So I posted my Final Net Worth Update for 2006, which I actually started writing on 15 December, a few moments ago. Once I hit publish, I expected it to show up as the most recent post. Apparently, Blogger is not *quite* that intelligent. Fuggg man! Anyway, go check it out through the above link and comment (if you want).
Damn!
Sunday, December 31, 2006
Blog Recommendation - All About Alpha
Considering that this blog is about a regular guy in search of alpha, how better to end the year than with a recommendation for a blog that is All About Alpha. I'm sure many of my readers are familiar with this one. For those who aren't, go check it out now! A very research oriented blog, almost academic even, except for the real world experience of the host, the aptly named Alpha Male. As he describes the site, its not just a blog but also a portal for dedicated to "alpha-centric investing strategies". Man, does it ever fulfill that role! I'll be increasing my reading over here over the course of the coming months, no doubt!
I've got a few more queued up, because I realized I hadn't actually written any recos in recent memory. As I find them and find value in them, I'll bring them to you.
Until next time, gentle readers...
I've got a few more queued up, because I realized I hadn't actually written any recos in recent memory. As I find them and find value in them, I'll bring them to you.
Until next time, gentle readers...
Friday, December 29, 2006
Alpha and Wealth Preservation
I can't help but laugh when looking at the ads that Google serves alongside these posts. Its not their fault. But still - the billionaire's secret? Ha! Like the average billionaire became a billionaire because of hedge funds.
And that is what I want to talk about in this post.
It seems to me that most alternative investments are tools of wealth preservation as opposed to wealth creation. Now, that is not to say there is anything wrong with wealth preservation. If you have it, you probably intend to pass it down to your progeny, or their heirs, or your favorite charity or whomever. That's all good and fine. Most people want to preserve their wealth, no matter how much or little they have. But the notion that hedge funds serve to make the wealthy extremely wealthier is lost on me. With the possible exception of hedge fund managers, I just don't see it.
Most of the billionaires that I can think of became wealthy from a business of some sort, an observation pointed out by John Mauldin recently. Not all, but most. That business served as the vehicle which led these people to alternative investment strategies/managers as well as asset protection systems, among other things.
I often get the feeling that people think that finding the right investment will automagically catapault one into the pantheon of the high net worth. For most people, however, it is is a slog. That slog may take more or less time for various reasons, but it is still work. Although I like investing as much as the next guy (hopefully, the next guy agrees), I remember stating early on that my portfolio is built on a somewhat aggressive asset allocation model that I follow rather strictly. No real science behind it, and not an exorbitant amount of trading. (But more than the average bear's portfolio, eh Boo-Boo.)
Now, when I am trading, I do seek alpha. Isn't that what we all would like from our investments - absolute, positive, risk- and inflation-adjusted returns as measured against a relevant benchmark? Most of the time, I don't hit it. I'm still learning. But that's where money management comes in. I'm playing with amounts that will sting, but not kill, me if they disappear. Sometimes I make the numbers, sometimes I don't. But real wealth won't come from this, not as things stand now. I don't consider a few million to be wealth - apologies to the millionaires I may offend with that remark. I personally want wealth - as in, *stupid* amounts of money. Enough to swim in like Scrooge McDuck! Enough that American Express gives me a card more exclusive than the Centurion, because I'm the only person on the planet with it! And I'm willing to work really hard for a few years to get there. I see it coming in fits and starts. A few million here, a few more millions there. Then a billion, then more billions. That's ok.
Here's something else to think about. For your average hedgie, isn't trading a job? I mean, I would hope they enjoy their job and that compels them to be outstanding at it, but it is a job. They report to their investment committees, investors, LPs or whomever. Its work. Its just work using OPM to generate the returns, and with a helluva compensation schedule. (Come on, how can you not like the idea of 2 and 20 or better?) But it is still a job.
I'm done with jobs, personally. I've committed myself to working my last job. While the alpha that hedge fund and private equity generate is nice, for me, its not the end all be all. I'm after real wealth. And for that, real work is involved. Seems pretty straightforward to me.
I think I might have been rambling. Hopefully, enough of a point comes through to make sense to someone. If not, that's what comments are for.
Until next time...
And that is what I want to talk about in this post.
It seems to me that most alternative investments are tools of wealth preservation as opposed to wealth creation. Now, that is not to say there is anything wrong with wealth preservation. If you have it, you probably intend to pass it down to your progeny, or their heirs, or your favorite charity or whomever. That's all good and fine. Most people want to preserve their wealth, no matter how much or little they have. But the notion that hedge funds serve to make the wealthy extremely wealthier is lost on me. With the possible exception of hedge fund managers, I just don't see it.
Most of the billionaires that I can think of became wealthy from a business of some sort, an observation pointed out by John Mauldin recently. Not all, but most. That business served as the vehicle which led these people to alternative investment strategies/managers as well as asset protection systems, among other things.
I often get the feeling that people think that finding the right investment will automagically catapault one into the pantheon of the high net worth. For most people, however, it is is a slog. That slog may take more or less time for various reasons, but it is still work. Although I like investing as much as the next guy (hopefully, the next guy agrees), I remember stating early on that my portfolio is built on a somewhat aggressive asset allocation model that I follow rather strictly. No real science behind it, and not an exorbitant amount of trading. (But more than the average bear's portfolio, eh Boo-Boo.)
Now, when I am trading, I do seek alpha. Isn't that what we all would like from our investments - absolute, positive, risk- and inflation-adjusted returns as measured against a relevant benchmark? Most of the time, I don't hit it. I'm still learning. But that's where money management comes in. I'm playing with amounts that will sting, but not kill, me if they disappear. Sometimes I make the numbers, sometimes I don't. But real wealth won't come from this, not as things stand now. I don't consider a few million to be wealth - apologies to the millionaires I may offend with that remark. I personally want wealth - as in, *stupid* amounts of money. Enough to swim in like Scrooge McDuck! Enough that American Express gives me a card more exclusive than the Centurion, because I'm the only person on the planet with it! And I'm willing to work really hard for a few years to get there. I see it coming in fits and starts. A few million here, a few more millions there. Then a billion, then more billions. That's ok.
Here's something else to think about. For your average hedgie, isn't trading a job? I mean, I would hope they enjoy their job and that compels them to be outstanding at it, but it is a job. They report to their investment committees, investors, LPs or whomever. Its work. Its just work using OPM to generate the returns, and with a helluva compensation schedule. (Come on, how can you not like the idea of 2 and 20 or better?) But it is still a job.
I'm done with jobs, personally. I've committed myself to working my last job. While the alpha that hedge fund and private equity generate is nice, for me, its not the end all be all. I'm after real wealth. And for that, real work is involved. Seems pretty straightforward to me.
I think I might have been rambling. Hopefully, enough of a point comes through to make sense to someone. If not, that's what comments are for.
Until next time...
The Specter of Deflation
Just received the latest "Bull! Not bull" from Michael Nystrom. This one is better than average (where average is pretty damn good) and is entitled "The Specter of Deflation". Some very good points and references are included, more than usual, and the piece is a bit meatier. All in all, an excellent read.
So now I am thinking about the role of the Federal Reserve in credit expansion, and how one can prepare for "the next leg down". This would be the time to have plenty of cash on hand. Gold and silver benefit from inflationary pressures moreso than deflationary ones, but in the long term, I think they are solid holdings. I plan to acquire some of both in the near future, along with balancing my portfolio holdings for more emerging market and international exposure (un-hedged). I think dollar denominated assets are far riskier than international assets, at least to my untrained eye. While the US will take a significant hit, I think many other markets will shake it off, or at least weather the storm better. (Think commodity based economies.) As liquidity (can I use that word?) drains out of US assets, I expect some of it to find a home overseas. Maybe even in Thailand. (Ha ha ha!)
Anyway, I'll have a last net worth update for the year in the next few days. It should come in around 84K, maybe 85K but that is seriously pushing it. I may also have a few thoughts about wealth preservation and the role of alpha in achieving it; we'll see if I can get that one to gel.
Until next time...
So now I am thinking about the role of the Federal Reserve in credit expansion, and how one can prepare for "the next leg down". This would be the time to have plenty of cash on hand. Gold and silver benefit from inflationary pressures moreso than deflationary ones, but in the long term, I think they are solid holdings. I plan to acquire some of both in the near future, along with balancing my portfolio holdings for more emerging market and international exposure (un-hedged). I think dollar denominated assets are far riskier than international assets, at least to my untrained eye. While the US will take a significant hit, I think many other markets will shake it off, or at least weather the storm better. (Think commodity based economies.) As liquidity (can I use that word?) drains out of US assets, I expect some of it to find a home overseas. Maybe even in Thailand. (Ha ha ha!)
Anyway, I'll have a last net worth update for the year in the next few days. It should come in around 84K, maybe 85K but that is seriously pushing it. I may also have a few thoughts about wealth preservation and the role of alpha in achieving it; we'll see if I can get that one to gel.
Until next time...
Thursday, December 28, 2006
Water futures?
After my diatribe the other day, I started thinking seriously about the future of obtaining water on this planet. I'm curious how come we haven't yet seen a futures contract on the delivery of water come into existence. I imagine that someone in the wonderful world of derivatives has considered or maybe even tested such a concept. Maybe water is still too plentiful for this to work now? However, I have the distinct feeling that such a futures contract is not too far off on the horizon, say within 10 years. As water becomes scarcer, Wall Street will inevitably find a way to monetize and hedge that scarcity. Financial engineering at its best!
Tuesday, December 26, 2006
Oil futures prices dropping on warm weather
Well, of course the oil futures are getting kicked in the nuts - blame global warming. Look, whether you believe in it or not really isn't important. Its happening. Maybe you'll believe in it after your beach house washes away into the ocean. Ha ha! I won't have any remorse for your loss. (That's my Capricorn ascendant speaking, but that's how we feel.)
Anyway, checking out this piece over at Bloomberg and I got to thinking about this. The other week I watched "An Inconvenient Truth". Powerful stuff, indeed.
My questions for all the people who don't believe in global warming are [1] why don't you believe it and [2] if it just happens to be even a little bit true, on what other planet do you and your progeny expect to live? Friggin' morons.
Honestly, I figure most Republicans could give a shit about the condition of the planet since they won't have to live here after they die, right? Fuck it, its their children's and grandchildren's problem. (The whole baby boomer generation so entirely fucked up this country, IMO. But I swear there is a special circle of hell for Republicans, the vanguard of Satan's army.) But hey, I still live here and I don't have a weekend getaway spot on Mars. If you fall into the same category (which I imagine is most everyone on this planet), then you have a responsibility to be a steward of the planet.
My personal experience this winter has shown that some unnatural shit is happening. I live in an OLD apartment complex. Its convenient to work, its inexpensive, but damn is it old. So old that it has a real problem with spider infestation. I've killed an average of 1 spider per week, and sometimes 2 - 3 per day. Now, by this point in the seasonal cycle, I figure that most of these little bastards should have died off in the cold. Unfortunately, I don't think the temperature has been cold enough to kill off the eggs, the baby spiders, and most importantly their *food*, to restrain their breeding. So even 1 week before Christmas, in the northern Maryland suburbs of Washington, DC, I'm killing spiders. And not small spiders, but spiders 1 - 1.5 inches tip-to-tip. That's a bloody big ass spider for the middle of winter. Nevermind walking through swarms of gnats in the middle of December. WTF?
Anyway, whether you believe Al Gore's position in "An Inconvenient Truth", or not, is irrelevant. If you haven't noticed that things are changing, and not for the better, then you're either blind and stupid, or irresponsible at best and evil at worst. There clearly is not a lot of time to affect change on this matter.
I didn't mean to turn this into a screed, political or otherwise. I'm just commenting on my experience, which is my reality. And I know I'm not the only one. While investing in futures is all good, think about something...the reason wheat futures have had the kind of action they have had this year is because of a drought. As in, the lack of water. Heat causes water to evaporate (if you didn't know). So if the temperature of the planet rises, then water evaporates, and there is less water available for purposes that are near and dear to all of our hearts (for those in possession of one). Uses such as DRINKING water. Expect the water wars to come soon. Military conflicts for oil were nothing. And the funny part is, the US is so beholden to oil (which we are able to get reliably in declining quantities) that with the inevitable price increases in petroleum goods, we won't even be able to afford to fight for the most important resource on the planet - WATER! What a dumbass trade to make.
No global warming, my ass.
Okie, I go now.
Anyway, checking out this piece over at Bloomberg and I got to thinking about this. The other week I watched "An Inconvenient Truth". Powerful stuff, indeed.
My questions for all the people who don't believe in global warming are [1] why don't you believe it and [2] if it just happens to be even a little bit true, on what other planet do you and your progeny expect to live? Friggin' morons.
Honestly, I figure most Republicans could give a shit about the condition of the planet since they won't have to live here after they die, right? Fuck it, its their children's and grandchildren's problem. (The whole baby boomer generation so entirely fucked up this country, IMO. But I swear there is a special circle of hell for Republicans, the vanguard of Satan's army.) But hey, I still live here and I don't have a weekend getaway spot on Mars. If you fall into the same category (which I imagine is most everyone on this planet), then you have a responsibility to be a steward of the planet.
My personal experience this winter has shown that some unnatural shit is happening. I live in an OLD apartment complex. Its convenient to work, its inexpensive, but damn is it old. So old that it has a real problem with spider infestation. I've killed an average of 1 spider per week, and sometimes 2 - 3 per day. Now, by this point in the seasonal cycle, I figure that most of these little bastards should have died off in the cold. Unfortunately, I don't think the temperature has been cold enough to kill off the eggs, the baby spiders, and most importantly their *food*, to restrain their breeding. So even 1 week before Christmas, in the northern Maryland suburbs of Washington, DC, I'm killing spiders. And not small spiders, but spiders 1 - 1.5 inches tip-to-tip. That's a bloody big ass spider for the middle of winter. Nevermind walking through swarms of gnats in the middle of December. WTF?
Anyway, whether you believe Al Gore's position in "An Inconvenient Truth", or not, is irrelevant. If you haven't noticed that things are changing, and not for the better, then you're either blind and stupid, or irresponsible at best and evil at worst. There clearly is not a lot of time to affect change on this matter.
I didn't mean to turn this into a screed, political or otherwise. I'm just commenting on my experience, which is my reality. And I know I'm not the only one. While investing in futures is all good, think about something...the reason wheat futures have had the kind of action they have had this year is because of a drought. As in, the lack of water. Heat causes water to evaporate (if you didn't know). So if the temperature of the planet rises, then water evaporates, and there is less water available for purposes that are near and dear to all of our hearts (for those in possession of one). Uses such as DRINKING water. Expect the water wars to come soon. Military conflicts for oil were nothing. And the funny part is, the US is so beholden to oil (which we are able to get reliably in declining quantities) that with the inevitable price increases in petroleum goods, we won't even be able to afford to fight for the most important resource on the planet - WATER! What a dumbass trade to make.
No global warming, my ass.
Okie, I go now.
2007 Goals
I was looking around the blogosphere to see who, if anyone, has updated their blogs recently. Over at Blueprint for Financial Prosperity, I found a post for Jim's 2007 goals. Now, part of me says that this is a bit ridiculous, and part of me says that the information is too private. However, you can't be held accountable if no one knows what you are supposed to be held accountable FOR. So no matter how absurd doing this might seem to my ego, I'm going to do it anyway. In following with Jim's thoughts, I added "stretch" goals, and boy, do they *ever* seem to be stretches. But hey, to paraphrase T. Harv Eker, your bank account can only grow to the extent that you do. (Actually, that may be a direct quote, but I don't have the book here with me. *shrug*)
Regular Goals –
Personal: Accumulate $50,000 in emergency funds (31 Dec 2007)
Personal: Achieve net worth of $150,000 (31 Dec 2007)
Personal: Have saved $15,000 for house down payment (31 Dec 2007)
Personal: Obtain Certified System Administrator for Solaris 10 (31 Mar 2007)
Business: Achieve $50,000 in revenue in my new venture (31 Dec 2007)
Business: Be directly responsible for acquiring 5 properties for my real estate partnership (31 Dec 2007)
Stretch Goals –
Personal: Read 100 books (31 Dec 2007)
Personal: Learn to drive a manual transmission (30 Jun 2007)
Personal: Attend Skip Barber driving school (31 Dec 2007)
Personal: Obtain Oracle Certified Administrator certification for Oracle 10g (30 Jun 2007)
Business: Purchase 1 multi-unit rental property w/ a monthly cash flow in excess of $1000 (31 Dec 2007)
Business: Achieve $100,000 in revenue in my new venture (31 Dec 2007)
Regular Goals –
Personal: Accumulate $50,000 in emergency funds (31 Dec 2007)
Personal: Achieve net worth of $150,000 (31 Dec 2007)
Personal: Have saved $15,000 for house down payment (31 Dec 2007)
Personal: Obtain Certified System Administrator for Solaris 10 (31 Mar 2007)
Business: Achieve $50,000 in revenue in my new venture (31 Dec 2007)
Business: Be directly responsible for acquiring 5 properties for my real estate partnership (31 Dec 2007)
Stretch Goals –
Personal: Read 100 books (31 Dec 2007)
Personal: Learn to drive a manual transmission (30 Jun 2007)
Personal: Attend Skip Barber driving school (31 Dec 2007)
Personal: Obtain Oracle Certified Administrator certification for Oracle 10g (30 Jun 2007)
Business: Purchase 1 multi-unit rental property w/ a monthly cash flow in excess of $1000 (31 Dec 2007)
Business: Achieve $100,000 in revenue in my new venture (31 Dec 2007)
Elevator Pitch
On Christmas day, I finally started talking about my new venture. Not widely, mind you, and I won't go into details on this blog, but I will discuss certain aspects of the business as openly as I can.
I spent most of my time pitching to my aunts and uncles. I figure that at some point in the not-too-distant future, my partner and I will need some level of outside financing. While discussing this with one of my advisors, it made more sense to start with friends and family investment as opposed to institutional (read: venture capital) financing. So I began giving impromptu demos of the current state of the software with my uncles and cousin. We're not ready yet but I figure I should start working on these skills to be ready when the point in time comes to really start pitching. I did get some questions that I was a bit unprepared for, and while I feel I navigated them well, I need to be less "on my feet" and more "ahead of time". I need to be able to present my answers and rebuttals quickly after having prepared for those questions instead of improvising. Its funny because I don't think well "on my feet" anyway, and I never have. But I think this idea, this business, has consumed me so much over the last few weeks that these answers are becoming second nature. Now I need to cement them and make them automatic.
Clearly, this preparation could become a full time job. But as the brother of a friend of mine said to me as a freshman in college, "if you want something you've never had before, you have to do something you've never done before." So I'll start practicing my pitch along with working out the business plan details.
As for the product, it is coming along nicely. My partner has been very productive in the last few weeks. She's great! This is moving so much faster than I imagined. 9 figures, here we come!!!
So until next time...
I spent most of my time pitching to my aunts and uncles. I figure that at some point in the not-too-distant future, my partner and I will need some level of outside financing. While discussing this with one of my advisors, it made more sense to start with friends and family investment as opposed to institutional (read: venture capital) financing. So I began giving impromptu demos of the current state of the software with my uncles and cousin. We're not ready yet but I figure I should start working on these skills to be ready when the point in time comes to really start pitching. I did get some questions that I was a bit unprepared for, and while I feel I navigated them well, I need to be less "on my feet" and more "ahead of time". I need to be able to present my answers and rebuttals quickly after having prepared for those questions instead of improvising. Its funny because I don't think well "on my feet" anyway, and I never have. But I think this idea, this business, has consumed me so much over the last few weeks that these answers are becoming second nature. Now I need to cement them and make them automatic.
Clearly, this preparation could become a full time job. But as the brother of a friend of mine said to me as a freshman in college, "if you want something you've never had before, you have to do something you've never done before." So I'll start practicing my pitch along with working out the business plan details.
As for the product, it is coming along nicely. My partner has been very productive in the last few weeks. She's great! This is moving so much faster than I imagined. 9 figures, here we come!!!
So until next time...
Friday, December 22, 2006
Getting Back Up to Speed
As you can probably imagine, my posting will be spotty over the next few days. I meant to kick this one out earlier, but I spent the vast majority of the day sleeping.
Anyway, Michael Nystrom has posted his "predictions" for 2007, which was an interesting read. Mauldin also sent out his latest newsletters, but I can't link to his site from this crappy BellSouth DSL line.
(Man, why can't these cock knockers get their game together? Can't someone steal the "high speed" connectivity game from these fools, PLEASE!?!?!?!? This is soooo painful. Is it even possible to make a living in any online business living in the southest U.S.? Fugggg, man! But I digress.)
After waking from my deep slumber this afternoon, I started catching up on all of my blog reading. Some interesting stuff to be found, but mostly...well, let's just say that you can tell this is the slow part of the year. Personally, I'll be glad once the holidays come to a close. I need some action, something happening. But I do welcome the downtime to get back up to speed on all facets of my life.
Right now, I'm taking a break from hacking away on my business plan. Ugggghhhh! I really can't stand writing these things, no matter how necessary they are. But I plan to do this startup RIGHT, and that means I have to suck up the pain. The sooner I get this fashioned, the better. I have some database schemas to start designing. Software architecture has been on my mind recently too.
So I think I was surfing around Going Private the other day when I found, via some other site (Abnormal Returns, IIRC, but maybe not), this blog named Accrued Interest. Very cool! A bond market blog written by a professional bond market trader. Me like bond blog! I haven't yet crawled through the archives, but I plan to get to that sometime before I leave Atlanta on Wednesday morning.
So it looks like wheat performed very nicely this past week, ending up strongly. We'll see if that continues after Christmas. The chart for the May contract looks very good though. This is one area, along with equity options, that I intend to increase my investment in during the course of 2007.
So now its time to continue my business plan writing. I have to keep this venture moving forward, as I fully expect to bring in some outside capital in the next year. Maybe not full fledged VC, but either friends and family or a small angel round of financing would be useful. I think the potential is GINORMOUS so right now, it is back to writing for the K.
Until next time, good people...Merry Christmas. (Just in case I don't post between now and then.) May the Alpha be with you!
Anyway, Michael Nystrom has posted his "predictions" for 2007, which was an interesting read. Mauldin also sent out his latest newsletters, but I can't link to his site from this crappy BellSouth DSL line.
(Man, why can't these cock knockers get their game together? Can't someone steal the "high speed" connectivity game from these fools, PLEASE!?!?!?!? This is soooo painful. Is it even possible to make a living in any online business living in the southest U.S.? Fugggg, man! But I digress.)
After waking from my deep slumber this afternoon, I started catching up on all of my blog reading. Some interesting stuff to be found, but mostly...well, let's just say that you can tell this is the slow part of the year. Personally, I'll be glad once the holidays come to a close. I need some action, something happening. But I do welcome the downtime to get back up to speed on all facets of my life.
Right now, I'm taking a break from hacking away on my business plan. Ugggghhhh! I really can't stand writing these things, no matter how necessary they are. But I plan to do this startup RIGHT, and that means I have to suck up the pain. The sooner I get this fashioned, the better. I have some database schemas to start designing. Software architecture has been on my mind recently too.
So I think I was surfing around Going Private the other day when I found, via some other site (Abnormal Returns, IIRC, but maybe not), this blog named Accrued Interest. Very cool! A bond market blog written by a professional bond market trader. Me like bond blog! I haven't yet crawled through the archives, but I plan to get to that sometime before I leave Atlanta on Wednesday morning.
So it looks like wheat performed very nicely this past week, ending up strongly. We'll see if that continues after Christmas. The chart for the May contract looks very good though. This is one area, along with equity options, that I intend to increase my investment in during the course of 2007.
So now its time to continue my business plan writing. I have to keep this venture moving forward, as I fully expect to bring in some outside capital in the next year. Maybe not full fledged VC, but either friends and family or a small angel round of financing would be useful. I think the potential is GINORMOUS so right now, it is back to writing for the K.
Until next time, good people...Merry Christmas. (Just in case I don't post between now and then.) May the Alpha be with you!
Wednesday, December 20, 2006
Last Check
Woo hoo!
I made my final payment of $4750 into my RE investment group today. (Actually yesterday, since it is almost 2 AM EST on Wednesday, 20 December.) That brings my total investment to the $11,200 required for all the members. Just under the wire, baby!
Now I will focus on rebuilding my emergency savings. Although not depressed too terribly, and I have a good 3 months worth of expenses saved, I'm working to double that by June. I put just over 1/3 of every paycheck into an HSBC Direct Online Savings account, so it shouldn't take too long to rebuild the funds. I just need to be ready for Trinidad Carnival!
From here on, I'll spend a lot more time crafting the business plan for my new venture and watching my wheat investment. Go global warming, destroying crops worldwide!
Until next...thought?
I made my final payment of $4750 into my RE investment group today. (Actually yesterday, since it is almost 2 AM EST on Wednesday, 20 December.) That brings my total investment to the $11,200 required for all the members. Just under the wire, baby!
Now I will focus on rebuilding my emergency savings. Although not depressed too terribly, and I have a good 3 months worth of expenses saved, I'm working to double that by June. I put just over 1/3 of every paycheck into an HSBC Direct Online Savings account, so it shouldn't take too long to rebuild the funds. I just need to be ready for Trinidad Carnival!
From here on, I'll spend a lot more time crafting the business plan for my new venture and watching my wheat investment. Go global warming, destroying crops worldwide!
Until next...thought?
Tuesday, December 19, 2006
Hands Off Hedge Funds
By way of Going Private, I came across this very nice piece of writing at Foreign Affairs by Sebastian Mallaby. All very good points. At least, they make sense to me.
Just working on catching up on some reading. Monday sucked ass. Why won't people just let me sleep? Damn!
Anyway, it looks like wheat got hit hard again today. Not that I noticed until tonight, but we'll see how things progress. Its a marathon, not a sprint, at least right now.
So I was just doing some scratching around my favorite equity basket case, SUNW, and found this linked from the WSJ site (of course, referring to another Dow Jones site, but still). Mind you, I have no position in SUNW; I just have been keeping tabs on them for a little while. I may or may not take a position in the future. That is TBD. However, I do think SUNW is poised to make some really positive upward moves in the near future. That is just my feeling and observation. It is going slowly, but the trend is positive.
Anyway, until the next time...which should be after my Christmas shopping is done.
Just working on catching up on some reading. Monday sucked ass. Why won't people just let me sleep? Damn!
Anyway, it looks like wheat got hit hard again today. Not that I noticed until tonight, but we'll see how things progress. Its a marathon, not a sprint, at least right now.
So I was just doing some scratching around my favorite equity basket case, SUNW, and found this linked from the WSJ site (of course, referring to another Dow Jones site, but still). Mind you, I have no position in SUNW; I just have been keeping tabs on them for a little while. I may or may not take a position in the future. That is TBD. However, I do think SUNW is poised to make some really positive upward moves in the near future. That is just my feeling and observation. It is going slowly, but the trend is positive.
Anyway, until the next time...which should be after my Christmas shopping is done.
Sunday, December 17, 2006
The Ramifications of Twilight
I finally completed "Twilight in the Desert" while working out earlier today, and all I can say is "Wow!". If that book doesn't make you re-think your relationship to oil, and the relationship of oil producing nations to the US, you're hopeless. There really is nothing else that can be said.
Matthew Simmons lays out an awesome, and logical, case for the impending end of the Saudi Arabian "Oil Miracle". Whether you're convinced is up to you but the arguments are compelling in my opinion. Once you know something, you have the choice to act on your newly found knowledge, or to ignore it, but you do the latter at your own peril.
While the book clearly states that there is no way to know with certainty when the "Oil Miracle" (whether Saudi Arabia's or any other oil producer's) will end, it is clear the end is coming. Faster than you think. A lot faster.
I plan to share this book with as many people as I can, starting with my students. If you haven't read it, you need to. Today. There are so many investment theses that I can see coming out of it, starting with investing in scarce natural resources like oil. However, the scale of the consequences of Matt Simmon's assertions is planetary. As is this. Scary stuff man.
Wow!
Now, on to the next book, "Speedwealth" by T. Harv Eker. Until next time...
Matthew Simmons lays out an awesome, and logical, case for the impending end of the Saudi Arabian "Oil Miracle". Whether you're convinced is up to you but the arguments are compelling in my opinion. Once you know something, you have the choice to act on your newly found knowledge, or to ignore it, but you do the latter at your own peril.
While the book clearly states that there is no way to know with certainty when the "Oil Miracle" (whether Saudi Arabia's or any other oil producer's) will end, it is clear the end is coming. Faster than you think. A lot faster.
I plan to share this book with as many people as I can, starting with my students. If you haven't read it, you need to. Today. There are so many investment theses that I can see coming out of it, starting with investing in scarce natural resources like oil. However, the scale of the consequences of Matt Simmon's assertions is planetary. As is this. Scary stuff man.
Wow!
Now, on to the next book, "Speedwealth" by T. Harv Eker. Until next time...
Saturday, December 16, 2006
Final Net Worth Update for 2006
I spent a little time recently rebalancing my 401(k). Not that there was a lot to do, but a little, just to make sure things were within the parameters I have set. I use the aggressive portfolio allocation recommended at www.401khelp.com. If you are an employee of a sizable US company, you should check the site out. They probably have a model portfolio for you!
Anyway, the net worth stands like this...$85,083.19 as of the end of 2006.
For comparison purposes, my net worth was $66,727.49 at the end of 2005. The YoY increase is $18,355.51, for a 27.508% increase. Not quite where I wanted to go, but a win is a win. I had hoped to get to 100K net worth by the end of this year but a lot of recreational travel and a job flip-flop in February worked against me. The travel thing I can fix (although I like to travel and I plan to keep doing it). The job thing was unavoidable. As I said in an earlier post, avoid working for Unisys if you can. I gave up all my seniority, including my 3 weeks of vacation (which is the same amount of time I had the job), to take that spot, and 6 weeks worth of 401(k) contributions as well. Ouch!
Rat bastids!
Anyway, we shall move on. I've got better things going than a low 6 figure contracting opp anyway.
Until next time...Happy New Year to all my readers. Hope its a prosperous and joyful one from beginning to end, for everyone!
Anyway, the net worth stands like this...$85,083.19 as of the end of 2006.
For comparison purposes, my net worth was $66,727.49 at the end of 2005. The YoY increase is $18,355.51, for a 27.508% increase. Not quite where I wanted to go, but a win is a win. I had hoped to get to 100K net worth by the end of this year but a lot of recreational travel and a job flip-flop in February worked against me. The travel thing I can fix (although I like to travel and I plan to keep doing it). The job thing was unavoidable. As I said in an earlier post, avoid working for Unisys if you can. I gave up all my seniority, including my 3 weeks of vacation (which is the same amount of time I had the job), to take that spot, and 6 weeks worth of 401(k) contributions as well. Ouch!
Rat bastids!
Anyway, we shall move on. I've got better things going than a low 6 figure contracting opp anyway.
Until next time...Happy New Year to all my readers. Hope its a prosperous and joyful one from beginning to end, for everyone!
130/30 on My Mind
This one will be short. I know its not Friday anymore (barely) on the east coast. However, this server is in California! Ha! :)
So it looks like there's been more positive movement in what. I am very happy and thankful to God for this. Take a look at this chart. See this one too. Its hard to believe I originally got into wheat in the 420 - 430 area then sold off once I had a profit. Had I let that winner run.... Let this be a lesson in not culling your winners too quickly. Let them run and use trailing stops as much as possible. Oh well. You live and you learn.
Just catching up on some reading. There will be more tomorrow night. I'll have to wait until then for the latest issue of Barron's.
Something over at Institutional Investor did catch my eye though. The 130/30 fund. I need to look into this a bit more. Its an interesting concept, but I can't work the mechanics in my head as yet. Is anyone out there reading this familiar with or knowledgeable about these? How much leverage does it take to setup a fund like this? 1.5 - 2 times? A 30% short position coupled to a 130% long. Very intriguing. I see I'm going to have to look at the cost of subscriptions to II and Alpha Magazine. I love learning new stuff, and its even better when it deals with a subject so close to my own heart!
Anyway, time to get out of this lab and get some sleep. I was up until 6:30 AM this morning hacking away on my systems. I've now got my SPARCstation 20 and Ultra 2 running, and I'll probably install NetBSD on the SS20 tonight. I do also plan to get caught up on sleep, as the coming week will be quite long.
Until next time...may the Alpha be with you!
So it looks like there's been more positive movement in what. I am very happy and thankful to God for this. Take a look at this chart. See this one too. Its hard to believe I originally got into wheat in the 420 - 430 area then sold off once I had a profit. Had I let that winner run.... Let this be a lesson in not culling your winners too quickly. Let them run and use trailing stops as much as possible. Oh well. You live and you learn.
Just catching up on some reading. There will be more tomorrow night. I'll have to wait until then for the latest issue of Barron's.
Something over at Institutional Investor did catch my eye though. The 130/30 fund. I need to look into this a bit more. Its an interesting concept, but I can't work the mechanics in my head as yet. Is anyone out there reading this familiar with or knowledgeable about these? How much leverage does it take to setup a fund like this? 1.5 - 2 times? A 30% short position coupled to a 130% long. Very intriguing. I see I'm going to have to look at the cost of subscriptions to II and Alpha Magazine. I love learning new stuff, and its even better when it deals with a subject so close to my own heart!
Anyway, time to get out of this lab and get some sleep. I was up until 6:30 AM this morning hacking away on my systems. I've now got my SPARCstation 20 and Ultra 2 running, and I'll probably install NetBSD on the SS20 tonight. I do also plan to get caught up on sleep, as the coming week will be quite long.
Until next time...may the Alpha be with you!
Thursday, December 14, 2006
Movin' On Up
That heating oil is on the move, if ever so slightly. Not that it matters to me anymore right now, but I'll continue watching the energies. Its a long term play, IMO.
Meanwhile, wheat is looking good so far today. Nice movement. Nothing special. We'll continue to monitor.
And for anyone thinking of starting any kind of business, be sure before you do. This stuff is killer. Be prepared for long nights with little to no sleep, lots of reading and document preparation, and other minutiae. Just came back from a meeting with my title company in Baltimore, and I was supposed to meet one of my partners to go take a look at a house but he was too tired from working overnight. I understand. Working the same kind of shift and trying to do anything else during the day will drain you quickly. So I guess I'll have to cancel and re-schedule to inspect that house. But right now, my feeling is that it won't get added to the portfolio. The owner looks like he has one of Kiyosaki's "alligators", and that's between him and his bank account. I don't want to take on anyone else's problems, at least not without an appropriate reduction in the price. This is a business after all.
Anyway, I'm off. Gotta finish configuring this Subversion repository for my coder and put in a little bit of work on my software business plan. And I still have some configuration work to complete on this HPC cluster and to see my doctor.
Oh, and if it seems like I'm rambling...welcome to my mind. :)
I'll follow up on things later today. Until next time...
Meanwhile, wheat is looking good so far today. Nice movement. Nothing special. We'll continue to monitor.
And for anyone thinking of starting any kind of business, be sure before you do. This stuff is killer. Be prepared for long nights with little to no sleep, lots of reading and document preparation, and other minutiae. Just came back from a meeting with my title company in Baltimore, and I was supposed to meet one of my partners to go take a look at a house but he was too tired from working overnight. I understand. Working the same kind of shift and trying to do anything else during the day will drain you quickly. So I guess I'll have to cancel and re-schedule to inspect that house. But right now, my feeling is that it won't get added to the portfolio. The owner looks like he has one of Kiyosaki's "alligators", and that's between him and his bank account. I don't want to take on anyone else's problems, at least not without an appropriate reduction in the price. This is a business after all.
Anyway, I'm off. Gotta finish configuring this Subversion repository for my coder and put in a little bit of work on my software business plan. And I still have some configuration work to complete on this HPC cluster and to see my doctor.
Oh, and if it seems like I'm rambling...welcome to my mind. :)
I'll follow up on things later today. Until next time...
Wednesday, December 13, 2006
Goldman's ART
I can think of no good reason for Goldman Sachs to launch a product like the Absolute Return Tracker (ART). They already have a fairly successful internal hedge fund operation, even if Global Alpha did get eviscerated recently. But this smacks of being a pure market share grab. I don't know, maybe to me it seems like they are imitating the wrong bank. I mean, because Merrill created a similar product means that Goldman has to do the same?
Oh well.
I guess this really means that the bloom is off the rose for hedge funds. It was bound to happen, right? Everybody and their grandmother runs a hedge fund nowadays. YOU too can invest in one. (And unbeknownest to you, you may just be doing that. Which is fine until it isn't.)
I wonder how far back the data will go that they get from this third party? And whether any of said historical data is coming out of the remains of PlusFunds, via the Refco implosion? (WSJ.com subscription req'd)
Hmmmm.
Oh well.
I guess this really means that the bloom is off the rose for hedge funds. It was bound to happen, right? Everybody and their grandmother runs a hedge fund nowadays. YOU too can invest in one. (And unbeknownest to you, you may just be doing that. Which is fine until it isn't.)
I wonder how far back the data will go that they get from this third party? And whether any of said historical data is coming out of the remains of PlusFunds, via the Refco implosion? (WSJ.com subscription req'd)
Hmmmm.
Getting All Misty
So while traipsing around the blogosphere tonight (from the comfort of my cubicle), I decided to check out Going Private to get caught up for the day. Lo and behold, what do I see but a post indicating that my beloved PE blog may or may not survive much beyond the end of the year. How saddening!
Well, things change. Of course, that won't stop me from continue to soak up Equity Private's extremely well written posts for as long as possible. (Reading the archives of Going Private was one of the most enjoyable experiences of my blog-reading life. Mildly erotic, in a certain way, but I'm kooky like that.)
Anyway, get on over to Going Private before it should disappear. (Not saying it will, but just in case.)
EP, I love you! Viva Going Private!
Well, things change. Of course, that won't stop me from continue to soak up Equity Private's extremely well written posts for as long as possible. (Reading the archives of Going Private was one of the most enjoyable experiences of my blog-reading life. Mildly erotic, in a certain way, but I'm kooky like that.)
Anyway, get on over to Going Private before it should disappear. (Not saying it will, but just in case.)
EP, I love you! Viva Going Private!
Tuesday, December 12, 2006
Taking a New Course with this Site
I'm going to work on doing something different with this blog from here on. I plan to start posting daily. Even if it is short (and most likely, in many cases, it will be), I will post SOMETHING every day. I'd like your help, dear readers, in determining the things to talk about in this space. If you want more details about my portfolio or its construction, let me know. If you want different topics than what I have typically written about, let me know. If you would like longer and deeper posts, say that. Tell me what you would like to read. I write this for you as much as for myself. I may even be able to share a bit about my new startup.
Anyway, I find myself fairly successful with regard to today's goals. I've got some money in motion that will top of my investment with my real estate partnership. Each of us was to put $10,000 into this group for an equal share of the business. I didn't have $10,000 up front so I've been on a $750/month payment schedule. However, for tax reasons, I want to get all of the funds in before the end of the year. This will also allow me to save money in my emergency account more quickly, as I won't keep draining it for various reasons (including the monthly payment into the RE business).
So taking a look at the grain futures action, I see wheat is down again. Bad, bad wheat. I decided to put on 2 call spreads on May wheat along with an outright March 550 call. From what I have seen, wheat looks like it still has some room to run.
Now, I know some of you are thinking that I'm fuggin' nuts to continue with the commodities trading. And you could be right. But considering that I save about 28% of my gross income, once you consider my 401(k) and monthly savings into an HSBC Online Savings account, I feel that I can take these kinds of risks without doing too much damage. I've worked to automate as much of my financial life as possible. Factoring in the real estate, which has grown slowly but more profitably than not, I think there is room to pursue more aggressive strategies for realizing returns. Obviously, this is not for everyone. I still have some learning to do, and I understand that. But I don't see this, even if you call it "gambling", as being completely reckless.
Okay, my pain medication is starting to kick in and its getting harder to think, nevermind type. So until next time...which will be tomorrow. :)
Peace!
Anyway, I find myself fairly successful with regard to today's goals. I've got some money in motion that will top of my investment with my real estate partnership. Each of us was to put $10,000 into this group for an equal share of the business. I didn't have $10,000 up front so I've been on a $750/month payment schedule. However, for tax reasons, I want to get all of the funds in before the end of the year. This will also allow me to save money in my emergency account more quickly, as I won't keep draining it for various reasons (including the monthly payment into the RE business).
So taking a look at the grain futures action, I see wheat is down again. Bad, bad wheat. I decided to put on 2 call spreads on May wheat along with an outright March 550 call. From what I have seen, wheat looks like it still has some room to run.
Now, I know some of you are thinking that I'm fuggin' nuts to continue with the commodities trading. And you could be right. But considering that I save about 28% of my gross income, once you consider my 401(k) and monthly savings into an HSBC Online Savings account, I feel that I can take these kinds of risks without doing too much damage. I've worked to automate as much of my financial life as possible. Factoring in the real estate, which has grown slowly but more profitably than not, I think there is room to pursue more aggressive strategies for realizing returns. Obviously, this is not for everyone. I still have some learning to do, and I understand that. But I don't see this, even if you call it "gambling", as being completely reckless.
Okay, my pain medication is starting to kick in and its getting harder to think, nevermind type. So until next time...which will be tomorrow. :)
Peace!
Sunday, December 10, 2006
Playing Catch Up
So I just spent the last few hours reading some of the many blogs on my usual reading list. Not all of them, not even close. There's just sooo much stuff out there. But it must be done. Thankfully, I have some free time at work.
Anyway, time for a quick reco on a web site and then I'll delve into some other random shite.
I know there are some Information Arbitrage readers out there...somewhere...hopefully. If not, then you should check it out. The posts tend to be long, the kind of posts I hope to write one day. (Hmmm. "Whatever happened to that post about the similarities between investing and good driving, K?" K: "Good question. I'll get back to you.")
Anyway, IA has some really awesome, thought provoking posts. They're not all necessarily investing related, but more so about applying intelligence to companies and markets, from which we can then discern possible investment theses, particularly in the Internet and technology spaces. At least, that's how I view it. Whether or not that's the intent of the author, Roger Ehrenberg, I find it useful just from a big, broad stroke perspective. I'm always looking for new ideas and new ways of looking at existing ideas. Needless to say, I love this site though I haven't yet used, and likely wouldn't exclusively use, it to generate investment ideas.
Anyway, go check it out.
So I finally closed out that bum heating oil trade. How sad. Literally, the front month heating oil contract go to within 1 cent of where I needed it to be for the trade to be (slightly) positive before retreating. I guess winter in Siberia hasn't been quite cold enough.
*weep*
At least my options application FINALLY arrived. It seems that my broker had the wrong address on file even though it was one of the first addresses I changed when I moved. So they sent the same stuff to the same bum address twice. Whatever happened to mail being returned undeliverable? Sheesh! Things like this make me think the USPS should be privatized (however bad a move I think that might ultimately be). It shouldn't be that bloody difficult, especially when you have a mail forward in place.
I'll spend the rest of today working on that and waiting for a response back about the house I made a verbal offer on yesterday. Yes, it was that time of the month again. I am a member of one of the larger and better known real estate investor groups in the DC area. I haven't been to a meeting since late summer however, just due to conflicting commitments. But I did manage to drag myself out of bed for Saturday's meeting, and hopefully it will result in a successful close of another investment property. We'll see how that rolls.
Anyway, more to come but its starting to get hectic here. Until next time...
Anyway, time for a quick reco on a web site and then I'll delve into some other random shite.
I know there are some Information Arbitrage readers out there...somewhere...hopefully. If not, then you should check it out. The posts tend to be long, the kind of posts I hope to write one day. (Hmmm. "Whatever happened to that post about the similarities between investing and good driving, K?" K: "Good question. I'll get back to you.")
Anyway, IA has some really awesome, thought provoking posts. They're not all necessarily investing related, but more so about applying intelligence to companies and markets, from which we can then discern possible investment theses, particularly in the Internet and technology spaces. At least, that's how I view it. Whether or not that's the intent of the author, Roger Ehrenberg, I find it useful just from a big, broad stroke perspective. I'm always looking for new ideas and new ways of looking at existing ideas. Needless to say, I love this site though I haven't yet used, and likely wouldn't exclusively use, it to generate investment ideas.
Anyway, go check it out.
So I finally closed out that bum heating oil trade. How sad. Literally, the front month heating oil contract go to within 1 cent of where I needed it to be for the trade to be (slightly) positive before retreating. I guess winter in Siberia hasn't been quite cold enough.
*weep*
At least my options application FINALLY arrived. It seems that my broker had the wrong address on file even though it was one of the first addresses I changed when I moved. So they sent the same stuff to the same bum address twice. Whatever happened to mail being returned undeliverable? Sheesh! Things like this make me think the USPS should be privatized (however bad a move I think that might ultimately be). It shouldn't be that bloody difficult, especially when you have a mail forward in place.
I'll spend the rest of today working on that and waiting for a response back about the house I made a verbal offer on yesterday. Yes, it was that time of the month again. I am a member of one of the larger and better known real estate investor groups in the DC area. I haven't been to a meeting since late summer however, just due to conflicting commitments. But I did manage to drag myself out of bed for Saturday's meeting, and hopefully it will result in a successful close of another investment property. We'll see how that rolls.
Anyway, more to come but its starting to get hectic here. Until next time...
Tuesday, December 05, 2006
Not enough time in the day
Have I ever mentioned that consulting sucks? Or maybe to be more accurate, consulting for friends sucks. Don't get me wrong, I like my friends. Maybe I'm just too nice. I give a reasonably large discounts for my consulting time to my friends, because the ones I do work for aren't in a position to pay for too many hours of my time at my full $60 per hour rate. I don't think its unreasonable. But it would sure be nice if they would listen to my advice so they don't NEED me so damn much in the first place. We'd probably all be much happier.
Anyway, I was browsing around the Bloomberg site and found a video snippet of an interview with Peter Thiel. For those who weren't paying attention (or didn't care to pay attention) to PayPal, Thiel was the co-founder and CEO of the company. He now runs a hedge fund/think tank called Clarium Capital. Anyway, I think I can get with his investment thesis. You can find the video here. Let me what you think. They also have an article about his hedge fund returns of the last few years. How's that for alpha generation!
I just want to sleep dammit! The last few days are starting to take a physical toll, with my body literally breaking down. Why won't people just let me rest? So annoying.
Anyway, I'm off to do some more reading. Lots of Bill Gross to catch up on, and an economic report about the city in which I purchased that rental property. That one is getting long in the tooth, so I need to finish it quick. And I haven't read blogs for days. This could take a while.
Until next time (as he deposits his $500 consulting check)...
Anyway, I was browsing around the Bloomberg site and found a video snippet of an interview with Peter Thiel. For those who weren't paying attention (or didn't care to pay attention) to PayPal, Thiel was the co-founder and CEO of the company. He now runs a hedge fund/think tank called Clarium Capital. Anyway, I think I can get with his investment thesis. You can find the video here. Let me what you think. They also have an article about his hedge fund returns of the last few years. How's that for alpha generation!
I just want to sleep dammit! The last few days are starting to take a physical toll, with my body literally breaking down. Why won't people just let me rest? So annoying.
Anyway, I'm off to do some more reading. Lots of Bill Gross to catch up on, and an economic report about the city in which I purchased that rental property. That one is getting long in the tooth, so I need to finish it quick. And I haven't read blogs for days. This could take a while.
Until next time (as he deposits his $500 consulting check)...
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