Wednesday, November 30, 2005

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).

Tuesday, November 29, 2005

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.

Monday, November 28, 2005

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!

Wednesday, November 23, 2005

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!

Tuesday, November 22, 2005

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?....

Monday, November 21, 2005

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%

Wednesday, November 16, 2005

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.

Monday, November 14, 2005

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.

Thursday, November 10, 2005

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

Tuesday, November 08, 2005

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.

Monday, November 07, 2005

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...

Wednesday, November 02, 2005

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.