Wednesday, September 28, 2005

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).

Tuesday, September 27, 2005

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
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 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.

Monday, September 26, 2005

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.

Wednesday, September 21, 2005

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.

Tuesday, September 20, 2005

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.

Monday, September 19, 2005

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

Thursday, September 15, 2005

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

Wednesday, September 14, 2005

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.

Tuesday, September 13, 2005


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).

Monday, September 12, 2005

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.

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.

Thursday, September 08, 2005

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.

Wednesday, September 07, 2005

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.

Tuesday, September 06, 2005

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.
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 ( 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).

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.

Thursday, September 01, 2005

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.