Friday
Apr282006

(MSFT) Portfolio Trades - Microsoft on sale 11% off.

Microsoft MSFT:Bought July2006 25 strike CallsBought stock at 24.10Bought stock at 24.15If you believe the Microsoft then the stock was having an 11% off sale today. Things that have not changed: China joining the rest of the world trading and copyright system is still good for the stock, weak dollar is still good, people still need to buy Excel and Word, the company still has loads of cash and a clean balance sheet, continues to buy back stock, and the company has gone through a pro-shareholder shift in the way it compensates employees and pays dividends.If you are not ...

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Wednesday
Apr262006

Rhodium on my Corn Flakes

One of the people on the investment committee for a foundation in which I am involved told me of some other foundations who are looking into buying platinum and rhodium for their portfolios.Here was my response:"Feels like they are chasing performance - almost always a suckers game. We could set up a plan for making commodity investing part of a long term plan for the endowment but remember, commodities don't pay dividends. So it's just plain speculation and inflation hedging - not investing. "I'm not saying these might not go up and go to the moon, but it ...

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Tuesday
Apr252006

Portfolio Trade - Tsakos Energy Navigation

Bought 1/4 position in Tsakos Energy Navigation (TNP).I listened the NYSE presentations on shipping today. Listening to company executives give presentations always forces me to do better analysis because I want to call out executives on their claims. I do feel shipping is at a bit of a peak right now but the valuations on the shippers do not bare this out. Therefore I feel safe with small positions. These shares are thinly traded so I also can pick them up with limit orders below the market when big sellers are in a hurry.Good things ...

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Monday
Apr242006

Weak Dollar - Who Does that Help?

Who does the weak dollar help? It helps US large multinationals. I was saying this at the beginning of the year and I continue to say it. Of those companies in my portfolio it helps Coke (KO) and Procter and Gamble (PG). However, with trailling p/e mulitples near 20, neither of these companies have a cheap valuation. I am waiting for a lower price in both to either more. Of course, there are others, and I will poke around to look for them. In general, I look for US based companies that get a ...

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Monday
Apr242006

Behaviorial Finance

I just picked up my copy of Advances in Behavioral Finance this week. (Edited by Economist Richard Thaler). If you are not an economist or mathematician but interested in why winning an auction is not really winning. I would pick up Thaler's easy reading book called The Winner's Curse. It has lots of anti-intuitive commentary like why when you have lots of competitors in an auction you should bid lower not higher. Very useful if you buy art, shop on ebay or enter office pools. ...

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Friday
Apr212006

Excerpt from my Great-Great Grandmother's Diary Entry: The San Francisco 1906 Earthquake

Excerpt from the "Places I Have Visited" Diary of Alice Josephine (Gallaher) Williamson: The Great San Francisco Earthquake of 1906 "Terrible Earthquake in Cal. April 18/06 5.14 A. M. while we were at the Hotel Del Monte in Monterey Cal. And we escaped. 2 killed in our hotel. We were all thrown right out of our beds at 5.14 A. M. Apr. 18th 1906 by the terrific Earthquake—which the whole country can never forget!!!!! Of course we all were simply dazed and could not stand on our own feet ...

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Wednesday
Apr192006

Lots of Cash at Big Corporates

Found another interesting article by Eddy Elfenbein at US Market Blog. This time he talks about cash levels at some of the US giants, in particular Microsoft (MSFT). My motivation for owning many of the US huge multinations is their cash levels. Of course, I'm hoping they spend this cash on share buybacks (in excess of employee option and stock grants) and dividends. I think Eddy and I both fear that it will be spent on stupid acquisitions. I must say one of my main motivations for buying Microsoft last year was their new found ...

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Wednesday
Apr192006

Outsourcing and Urban Myth

Kudos to New York Times Columnist David Leonhard and his column today on the outsourcing of Radiologist Jobs in India, “Political Clout in the Age of Outsourcing” Radiologist, accountants and other white collar workers are being worked into a frenzy of fear around outsourcing by politicians and the media. Fear and job loss makes great TV and Lou Dobbs of CNN has made a career from it. Leonhard talks reality. Leonhard writes about an investigation performed by MIT Economist Frank Levy, "they were able to find exactly one company in India that was ...

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Wednesday
Apr192006

Five Laws about Investing Bias and True Happiness by James Montier

I never met or heard of James Montier when I worked in London but he seems like a financial strategist after my own heart.  Read this Fast Company Magazine clip about him and his five laws.

Link to to article by him on Abu Graves and Behavioral Finance. 
http://turtletrader.com/james-montier.html

I'll be watching this guy.

Tuesday
Apr182006

Portfolio TradesMore YHOO and More Johnson and Johnson.

Doubled Positions in Yahoo (YHOO) Buy Write exactly as yesterday (now at 1/3 position) Added to my position in Johnson and Johnson (JNJ). I’m now up to a 2/3 position. The whole drug sector is still beat up. I think investment managers and small investors are still reeling from buying so much stock at really high valuations over the last few years and afraid to step in again. At some point they will wake up and drive this sector up. This stock still has growing earnings and at a forward price ...

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