Tuesday, October 31, 2006

Say Cheese!

I was pretty anxious this morning waiting for the Eastman Kodak (EK) earnings release. Now, I can let out a sigh of relief. Kodak managed to post a profit of 0.44 a share excluding one-time items. This was 25 cents ahead of the consensus estimates. We're not out of the woods yet, but it looks like the ship is now heading in the right direction. I've bet a lot on this turnaround, and maybe, just maybe this is the start of something big. I was fully ready to dump the entire position today had the numbers been disappointing. Just glad that I don't have to make that decision... it would have been a sad day.

In other parts of the long-term portfolio, Equity Office Properties (EOP) also posted earnings today. Excluding non-recurring items, they came in 2 cents ahead of estimates at 0.53. They did lower this year's earnings numbers, but guided their numbers in-line for FY2007.

That's it for now... too bad I never did move on Nuance (NUAN). I see they're ticking higher today after increasing their outlook for the 4th quarter. Still on the watch, but I'm not going to be chasing this issue.

*** Edit ***

I managed to flip some shares on a day trade of Akamai (AKAM) for over $1 this morning.

Added Advanced Micro Devices (AMD) to the Trading Portfolio at $21.20 today as well.

Monday, October 30, 2006

Labyrinthine Maize

Last night, QB and I hit up the MAiZE over at the Ardenwood Historic Farm. Neither of us had ever been there before, and we figured that we might as well check it out since we were planning on grabbing some burgers at Fuddruckers in Union City. The burgers were great. I've always loved Fuddruckers, even back when I lived in Laguna Beach. The only thing that was disappointing was that they no longer served ostrich burgers. But, the cashier lady told us that the Emeryville location still did... but, that's just too far away. After finishing up our food, we went off to the cornfield.

So, we get there around 7:15, and finally entered the maze around 7:30. You really do get lost in there as the cornstalks are 8 to 10 feet tall. And, to make things even more difficult, we didn't think to bring flashlights. There were a lot of people there, lots of younger kids, but quite a few adults as well. From time to time you run into some signposts with hints, but I personally didn't find them too helpful. Anyway, we finally made it out of there about 45 minutes later. Not sure I'll do it again, but if I do, I'll be sure to wear warmer clothes and bring a flashlight.

Saturday, October 28, 2006

Holy Shit! It's a Viking!

Last night, we had planned on going out to a costume party in Palo Alto. Then, we got invited to a house party that was a bit closer, so it just made more sense to go to that one. We figured if the house party was no good, we always had our original plan to fall back on.

I was going as Holy Shit. I am basically wrapped up in brown fabric without any armholes with angel wings made of toilet paper and a halo. Also, there were random strands of toilet paper attached to give the poopy effect. QB went as a sexy Viking. My costume actually held up okay, but I'll have to do some rework on it before the next party and before our office costume party. I'm going to add some corn kernels to the fabric, and possibly buy a cheap made-for-Halloween cross to wear. I've decided to stop being so damn paranoid and just post up pics without my usual blurring out of faces.

Anyway, we get there around 9, and the party is already in full swing. Everyone's drinking, dancing, and having a ball. You could see lots of extra provocative costumes everywhere, since they had a contest just for that. The winner was a lady with a super skimpy Strawberry Shortcake outfit. The second place winner was a voluptuous lady with everything hanging out. And, third place winner wore a sexy flight attendent that I'm sure would outdo any of the attendents on a flight on the now defunct HootersAir line.

But, the craziest thing happened that night, and it really goes to show how small a world we live in. So, I ran into a high school buddy that I haven't seen since we graduated... over ten years ago. It was really random. I was chatting with a few people while hidden inside my costume, and this guy in a Tyvek costume came by to chat, and I totally recognized him. And, I asked what his name was... he replied Edward. Back in school, we called him Eddie. I then gave him his last name and asked if he ever lived in Riverside. He confirms, and I poke my head out of my costume, and the dude tripped out.

There was a lot of catching up, and man that was nuts. So, anyway, the party was still going on strong when we left. I'm getting too old to party hard on Fridays after a long day at work.

Have a Happy Halloween party-filled weekend!

Friday, October 27, 2006

Halloween and Earnings

Well, I spent a fair amount of time last night making my Halloween costume. It's about 90% done... I'll put up pictures later. Man, I really hope it doesn't fall apart either, it's kind of fragile. I now have proof that I possess zero sewing skills, and I really suck at crafts.

Anyway, I just have to get it in wearable condition before the parties this weekend. Tonight, QB and I are heading out with some friends to what I believe is a private party over at the Blue Chalk Cafe in Palo Alto. I've never been there, so I have no idea what to expect.

Okay, onto the good stuff... all of you non-stock peeps can tune out now.

So, today the GDP number came in pretty low at 1.6%. Economists had forcasted a more robust 2.1%. Not good, but we'll see how the talking heads spin it.

Two holdings in the long-term portfolio released earnings this morning... Fortune Brands (FO) and Chevron (CVX). I wasn't too worried about Chevron's earnings after the strong showing by Exxon (XOM) yesterday. However, I was a bit worried about Fortune, especially since Constellation didn't have a strong showing in the alcohol department, and potential problems in their home and hardware brands due to housing slowdown related issues.

Anyway, let's get to the results... Chevron came in stronger than expected. Fortune missed their estimates by 3 cents, but they did manage to come in ahead of expectations on revenues. Their wine and spirits business did very well, which offset some of the weakness in the home brands department. I don't expect the miss to hurt them too much, and I still see a lot of potential in the company. If it does dip on this report, and it continues lower I will consider adding to the position.

Akamai (AKAM) got a few target price increases today... Piper boosted its target from $45 to $48. Merriman gave a $56-62 target price range. Deutsche Bank raised their target from $55 to $58. But, the stock is trading lower today, so I should be able to exit this short-side gamble profitably. Hopefully soon, maybe even in the pre-market. Market opens in about 20 minutes, and I think the sentiment is negative today due to the GDP figure. So, I'll probably just dump it during the normal trading session.

*** Edit ***

Covered AKAM short at 48.53. Small profit, but enough to pay for dinner for a week or so.

Thursday, October 26, 2006

Quick Portfolio Update

I said I would be adding to the Form Factor (FORM) position at $37.50 yesterday evening. I lied. I increased my existing position by 50% with a purchase just minutes ago at $38.48. This is actually averaging up, and not down. The cost basis of the position now sits at $37.36. I'm going to try and sell some calls on the entire position as a way to trade potential upside past $40 for a reduction in effective cost basis.

** Edit #1 **

Just noticed that FORM has bounced a bit, and my order to sell the calls was filled... sold the FORM $40 Nov Calls (AFUKH) at $1.40. This brings down the cost basis to 35.96 with a cap on the upside at 40.

** Edit #2 **

Sold calls on the Broadcom (BRCM) position in the trading portfolio. Just got filled on an order to sell the Nov $30 calls at $0.95. Effective cost basis is now $27.25 on this position... Shares put to me at $30 less put premium collected $1.80 less covered call premium collected $0.95. Upside capped at $30.

** Edit #3 **

GAMBLING... sold a small position of Akamai (AKAM) short at $49.46. Following in the footsteps of Gaamblor. Even if it moves big either way, won't really amount to too much, but gambling is fun.

Wednesday, October 25, 2006

Poor Form and Breaking Up

Well, I'm sitting here waiting for an installation of Windows CE 5.0 SDK to complete. But, it sure is taking forever. So, I guess now is as good time a time as any other to talk a bit about some recent happenings related to the long-term portfolio.

Today, Altria (MO) announced its earnings. It was a mixed bag really... they missed analsyts' earnings estimates, but they came in well above the concensus in the revenue department. They also guided their next quarter's numbers higher, which is always nice to hear. But, I think the biggest announcement today was that the company has set a date for finalizing breaking-up with Kraft. Everyone's been waiting a long time for this, and now it's finally going to happen. So save the date... January 31, 2007.

Form Factor (FORM) announced its earnings today, and it wasn't so hot. The earnings were in-line with expectations, and their revenues topped estimates. Unfortunately, they guided lower on next quarter's revenues, while guiding higher on earnings. The stock got clobbered as a result.

I am not sure exactly what to make of it, but it might be a buying opportunity. In fact, I put in an order to do some afterhours purchasing at 37.50, but my order hasn't filled with 25 minutes left in the extended session. If it moves to 37.50 or lower this week, I will be adding to my existing position.

All things considered, today was a great day for the portfolio. The long-term portfolio managed to advance well ahead of the market averages in spite of the FORM sell-off. Hoping to see some more good things... until next time, take it easy.

Tuesday, October 24, 2006

Long-Term Portfolio Update

Just a minute ago, I sold half of the First Marblehead (FMD) shares at $69.57. Currently, I do not intend to part with the rest of the shares. It's tough not to take a profit of this size. And, I did want to start freeing up some cash for other stocks. FMD has been very good to me... we picked it up at $28 a little over a year ago, and it's time to book some of the 148.5% gain. Tom Brown, hedge fund manager and regular contributor at bankstocks.com, was dead-on with his recommendation of this company.

Still interested in:


Monday, October 23, 2006

Quick Thought

I think that after getting slammed, Caterpillar (CAT) is looking quite attractive. I think if somehow the market trades it down to the $50-55, then it'd be a steal, and you should really load up.

Anyway, the company missed its earnings for a number of reasons, including production issues and legal issues. And, the company reduced its profit forecasts for 2006 from a range of $5.25 - 5.50 down to $5.05 - 5.30 a share. The company also hinted that double digit growth would be unlikely, and that investors should expect mid to low single digit growth.

Let's assume that earnings come in at the low-end of their range for '06 at $5.05. That would mean that at $60 a share, CAT would be trading below a 12x multiple. I think that's a very pessimistic outlook. Say it came at $5.05, but instead of no earnings growth, they see a modest 4% increase. That would put next year's earnings at $5.25, and once again, using a price of $60 per share, CAT would be trading at under 11.5x forward earnings. I think Wall Street has overreacted, and I think it's time to take a good look at the company.

CAT's a strong company, and there is serious upside potential if they do better than their low-end estimates. Also consider that, historically, their management tends to be conservative with estimates. In any case, I'll be waiting for it to come down a bit more. I will probably sell part of the First Marblehead (FMD) shares to fund this purchase, if an opportunity to purchase shares materializes. I'm going to start nibbling at $58 or better, and I'm prepared to add heavily to the position if it ever does see $55 or less.

Sunday, October 22, 2006


Yesterday, we checked out the Oktoberfest festival in historic downtown Campbell. It was fun, and there was a good turn out. We had plenty of beer and food. They served three types of Spaten beer at the festival... lager, wheat, and of course, the dark Oktoberfest variety. We ate these ginormous sausages from the Lockeford Meat and Sausage company, and we were totally suffed. When we got home after spending several hours at the festival, we pretty much went into a coma resulting from overeating and all the beer-drinking in the hot sun.

Lots of different vendors were there at the festival, too. Many you would expect at a festival like this one, like those selling foods and clothes. But, others you wouldn't quite expect, like one booth that was selling insects encasedin clear plastic molds. While pretty freaky, it was one of the more popular booths. We almost bought a few of them, but decided it'd be a waste of money. An insect keychain cost just as much as beer... insect or beer? Hmmm... Insect... beer. Insect... beer. BEER!

Friday, October 20, 2006

Politically Incorrect Joke of the Day

Anyway, I'm waiting on a few tests to run to completion here at work, so I'm going to share a joke that a buddy told me today.

So, a black baby is given a pair of wings from God. The baby then asks, "God, does this make me an angel now?" God laughs, "Naw, nigga, you a bat!"

Quick Update

Closed out the Intel (INTC) call options at $1.25. Tiny profit of 10 cents per contract... it was a small position, so not much to write home about. But, a gain's a gain, and that certainly beats a loss.

Still not sure if I want to let the Broadcom (BRCM) shares get put to me... I'm just a tiny bit underwater on the contracts right now with shares trading at $28.05. If I allow the shares to get put to me, then my cost basis will be $28.20. I'm leaning towards buying the shares at the moment.

Also, Advanced Micro Devices (AMD) is starting to look worthwhile to pick up after its recent decline due to the poor gross margins for the most recent quarter. And, I have my eyes on Genentech (DNA) at current levels. Would be nice to see it dip below $80. Not sure if that'll happen, but if it does, I might pick some up.

Wednesday, October 18, 2006

Trading and Poker Update

Well, unfortunately I got a bit greedy when I set my order to dump the Oct 20 Intel calls (NQJD) this morning. My price missed by a touch, and well, the market pulled back and now I'm more or less even on that trade... plus or minus a little. Will definitely dump the calls before the week is over, as this was a pure gamble, and I don't intend to buy shares.

Additionally, I dumped the Multi-Fineline Electronix (MFLX) shares today for a 12% overall loss at 22.65. It's a shame I didn't dump it earlier when I first saw the not-so-positive motives of the Roth & Stark buying spree. Bah.

In better news, I did chalk up another nice win last night at the lowly $6/12... I'm no baller.

Tuesday, October 17, 2006

Quick Trade Update

Once in a while, I like to gamble. So, here's my latest bet. I picked up Intel (INTC) Oct 20 call contracts (NQJD) at $1.15 today. Intel reports earnings after the bell. I guess we'll see if I make my point or if the stickman clears the table with my hard-earned money. It's a small position, so it's really nothing more than a fun gamble. Then again, maybe it's not so smart to bet against Goldman... they downgraded Intel today ahead of earnings.

What's a Gymnopedist?

Recently, I've been kind of hooked on some music by this eccentric composer named Erik Satie, who once introduced himself as a gymnopedist. I have no idea what a gymnopedist is... according to Wiki, it is related to some ancient Greek dance called the gymnopaedia.

I encourage all of you to give his music a try. It's some really good stuff. I know a few of you play the piano, so maybe you've played some of his music. Others may have heard a few of his pieces in movies or perhaps on television.

As far as his music goes, it seems that I like his popular stuff the most, Gymnopédies, in particular. But, some other pieces that I enjoy very much include the first Nocturne, all five Gnossiennes, and also Sonatine Bureaucratique. I don't know much about classical music, but man, seriously he's got some good stuff.

Monday, October 16, 2006

A Post of Poker Beats

If you don't like to hear about losing poker hands (both bad and legitimate beats), then I strongly advise you to skip this post.

So, as I mentioned in my previous post, I played some cards from late Saturday night until Sunday morning. And, while I can't say that I played all that well, I certainly didn't play horribly. If I were to rate my game that session, I'd give myself a solid B.

Here are three notable beats...

86c in the BB. We see the flop 7 handed for 2 bets apiece. The pre-flop raiser was this lady who doesn't play all that badly. She's not a strong player, but she was really hot that night and hit pretty much everything. So, the flop comes 5c 7x 9c (oh, flopping the nuts is so pretty), and we get 4 bets in on the flop 3-ways. The turn is a Qc, and the three of us put in a total of 2 bets each. The river is a blank, and my flush loses to the bigger one. Final hands: raiser had 99 for flopped top set, and the winning hand was KTc. Why the poker gods didn't give me a 7c on the river, I don't know. Ouch.

About 20 minutes later... I limp in MP with KsTx after a couple of EP limpers, and we see a 6-way flop for two bets apiece. The dealer deals me a beautiful flop of Qs Js 9x. Again, flopping the nuts is so nice... definitely a nice way to lose a lot of money. Anyway, we go two bets on the flop and the turn brings out a Ts. Ok, so I might be losing to a flush here, but at least I have outs with an open-ended straight flush draw with my beautiful King. Anyway, we go two bets 3 ways on that street, and we're off to see the River, the wonderful River of Oz. It's some low spade, and I lose to As4x. Double Ouch.

Later on, I've got KQh in the blinds and I call a raise. Four of us see the flop of Ks Qs 5x. I check-raise the flop, and 3 of us including the pre-flop raiser get to the see the turn. It was some blank, I bet and only the PFR calls. River comes some baby spade... I don't figure him for a flush draw, and go ahead and bet out. I get popped (ugh), and I call. Total put into the pot when I was ahead? Zero Dollars. Total I shoved into the pot when I was behind? Sixty Dollars. The look on my face when he turned over pocket Kings? Priceless. For everything else, there's the chip runner who can give you another rack of chips.

I was stuck a lot more at one point, but eventually clawed my way back to being stuck 260. Not really a big deal at just over 20 bets lost, but it does get to you when you get absolutely clobbered on a few hands that could have been so very nice. For me, losing when you're card dead just happens and I don't think that much of it. But, losing big pots in the manner described above just hurts. Okay, no more bad beat stories until after I go and play some tonight.

Sunday, October 15, 2006

Saturday Eats

Lunch on Saturday was actually more like a celebratory feast. Had we known this, we would not have made dinner plans at a local Cuban restaurant. So, anyway QB and I were invited to a lunch to celebrate the birth of her aunt's now one-month old newborn. So, we show up to China Stix in Santa Clara, and to our surprise, we learn that a total of 5 tables were reserved for this occasion. The tables were decorated with streams of gold ribbon, and every seat had its own cover. Even the chopsticks were fancy with gold-colored metallic ends.

We had a total of 11 courses in the 3 hours that followed our arrival... I'll just list them out with a dash of detail.

1) Cold Appetizer Plate - Typical dish to start off any Chinese banquet. Various cold cuts of meat, jellyfish, and some vegetables.

2) Shark Fin Soup - Imitation, of course. It was quite good. In fact, I really liked all the food that was served.

3) Peking Duck - I usually don't like duck, as it's often greasy. But, Peking Duck I don't mind because the bread that goes with the duck does a good job soaking up the grease.

4) Lobster With Ginger And Onions - I'm not that huge a lobster fan, but the couple chunks I had were tasty.

5) Wealth & Happiness Double Cake - This, I'd never had before. It was slices of honey glazed ham and a crunchy somewhat sweet cracker that went into some bread.

6) Minced Lobster With Lettuce Cup - This was new to me also. Again, I'm not a lobster fan, but I had two of these. Basically, lobster meat in a cup of lettuce. Really a nice and refreshing course.

7) Braised Sea Cucumber With Bok Choy, Chicken, and Mushrooms - Yummy. As gross as it may sound to eat a sea slug, sea cucumbers when prepared correctly remains one of my favorites. And, this place really did get it right.

8) Steamed Trout - Each table had two fish. I was pretty full at this point, so I only had a tiny bit knowing that there was more to come.

9) Napa with Scallops - This was a simple dish... Chinese Napa vegetables with scallop shreds in a seafood sauce.

10) Seafood Yee-Mein - This was the closer... a soft seafood noodle dish. Traditionally, noodles are mandatory fare at any birthday-related feast. It has something to do with their symbolism of longevity.

11) Sweet Rice In Pineapple Bowl - I liked this dessert quite a bit. It was an empty half-pineapple shell filled with rice and sweet red bean, and some pineapple chunks.

Okay, I lied. There was a 12th course... a second dessert. The new parents of Jaeden (the baby's name) brought over some cake also. So, everyone had some of it despite being way overstuffed already.

I went into a food coma shortly after this 3-hour meal. QB and I even had to move our dinner reservations by an hour, since there's no way we'd be able to eat much without more of a break.

So, this brings us to our Cuban dinner at Habana Cuba in downtown San Jose. Neither of us have ever had Cuban food, so we really didn't know what to expect. Also, there's no way for us to tell if the restaurant's food is really authentic. But, if the crowd was any indication, the place must be good. It was completely packed, and without reservations, there'd be quite a wait.

We didn't really know what to order, so we just winged it. We were still a bit too full to order any appetizers, so we just had the salad and chicken-corn soup that came with our meals. We decided to share dishes to get more exposure to Cuban cuisine. We ordered the Rabo Encendido, which was slow-braised oxtail in a red wine sauce. And, we also ordered the Lechón a la Cubana, which was a traditional Cuban pork dish.

I really like oxtail, and this dish met my expectations. It was delicious and full of spices and had lots of taste. The lechon had a light taste, and so QB wasn't thrilled. I, on the other hand, thought it tasted pretty good. Along with the meal, QB had a mojito, and I gave Hatuey, their Cuban beer offering, a try. The beer was okay, nothing remarkable. The mojito was also far from the best that I've tried.

I also played a lengthy poker session, but unfortunately I was stuck over a rack after about eight hours. I'll probably write something up later that will read more like a sad tale than anything else. Okay, this post is long enough as it is. Enjoy your weekend.

Friday, October 13, 2006

All Nighter

Well, I just pulled an all-nighter here at work. Critical project and hard deadlines. I haven't had to pull an all-nighter for work in over a year... hopefully, the next time I that I do will be a long time from now. I'm simply getting too old for it.

But, all-nighters when out partying or pokering? That's a different story. Everyone have a good weekend. Time to get soome sleep.

Thursday, October 12, 2006

Color of the Day

Today, the market's favorite color is... BEIGE.

The Fed came out with their Beige Book report, which gives us a regional economic summary. For the most part, it was very positive. Growth has not slowed nearly as much as some have feared, and prices were mostly stable.

Below is a link to published report on the Federal Reserve's website.

FRB: Beige Book Summary, October 2006

Wednesday, October 11, 2006

Kodak / Xerox Merger Rumor

Looking at recent price and volume action of both Eastman Kodak (EK) and Xerox (XRX), you've gotta wonder if the rumor of a merger between the two is more than just idle speculation. Kodak has been a part of more buyout and merger rumors than I can remember, so I am skeptical.

Both Xerox and Kodak are struggling and their management teams are trying their best to turn the companies around. Right now, Xerox commands a market cap of $14.6B, which is a little more than twice Kodak's $6.6B. Both companies are in similar spaces, and their product and service offerings complement each other well.

Anyway, let's take a quick look at some recent trading history.

11-Oct-06 - 8,491,500 - 16.21
10-Oct-06 - 3,854,100 - 15.86
09-Oct-06 - 2,485,800 - 15.70
06-Oct-06 - 2,416,400 - 15.68
05-Oct-06 - 3,978,400 - 15.59
04-Oct-06 - 2,945,100 - 15.74
03-Oct-06 - 3,078,400 - 15.40
02-Oct-06 - 2,864,000 - 15.37

Eastman Kodak
11-Oct-06 - 5,715,300 - 23.08
10-Oct-06 - 1,412,200 - 22.16
09-Oct-06 - 1,340,700 - 22.48
06-Oct-06 - 2,196,000 - 22.25
05-Oct-06 - 1,474,400 - 22.46
04-Oct-06 - 2,521,200 - 22.40
03-Oct-06 - 2,335,900 - 22.16
02-Oct-06 - 1,644,300 - 22.39

Notice that Kodak traded roughly 1.8MM shares each day over the past 7 days (excluding today), and Xerox had an average daily volume of 3.4MM shares over the same period. Today, Xerox trades up 2% on a whopping 8.5MM shares. The stock hasn't seen that sort of heavy trade since August 2. And, look at Kodak and its respectable 4.2% jump on heavy volume of 5.7MM shares. It hasn't seen that much volume since the 1st of August.

Looking at options activity...

EK October '06 Calls - $25 Strike (EK-JE) - Volume: 1215, Open Interest: 4938

I didn't see anything noteworthy looking at the Xerox call options, however.

I wonder how passive an investor Bill Miller is when it comes to his large holdings. The Legg Mason funds own approximately 25% of Kodak right now. And, for those who follow the markets, you're well aware that Legg Mason got clobbered today on reduced earnings guidance. Maybe this will put pressure on them to be more proactive and push Kodak towards a beneficial merger or alliance.

Additionally, there was no big news coming out of Xerox today, and all I saw from Kodak was a small press release about an exclusive offering of some Martha Stewart-designed photo products. I'd say that there's no chance that this move was based on that news. All this on a relatively negative day for the markets. Really makes you wonder, doesn't it?

*** Edit #1 ***

Looking more closely, it looks like 4MM of today's volume in Xerox was due to a large block trade. So, it's probably wise to ignore most of what I said above, but it's still fun to toss the idea around.

You Bet? I Raise

The two private equity firms that submitted an $81 bid for Harrah's last week, Apollo Management and Texas Pacific Group, have now increased their bid. The raised bid now sits between $83-84 a share. This comes after Harrah's directors rejected the initial buyout offer. Several sources are now reporting that Harrah's advisors have hinted that the bid needs to be even higher to be worth consideration.

My hope is that the directors listen to their advisors and turn down the bid even at this level. I believe that doing so will benefit the shareholders over the long-term. However, I'm not complaining. If they do accept the sweetened offer, I will be dumping the shares ASAP.

Tuesday, October 10, 2006

Earnings Season Kick-Off

Alcoa (AA) reports earnings after the closing bell today. This officially kicks off this quarter's earnings season. Here's an earnings calendar that I compiled last night for both long-term and trading portfolio holdings. Constellation Brands (STZ) is not included since they reported early.

Company Ticker Estimate
General Electric GE 0.49
Linear Tech LLTC 0.37
Apple Computer AAPL 0.51
Capital One COF 1.80
eBay EBAY 0.24
Student Loan Corp. STU N/A
Broadcom BRCM 0.21
Amgen AMGN 0.97
Altria MO 1.41
First Marblehead FMD 2.00
Harrah's HET 1.00
FormFactor FORM 0.33
Chevron CVX 2.05
Eastman Kodak EK 0.19
Equity Office EOP 0.51
Intl Game Tech IGT 0.34
Abercrombie & Fitch ANF 1.10
American Eagle Outfitters AEOS 0.63
Home Depot HD 0.76
Deb Shops DEBS 0.10

Fortune Brands FO 1.33
North Fork Bank NFB 0.48
Sun Bancorp SNBC 0.22
Lifetime Brands LCUT 0.53
Kongzhong KONG 0.09

Weekend Dinner

To continue the weekend story... on Saturday, Crestfallen flew into town for a business function on Monday. She flew in a couple days early to hang out. So, after the exhausting gold mining trip, I picked her up from the airport, and the three of us (QB, CF, and me) went to eat at the Left Bank at Santana Row.

I've never been there, and I had heard nice things about the place, so we gave it a try. I had made reservations for 9pm earlier in the week, but we ran a bit late, so I had them move the reservation half an hour later. We didn't have to wait all that long once we got there before we were seated.

We picked out a couple of appetizers to start off our meal. We went with Moules Florentine (steamed mussels) and Pithiviers, which was some pastry with meat in it. The Pithiviers was kind of like some appetizer-sized shepherd's pie. It was pretty good, I liked it. The mussels were also quite good, but I'm not that big on mussels, so both QB and CF ate most of it.

For our main course, I went with the day's special... a sturgeon dish. It turned out to be the most expensive of our three dishes, and unfortunately I liked it the least. I mean it wasn't bad at all, but it just wasn't as good as I had hoped. This might be due to the amazing sturgeon that I had over at Aqua back in November of last year. Anyway, I got to taste a bit of what the two ladies ordered.


Crestfallen ordered Le Short Rib, which I thought was the best dish, and not surprisingly, it's the most popular dish at the restaurant. QB went with a ribeye steak (not on the sample menu in the link above). It, too, was very good.

Le Short Rib

Ribeye Steak

I'm lazy, so we're going straight to dessert. CF had the molten chocolate cake, and QB and I split the profiteroles with chocolate syrup. It was excellent. Even CF, who is not a big profiterole fan, thought it was good.


The service was alright, but could have been better. My drink was always kept full, but we noticed that the server never came by to ask if our food was okay or not. Also, a pet peeve of mine is when you are given the check before you're done with dessert. Our server did just that, which was slightly irritating, but what can you do. Anyway, we inadvertently got our server in trouble, because we had just put our money in the booklet when his manager walked by and saw we were waiting around. He took one look at the bill to see who our server was and promptly went into the kitchen to find out guy. The server came back with the change and was looking pretty pissed off.

I thought that the prices were very reasonable for the quality of food that we got. The final bill not including gratuity was just under $100 for the three of us. And, considering we each ate a full meal, it wasn't too bad. I'd definitely go again, but I'll be trying something other than the fish. Maybe, I'll go with the dish that CF had.

Sunday, October 08, 2006

My Girlfriend Is A Gold Digger

This weekend, QB and I went on a gold mining trip with California Gold Adventures with geologist and gold mining expert, Joshua Vick. You might have seen him on TV before. He's been on both the Discovery Channel and The Learning Channel.

So, the gold site was nearly three hours away in Jamestown, California. We had to get up really early to make it to the site by 10. And, I'm really glad we made the journey. Our guide, Josh, was really a great guy. He was also full of non-stop energy. You can tell that he absolutely loves gold and mining. He didn't only explain to us how to get our gold, but where certain spots are much more likely to have gold, and why.

He explained what types of rocks would be in the soil where gold would likely sit, and also what color the dirt would be in gold-rich areas. He also knew a ton about the history of the miners; he was just full of information. We were there with 6 others, plus Josh. If anyone found a nugget on their own, they could keep it. Everything else was split up evenly.

We all took turns between digging and filling buckets with gold-rich dirt and working the sluice box on the creek. Transporting the buckets from the dig site to the water where the sluice box sat was hard work. Everyone worked hard for an hour or so, and that was when Josh gave everyone some extra incentive. He showed us what the sluice had found up to that point... SIX gold nuggets. An excellent start to our trip. Soon after that, we were all working like mad. We all had gold fever.

I did end up finding what the miners call a clinker. It's not quite big enough to be called a nugget, but big enough that if you put it in a vial and shook it, you'd hear it clinking. I found that piece by panning. Panning is really slow compared to sluicing, but it's fun. By the time we finished, it was already 5pm. We were both exhausted and physically sore from the labor, but it was a great experience.

If anyone is ever interested in doing some gold mining, I highly recommend Joshua Vick's adventure. You won't get rich unless you're really lucky, but I guarantee that you'll learn a lot and probably get a good workout too.

Some of the gold that we all split.

Our share of the gold (not including the clinker I found).

Friday, October 06, 2006

A Post Without Words

Quick Portfolio Update

I wanted to get this in just before I headed out for lunch. There's only a few points to be covered.

I have initiated a position in Lifetime Brands (LCUT) at 18.03. This is only the first purchase. I will continue to monitor the stock and the company, and I will decide whether or not to add to this position at a later time.

Starting yesterday, we are reaping the benefits of swapping partially out of American Eagle Outfitters (AEOS) and into Abercrombie & Fitch (ANF). Recall that the swap took place with AEOS at 39.75 and ANF at 64.30. They are now trading at 43.75 and 73.65, respectively. Nice to see ANF outpacing AEOS by 4.5%.

Deb Shops (DEBS) pulled back and into the red despite the strong numbers that came out yesterday morning.

Thursday, October 05, 2006

Falling Stars

Looks like Constellation Brands (STZ) met earnings expectations, but they have tightened their earnings range for 2007 from $1.72-1.76 from their previous estimate of $1.72-$1.80 due to intense competition in U.K. market. The stock is likely to sell-off. So, which Constellation is STZ today? I vote for Ursa Major, the Great Bear. Ugh.

*** Edit #1 ***

Well, the market has now been open for about 10 minutes, and STZ isn't down all that much. It did open near $27, but now trades down roughly 3%. I'm okay with that. Their conference call starts in about 20 minutes. I guess we'll find out more about the quarter at that time.

However, we do have a big winner today... DEB Shops (DEBS). It is currently trading up over 8% on great Same Store Sales figures (+10% vs a -6.8% estimate by a lone analyst) and reporting an upward revision of their earnings and revenue estimates. Go DEBS.

American Eagle Outfitters (AEOS) is trading down today despite very strong SSS figures (+19% vs 11.5%) and an upward revision of their earnings estimates. Talk about good news already priced in.

Abercrombie and Fitch (ANF) also released its SSS numbers today. They, too, came in ahead of expectaions (+10% vs estimated 6.5%). And, they also upwardly revised their earnings numbers. Unlike AEOS, this news was welcomed by investors, as the stock is now trading higher by almost 4%. Go Teen Retail, Go!

Wednesday, October 04, 2006

Wall Street and Its Poker Face

Let me just quickly say that today was one heck of a day for the markets... even the energy sector participated in today's rally. Tommorow will be an important day, as the portfolio's fifth largest position, Constellation Brands (STZ) announces its earnings. We should hopefully start hearing about the synergistic benefits resulting from the Vincor acquisition. Anyway, I will be up bright and early for the news.

On a different note, I recently finished The Poker Face of Wall Street by Aaron Brown. While the book does talk about poker and some concepts of the game, it is not a book about poker. Instead, this book is about risk (in gambling and other financial forms), and why, with proper management, it should be embraced. The book also covered a lot of history behind gambling and its importance in the development of today's financial industry. It's definitely an interesting read, and although I grasped only a portion of what Aaron tried to convey, I learned quite a bit. If you're looking for a book on poker, skip this one. But, if you want to convince someone why gambling is good for you, this is your book.

I know Norwegian Alex reads this blog only for the poker highlights, and since the title of this post does contain the word poker, I might as well write a bit about my latest session. So, anyway, last night I played my usual low-limit ($6/12) poker at Bay101. Right off the bat I was hurt in a nasty flush over flush hand. I had 97d in the big blind, and I turned a flush, only to be check-raised on the river by the small blind who was holding the Q-high flush.

So after a few more hands, I pick up QQ. This is just weird, because in my previous session I got a ton of pocket queens. Unfortunately for me, we see the flop 7 handed, and I check-fold the A-high flop. A few more orbits of nothing, and things started to turn around. I picked up a few good hands, and made the most of my cards. I played really solidly throughout the night, but there were a few spots where I felt I played like a sucker.

Here's a hand where I felt I played poorly... I have AJh and I open-raise it in early position. There are two cold-callers, and the blinds fold. Flop comes Qh Jx Tx. I bet, the next guy folds, and the other guy raises. I call, and the turn brings another T (not a heart). I am pretty sure this guy's got a good hand, and I'm quite sure if I bet here I'm going to get popped. So, the sane person probably check-folds here. I ended up check-calling, and since I'm a luckbox, I spiked the J. I lead on the river and get called by AK who had flopped the nuts. So ya, I'm a runner-runner rat.

As you can tell, luck trumped skill this session. Anyway, I finished up a whopping 50 bets in less than 5 hours. I think some of that luck came from Rowr via an SMS text message. Rumor has it that her luck has been responsible in part for over $1MM in poker winnings. Maybe she can bottle her luck and auction it off on eBay.

Tuesday, October 03, 2006

Quick Trade Update

Those of you that actually read my stock-related posts know that I recently dumped Broadcom (BRCM) in the $31's, and I did mention I might be selling BRCM puts if the stock were to fall. Today, that's what it did due to a downgrade by Amtech and also poor guidance from Marvell Technology (MRVL). So today, I did end up selling some puts... details below.

Sold October $30 BRCM Puts (RCQVF) for $1.80. I could have gotten $2 or more earlier in the day, but I didn't pull the trigger. These puts are uncovered (I'm not short any BRCM). But, they are covered by cash... if you're interested, you can read more about a cash-secured put option strategy.

In summary, if BRCM is $30 or higher on Oct 20 (expiration date), then I pocket the $1.80 per share. If BRCM is less than $30, then I will be buying the shares for $30, giving me an effective cost basis of $28.20.

Monday, October 02, 2006

Today's Jackpot

I wasn't really going to post anything this morning following the quarterly checkpoint, but this news is large. Harrah's Entertainment (HET) is quite possibly getting taken private by Apollo Management and Texas Pacific Group for $81 a share in cash. This is being reported as one of the largest leveraged buyouts ever.

In addition to the acquisition news, there was also news of property swaps with Boyd Gaming (BYD).

What a great way to start a new week... who doesn't love the smell of money in the morning?

Sunday, October 01, 2006

Portfolio Checkpoint - 2006 Q3

The stock market rebounded in the third quarter this year. Most investors should be cheering right now, except for those who were seriously overweight in oil stocks or those stocks counting on high commodity prices. Anyway, here's the latest long-term portfolio allocation for the end of this quarter. You can see the previous checkpoint by clicking on this link.

The following represents the allocation of the long-term portfolio as of the end of Q3, 2006.

Company Ticker Q3 Q2 Change
Altria Group MO 17.0% 18.2% -1.2%
Harrah's Entertainment HET 7.9% 9.6% -1.7%
Student Loan Corp. STU 7.7% 7.5% 0.2%
General Electric GE 6.0% 6.2% -0.2%
Constellation Brands STZ 5.7% 5.6% 0.1%
First Marblehead Corp. FMD 5.5% 5.1% 0.4%
International Gaming
IGT 5.1% 5.2% -0.1%
Eastman Kodak EK 4.8% 4.4% 0.4%
Fortune Brands FO 4.5% 4.8% -0.3%
American Eagle Outfitters AEOS 4.4% 6.1% -1.7%
Form Factor FORM 3.4% 4.0% -0.6%
Apple Computer AAPL 3.1% * * *
* * *
Capital One Financial COF 2.9% 3.6% -0.7%
Home Depot HD 2.9% * * *
* * *
North Fork Bancorp. NFB 2.9% 3.4% -0.5%
Amgen AMGN 2.8% 2.9% -0.1%
Abercrombie and Fitch ANF 2.8% * * *
* * *
Chevron CVX 2.6% 2.8% -0.2%
Linear Technology LLTC 2.5% 3.0% -0.5%
Equity Office Properties EOP 1.8% 1.9% -0.1%
Sun Bancorp. SNBC 1.6% 1.5% 0.1%
Deb Shops DEBS 1.5% 1.6% -0.1%
Kongzhong KONG 0.6% 0.8% -0.2%
Dow Chemical DOW 0.0% 1.8% -1.8%


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

Dow Chemical (DOW) was sold off in August in order to purchase more Home Depot (HD). About 40% of American Eagle Outfitters (AEOS) was sold in order to initiate a position in Abercrombie and Fitch (ANF).

New positions initiated this quarter are: Abercrombie and Fitch (ANF) and Home Depot (HD).

Apple Computer (AAPL) was transferred from my trading portfolio into the long-term portfolio.


There were a few notable stocks this quarter that moved more than 15%.

American Eagle Outfitters (AEOS) moved up nicely this quarter, finishing at $43.83, up 29%.

First Marblehead (FMD) also continued on its way up, finishing the quarter at $69.26, up 21.6% for the quarter. And, up a huge 147% from our initial purchase last September at $28 a share.

Constellation Brands (STZ) closed at $28.78 on Friday, up 15.1% from its $25 price tag at the end of last quarter.


Current Trading Portfolio Holdings: eBay (EBAY), Multi-Fineline Electronix (MFLX), and Jan 2007 EBAY $32.50 Calls


Still on the watch list:

Bare Escentuals (BARE)
Lifetime Brands (LCUT)
Nuance Communications (NUAN)
Shinhan Financial (SHG)
Universal Corp. (UVV)

Sushi Dinner... Compliments of the Queen

Late Friday night, I played some graveyard shift poker at the local card room from 1:30 to around 6:30 in the morning. I played well, but the weirdest thing happened that session. I was dealth pocket queens FIVE times. Pretty nuts considering we're only seeing about 30 hands an hour. I never did get any other big pairs.

Lucky for me, my queens held up 4 times. Once, I got lucky and flopped a set against AA. And, twice, it held up in spite of an ace on the board. The one time it did lose, I paid dearly when a not-so-good player actually turned a flush, but waited for the river to raise me. Looking back, I don't think she meant to be sneaky, she just wanted to make sure her hand was going to be good before she put in extra money. Anyway, I 3-bet her, and she called.

The night was good for a good score, and so yesterday, QB and I went to Sushi Tomi in Mountain View. It was great. The fish was very fresh. The only thing was that the cuts were a bit on the smaller side. This sushi place came highly recommended by a co-worker of mine who really knows his stuff when it comes to Japanese dining and culture. Definitely a good place for sushi, so try it some time.

Following our dinner, we met up with a few freinds at the Buddha Lounge nearby. I used to go here a lot more, but this was the first time in a while. It was good that we got in before they started charging a cover. In the past, they never did charge any cover. I guess they're trying to eke out more money from its patrons these days. The drinks were also a bit more expensive than I had remembered too. The place was pretty much popping though, and the ratio was alright (not that it matters for me, hah).

We left before the music died, and found ourselves at the card room for some food. We munched on some chicken nachos and some super spicy buffalo wings before we called it a night. One of the guys went to go play some cards, but we left just as he sat down, so I have no idea how he did. And, I guess that's it. Time to relax, I'm beat.