (this shows all the orders throughout the day) and saw my order there. After about one hour there was only one more trade placed. So this is a long term investment, which means I shouldn't have to check the price constantly (but of course I am).

CFA: The studying is going well, but I still think I need more time. I have less than a month to go and while this seems like a lot if you break it down by available hours it's really not too much time.
I feel that I'm strong on the equity and economics parts. My weakest parts have to do with financial accounting (I thought I was finished with debits and credits after college...) and the fixed income section. I also need to review parts of the math sections because I haven't used the Bayes formula in about five years. Overall I think I have a so-so chance of passing. It all depends on how I use the next few weeks (especially weekends, when I can get a lot done).
If I don't pass, I'm fairly sure I will pass in June. I would be more confident if the test was in January rather than the beginning of December, but oh well.

Guangshen Railroad (GSH): I can't remember how I came across this one, but it was awhile ago. If the dividend information is accurate, it has a 4.7% yield.
It's really hard to find info on this company, but I did manage to find one report.
Here are the highlights:
-60% of all freight and 35% of all passenger traffic in China goes by rail
-railroads haul over 700 million tons of coal per year
-they are expanding their railroad network fairly fast and total investments earmarked is about 38 billion (which seems kind of high, this isn't definite)
-GSH deals mainly with the Guangzhou and Shenzhen regions; they are the sole operator
- the rail line is considered an integral part of the PRC national railroad system
- through the first half of 2004 revenues rose 36%, net income rose 66%, profit margin was 23%, ROE was 6.6%, no long term debt (which may explain a lower ROE), and they had about $300 million in cash (US $)
-then the report ends with a note about how passenger travel is up, freight travel is up, and both are expected to rise

It's a pretty interesting company, although I wish I had more information. I might look into it more, but there are a ton of risks. First is the country risk (who knows what China is going to do), then the fact that it's a Chinese company presents risks about their financial information. Chinese companies (and the country) are still known for kind of shady financials.
The lack of information is a big risk and as well as the coverage. It may be a great stock, but with an average volume of 18,000 shares per day it's going to take a lot to move it up.
The dividend is interesting if it's sustainable. I saw some information off Reuters and their cash flow seemed to fluctuate a lot, but this may not be accurate data. Basically the dividend yield is catching my eye, because if it's sustainable then you have a growing company in a growing country with a ton of cash and no debt.
I'm going to try to find some more info, and I'll post it if I do.

*note if you do look up GSH on Yahoo you will notice a div yield of 9.6%. A quick way to see if this is real or not is to look up Historical Prices on Yahoo and then select Dividends only. Assuming this information is correct, it looks like the company pays out a dividend around once per year and Yahoo calculated the yield by adding the last two payments (which was technically over one year's time, but it's close to two). I guess you can look at it both ways because of the timing.

End of Month Review

I was able to save a good amount in the month of October. On a month by month comparison, my net worth increased by 4.43%; which is a lot better than the previous comparison. I didn't have any major expenses and I tried to watch what I spent throughout the month. My total expenses for October came out to $370

My net worth at the end of October was: $29,051

I need to increase my net worth by 10.2% in two months in order to meet my year end goal of $32,000. I think I can do it if I can watch my daily expenses and prepare for Christmas spending.
I'm not going to hold back on Christmas spending, so I will try to save more in November. I also have two months worth of transportation reimbursement I can get back from work. I need to complete the form tomorrow, but then I should get a check for about $280.

I also have a good amount of things I'm going to try to sell: numerous books, a small mp3 player, and my digital camera (it's too bulky). I plan to do at least two more options trades (most likely spreads) and I think I might be able to bring in another $200.
My job does pay a bonus, but I have no clue about the amount. I doubt it will be big since I'm new, young, and I'm not an analyst or trader.


Other news
Jones Soda: The reason why I haven't purchased any JSDA yet is because it will be a transaction that goes against the type of investor I am right now. I rarely hold things for more than one year. As of right now my investing behavior is to hold things for a short term, wait for it to move up, sell and move on. I definitely can't consider myself a buy and hold investor.
I know I will need time with JSDA, but I do think it's a good company. The next quarter will be important, but I think the long-term reward/risk ratio is rather good. I plan to buy a small amount tomorrow (200-300 shares) and this is going to be a long-term investment (unless it goes crazy and I quadruple my money....then I might take my profits and run).
I might make a second long-term investment tomorrow in GSH. This will also be small because I want enough available capital to continue with my short term investments and I also need available capital for my option trades.
I'll try to post about GSH tomorrow; it's risky but I figured in the long run it might work out.
I'm still thinking about it, so I might either buy none or just 150 shares or so.

Jones Soda

First of all, I followed Neville's advice and changed the comment section so it has the word verification thing; hopefully this stops all the spamming.

Jones Soda
Before this quarter was released I was hesistant with this company because I was unsure of their Halloween promotion idea (as well as a few other things). Well it looks like the Halloween cans were a big success, but now I'm still hesistant with the company!
I read over the transcript for the conference call, and there wasn't really anything too spectacular.
Earnings per share came in at a nice rate and they managed to increase their sales with only a small increase in promotional costs (nice sign). Now I'm hesistant about Q4 and their levels of inventory. They said they can sell the inventory, but it's a good amount of inventory!

Stolk and Cue (CEO and CFO) did seem very confident about the next few months so it will be interesting to see how much sales increase and if they can have some positive cash flow.
I still think they need to diversify away from Target. They hinted that due to their Halloween success (which was quite profitable for TGT), they might have more bargaining power with Target. I rather see them spend more effort into expanding their products through more stores. They are partnered with more chains, but they could expand into the grocery business.
They just seem too Target focused.

I think they are in a great position right now, but the next quarter is going to be important. They basically came under with light revenues and now are really confident that q4 is going to be great. If it doesn't meet these high expectations it might lose some investor confidence for awhile (and analyst confidence- Kanter from Prudential seems to be waiting for expectations to come down a bit).
Long-term, I still think it's a good company. Plus, if they get listed on the Naz that would be great. Also, you have to think some of the big beverage companies are looking at Jones (Pepsi and Coke). Wouldn't this be an attractive target for a takeover? Niche brand/branding, growing sales, big fan following...

One stock on my watch list went down 5.2% today and it got my interest. It's GSH and it's a Chinese railroad company. It is kind of hard to find information on this company, but I found one decent report. I'll try to write a post about GSH in the near future.

Also, I've been giving my opinion to the head trader regarding industries/stocks based on technicals and I hit a few good ones today! Just to be on the safe side, I won't mention any names (because I don't know if they will take a position in it or not), but I picked one industry to go down and all my picks went down, so that was good. One pick actually went down over 12% today, so that was nice to see (I was picking to short).
I say: beginner's luck, but I'm trying hard to improve the streak

Things I still need to do

This is basically more of a reminder for myself, but I figured if I made a post it will prevent me from slacking off.

I still need to find out about taking a math class at a junior college. A good friend of mine said it was possible to teach myself some of the basic things (like refreshing pre-calc and calculus), and I have thought about it. If I can fit something into my schedule, I'll probably sign up.

I'm tracking my expenses, but I need to plan out a monthly budget. I know a few other blogs break it down by categories, and I might try this and see how it works.

Regarding my last post about information is key, I need to get myself some more info. I get the Wall Street Journal, but I'm also going to look into re-subscribing to Business Week and then subscribing to Barron's and the Journal of Finance. I don't think it will cost too much money and I think it will be worth it.

Although it's still a few months away, I need to think about the new year. Right now my cash levels are too high and I need to invest. Besides that, I should look into setting a 2006 goal, but I will need more info about some cash inflows.

Nev over at his blog, always manages to try new experiments and network. I'm going to attempt to do more of these two things. Right now I'm talking and meeting with more traders from different firms (went to lunch with one today), and I'm looking into joining some investment related groups in the city. In November I'm going to an options training class and I'm going to try to meet some new people there.

Looks like I need to do a lot of things!


Jones Soda comments: I haven't had time to listen to the conference call and I just glanced at the numbers at work. The two big things I noticed was the increase in Accts Receivables and the huge increase in Inventory. I'm assuming they are stocking up for the last part of the year (Halloween, Thanksgiving, and Christmas), but I wonder how this increase (something like +38% from last Q if I remember?) is within range in terms of their past history. Also, for some reason I thought the revenues were a little light. Tomorrow I should be able to print out a transcript of the cc. Any comments?

As for the comment spamming, I switched it so only registered users can leave comments and hopefully it will cut down the spam a little. A guy mentions a little gambling here and there and all the spammers come out....

Information is Key

So far, I've been learning a good amount of things at my job. I think the most important thing is that information is key. The analysts and traders stay on top of everything and this means keeping track of tons of stocks, reading many 10-k's, calling up people from around the country, and basically trying to find out as much information is possible.

Everyone reads the Wall Street Journal, that is a must. Besides that, everyone has other sources of information. They all use Bloomberg and read many of the news stories off of there. The traders talk to other traders to see what's being whispered and any preliminary information on earnings. The analysts talk to other analysts that they know, read 10-k's all the time, and listen to conference calls when companies release their earnings. It's pretty amazing how much information they have to keep on top of. During one day an analyst might listen in (and ask a question or two) on two to three conference calls, depending if it's earnings season or not, and then take more conference calls with management of specific companies. We're a big enough firm where we can also bring management in to see us and then the analysts can have a more personal meeting with them. Besides all of this, they keep track of breaking news and how stocks are reacting throughout the day. My reuters station has about 50 tickers of stocks I'm watching. The analysts all have at least a few hundred!
The traders also track these stocks and they also have to keep on top of technical analysis reports and charts.

Right now I barely have enough time to scan a few news articles! At first I was hesistant because I thought they wanted me to only focus on the trades/operations part, but the main trader is showing me more things. Now I feel more comfortable reading news stories and looking at charts. When I first started, I would only quickly glance at a news story and then quickly go back to the operations work.

Information is key!

Sitting on Cash

In terms of percentages, I have the lowest percentage ever in stocks. I'm sitting on cash and getting ready to put more cash into my brokerage. I'm also getting ready to buy, but I don't know what as of yet. I need to spend time looking for things, and while I have been looking at certain industries (some packaging companies, technically, look decent- but natural costs are hurting their margins). Right now I think it's best for me to remain in cash and just take my time looking for decent investments. The way the market is acting, I'm not even sure if I will do anything for awhile.

I did finally sell something at a decent time. UNTD has dropped over 5% since I sold it a few days ago. I made the decision technically and stuck with it, and it's good that I'm sticking with the plan. I need to remember to not hesitate.

Also, I completed my first option trade! I won't go into the details, but my after commission return was +0.25%. Now, I know it's nothing to brag about, but here are a few details: it was made over a 2 day span and I just wanted to end up with a positive gain. My max profit was roughly 1.15% and I think I could have achieved that, but I wanted to minimize some risk. I'm still learning, but I do want my option trades (lots of spreads) to hopefully average a 1-2% per month. I'm dealing with short term options and using theta (the time decaying factor of options) to my advantage. I'll be limited my profits through the use of certain spreads, but I will also be minimizing my risks. I'm not looking into hitting home runs, but rather just a few nice singles per month. If I can hit my average, I'll definitely take that 12-24% gain over a year's time.

Another day of red

I ended up selling UNTD and EBF at the open today because I thought it was time to get rid of EBF and UNTD looks like it's breaking down technically. I closed that position with an almost 12% gain, and I didn't want to see my gains slip away. I think it might go down a bit, but I don't think I will re-invest in it.
Now I'm sitting on a bunch of cash and nothing to invest in. The way the market has been acting, I think I might do okay by sitting on the sidelines. I was thinking about looking for some low growth high dividend stocks, but I don't think that's the best plan for me. I normally don't hold stocks for a long period of time and by parking my cash there, it will/might force me to wait awhile for some decent returns. As of right now, my investing mentality is on a year to year basis. I know some people look at the long term, but I'll stick to a short term mentality. Before October, my average yearly return was 23%. I'm assuming it's lower now since October has been a bad month, but I think I can maintain around that average. It might be because I am young (and possibly impatient), but also because I'm surrounded by other investors who have the same sort of mentality. At our place, and others, we want to generate returns (generate alpha). Beating the S&P is not the goal, it's making money. If the S&P lost 3% and we lost 2%, that's useless to us.

I also need to move some money over to my brokerage account. I want to hold about $3000 in my ING account (for emergencies, etc.) and around $2000 in my bank account for bills and spending money. This means I need to transfer over about another $5000 or so into my brokerage account. I still haven't decided if I want to transfer over my Roth, and I still need to fund that. By the way, the Think or Swim software platform is incredible. It's really advanced and it will definitely help me with my options trading in the future.
One more thing: by transferring over more cash I will also have more option buying power. I'm looking into a few ideas where I would write calls and puts, but I'm not ready to go into the details just yet. I think I might be able to generate between 0.8% and 1.3% returns per month. Annualized this is about 9.6% to 15.6%, this is assuming nothing goes terrible wrong (which may be wrong to assume). It's a learning process though, and the only way to learn is by trying new things.

Quick Disgusting Update

I need to catch up on a few things so I won't be able to write a long post.
Earlier today I was reading up on some news and came by this report on Lifecell. The article mentions how Lifecell is going to take a third quarter charge. Lifecell is a provider of human tissue for skin grafts and operations. The reason for the charge: they need to recall some products "that may have come from body parts illegally bought from funeral homes".
Disgusting!

A few updates

Just to note: I fixed some links on the right hand side and added a few more blogs. Hopefully one day I will actually put them in some type of order, but for now I just want to make sure the links work.
If any of the links are broken, just email me and I'll fix it.

New post coming shortly.

There goes the retailers

The clothing retailers basically got destroyed today. I was looking at a list of them earlier and it was full of red and decent declines. Here's how some of them did:
American Eagle down 5.58%
Tommy Hilfiger down 6.04%
Coach down 5.24%
Aeropostale down 2.57%
Abercrombie down 4.15%
Limited down 2.23%

Definitely not a good day for retailers or for the market in general as the S&P dropped another 0.6% today.
I have been doing some preliminary research at work involving the S&P and moving averages and based on some historical information, I wouldn't be surprised if the S&P continues downward for awhile. I could take a guess at a short-term bottom, but I don't have any figures with me (maybe around 1160-1165 area).

I did read an interesting headline: Comcast and Google in talks over AOL.

Is anyone doing the Mad Money Challenge? I'm basically even and I see the leaders have made about $40,000 in profit. It seems like the way to do these challenges is to go for one or two stocks that are speculative/momentum plays. Ngas seems to be the choice for a lot of these people.

Personal Finances: I've been controlling my expenses and I need to deposit a reimbursement check soon. Besides that, October is going okay so far.

Is anything going up?

The S&P made a new three month low today and well nothing is looking too good. A few months ago everyone was raving about energy and now those are getting hit hard, followed by the home builders, and now companies are getting hit with rising costs. I have been reading and hearing more people talk about a recession looming (and of course I forgot to save links, sorry about that).
It's definitely an odd time right now and maybe I am safer with more cash on the sidelines. I've also started to think more about the type of investor I want to be in the future. Some are buy and hold, and I know that's not for me. I've been thinking about it more, and I will probably post something longer before the year is over (maybe like a year-end investment review).

I'm still up in all my holdings except for one (EBF- basically even with dividends). UNTD has been climbing upwards and hopefully it continues for awhile. I still need to add some more stocks to my portfolio and I do like the idea of looking into small-caps or even micro-caps, although that can be risky.

I missed out on a good eBay sale. There's a concert that I knew would sell out fast and I tried incredibly hard to buy some tickets. I logged on to the site and right when the tickets went on sale I tried buying them. I was unable to get the tickets I wanted. If I had, the total cost would have been around $110 for two tickets. The last time I looked on eBay, the same type of tickets were going for $500...maybe next time.

A tough week

The S&P has had a rough week, as you can see here. There is definitely a lot of pessimism out there: inflation talks, rising rates, uncertainty about oil, and profit warnings. I have an old copy of Barron's on the floor (from about one month ago) and it talks about how the market might go up 10% by the end of the year. Looks like that's not going to happen...

In other news, rebalancing portfolios is a pain in the ass. We've been doing this over the past few days and it causes a ton of problems and work. Basically we have out portfolios in line, but sometimes they need to be rebalanced by selling some shares in one fund and buying it in the other. You would think it would be easy, but it's not. It creates a ton of trade transactions because they can't just switch the shares from one portfolio to the other.

On a normal day the trade report I work off of is usually around seven pages long. That's not too bad and in the morning it might take me under two hours to get through everything. When we rebalanced yesterday my trade report was 35 pages long! Also, when the trades are done at the end of the day I basically have less than two hours to process them and send it to the company that handles are trading platform (which then send it to our prime broker). I always have enough time, but yesterday I only finished with two minutes to spare. In the mornings I deal with the previous day's trades and any trade breaks (mistakes made by the various brokers, etc.). I sometimes get one or two trade breaks, which isn't too bad. For instance the shares might have been booked with a different commission than what we reported or the shares when to the wrong account. This morning I open up my inbox and see my trade breaks report, it was three pages long! One guy at one of the brokers we used screwed up, and then on top of that there were many other mistakes. It literally took me all the way up till the market close to figure everything out. Then I took a breath, and had to process today's trades. We did a small rebalance so it wasn't too bad, but it was still pretty hectic.

A little extra income

I received a reimbursement check as well as some money from an eBay sale. This should add about $250 to my net worth, so I'll take that. I've also finally gathered a stack of books I might try to sell on eBay or Amazon.

The market has not been too fun these past three months. It's been filled with a ton of anxiety, and with that strong emotion comes volatility. I've seen stocks start off the morning going up over $1 and then ending the day down $1. I haven't been able to spend too much time looking at stocks, but I have been spending more time looking at graphs.

One of my new technical analysis projects is trying to find patterns of price run-ups or downward momentum and how far it moves from particular moving averages. It's going to require a ton of numerical data and I'm finding a hard time gathering the info from the software we use. So far it is pretty interesting though. I'm also trying to teach myself technical analysis by looking at graphs and using moving averages, MACD, and rsi to see if they will go up or down. After writing down my reasons I'm sending my recommendation to the head trader and then he will see if I made a good choice or not. We've been spending more time looking at particular stocks (I can't mention any particular ones) and trying to see his reasons behind certain transactions. It's been a learning experience.

End of Month Net Worth

September was full of fairly big one time expenses: two birthday gifts, the gym membership, the CFA program, and doctor bills. Awhile ago I mentioned I had to get my leg checked out (everything is fine), but the bills kept on coming! I had limited health insurance because this was during the time I was unemployed. Bills: $30 to see the doctor for 10 minutes, $37 to get blood taken out of me (5 minutes), $437 to practically enter the hospital, and $37 to get a 5 minute examination.

Anyways, back to my net worth. I managed to increase it by a little over 1%...
Before I calculated everything I thought I was actually going to go down a bit, so I'll take the 1% gain. As of the end of September the figure is $27,818

I'm a decent amount away from my end of year goal, but I think I can still make it.

Stockdiva left a comment about a stock picking contest going on with Mad Money (Cramer's show). The link is here for anyone interested. I'm going to look into and hopefully sign up.
You know what's odd? I work at a hedge fund that deals with stocks all day long, and I really haven't been able to catch up on any particular stocks or sectors. That needs to change.

Cost of Living

I just saw a news report saying the following: the cost of living for a family with two children living in San Francisco is $80,000. This is to just basically stay even. This is just an insane amount of money and I can't believe the figure is this high. I'm not sure what the average salary is in San Francisco, but I know it's higher than the average. How are people expected to maintain some level of savings while living in the city?

In other news, I was browsing on Yahoo Finance and noticed that they added eight columnists (the most famous probably being Jeremy Siegel, or Ben Stein). I read the intro columns and most of them seemed pretty good. I think it will be worth the time to check out the site every now and then to read the new articles.

CIA tactics for investment managers?
A few people at work attended a workshop hosted by two former CIA agent. The workshop was how to read people and see when they are lying. The retired agents both had many years of experience in this area and are now trying to start a new business. The idea behind it is that big funds bring in key managers from public companies into their offices to talk about the particular company. At our place, it seems like one company comes every week. Now with these tactics, investment analysts might be able to tell when the managers are lying or hiding something.
I'm not sure how successful this will be, but it sounded interesting (I didn't go).

A pretty good site

Things have been hectic lately and prices have been jumping all over the place. In times like these it's always interesting to see how people react so quickly to news updates. It's even more interesting to see it happening in front of you on your computer. For instance, the other day when Hurricane Rita was downgraded (I think, from a 5 to 4), showed a bunch of anxiety and panic among investors. The day started off with things looking bad as everyone thought the Hurricane was going to be bad. The majority of the quotes on my Reuters screen turned red and it looked like it was going to be a bad day. I have about 100 quotes or so ranging in industry, and another screen shows the S&P components so it's a good mix.
Most of the analysts at my firm were reading about the hurricane and I received about three phone calls from other brokers with hurricane related news. Then in the middle of the day, the hurricane didn't look so bad and it was downgraded. Immediately the buying starts and a bunch of quotes on my screen turn from red to green in no time.

Anyways, today at work I started reading this investing site at about.com
In terms of simplicity and clarity, I think this is one of the best investment guides I've seen online. The writer breaks it down into lessons (which all have multiple parts) and covers the financial statements. He then ends it with a real-case example and a quiz. I like about.com in general, and this site is definitely worth a look to catch up on some of the basics.

A net worth update should be coming up in a few days and I've been watching my expenses. I'm due another paycheck, money from eBay, and a reimbursement for travel expenses.
I calculated a year end goal awhile back, but I think I should come up with a concrete month to month goal as well. I've basically been using a 40% savings rate (or so), but I think with two full months of information I might be able to make a better goal. Of course, as more information comes in I will adjust the goals.

Money Masters

I'm about half way done with Money Masters of Our Time by John Train. I definitely recommend this book because you get a little background info on various big name investors, plus a general outline of their investment approach. You see how the value investors choose their stocks, growth investors, and those who invest all over the world. I just finished the section on Soros and was amazed that at times he was leveraged 5 to 1! He took a lot of big bets and his record proves that it mostly paid off. The book is also well written and you can find a used copy on Amazon for fairly cheap. There is also the possibility that I'll offer it on this site sometime in the near future.

My account is in limbo so even if I wanted to sell FRX, I don't think I can. It seems that my Scottrade account is closed (since I can't log in and get any of my old financial records), and that my Think or Swim account is not yet funded. From my brokerage experience, I know transfers can take 7-10 days, so I think by the end of this week or early next week I will be able to use my new account.
In the meantime, NTE has been making some nice moves as it finished the day up 3%.

Random Notes
-----------------------------------
No Credit Needed is hosting the Carnival of Debt Reduction, and I suggest you check it out.

Free Money Finance has a Carnival of Personal Finance, and that's worth checking out as well.

After one bad and two mediocre weeks of NFL bets, I'm shutting it down for the season. I ended down for the season, but I'll try it again next season with a twist: only bet on weeks 4 through 15. The beginning weeks are tough to figure out, and the chance of upsets are greater in the last few weeks if a weaker team is playing a team who is already guaranteed a playoff spot.

I should close another eBay sale within the next few days and I should book about a 70% profit (only $45 in dollar profit, but a nice percentage profit).

CFA studying is going well (I think) and I know what areas I need to work on: leases, taxes, and basically all the accounting details.

Think or Swim

Today I finally completed my account transfer to the Think or Swim brokerage. It was an easy process, but I always got side-tracked. Normally I use my laptop, but I needed to print out forms and things like that (this hassle looks more like laziness, and that might be the case...).

Anyways, the good news is that I'm done. Now I just have to wait a little while before my account transfers over. This brokerage is tailored more towards options, but it does have stock trading capabilities (with low commission rates). So far, I really like the demo software. My biggest complaint about Scottrade was that the site and software always looked like it came from the 1980's. They have since redesigned the site and that looks fairly nice. I really like the look of the Think or Swim software.

The one thing I really like: customer service. I emailed them a question and received an answer very fast. Since I work at a hedge fund, my company needs to get copies of my monthly/quarterly statements for compliance reasons. I emailed them about this and the Managing Director for Compliance emailed me back promptly. Plus I like how they follow-up. I faxed over my paperwork and received an email letting me know that they received the fax and will start the account transfer. Then, I also received a phone call confirming the same thing.
It's the little things that count, and they are doing a great job so far.

I received an email from them that I wanted to post about. They are teaming up with Option Planet and offering free option courses. The link is here, but I think it's mainly for major U.S. cities. If you are interested in options, it might be worth the look (I don't think they will try to sell you anything). I'm planning to go to two so far, another one conflicts with my work schedule. They have an 8 hour class that deals with advanced options and it's free, that's definitely worth my time! They also have a Think or Swim software demonstration that I might attend, but I'm not so sure yet.

At work today, I learned I might be getting a Bloomberg station. I'm signed up to attend two workshops next week (one dealing with fundamental analysis and the other with technical analysis), so hopefully they do decide to get me a Bloomberg.

A Way of Thinking

Are some people better savers because of the way they think? How come one person is able to charge $1000 on their credit card without a moment's thought, when another knows that it would be better to stay out of debt?
Maybe it comes down to the logic and reasoning behind the two people. The first is driven by consumption in the present. He "needs" the new Ipod/stereo/tv/etc. He doesn't really need these things, but he wants these items. He can justify his wants by re-naming them as needs. The second person is thinking more about the future. Can he give up this present consumption in order to consume more in the future? (this is also where the time value of money comes into play).

Another thought involves opportunity costs. These costs can be explicit and implicit and involve money, time, or generally something that is given up for something else.
I just wanted to share a quick example. Let's say you get a speeding ticket and you need to go to court. The judge gives you an option: either pay a $500 fine or pay nothing and do ten hours of community service during the week. Which would you do? Many people would opt for the community service because it doesn't involve a cash outflow. But this does involve time, and your time is worth money. If your current salary is $70/hour, wouldn't it make sense to pay the fine? By doing the community service you are giving up $70/hour for ten hours = $700. (You could argue that the externalities, like helping the community, will offset the -$200 loss for doing the community service). This example just offers another way of looking at things.

Selling some stocks?

I've been watching FRX and NCC lately, and I'm not liking what I see. I still have some nice gains (up 6% in NCC and 20% in FRX), but I don't want to see my gains evaporate like what happened in LB. NCC is hitting below some of its moving averages and this might be the first one I sell. But the action in FRX is just ugly. Today it dropped about 3% and it's starting a downtrend. I want to see how the next few days (hopefully the markets in general can pull together a few nice days), and see how they react. I'll be looking not only at the price action, but as well as volume. If I do get rid of these two, then my stocks as a percentage of my total net worth will drop to 25%. I don't mind that figure too much as long as I can find a few more stocks. This will also mean that my portfolio will be small and made up of just a few stocks. The volatility of these stocks are fairly low, so I might be able to close out 2005 with double digit gains. This would just mean I'm satisfied with those gains, but I might want to take a risk to try to improve my gains in the last few months. Honestly though, the markets have been a bit shaky. I have a few option ideas in mind though...
When it comes down to it, I would be happy to end the year +double digits. It's been a fairly tough year and I'm not sure the last few months are going to be any better.

I'm going to try to look up some time management articles online (during my lunch break), but if anyone has any ideas please leave a comment!
Here is my current week schedule:
Wake up at 4am
Leave work at around 3pm
Get home at around 345pm unless I go to the gym then it's around 530pm
Eat dinner at 6pm
Get my bag and clothes ready for the next day at 830pm
Depending on how tired I am, go to bed at either 9, 930, or 10pm (then there are those really fun days when I'm so tired I go to sleep at 8pm, tonight might be one of those days).

Somehow in that time I need to: write this blog, study for the CFA, catch up on emails, and check out a few other blogs/websites.
Any suggestions?


Just a note: the CFA studying is going okay, I got down the two big economic sections and I'm moving on to another section. As of right now, I'm definitely not sure I can pass this December. I know I have time, but I still think I need a little more. I'll keep on updating

87% Towards my Year end Goal

Alright, I just wrote three big paragraphs and then my browser shut down for some reason. I really don't feel like re-typing everything, so this one will be shorter. Due to some big expenses, my net worth so far has only increased by about $230. I actually thought it was going to go down a bit (this is just an update, not an end of the month update) due to the expenses. Every little bit counts and I think I should get a check for about $140 fairly soon to compensate me for my commuter expenses.

My goal is within reach, but it might take a little more effort than I previously thought. I don't see any major expenses in the next few months except for a few birthdays and Christmas shopping.
I gathered up some books that I will try to sell (I'll list them here first for any takers) and I might sell some dvds and cds.

I think as long as I keep my expenses in line, the goal should be in reach. The one thing that would help is the fact that I still haven't found an apartment (okay, I haven't looked in awhile).
The lack of a rent check should help me reach my goal.

My offer to send my CFA notes to anyone who wants them is still up. If you're interested, email me about the notes (my email address is in my profile). I've received about six emails already, and I'll send the notes off tonight.
For those interested, just be aware that it is a big Word file (about 850kb).

One more thing: I just saw a list of the best business schools
Here are the top 10
1. Dartmouth
2. Wharton (Penn)
3. Chicago
4. Columbia
5. Yale
6. Stanford
7. Harvard
8. Virginia
9. Cornell
10. Northwestern

CFA notes

I need to make this post short because I only have a little time to study tonight. I'm not sure if anyone wants my CFA notes, but I sent a copy to my friend and I thought I would offer to send it to anyone interested. It's a rather big Word file, but if you're interested in the test or just want to see the information I will be tested on just send me an email (it's in my profile).
There are a few abbreviations, but everything should make sense. If you do email me for the notes, I'll reply back within a day or two.

I read this fairly interesting article on drug makers.

Time to study.

NCC

I'm starting to look at NCC. I haven't liked the way it has been acting lately and today was a decent sell off and high volume. Check out the end of this graph to know what I mean. They came out with a mid-quarter report and it showed they are still buying back shares. They plan to continue their buyback and hopefully this could stop this mini-downtrend.
UNTD is still looking pretty good and no weakness is showing yet. I still need to find some more stocks to invest in. Right now stocks are making up about 54% of my total net worth and I think this is way too low for me for a few reasons. I can have a higher rate in the stock market because I'm young, my paychecks coming in represent a size-able percentage of my total net worth (which means my % of stocks as part of my net worth will drop fairly fast), and I have no major bills or expenses.

So far, I've been doing pretty well with my savings plan. I'm maintaining a high savings rate and I'm watching my expenses. It hasn't been too tough and I think I continue in the future. I do have those days where I go "I bet I can afford a new car", but those quickly go away. Maybe in a few years I'll decide to trade-up from my Civic.
The one thing that has helped me is making lunch at home. I think I've done this for almost a full week and the savings add up. I'll sometimes buy my lunch out of pure laziness, but I think I've already saved about $30 or so.

I know many other blogs post savings tips, I usually get tips off Frugal for Life, but my tip is to limit eating out (unless your company is paying for it, then get the expensive stuff).

A few articles, and some stocks

I was on BusinessWeek during lunch and the two articles I liked are 'How worldly is your portfolio?' and an article regarding Conagra's dividend (it popped up on a screen a little while ago).

I've been spending more than I originally planned, but they are worth the money. The first big purchase was my gym membership, but I think I got a good deal and this will definitely be worth the money. Today I spent another $150 (September is going to be a big month for expenses!) for a CFA online question program. It has thousands of potential CFA Level 1 questions and I heard that this will be extremely useful.
Looking through my notes I really realized that this test is going to be hard! I'm wondering if I have enough time. None of the material is really hard, it's the fact that there are so many details to know that causes the problems. I'm starting to review my notes, start the problems, and then use the online question bank. I tried the online one today and I can do fairly well with the knowledge I have now, but I'm not comfortable with any of the topics. I need to know all the details.

Stocks
I haven't had time to research any stocks lately or look for stocks based on technicals at work since I've been busy lately. I'm going to have to re-evaluate my schedule and try to move things around. Right now I don't have too much time to study for the CFA (on weekdays), barely any time for this blog, and now I'm starting to go to the gym. I'm going to use my time on BART to study my notes. I'm not sure how I'm going to do next year. Next year is probably going to be busier as I: try to attempt some option strategies, continue studying for the CFA (either Level 1 if I don't pass, or Level 2), take one math class, and possibly work on some business ideas with a friend.

JSDA went up 9.77% today on fairly strong volume. I'm still going to wait for the next quarter to see how they are doing.

NTE went up 5.32% today and UNTD followed up with a 5.06% gain.

Net Worth taking a hit

My friend and I signed up for the gym yesterday (24 hour fitness). We wanted to do a long-term deal since we know it would be useful. They had a deal where you sign up for one year and get two years free and I ended up paying $642 up front for the package. I figured I might as well have the money come out since: on a monthly basis it will be about $12 cheaper than the month-to-month plan and I can afford the chunk of money leaving my account since I don't have any huge bills (no rent yet, I'll get to that). This just means that my net worth will probably only grow by a small amount this month. I'm still tracking my expenses and I'm going to try to limit any other big expenses for the rest of the month. Although I need to buy a few more work shirts.
Oh, and I've only bought my lunch at work one time this week (saving about $17 or so). Sometime in the near future I'm going to clean my room and gather any cds, dvds, and books I don't really need and hopefully sell them to bring in a little extra cash.

The apartment: I've thought about moving in with strangers by finding a room off Craigslist, but I am leaning towards moving in with friends. I have one friend in mind, but we need to wait until he finds a full-time job. I'll post any updates when they happen.

I also finished typing my CFA notes. I somehow managed to write 177 pages of notes! I better pass this damn test....
I have about three more months to study and do the problems- no time to slack off.

My first Technical picks

I don't have anything major to post, so I'm going to post my technical picks from the past few days.
I think the majority of the picks are from 8/31 and then the last few I'll note are from 9/7.
I'll note the ticker, price, and why I think they will go up or down. Again, I'm a beginner so any help is appreciated. All these picks are based mainly on various moving averages, support/resistance levels, and volume. My first picks turned out pretty well, but that doesn't mean anything to me right now.
I'll try to track these on the right hand side.

PFE: $25.35 It's almost reaching the 50 day moving average. It's beginning to rise away from it's downward momentum (short-term starting at around $28.90). The key areas I think are under $27 and then around $27.50 has resistance. Support at $25.
Price today: $26.30

MRK: $28.17 Basically the same setup as PFE, I had the same reasons jotted down.
Price today: $29.25

LLY: $54.80 Broke past the 50MA, the 100 and 200 day MA are flattening. Resistance because of volume at 57, major resistance around $60.50
Price today: $56.36

SGP: $21.31 Beginning of divergence between 50 and 100 MA
Price today: $22.38

CAH $59.70: trending up, 100MA = floor of trned, but it's showing short-term weakness around 60. The key thing to watch for is if it breaks 60.
Price today: $59.70

AET $79.54: short-term uptrend, rising above MA's and broke through the 50MA
Price today: $83.20

CMX $46.71: reversed downtrend in short-term and rising averages
Price today: $48.65

BIIB $42.41: 50 crossed over the 100MA, both starting to trend upwards
Price today: $42.47

9/7 Picks
PHG $27.32: rising MA's
PIO $15.62: MA's are flattening, base is forming. Resistance is 16 due to heavy volume on 6/17 (then it was $19)
RIMG $25.39: Increasing MA's and RSI (now at 60)
SANYY $13.47: Crossed above 50 and now around 100MA, 2 months of heavy volume (could be forming a base)
Short trade FLOW $8.44: losing momentum with a RSI trending downward

We'll see how these turn out.

Time to Focus

I'm interested in a variety of subjects and when it comes to the finance related ones, I think I need to focus on a few spots. The one thing I do not want to do is to stretch myself too thin. I have many goals and plans for myself, and I have to realize that I cannot do them all at once or else none of them will get done.

I wanted to learn more about currencies, but that will take a back seat. I think it's time for me to re-evaluate the areas to concentrate on. Number one is definitely the CFA material. This involves financial analysis and economics. I want to have a strong foundation in this area because this will help in the immediate future.

Although I'm still learning technical analysis, I want to limit the amount of time I spend studying it after work. I rather use that time studying for the CFA. Right now, my job is not rushing me, so I have enough time to get my main functions done and then that usually leaves a few hours to study. The head trader has taken a good amount of time showing me things he knows, websites he reads, and his mindset when looking at graphs. Right now I'm going to focus on moving averages, volume, and a few major indicators.

The third major area I want to concentrate on is options. I find options really interesting and I'm looking for a few more books to read. I know a good amount of general information, but I'm still a little murky on more of the advanced info. The more I read about it though, the faster I'll understand.

Any other finance topics for right now will have to wait. I need to spend some free time on CFA/financial analysis stuff, options, and then technical analysis at work.

I'm putting up this post more of a reminder to myself, but it might be helpful to others.
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I deposited $300 into my NFL account, let's see how this experiment goes!
Well for the first week, my plan is taking a little hit. I just logged on and the odds are there but the money line (where you just pick the winner) is off for every game. I'm hoping that when it gets closer to Sunday, there will be some money lines to choose from. If not, I might not bet or just put a little money on a few games. The site I use (sportsbook.com) is also offering a free $10 bet. If I lose, my money is refunded back to me. I figured I'm not going to bet the full $300 anyways, so I'll take a shot (okay, we want the Patriots to cover by 7.5 over the Raiders).

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Site Updates
Alright, I've been slacking in this area. I need to add a few more blogs (and take out one or two that are no longer up). I'm going to try to work on one part of this site at least every other week.

I have two ideas that I want to add to this site.
The first one deals with technical analysis. While I'm at work I'm going to look for stocks that I think will go up or down and give a few sentences about my thinking. I guess I have to put this part just in case: don't buy or short stocks that I mention because when it comes to technical analysis I still no next to nothing
I figured this would be a good way to start, track my results, and hopefully get some helpful comments about how I can get better. I started this at work last Wednesday, so I'm going to put up those results so far. For those who know a lot about technical analysis, please leave some comments.

I've been thinking about the second idea for awhile and I think I might have enough time.
I'm going to pick a really basic company (ie. someone who makes widgets) and then try to evaluate that company on this site. This will most likely be a long, step by step process, and I'll post updates every once in awhile. For instance I might do a business summary sometime during Week 1, then an industry summary, things like that. Then hopefully it will end with a valuation of the company. This is more about finding out how to value a company, rather than finding a company that seems like a worthwhile investment.
More on this later.


Money News: I'm going to join 24 hour fitness. My friends and I are going to try to get a deal by going together and signing up for a full year. We think it might cost around $650 for one year (plus two free years) so three years in total. This will be about 50% cheaper than paying month to month, but I have to pay the money up front (for those into the little details, then it will be lower than 50% because of opportunity costs). We're hoping that they will be able to waive the processing fee.

Another way to look at a Call Option

Buying a call option gives you the right to purchase 100 shares of stock (it's normally 100, but it can be different depending on the contract) at a pre-determined price (the strike price). The option also has a specific time, so it might expire in two months. There are options that go out years (LEAPS). I've been interested in options for awhile, which is partly the reason why I'm switching brokerage accounts. I've read a few fairly detailed books on options, but I still need to study more. I especially need to put in more time if I want to try some advanced option strategies.

As for now, I was reading the options section for the CFA test and it's really basic. It basically covers the general definitions and the payoff diagrams. One part that I found really interesting was the way they described call options. I've always read that call options are generally a bad bet because people tend to buy options that are too far out of the money. They buy these because they are cheaper, but they still need the price to travel up a great distance. This is also one of the big reasons why people say options are risky, but it is because they take their chances and buy these deep out of the money calls (this is just one reason, but an important one).

The book explains the riskiness of calls by showing the percentage the underlying (the shares) need to move before the call goes into the money. In the book example they calculate a break-even price taking into account the premium the buyer needs to pay for the call option. Then you calculate how much the underlying will need to increase in order to cover the cost of the option. In the example the underlying would have to increase by 4.1% in one month in order to break even! Now, depending on the price, this might amount to a few dollars or less, but it's still 4.1%. The book says it perfectly: The underlying must go up by about 4.1 percent in one month to cover the cost of the call. This increase equates to an annual rate of almost 50 percent and is an unreasonable expectation by almost any standard.

I've never thought about calls in this way, and I found it pretty interesting.

Closing the month of August and a few articles

The devastation caused by Hurricane Katrina is unbelievable. I'm sure everyone has seen the news. The hurricane has caused not only drastic effects for the people there, but it will affect everyone as gas prices are rising fast and the stock market is jittery. Just one chart to look at: BMHC. I guess some people are finding a company that will benefit from the hurricane.

Two articles for today: MasterCard is going public. The other article is a bit longer but it deals with the Chinese economy. It's more of an economics article, but I thought it was interesting.

August is over with and I'm starting my month to month tracking of my net worth. I was previously just posting a net worth from time to time, but I'm going to do it on a monthly basis from now on. I need to get some sleep so I'll just a total.

August Net Worth: $27,519

Amount left towards end of 2005 goal: $4,481
I've completed 86% of my goal so far.


One side note: I finished my last reading assignment for the CFA test. Now I just have to finish typing up notes for the last few sections and then start studying more in depth and completing the problems. About 3 more months to go.

Random Things

I've been reading more on technical analysis at work, and some of it is actually pretty interesting.
I tried reading about technical analysis awhile ago, but I couldn't get into it. It seemed too subjective: is this a pennant, a flag, a hammer, what? I would see some charts where one guy argues that the graph is bullish, while the other guy (using different indicators) argues that the graph is bearish. I guess the same could be kind of said for stocks (like a value investor vs. a growth investor), but it just seemed odd arguing about one part of a graph.

The book I read at work, Stan Weinstein's Secrets for Profiting in Bull and Bear Markets, doesn't get into the flags, pennants, and things like that. Besides the incredibly cheesy cover, I did learn some new things. I won't go into too much detail because I want to mention other things, but I might recap the book in a later post. He deals with moving averages, relative strength, and volume. Those are the three main things and he uses support and resistance areas to make some decisions.

I've since finished the book and my next task is looking at graphs and learning the ins and outs of Reuters Bridge Station. This program is incredible. It's a software program, but it's also connected to a Reuters server for real time info. Anyways, this program has practically everything you could think of. The amount of topics and choices seems like a little too much, but I'm slowly making my way through the program.

I transferred money over from my ING account to my bank account. The funds hit the account today, so then I will transfer money to my Roth account. I'm also done with the forms for my new brokerage, Think or Swim, but I had a problem with my printer today. I'm going to print them tomorrow and hopefully get things set up. I already downloaded the software and set up my account, so now I just need to send the paperwork. I think this will also motivate me to study options more in depth, which leads to my next random thought.

After struggling through the Bond book for the CFA, I'm almost done with my reading. I have a few chapters in the derivatives book and then one more section. Going to work everyday has drastically slowed down my process, and I need to step it up! My goal is to finish the reading by the end of the weekend.

I've also added "5 Key Lessons from Top Money Managers" to my reading list. I tend to read many books at the same time so I think I should get to this book fairly soon.

Time to finish up some CFA reading.

August Expenses

Well August isn't really over with, but I had time today to calculate my total expenses for this month. I decided to track my expenses as well as my net worth on a month to month basis so I can see how I'm spending my money and the growth of my net worth (that will come at the end of August, since I will get paid).

Total expenses came out to about $940 for this month. This figure is on the high side (considering practically no bills needed to be paid) because this weekend I went on a weekend vacation that ended up costing around $400. The vacation was definitely worth it though, since I had a great time (and some interesting moments) and it was relaxing.

If I take out the vacation then expenses would be $540 for the month. I think this is an okay figure, but I want to cut back on my lunch expense from work. They buy us lunch on Fridays, but I usually buy my own at least three out of the other four days. This adds up to about $20 a week. I think I should be able to reverse this situation by taking my lunch at least three days per week, eating out once, and then getting the free lunch. I think I should be able to lower my expenses by $80 or so.

On a side note: I do want to save money, but I also want to have some fun. So I'll spend money on things that I think are worth it (this means that even if I could afford a laptop this month, it will make no sense to buy it).

My August expenses came out to be about 38% of my take home pay. I'm saving the rest and still not paying rent since I haven't found an apartment yet (this is getting annoying by the way). My goal for saving (after expenses and the eventual rent cost) is to save about 40% of my take home pay ($1000/month). I think this is a high savings rate, but I also think I can accomplish this.