Thursday, April 27, 2006

Microsoft misses?

First of all the market action was pretty volatile today. I looked at my screens in the morning and the Dow is down 60 points, what seemed like half an hour later the Dow was up 20%, then it even sold off later on in the day. What caused these wild fluctuations? Well it was two main stories.
One is that China raised their interest rates.
The other was Bernanke's comments about inflation.

In other news Microsoft's income rose 16%, but they missed estimates. Their revenue also came in below estimates. The title of this post has a question mark because Microsoft used to be notorious for "beating" estimates by a penny. Firms can do many things to increase their earnings per share and there was a long stretch where Microsoft would barely beat estimates. They would also use another tactic by talking about their guidance before they report. For instance, some analysts might throw out some numbers and Microsoft would say something like "well those are very optimistic numbers" blah blah blah. So analysts might take down their numbers a bit, but what do you know when MSFT reported their numbers were a bit higher than the analysts!
Well not today, and MSFT is down about 6% in after-hours.

Also, a decent article on Jones Soda.

To somehow tie this post into my organization post from a few days ago, I saw a fairly cool gadget on Amazon that is basically a pen-scanner. So you scan the words and the pen saves it and uploads it to a computer. I read about these awhile ago, but forgot about them until today. I looked at a few and they might be a little buggy, but I might keep looking. This would definitely be a good way to keep track of information.

Wednesday, April 26, 2006

Quick Post

I have a ton of things I need to catch up on, so I need to make this quick.

So far this month is going fairly well in terms of my savings and investing. My stocks have been acting pretty well and I haven't had any major expenditures. I might need to get something done on my car, but it shouldn't be too expensive.

I also *might* be going to Europe later this year. The key word here is "might" because there's a chance my friends might flake out. As of right now we're looking into things and where to go. The goal is to go for about 12 days for under $2000. I think this is definitely do-able because we will be going during the off-season so a roundtrip ticket is around $600 (pretty cheap).
I'm glad I started that vacation fund because by the time we're ready to go, the fund should be able to pay for the majority of the trip.

Monday, April 24, 2006


I finished reading a biography on Fischer Black (co-creator of the Black-Scholes option pricing formula, among other things) awhile ago and one of the things that struck me was his detailed organizational skills. I lack in this department and I'm thinking of ways on how to get things organized. While parts of my room seem like a mess, it's actually in an organized-chaos environment. Like my two foot tall stack of reading materials. Nothing there is organized, but I know everything that makes up the pile (some old WSJournals, some Barrons, a few trading magazines, and a few back issues of Journal of Finance).

Black had an elaborate system to organize all the information he came across. I want to start making up a similar type system. He first had a huge cabinet with information he read and I'm fairly certain he even cross-categorized the data. So whenever he came across a particular subject, he would be able to look in his system and find a card that had some available info, what papers he read that dealt with the subject, as well as the people who knew more about the subject.
He later moved his system on to a computer in order to speed things up and he was able to save a lot more information. I remember a somewhat funny thing about him that goes along with his organization skills. He would always carry a small notepad with him (good idea) and let's say he was talking to someone about options. If that person said something very interesting, Black would stop him in mid sentence and write down what the person just said! Sometimes he would even ask for the person to repeat themselves.

I definitely do not want to go to that extreme, but I am starting up a digital catalog for finance. At work I can "print" out articles in pdf format so I have the ability to save just about anything as a pdf. Last week I realized that I come across a vast amount of information. For instance in one day I check about four different finance sites that all have a few new articles. So far that's easy to come up with. Then there's the Wall Street Journal, which has a ton of info. Right now I read the stories that interest me and skim the rest of the headlines, but I want to start reading the whole thing. On Monday's I have Barron's to go through. Then there are the stocks I track. These include the ones in my portfolio as well as others. Some of the software I use at work combines all the major news sources so if I'm watching a big company this can amount to many stories to get through or skim the headlines. I'm spending all this time reading, but I have to work on saving the information I want to keep.
Information is key. The more information you know, the better story you can tell. Why is this stock acting one way? Well maybe it's because of this article I read in Business Week that mentioned how demand was picking up, an maybe demand was picking up because of this article I read on Reuters that highlighted strength in a particular sector. This is just an example, but stories are related. It's best to put the key points of these stories together, and then you will have the bigger picture.

Thursday, April 20, 2006

Portal Player

It was a rough day for whoever held a position in Portal Player today (PLAY). Their product is used in the Ipods and Apple is their main customer.
First Apple came out with an okay report and strong demand in Ipods and the Nano Ipods. So things were looking fairly good for PLAY. Then a press released went out last night stating that Apple was no longer going to use PLAY's products! Today was a terrible day as it ended down over 41%.

In other news, Google's profit went up by 60% and the last time I checked it was up almost 8% in after-hours.

My portfolio had a decent day, finishing up over 1% while the S&P was basically flat. I was helped out by my small insurance company. It's had a nice few days and I'm up almost 4% in about one week.

I still need to invest more and I feel that my cash levels are too high. Although I think it's hard to find good stocks, I can always find something. In the U.S. area I might stick to more stable dividend paying stocks, unless I can find some small-caps I like. I'm searching through some ADR's for some foreign exposure as well (although many of them have gone up quite a bit so far)

Monday, April 17, 2006

Slow and Steady

The last time I checked the S&P was up just under 3% for the year. Considering that almost a third of the year is gone (that was fast!), the market has been looking fairly average at best. But doesn't it seem like it's going to correct a bit? Where is the good news?

It seems like the majority of the stories out there are more for the negative side. Let's see what we have:
Housing prices are starting to drop around the nation, which may help along a recession.
Interest rates are rising and this will hurt interest rate sensitive stocks (like banks) and other types of loans (how about all those people paying interest only loans?)
Oil just hit over $70 a barrel. I'm paying $3/gallon right now.
Consumer spending hasn't been strong at all.
The tech sector has been lackluster with below average earnings reports, slowing growth, too much inventory, and falling prices (see semiconductors, flash memory, etc.)
Many natural resources are making multi-year highs and that's adding to the costs of many products
What's going to drive the market up? Is it the finance stocks? Tech (Google is slowing, Microsoft still hasn't done anything, Intel keeps dropping)? Retailers? What industry?

It might come down to a best of breed market, where the best companies will outperform and there won't necessarily be any hot industries.

In other news, I'm keeping my eye on JNJ.

Thursday, April 13, 2006

Portfolio Changes

A few days ago I made some portfolio changes by selling my NCC. For a bank, I had a nice one year gain, but I thought the risk:reward ration wasn't on my side. Interest rates are rising, which the big banks can offset/hedge, but the one thing that bothered me about NCC was their mortgage side. The housing sector is getting a little shaky where prices are dropping in most major markets, inventory is picking up, and there aren't enough buyers out there.

I took some profits in a few other stocks because of nice rallies and I added (slightly) to the insurance sector. The company is a small cap and doesn't really have a strong correlation with the market.

I ran a few more screens today and I need to go through that list, but I might have found a couple interesting stocks to look into.

The tanker sector is not turning up. A few companies were downgraded this weak because of lower rates and higher capacity. Everyone is trying to build more tankers (especially China) and this will just increase the supply of ships. This increase in supply will put downward pressure on the charter rates and they are starting to decline even more. I was tempted to buy a little bit of a few tankers, but I rather watch the rates drop even further especially when you have companies getting rid of their dividend (TOPT- although they will pay out a special dividend). I rather wait till things bottom out and rates start picking back up. It might take a few years, but when the industry hits the bottom I'll be ready to buy. The only company I might look into and add to my position is SFL because it's a leasing company rather than a tanker company. The majority of their contracts are locked in for awhile and I need to see how safe the dividend is (yield is north of 9%).

After writing my post about coins, I'm thinking about putting 1-2% of my net worth into coins.
I definitely have to read up more on this area, but it might be worth a 1% position.

I'm closely keeping my eye on the Peruvian elections. No candidate won the majority of the vote, so there will be a run-off between the top two candidates. As of two days ago this was bad news for foreign mining companies because Humala is in the lead. He's preaching a leftist campaign and doesn't like foreign companies making huge profits (he's like Chavez in Venezuela). If Flores isn't in the top two, then mining companies might take a hit. I'm still watching CUP and it's rallied a bit lately but if Humala wins it might take a hit.

Wednesday, April 12, 2006

Filing Extensions

The following helpful article comes from H&R Block.

What to Know About Extension Filing

Taxpayers are increasingly buying time by filing for an extension. As the April 17 tax deadline looms, the IRS expects at least 10 million taxpayers to file extensions this year.

Reasons for seeking an extension vary. Many taxpayers are intimidated by the ever-growing complexity of the tax code. Others are held up by late or missing documents. Still others face major life changes, such as a divorce, a move or a new job, that make timely filing more difficult.

Know the Rules

To avoid penalties, interest and other headaches, taxpayers who need to file an extension should pay close attention to IRS rules. Extensions take time and preparation to calculate. However, with assistance from a tax professional, online programs or software products, extensions can be completed easily and filed correctly, buying the time needed to complete the tax return.

According to H&R Block, the important facts to remember when considering an extension include:

  • Notify the IRS – If a taxpayer files an extension with the IRS (Form 4868) he or she will have until Oct. 16 to complete their tax return. (Taxpayers living and working outside the US have an automatic two-month extension to June 15. They can request an additional 4-month extension by filing Form 4868.)

Preparing Form 4868 isn’t always easy, so the taxpayer should plan ahead. Using a tax professional or a digital solution (online or software) may simplify the task. They may also visit to file an extension electronically or to find the nearest year-round H&R Block office.

  • File later, pay now – The extension to file will not give taxpayers more time to pay their tax bill. Taxpayers should estimate their tax liability and pay as much as they can by April 17. Underpayments are subject to penalties and interest.

  • Use your credit card – The IRS accepts most major credit cards, so taxpayers can charge their taxes owed as part of the extension. There is no IRS fee for credit card payments, although card processors may charge a convenience fee. When H&R Block clients visit an office to file their tax return and find they have a balance due, the standard card-company convenience fee of 2.49% is eliminated if they choose to pay by a Visa® check card. If clients choose to pay with a Visa credit card, the standard 2.49% fee is reduced to 1.99%. To receive this special Visa Credit Card offer, payment must be made in the tax office through There are also other credit card offers available via Shouldn’t we mention the other offers?

  • Year-round Tax Professionals– Using a tax professional to complete a late return can save the taxpayer time and may save them money by identifying deductions or credits. More than 4,000 H&R Block offices nationwide are open year-round.

  • File if you can, even if you can’t pay – If taxpayers complete their returns but are unable to pay the tax due in full, they should file their returns by April 17, and submit with as much of the tax due as possible. The IRS will send the taxpayer a bill or notice for the balance due. Installment agreements are another option. The IRS charges a $43 fee to set up an installment agreement. It will also charge interest and, sometimes, penalties on the unpaid balance.

  • Extend the extension? – Beyond the first extension of October 16, the IRS says it is unlikely a taxpayer may receive another extension. There are exceptions for U.S. taxpayers living out of the country. Taxpayers should consult the IRS or a tax professional if they have questions.

Last-Minute Help is Available from H&R Block. For more information, please visit:

Monday, April 10, 2006


I was cleaning up a bit and found some silver coins I have and a rather small vial of gold.
Gold, and metals in general, have been surging lately and today I spent a little time reading up on gold and silver coins as an asset class. I've been thinking about different asset classes lately because right now I'm in cash and stocks. I've been interested in coins because my dad has a small collection, but I never thought of it as another form of diversification.

The best article I came across of today is this one. It's rather in-depth and it had some surprising statistics. I never new that the annual average return was around 10.5% (based on their studies), but what was also surprising is that the overall returns had a standard deviation of 12.3%
Stocks generally have standard deviations that are a little higher, so coins seem to be more stable.
Another interesting point is that from the start of the study till the end, there were only a few negative years with the worst being down 7.4%. The best year had a return of +48%
I'm not exactly sure how the study was set-up so it can be skewed. For instance, it might only be looking at the rare coins that are put up for auction. It might also be focusing on a limited amount of coins or certain issues. I'm going to try to look for other studies that will back up these figures, and if I do I'll post them.

Added one new link

Thursday, April 06, 2006


I procrastinated long enough and finally finished my taxes. I'm actually going to get a decent amount back because there was a four month period from just before graduation to finding my current job where I wasn't working. That led to my taxable income being fairly low. I should get a decent amount back from federal and state. I plan to do three things with the money: put some into my vacation account, put some into savings, and spend a bit. I might get a new digital camera (lots of great deals going on right now at or I might use some of the money on something else.

I think, for some, this is one of the tough things to balance. How much to save versus how much to spend. I know a few people who spend whatever they have. Sure, they have all the cool gadgets (which will drop 50% in price in months...), but they have no plan for the future. I also knew one guy who was quite old (past retirement) who was still working even though he was worth millions.
Personally, if I was in his situation I would travel and spend time with family. The one thing I keep in mind is that I want to be worth millions some day (need to set those goals high), but I can't bring the money with me after I die! I don't want to just store all my cash, if I could afford to buy a few things I want. I think it will definitely be something that I will keep in mind as I grow older.

It also helps depending on the type of person. For instance, I like gadgets but I'm not the one who goes out and buys them when they first come out. I have a mp3 player, a digital camera, and a laptop. My mp3 player (not an Ipod) was cheaper than the Ipod and had four times the battery life. My digital camera is old, but still works well. My laptop is over a year old, but still working great. I could take my next paycheck and buy a new laptop, camera, and Ipod; but I really don't want to.

Other news
I still need to invest more and I'm thinking about a few other options besides stocks.
My math class is going well and I think I'm balancing work and my other activities fairly well. Although this week has been rough, leading to a lack of sleep.
I mentioned a potential online business and we're hopefully going live within a month. My involvement so far is more for financial guidance and planning. I probably won't discuss this site unless it becomes profitable. Right now it's a learning process for us.

Monday, April 03, 2006

March month end review

Another month has passed and it's time for another review. I'm slightly disappointed by the results, but there's nothing I can do about that now.
I did have a few fairly large expenses this month, which brought down my total. For instance I bought a usb flashdrive for $60, I bought six concert tickets for over $200, I took a trip to Reno and that was a bit expensive, had to pay one fairly large bill, and the last expense was $180 for a new window. My car was unfortunately broken into a week ago and they broke through the little triangle glass in the back. A jacket was stolen and that's about it, and I was surprised by how expensive it was to replace that little piece of glass!

My month end total is $43,493.

This represents a monthly gain of only $528. Based on my take home pay, I managed to save a little over 15% of my paychecks. While I'm glad I had a positive gain, this if pretty low from my 40% savings goal.
Well, this month was full of one-time charges. If I add those back and pretend they didn't happen, my savings rate would have been 45%
I think next month I'll get back on track because I should receive a reimbursement check, money for concert tickets, a few things on eBay, and possibly a few other items.