Sunday, July 30, 2006

An Exhausting Weekend

I'm going to make this weekend update quick, because frankly, I'm dead tired.

So, Friday, QB and I went to a BBQ, which was followed up with a party. It wasn't a big party, maybe a total of 18 people showed up. But, there was more hard liquor than there was beer, and it was roughly a 2:1 female-male ratio, so as you can imagine, it was pretty nuts. The food was great... there was all sorts of meat and grilled corn and asparagus along with plenty of side dishes. Lots of good times and lots of booty-shaking (to the music).

Everyone pretty much passed out by 2am. I didn't really pass out from drinking or anything, mostly just from being exhausted due to lack of sleep. Anyway, we left early in the morning before the sun had come up.

Saturday was a day of rest. Sunday was going to be a big day.

Anyway, that brings us to today. Got up early in the morning and headed to Cache Canyon for self-guided Level 3 whitewater rafting. It's really a lot of fun. Level 3 rapids are pretty much the highest level that you are allowed to do on your own. We got totally drenched and QB was thrown out of the raft once. She totally freaked out, but everything was fine. Some guy did require a trip to the hospital, since he dislocated his shoulder pretty badly when he was flung from his raft and onto some large rocks. After nearly 4 hours of fighting the rapids and all the muscling, we finished. The entire journey was only 9 miles, but it wasn't easy... it took 4 hours after all. It was an awesome time. If you've never tried rafting before, I highly recommend it.

We learned from our previous rafting experience, and we brought a change of clothes (including shoes). After getting into some dry clothing, we headed off to Cache Creek Casino to play some poker and have dinner. I played in a ridiculously soft 4/8 game with full kill. It was the biggest game that they spread, but man, talk about a group of players that had absolutely no clue. The players there made Bay101 players look like pros. The annoying thing about Cache Creek poker is their cards. They use the Jumbo Sized print cards, which makes it difficult to read your hand without peeling your cards way up. Pretty annoying. Anyway, won about 8 bets in a couple of hours, and then off to the buffet we went.

The food at the Cache Creek Buffet is decent. While it wasn't bad, it probably was not worth the $24. We totally stuffed ourselves with food, and then made the drive home. And, two and a quarter hours later, here we are... sore, sunburnt, and beat.

Thursday, July 27, 2006

Grammar and the Google Test

I've been meaning to blog briefly about this for some time, and well, I'm conducting a few tests on my system right now and so I have some free time.

Have you ever unsure about proper usage of a common phrase or colloquial expression? Sometimes, you can think of several ways to say it, but you are pretty sure only one is correct.

Here are a couple of real-life examples that came up recently.

"Splitting Image" or "Spitting Image"?
"Keeping It Real" or "Keeping It For Real"?

Both times someone asked me about them, and even though I could answer them, I figured I'd tell them a quick-and-easy way to find out for themselves. I told them about the Google Test. It's really quite simple.

Use Google to search for the exact phrase by placing quotes around it.

Splitting Image vs. Spitting Image

Keeping It Real vs. Keeping It For Real

What you see is that searching for "Splitting Image" returns 40,000 results, while "Spitting Image" produces nearly 1.8 million results. "Keeping It Real" returns 1.2 million results, and "Keeping It For Real" comes up very short with 11 results.

This simple test will suit your needs for almost all cases where you have to decide between similarly worded phrases or colloquialisms. Just another way to use Google's far-reaching search powers.

Recently, I had a conversation about the incorrectness of saying "close the light." It doesn't make much sense... "turn off the light" is obviously the correct way to say this. The Google Test does not fail us here. "Close the light" returns just under 14,000 results, and "turn off the light" gives us a whopping half million.

Tuesday, July 25, 2006

Quick Update

I sold August $40 Calls on the new shares of Form Factor (FORM) that I picked up yesterday. Got filled at $3.10 a share.

Basically, I am a bit nervous about the upcoming earnings release this week (July 27). I am basically giving myself a $3.10 buffer. So, right now the new FORM shares carry an effective cost basis of $34.45, but have an upside cap at $40. The recent Broadcom (BRCM) dump gave me cold feet.

In any case, I'm still holding the original FORM shares in the Long-Term portfolio without any options coverage.

** Edited to Add **

Good news has been pretty rare these last few months... so I better take the opportunity to throw out a couple positives here. Altria Group (MO) did well last quarter and in their earnings call, they guided above expectations. They were able to increase their U.S. market share in cigarettes to 50.5%. The shares are now at an all-time high trading at over $80.

Chevron hit an all-time high today at $67, as well.

** Yet Another Edit **

So, for shits, I put out a small buy order on FORM in the afterhours market at $38.65. This is a full $1 below the closing price. I did not expect the order to fill... but it did. So, I guess I've got me some more of it.

Zip-It, Poker, and Stocks

I just got in not too long ago from Bay 101. The game was juicy as usual. Not too many interesting hands though... most were fairly straightforward. Only got rivered by 3-outers twice, and my aces held up. In just over 3 hours, I had zero flush draws, and two straight draws. I hit one of them, and was paid off nicely.

Anyway, this is the second time I've played poker since before the Ixtapa trip. At this moment, I've got $0 online. I took out all my online poker funds and used the cash for some of the recent stock purchases. In a couple of years I will either look like a double-idiot or a winnah. It might end up being pretty stupid of me to remove one of my income streams.

Today was a decent day in the market. Lots going on... tomorrow morning, Altria (MO) reports its earnings. After the market closed earlier, Kraft announced its earnings, which were quite strong. In the afternoon, another portfolio holding, Linear Technology (LLTC), reports its earnings.

Now, let me tell you about the clog removal product called Zip-It. It's just the most effective way to get your drains working again. I am a big fan. I've used their products for the past few years, and just this past weekend, I needed to unclog a sink. So, I hit up Home Depot, and got me a Zip-It, and the sink is draining properly again after pulling out some pretty nasty crap. Okay, enough free advertising.

Have a good night.

Monday, July 24, 2006

True to Form

Quick update...

Added to Form Factor (FORM) position at 37.55 after last week's decline following S&P's outlook cut on Semiconductors. FORM produces wafer probe products, and any slowdown in the Semis industry could affect them. While their margins may be hurt slightly, I think their technology edge should provide a reasonable buffer going forward.

Market is moving sharply higher today. Been busy this morning, so I haven't been paying much attention to the day's news.

Friday, July 21, 2006

Air Conditioned Stupidity

I try my best not to be a complete moron for the most part. But, today I realized that I'm just incredibly stupid.

So, I've lived in this apartment for almost half a year already. Recently, the summer heat has really hit hard, and I've been sweating it out. It sucks, but you just man up and deal. Turn the fan on and open the door and windows. Take multiple showers to keep cool.

Today, I learn that I have an in-unit air conditioner. For some reason I always assumed that it was only a heater. And, QB always assumed that I was just trying to conserve energy by not using the AC and using other means to keep cool.

Earlier today, I was complaining a bit to QB about not having AC at home. She was totally confused and told me about my AC unit. I then flat out told her... "What are you talking about? I don't have any AC at my place." I was proven wrong. So, I had to eat my words pretty badly. Constantly being reminded of my stupidity is a small price to pay, I guess, for staying cool during this heat.

Wow, I'm an such idiot. So, here I am tonight chilling (literally) for the first time in a while. I need to take a few lessons in being more observant. Thought I'd share this embarrassing moment with all of you.

Portfolio Update

Well, the Trading Portfolio has been taking it on the chin as of late. Dell Inc. (DELL) dropped an earnings warning bomb today, and I dumped it this morning for a substantial loss at 19 and change.

Currently hold Broadcom (BRCM) at a cost basis of 25.72, but following last night's 'non-earnings' report, I am down on that position quickly.

In the Long-Term Portfolio, we have Capital One (COF) that failed to meet Wall Street earnings expectations, and that sent shares tumbling. This also affects the Northfork (NFB) position, as they are being acquired by COF.

That's all for now. Will continue to look out for opportunities in this difficult market. At least I recently bought a nice bottle of scotch in case things get really rough.

Thursday, July 20, 2006

Earnings Today

Feeling frisky... did a buy-write on Broadcom (BRCM) for a debit of $25.72. Bought shares at 26.52, sold 27.50 calls at 0.80.

BRCM reports earnings after the market closes today. Also, reporting are Amgen (AMGN) and Capital One Financial (COF).

This morning, International Gaming Technologies (IGT) reported, and it did well sending shares higher. Apple (AAPL) surged in a big way as a result of their strong earnings reported last night.

Let's see how things pan out.

Wednesday, July 19, 2006

Strong Apple Earnings and More

From Dow Jones Newswire:

Apple (AAPL) said it earned $472 million, or 54 cents a share, for the period ended July 1, up from $320 million, or 37 cents, a year earlier. Oppenheimer added that Apple's gross margins rose to 30.3% from 29.7% a year ago.

The results topped the average estimates of analysts surveyed by Thomson First Call, who expected 44 cents a share.

Revenue climbed 24% to $4.37 billion, up from $3.52 billion but just shy of Wall Street expectations for $4.4 billion.

Additionally, eBay (EBAY) and Motorola (MOT) earnings were strong. This should bode well for the market. We needed it after that Yahoo (YHOO) bomb. Intel (INTC) didn't do that hot, but everyone was expecting that for the most part.

General Dynamics (GD) kicked major butt as well. Will we finally have a market recovery? I certainly hope so.

And, to top it off, Bernanke had good things to say about inflation and interest rates. Looking for a solid follow-through tomorrow. Finally, a day where I'm not frustrated about the market's pissy mood.

Sunday, July 16, 2006

Sunday Splash

I just got back from Raging Waters -- San Jose not long ago. We got there at 3pm for the special discount price, and also for the shorter lines. I haven't been to a water park in many years... I was a teenager the last time. So, I really didn't know what to expect as an adult.

I guess I'm still a kid at heart. I really had a great time, and most of the slides were a lot of fun. My favorite one was the Dragon's Den, which I think is their newest attraction. It's got a pretty steep drop inside a tunnel, and then you're spit out into this watery vortex that takes you around in circles before you are eventually sucked down into the bottom.

Anyone in the Bay Area that's looking for some water-filled fun, I highly recommend the Raging Waters right next to Lake Cunningham in San Jose. The 3pm discount price is only $19 a person. Food inside the park isn't outrageously priced either. We enjoyed a brownie fudge and oreo cookie sundae for less than $5. It was large and could have easily satisfied three people. I also noticed that burger meals were going for $4-6, which isn't bad for an in-park price.

Thursday, July 13, 2006

Quick Update

The military action taking place in Israel and Lebanon certainly trumps any other news today. It's pretty damn serious over there.

But, here's a quick update on the long-term portfolio: Initial HD position established at $33.85. While this is roughly one-third of what I intend as a full position, I will now enter into a wait-and-see mode. As time passes and more is information is released about the economy, housing, and markets, I'll make a decision as to whether or not I will add or not.

Wednesday, July 12, 2006

A Random Gift

So, I found a 'You weren't home to sign for the delivery' UPS slip at my door on Monday night. Not knowing what the package was, since I had not ordered anything, I asked UPS to hold the package for me. I had until the end of the week to pick it up at my convenience.

What a hassle for an unknown package.

Well, I just got back from picking it up... it was definitely worth the trip to the UPS Service Center. Turns out it's a 30GB iPod Video from the brokerage that handles my trading portfolio, TD Ameritrade. Why did they send me this gift? I'm not really sure.

Perhaps there was some promotion that I lucked into. All I got was a form letter saying thanks for being a valued client, and thank you for your recent deposit. Now, I regularly deposit (and withdraw) from my trading account, so I did not do anything special. I'm not even sure which deposit(s) triggered this act of gift-giving. But, I don't care... I've got an iPod Video.

The next question is whether or not I really have a use for one, or if the gift serves me best in the form of eBay-generated cash. I'm such a luckbox.

Tuesday, July 11, 2006

Earnings Season In Effect

Earnings season kicked off on Monday with Alcoa's below-expectations report. We should always keep a watchful eye on earnings releases as they will give us insight as to how well the economy is really doing.

Here's a list of earnings release dates for the next month covering those companies that I feel are important to watch, or of other interest to me (i.e. I'm tracking them). I've also included those companies that are currently held in the long-term and trading portfolios (in bold). In each listing, there are two EPS numbers. The first is the current Reuter's estimate (or, consensus estimate if Reuter's is not available), and the second is previous year's number.

This might be a handy list, so you might want to just bookmark this page.

Wednesday, July 12

Infosys (INFY) : 0.55 / 0.43

Friday, July 14

EMC Corp. (EMC) : 0.14 / 0.12
General Electric (GE) : 0.47 / 0.44

Monday, July 17

Citigroup (C) : 1.05 / 0.91
MacDonald's (MCD) : 0.56 / 0.51

Tuesday, July 18

International Business Machines (IBM) : 1.29 / 1.12
Johnson and Johnson (JNJ) : 0.97 / 0.93
Merrill Lynch (MER) : 1.52 / 1.14
United Technologies (UTX) : 1.01 / 0.86
Yahoo! (YHOO) : 0.16 / 0.13

Wednesday, July 19

Apple Computer (AAPL) : 0.44 / 0.38
Bank of America (BAC) : 1.09 / 1.08
eBay (EBAY) : 0.24 / 0.22
General Dynamics (GD) : 0.99 / 0.85
Intel (INTC) : 0.13 / 0.33
Motorola (MOT) : 0.29 / 0.26
Qualcomm (QCOM) : 0.42 / 0.28
St. Jude Medical (STJ) : 0.39 / 0.38

Thursday, July 20

Advanced Micro Devices (AMD) : 0.22 / 0.03
Amgen (AMGN) : 0.94 / 0.88
Broadcom (BRCM) : 0.24 / 0.23
Capital One Financial (COF) : 2.04 / 2.03
Google (GOOG) : 2.21 / 1.19
Halliburton (HAL) : 0.98 / 0.76
International Gaming Technology (IGT) : 0.31 / 0.32
Microsoft (MSFT) : 0.30 / 0.32
Nokia (NOK) : 0.29 / 0.23
Pfizer (PFE) : 0.48 / 0.46
SAP AG (SAP) : 0.37 / 0.32

Friday, July 21

Caterpillar (CAT) : 1.41 / 1.08
North Fork Bank (NFB) : 0.47 / 0.51

Monday, July 24

Kraft (KFT) : 0.48 / 0.47
Merck (MRK) : 0.65 / 0.62
SanDisk (SNDK) : 0.45 / 0.37
Sun Bancorp (SNBC) : 0.18 / 0.24
Texas Instruments (TXN) : 0.46 / 0.42

Tuesday, July 25

3M (MMM) : 1.14 / 1.09
Altria (MO) : 1.37 / 1.32
Amazon (AMZN) : 0.07 / 0.12
Flextronics (FLEX) : 0.16 / 0.17
Linear Technology (LLTC) : 0.38 / 0.34
ST Microelectronics (STM) : 0.18 / 0.04
U.S. Steel (X) : 2.35 / 1.90

Wednesday, July 26

Allegheny Technology (ATI) : 0.91 / 0.82
Boeing (BA) : 0.77 / 0.79
Conoco Phillips (COP) : 2.74 / 2.21
General Motors (GM) : 0.40 / -0.56
Lucent (LU) : 0.04 / 0.05
Moody's (MCO) : 0.55 / 0.49

Thursday, July 27

Boston Scientific (BSX) : 0.27 / 0.48
Dow Chemical (DOW) : 1.18 / 1.30
Exxon Mobil (XOM) : 1.61 / 1.23
Form Factor (FORM) : 0.28 / 0.12
Fortune Brands (FO) : 1.50 / 1.45

Harrah's (HET) : 1.02 / 0.90
KLA-Tencor (KLAC) : 0.58 / 0.52
WebEx (WEBX) : 0.33 / 0.29

Friday, July 28

Chevron (CVX) : 2.16 / 1.76

Monday, July 31

Metlife (MET) : 1.14 / 1.17

Tuesday, August 1

Eastman Kodak (EK) : 0.24 / 0.53
Equity Office Properties (EOP) : 0.55 / 0.59
International Paper (IP) : 0.22 / 0.21 (NTES) : 0.27 / 0.21
Verizon Communications (VZ) : 0.63 / 0.63

Wednesday, August 2

Automatic Data Processing (ADP) : 0.46 / 0.44
Garmin (GRMN) : 0.93 / 0.68
Procter & Gamble (PG) : 0.54 / 0.56

Thursday, August 3

Cardinal Health (CAH) : 0.87 / 0.89
Deb Shops (DEBS) : 0.34 / 0.46
Univision (UVN) : 0.31 / 0.24

Friday, August 4

Maxim Integrated Products (MXIM) : 0.38 / 0.37

Monday, August 7

Texas Roadhouse (TXRH) 0.13 / 0.11
UT Starcom (UTSI) : -0.45 / -0.45

Tuesday, August 8

Cisco Systems (CSCO) : 0.28 / 0.25
Walt Disney (DIS) : 0.44 / 0.42

Wednesday, August 9

Newscorp (NWS) : 0.24 / 0.23

Thursday, August 10

Kohl's (KSS) : 0.64 / 0.54

Friday, August 11

Concurrent Computer (CCUR) : -0.01 / -0.02

Monday, July 10, 2006

Home Depot Looking Cheap

For those who have been following the management of my personal portfolio, you know that I have been in a selective buying mode as the markets continue to move lower. Recent purchases have done alright, but the overall portfolio has endured some pain... nothing can really be done to escape a broad-based market downturn when you have a well-diversified portfolio.

In any case, I've been eyeing shares of Home Depot (HD). The shares are trading at levels that I believe are simply too cheap. My opinion is that shares are severely undervalued, and while they may continue to fall in the near-term, there is a sufficient cushion embedded into the current price that the reward far outweights the risk.

The company continues to generate monstrous operational cash flow. Operating cashflow sits at roughly $6.9B annually. In addition to a nice increase in its dividend (shares are currently yielding ~1.7%), HD has also been buying back its own shares. The shares have been punished as many are overweighting the effect that the housing slowdown and the expected consumer spending pullback will have on the company's earnings.

It is true that as new home sales decline, Home Depot will suffer somewhat. But, a large part of Home Depot's sales are due to home improvement and renovation. These are likely to remain strong despite fewer new home sales. Additionally, Home Depot Supply, which currently represents 5% of Home Depot's total sales continues to show incredible amounts of growth... triple digit growth.

A couple of non-fundamental issues are clouding the company at the moment. First, is the ongoing bickering over the CEO's pay. Yes, Nardelli is probably overpaid. Yes, I think people should be aware of his overcompensation. But, really... $25MM is hardly material to a company generating the sales numbers of Home Depot. Is this something that should be followed? Definitely. But, does it actually affect how the company is valued? Probably not.

A executive-related issue facing the company is the recently announce resignation of Tom Taylor. Taylor was the Executive Vice President of Merchandising and Marketing. From my research, I learned that he was a strong leader who basically got the job done. He had a cutthroat attitude, which made him a formidable foe. Additionally, he always made sure to take care of even the smallest problems, sometimes personally. While this is clearly a negative, perhaps new blood will inject new ideas into the company and help the company in different ways.

Last fiscal year, Home Depot made $2.72 per share. For the current fiscal year, a conservative estimate of Home Depot's earnings would be right at around $3.00 a share. This is what CSFB currently estimates HD's earnings, which accounts for a slight decrease in same-store sales and minor compression of margins. CSFB also believes that at current depressed levels, the market is embedding a dismal EPS of $2.92.

The fact is, Home Depot is trading at less than 12 times the current year's estimated earnings. It should not be trading so cheaply. As mentioned earlier, the company has been increasing their dividends and buying back shares. This is indicative of the quality of earnings that the company produces. You can play with the numbers all you want, but in the end, a dividend distribution cannot be faked.

Currently trading at $35, I think I'm going to start building a position in Home Depot starting this week. The shares might not do much in the near-term, but that's fine. I don't mind building a solid-sized position over the next 2-3 months.

So, who's with me?

Saturday, July 08, 2006

Congratulations PetDander!

Just wanted to shout out a Congratulations to PetDander for making the money in World Series of Poker 2006 Event #11: $1500 Buy-In Limit Hold'em.

Thursday, July 06, 2006

Market Update and Mighty MOuse

So far today, individual portfolio holdings have made some strong moves... as a whole, the portfolio is fairly flat. Not really good to be flat when the market is up though.

Anyway, here are three of stocks that made large moves today... two to the downside, and one to the upside.

Debs Shops (DEBS) - The company is having some difficulties in growing their sales figures. They are now expecting small decreases in Same Store Sales for the rest of this year, and even with sales from new stores offsetting the decreases, they projected a sharply lower full-year earnings range of $1.40 - $1.50, compared to its previously guided range of $1.85 - $1.90. Shares are down sharply and are now trading at around the $22 level. I will not be adding to the position. If anything, I might dump it and take the loss. My timing was just bad on this one... should have waited for their monthly sales numbers to come out first before jumping in. Thankfully, it's not too large position.

First Marblehead (FMD) - Shares are off over 10% today after negative comments came out this morning from a brokerage house. From Briefing: Friedman Billings says they have confirmed that BofA is now outsourcing new private student loan products to a competitor of First Marblehead (FMD 55.59). While it is impossible to determine the impact to earnings, firm says the fact that one of FMD's long standing partners chose a competitor raises issues regarding the co's vulnerability to competitors and pricing.

Talk about jinxing myself after I sang a song of celebration after the stock became a quick double for me. The position has grown enough to represent roughly 5% of the portfolio, so this drop hurts. If it weren't for another big gainer in the portfolio, today would have really sucked.

Altria Group (MO) - Go Florida! Hip Hip Hooray! Just before 11AM EST, the Florida court ruled out a $145B award against cigarette makers. This was the biggest legal risk to Phillip Morris. Now, all the analysts are predicting that the expected company break-up, which includes the spin-off of Kraft Foods, will happen fairly soon... maybe early next year.

And, with this single ruling, my day went from quite bad to really flat. Even though percentage-wise the move was smaller than the two stocks highlighted above (~5% vs ~12%), the gain in MO today more than wiped out the losses. It's nice when the largest position in your portfolio comes in to save the day in a Mighty Mouse sort of way.

For those who play poker, but don't know what today's portfolio gyrations would feel like, here's my analogy. Okay, so you go and sit down at the card table, and immediately you are beat up. An ill-timed 3-barrel bluff fails miserably, and Debbie, the local seamstress and part-time hustler, scoops up a large pot that should never have gotten that large in the first place. The very next orbit, you lose with your Aces to Mr. Billings' Queens when he spikes his set on the river and forces you to pay him off. And, after a couple of hours your chip stack is fluctuating only slightly and so you're still significantly down, when you're dealt Jack-Ten suited. You flop an open-ended straight flush draw... you're gonna hit and win a decent pot, or you're going to lose a lot as you're tied to this super-draw. Well, you turn the nut straight and the river gives you a straight flush. Betting gets wild, and you are paid off handsomely when an ex-smoker from Florida turns over Ace-rag suited for the second best flush. Winning a single monster pot to get back to even. That's pretty much how this day's been.

Wednesday, July 05, 2006

Microsoft Excel Rant

Ok, it's almost 10pm, and I'm still at work. I'm going to take a break from my tasks and bitch a bit about Microsoft Excel. For some reason, Excel just loves hard coded maximums.

Here are the top 3 things about Excel that piss me off. Maybe I'm just a moron and don't know how to get Excel to do this, but here's my current Top 3 list of annoying Excel properties. If anyone knows how to get around some of these limitations, please share.

1) 64K Row and 256 Column Limit - I mean seriously... this is f'ing annoying.

2) The inability to set more than a single custom delimiter when opening up a text file. For example, I have data output files that are delimited by commas, and #'s. But, I can choose to turn on the built-in comma-delimiter, but then I am only allowed to specify either the # or the $ as my custom delimiter. So, now I have to do a search and replace and replace $'s with #'s and specify the # as the customized one. Incredibly lame.

3) Sorting data only allows me to choose 3 fields to sort based on. Unfortunately, I have to deal with data that has as many as 20 fields, and needs to be sorted using all the fields. It is ridiculous for me to have to come up with an encoding of the 20 fields in order to get Excel to sort it the way I need.

Argh. F* Excel.s, and #'s. But, I can choose to turn on the built-in comma-delimiter, but then I am only allowed to specify either the # or the $ as my custom delimiter. So, now I have to do a search and replace and replace $'s with #'s and specify the # as the customized one. Incredibly lame.

3) Sorting data only allows me to choose 3 fields to sort based on. Unfortunately, I have to deal with data that has as many as 20 fields, and needs to be sorted using all the fields. It is ridiculous for me to have to come up with an encoding of the 20 fields in order to get Excel to sort it the way I need.

Argh. F* Excel.

A Pascal's Wager of Sorts

So, North Korea fired off some test missiles... shook up the markets a bit. Their nuclear ambitions might one day be realized, and maybe they'll use their newly acquired nuclear power to do some really nasty stuff.

Anyway, I was thinking about this a little bit last night before I went to bed. Say that in the future, North Korea (or some other nuke-enabled nation) threatens the U.S. and the rest of the world, which in turn causes a collapse in the financial markets. Then, it would seem that you should be going nuts and buy heavily into equities or any other investment vehicles that suffered devastating declines due to the nuclear threats.

Just as Pascal laid out in his faith-related decision matrix, the decision matrix for global nuclear devastation is similar.

If the nuclear threat goes away for whatever reason, then the financial markets should recover in a large way, which would benefit those who invested in a collapsed market. If the nuclear threats eventually lead to a truly global-scale nuclear war, which would result in armageddon, then you've really lost nothing, since you'd be dead or you'd be living in a world that is for the most part, dead. Even ownership of gold or maybe even water would not be honored. The guy with the gun pointing at your head would be the ultimate consumer... surely, not you (unless you had the gun of course).

Just a random thought.

It's an X360 Weekend

Well, other than blogging the brief Portfolio Checkpoint, I basically spent the weekend playing the Xbox 360. I got a couple of new games... Tom Clancy's Ghost Recon: Advanced Warfighter and Dynasty Warriors 5: Empires.

I guess the Dynasty game got mixed reviews. But, the negative critics were simply underwhelmed, because it is similar to the earlier versions. Being a first time player, I really enjoy the game. It's a decent mix of strategy and hack-and-slash.

Ghost Recon... WOW. It's pretty friggin' awesome. Really realistic and awesome all around. I really suck at it, because there's just a lot to learn about the game and how to play it. This game will end up costing me a lot of money, but whatever. Poker is going on hold while I play this game. I haven't tried playing multi-player online yet, but I will soon.

I did end up watching Superman Returns this weekend... it was alright. Not bad, but certainly not anything as cool as Ghost Recon. I might have been a ton more impressed if I had watched in at an IMAX theatre. Actually, what might have been more impressive is if I had invested in IMAX Corp. back in September of 2001 at 60 cents a share... would be a nice 15-bagger at its current price of $9. October 12, 2000 was a sad day in that company's history. That day, the company's stock plunged to $4.28 from $14.50 following a serious earnings warning. It continued to fall to the 60 cent range, and has since recovered somewhat. Okay, sorry for talking stock.

Tuesday, July 04, 2006

Portfolio Checkpoint - 2006 Q2

The second quarter was not a fun one for investors, unless they were playing the short side. My portfolio took a hit along with the rest of the market, but I did manage to pick up shares in a few companies during the downturn. Hopefully, we will see that I picked them up at bargain prices. Time will tell.

Here are my current long-term holdings along with the percentage that each position makes up in the overall portfolio as of the market close on June 30, 2006.

Edited to fix erroneous Change column. Thanks for pointing out the problem, Spud.

Company Ticker Q2 Q1 Change
Altria Group MO 18.2% 18.4% -0.2%
Harrah's Entertainment HET 9.6% 11.1% -1.5%
Student Loan Corp. STU 7.5% 9.1% -1.6%
General Electric GE 6.2% 6.9% -0.3%
American Eagle Outfitters AEOS 6.1% 5.7% +0.4%
Constellation Brands STZ 5.6% 6.0% -0.4%
International Gaming Technology IGT 5.2% 5.1% +0.1%
First Marblehead Corp. FMD 5.1% 4.1% +1.0%
Fortune Brands FO 4.8% 3.9% +0.9%
Eastman Kodak EK 4.4% 5.5% -1.1%
Form Factor FORM 4.0% * * * * * *
Capital One Financial COF 3.6% 3.6% 0.0%
North Fork Bancorp. NFB 3.4% 3.4% 0.0%
Linear Technology LLTC 3.0% 3.4% -0.4%
Amgen AMGN 2.9% 3.5% -0.6%
Chevron CVX 2.8% * * * * * *
Equity Office Properties EOP 1.9% 1.8% +0.1%
Dow Chemical DOW 1.8% 1.9% -0.1%
Deb Shops DEBS 1.6% * * * * * *
Sun Bancorp. SNBC 1.5% 1.9% -0.4%
Kongzhong KONG 0.8% 1.3% -0.5%
St. Jude Medical STJ 0.0% 2.0% -2.0%


Percentages do not account for any cash held in the portfolio.

St. Jude Medical (STJ) was sold off a couple weeks ago in order to purchase more Fortune Brands (FO).


Some good things did happen in this painful quarter... so, it wasn't the worst quarter ever, just a bit painful.

First Marblehead (FMD) became an official 'double' at its current closing price of $57.15 (first purchased last September at $28 flat). A 1-bagger in less than a year is more than I could have hoped for. I'll cherish the moment, as these types of moves are atypical for the types of stocks I usually invest in.

Wafer probe card company, Form Factor (FORM), was a recent pick up during the market downdraft. It is up a whopping 28% in six short weeks.

The other two new additions to the portfolio during Q2 were Chevron (CVX) and Deb Shops (DEBS). CVX is currently up 7%, and DEBS is down 8%. Lucky for me, Chevron larger than DEBS by a 3 to 2 ratio. I had been eyeing DEBS for way too long, and was able to buy it cheaper than I had hoped. Unfortunately, it continued to fall further.

The smallest positions of the portfolio continued to lag. My smallest stake is in Kongzhong (KONG), which is now down a sizeable 33%. But, the position is much too small to worry about. I worry a hell of a lot more about the top five holdings (MO, HET, STU, GE, AEOS), which make up nearly 50% of the portfolio.

I guess that's the portfolio checkpoint.

Current Trading Portfolio Holdings:

Apple Computer (AAPL)
Dell Inc. (DELL)
eBay Inc. (EBAY)
Sept $16 Calls - PowerShares Water Resources (PHO) - Palisades Water Index ETF