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Aug 26

every night

every night at about 12:10 a.m., i try to make my life better

i try to make the world i create

Aug 12

Setting Up Android Mail for SDF and Dreamhost

Man, I don’t know why this has been so difficult, but I think there’s conflicted information online about how to setup mail for SDF and Dreamhost. 

My setup is that I have an SDF email account, but I use Dreamhost for outgoing email (SMTP). The key is that for SDF, the email port for IMAP on SDF is 143—and not, as documented, port 587 or any other port. 

For Dreamhost, the SMTP port is either 25 or 587. Sometimes 25 works, but so far every time 587 has worked. 

May 14

Catching a Falling Knife?

(Note: I’ve moved my day-to-day investing journal off-line for privacy reasons, but I’ll still write more general posts like this one from time-to-time.)

Every week, as I watch the market fall and the value of my portfolio start crumbling away, I don’t push my hands into my face and look away. I get excited. I look at my portfolio, and I think each of my stock picks are great, long-term, so every time they drop, I see a new buying opportunity.

There’s the old adage about catching a falling knife. The take-home: Don’t do it. I’ve definitely done it in some cases. (I’m looking at you BCS and CSCO—which, by the way, were the two stocks I bought after watching my Fisher portfolio buy them—and I got them both at lower prices.) But the rest of them look better and better as the markets go lower.

MSFT is an easy call. Great business, already a good price, and still going down. That’s a knife I’m going to catch. MCD, too. Then, there’s also an index ETF like DIA. The Dow Jones will break 13,000 again. Right now, it’s at 12,675. If it recovers by the end of the year, it’s safe a bet of at least a 2.5% gain. Not great, but probably pretty safe.

Closer calls: AAPL (pretty steady around 560-570, but most analysts value it in at least the high 600s); NFLX (I’m a fanboy, I think the growth potential is so there, particularly with the shutdown of most illegal torrent sites and the lack of competition overseas); INTC (everybody needs chips). And stocks I don’t own, but I think have close-call potential (waiting for better prices): SBUX (I want to see it below 50), AMZN (below 210), JPM (take advantage of the spectacular investor hit after the recent trading flack, but would like to see if below 30). 

Disclosure: Unless otherwise noted, I own long positions in all stocks mentioned.

May 1

CSCO, and Freeing Up ETFs

Tracking activity in my Fisher portfolio, I bought a $5,000 position in CSCO. To maintain enough cash for future decisions (at least $10,000, but ideally $20,000), I had to dump at least one position. I have $10,000 in IWM, an ETF tracking the Russell 2000 index. For me, ETFs are conservative bets to take when I’m not sure what individual stock to look into. So even though I’m only up about 2% on the ETF, I sold it to free up cash to put into CSCO.

Yesterday I sold my position in BAC at a big loss. Haha, the joke’s on me, as today BAC announced cuts in staff, which oftentimes the market takes as good news, so the stock’s up almost 2%. Oh well. Wouldn’t have staunched the bleeding so much—a 2% increase in a low price is a lot less than a 17% decrease at a higher one. So no biggie. Just sweet irony.

Apr 30

Busy Day - WFM, NFLX, AAPL

Been staring BAC and BCS in the eye, as both of them have been in the shitter since I bought them (each down almost 20%). I know now that I should have considered selling them earlier, before the kept on diving… But if I knew that then, I wouldn’t be here now!

I’m keeping the BCS in an effort to test my Fisher Investments portfolio. They made the call for a reason, and I got it at a cheaper price, so here’s for trusting they might know something I don’t. They’ve bought a few more positions since, but I’ve held off on those because I don’t feel I understand the business of those stocks.

I sold the BAC because I feel there’s still some good buying opportunities out there, and I’d rather free up the cash (and declare the loss) so that I can put the money to work as opposed to just have it waiting around, just to hopefully reverse my losses. For example, if I’m down 20%, I’m hoping to get to at least 0%. But if I cut the stock loose, and even if my next position gets 5%, then I’m only down 15% on that cash, and with subsequent smarter trading I stand a better chance to break even faster—or even exceed even—than betting on the risk that the original BAC stock might ever recover.

I also sold my position in a pharma ETF (PJP). It was up about 5%, and it was basically a hedge that paid off about $200-odd bucks. I’ll take the money and use it somewhere else…

AAPL’s been crashing down in the past weeks. I’m still bullish on Apple. There’s been a lot of speculation on the airwaves that they’re not going to get the growth one might expect out of markets like China, but I don’t buy it. They reason that the subsidies in the US make it easier for folks to buy the latest iPhone and then to upgrade in a year or so later, whereas in China, the $600 investment is much more substantial and stunts growth potential at the outset and slows down turnover.

However, given Asian culture and the hunger China has to keep up with the US, I think that people see the iPhone in a completely different light. I think that the iPhone will gain market share and experience similar model turnover/upgrades as the US because people see it as something more than a smartphone. It’s a status symbol, and it’s a must-have. It’s not just another phone. People will save extra and make exceptions to get it and to upgrade it.

So I think that worries over subsidies and international growth are not well-founded. The recent dive in the price (today it’s around $586) just provides another buying opportunity. With price targets in the high $600s, $700s, even $800s, it’s not something that’s easy to pass up. (Disclosure: my average cost basis on my position is around $540.) I’m in for a few more with the recent cash I freed up.

Next up: NFLX. I’ve been following this stock for a while now. Lots of chatter, most of it negative. But they showed strong earnings. A lot of people are still pissed at the CEO for his problems with branding (i.e., Quickster), etc. But I think those are just optics that may or may not be hurting the stock. Where I see an opportunity in Netflix is not just in the domestic subscriber base, but in their international expansion. As different governments continue to crack down on video piracy, people will have to move towards a paid-model. And if Netflix can even match 10% of its catalog in the US in other markets, I think it will succeed. I can already see its strategy developing as a while ago it started adding more Bollywood films and more recently a lot of South Korean dramas. These are smart moves, as they show its hand a bit in its international expansion, but they’re also movies that have a larger market outside of their source countries—some of them even big in the U.S. (I personally know that South Korean drama are huge and grossly addictive, and will only grow in their U.S. consumption. They’re also hugely consumed in other Asian nations—e.g., they’re immensely popular in Thailand.)

On top of it all, there’s been some notable inside-trading at a price higher than today’s. For me, it’s a buy for about $10,000 of shares.

Last: WFM. They’re announcing earnings on Thursday. I am a fairly frequent shopper at Whole Foods, and I’ve only seen my receipts get bigger and bigger. (Last trip, we spend just under $200 for four packed (resusable) bags of groceries.) I’m not comfortable with the price and P/E (40), but I’m interested to see if it gets a bump with its earnings. I’m not too excited about it long-term at this price. But I’m taking the gamble this week.

Apr 27

Learning Profit-Taking

One of my core issues is these days is trying to understand how and when to take short-term profits on my positions. The problem I have is that I try to only buy a stock if I think that the long-term fundamentals are good. So if a stock takes a short-term run up, should I sell and take profits, or hold on that the stock might go higher and risk leaving money on the table?

Today, I took a swing at AMZN. I think that Amazon still has a lot of long-term growth opportunities. I wanted to buy in when there were rumors they were going to buy Kiva, to build-up their warehousing infrastructure and make it more efficient. But I held off and missed that blip. I then waited for the stock to dip back to pre-Kiva levels, and when it did I bought it. Today, after they announced earnings, I found myself up over 20%.

If I believe that there’s still a lot more that Amazon can go, I should still ride the stock out. But I can’t shake the fact that there’s always a lot of risk with that prediction, and when 20% (over $2,000) is staring me in the face, after holding it for about a month, I am tempted to just take it.

So for now, I decided to sell half my position and bank the $1,000. Not sure if any of my decisions are right, but I’m going to have to see how this all shakes out in the next couple of weeks.

Apr 24

Riding the Bowl with Wal-Mart

So now I’m taking some of my own advice: I bought Wal-Mart. My opinion is that their current legal issues with respect to bribing government officials in Mexico is more-or-less a “cost of business” issue that will get worked out over the long-term. The fact is that the news has pushed the price down—but I don’t think the news affects the overall value of the business. Therefore, this new depression represents a buying opportunity. P/E is 12.71, so it could represent a good value. (COST is around 25; TGT is at 13.)

I needed cash to do this, so I sold my IVV (S&P index fund) position (I was up about 4%). I don’t see the S&P going anywhere big in the near term, and I can reap some gains on this, so let me put it into something where I am more confident I can get a better value. WMT is still tracking down for the day, so I bought at $57.69. Let’s see how this one goes!

Apr 23

Tempted by Wal-Mart

So Wal-Mart got hit with allegations that it bribed government officials in Mexico in efforts to gain market share in that country. The bribes “greased the palms” of a wide range of government players to get favorable treatment in light of government actions and processes. In many countries, like Mexico, this might just be the “cost of doing business.” And while this type of activity is often illegal in foreign countries such as Mexico, it’s also illegal in the U.S.—and companies can be prosecuted by the US government under the Foreign Corrupt Practices Act (FCPA). (Disclosure: In my day job, I do a lot of FCPA-related work.) 

For investors, this means that Wal-Mart may be exposed to a length government investigation and prosecution, which will definitely create large legal bills and may likely lead to a cash settlement. On the surface, this may be bad for investors. But I think it’s not that big a deal with respect to the stock’s long-term targets.

First, the allegations point to a wide-ranging, complex morass of deals that may be difficult to untangle or even fully comprehend. This means that the prosecution may easily go on for years. And a zealous government prosecutor may even further extend the timeline, as he or she may work to unwind every tick and tie in order to create the biggest exposure—which might be lost at the settlement stage in any case. So the key point: it’s going to take a long time.

Second, I don’t think we have any idea how much a government settlement could possibly be—as above, we don’t know how deep this goes, and we don’t know how to value how much Wal-Mart may have gained from bribing officials. So we don’t know how much Wal-Mart may ultimately pay, whether it’s hundreds of millions or billions… Which in any case, might not be much of a blip for a company as large as Wal-Mart.

Lastly, Wal-Mart is a solid company, and therefore consistently represents a solid long-term investment. It’s not going anywhere. And so when you see the share price take a 4+% dip that’s not a warning signal—it’s a buying opportunity. 

For me, Wal-Mart represents a possible short-term gain, but a definite long-term investment. However, right now I’m a little tight on free cash, and I don’t have any positions I’d trade up for a cheap shot at WMT. The best I can see is buying in for $5,000, with hopes that in a month it will regain the 4% it lost today—so $200 (or $180 minus costs)? Not really worth the risk that I might have to stick in the stock for much longer to see any significant gains. Still considering it, though I don’t have much time as I suspect Wal-Mart will regain most of its losses by tomorrow morning (if not already tonight). 

Apr 23

Still Buying in to the Falling Market

As someone who really started putting money in during a bull market (i.e., in the past year or so), I’ve been dying to put money in while the market’s been going down over the past week. I’ve turned into one of those guys who breathes out victory when I see the TV in the elevator showing red—the market’s going down! 

So now, with the rest of my portfolio in the John Crapper, but with my own call on the market still seeing it as a good investment, I took today’s 1% dip as a elbow nudge to get back in. I’m starting small because there’s still good signs that it will keep going down, but at least this way I won’t kick myself for at least missing this dip.

- - -

As you may know, I just started this investing-diary-online business. The thing is, I know my background, so when I was journaling just for myself, I understood the context of my own “advice.” But now that I’m online, I figure I’ve got some explaining to do.

I’ve been in and out of the market for a good 10-15 years now, but never anything big. I’d wager the most I’d ever been in at one time is probably $10-15,000. (As a personal investor, that is. I always had some amount of money in IRAs and 401(k)s and even some in an individual stock from my dot-com days.) Now, I have a sizeable portfolio that is professionally managed. So this type of investing is *not* for retirement. That money I just keep in the background—I don’t actively manage it, and I more-or-less try to live my life as if it doesn’t exist.

What I’m doing with respect to my take in this diary consist of my thoughts on my own “on the side”/personal portfolio. It’s become a mix of mostly long-term and some short-term positions, and it’s mainly a vehicle for me to learn how to do this thing. My livelihood and retirement are taken care of. I now have the luxury to concentrate some of my time and money to wealth creation, and not just wealth maintenance.

So, yes, this is gambling. But it’s gambling where I think an individual investor can take risks—which you’d rather avoid when addressing your nest egg—in a smart, informed manner. And you can consider one to twenty-four month positions, instead of always being force to think in decades.

But we’ll see how this goes.

Apr 20

Breaking Up Winners and Losers

Right now, I use Google Finance to track the performance of my portfolio. In it, I have my short term (less than 6 months) and long term (at least 9-12 months, if not more) positions—which right now is a pretty mixed bag of winners and losers. I also have another section of my portfolio on another account—there’s are my “big bets,” usually smaller positions that I only want to keep around for less than 3 months. 

I’ve noticed that whenever I look at my performance, focusing right now on the losers, they affect how I view my winners. I think that if I look at some of my winners purely on a percentage gain basis, then some of them are ready to sell. I’m up enough on them. 

But when I see them next to my big losers, then I think, man, I got to let the winners win more to make up for those losers. So potentially I’m not taking gains when I should. So I think I’m going to split up my views on my overall portfolio, break it up between winners and losers. That way I can take profits on the winners and not be depressed by the losers. 

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