Monday, October 31, 2005

Cypress Ready to Price Sunpower IPO

Cypress Semiconductor (CY) announced a few more details about the initial public offering of its Sunpower division. The Sunpower division specializes in solar cells and panels. I believe the spinoff is worth at least $4 additional dollars per share for Cypress shareholders. Cypress looks to offer about 7.7 million shares priced between $12-$14 and will own 87% of the outstanding shares. The proposed ticker symbol is (SPWR) and will trade on the Nasdaq.

Note: I am long Cypress Jan 15 Calls

Sunday, October 30, 2005

Stock Market Bottom? Dow 40,000?

A lot of people are calling a bottom in the Dow Industrial Average. I cannot stand when people say a stock bottoms or the general market bottoms. A bottom is zero or being delisted from an exchange! A bottom is not a specific price and it is not some technical level on a chart. I admit that there are price ranges (the past 5 years has been one ugly trading range), some people believe in "support levels ." I find support levels questionable because bulls only have so much money to pour into a loser (Ex: Pfizer or Tyco).

A lot of people believe that the Dow will hit 40,000 within the next 3-5 years. It would be nice to see some action in the stock market. I love looking at short interest on for overly bearish sentiment.

Why the Dow might run in the "short" term!
Diamonds Trust (Dow Industrial Average Exchange Traded Fund) (AMEX: DIA)

If you bought in the first 2 weeks of May you could have made 4-6% in just a couple of months. I think you can buy the Diamonds (DIA) right here and sell it in a couple of months for a 3-6% gain. I am considering the same trade for my account. See below for visual evidence.

Friday, October 28, 2005

"Google Base" Ready To Kill Ebay & Paypal

There has been a lot of chatter among bloggers this past week who were able to catch a screenshot of a new Google service that looks to compete with Ebay & Paypal. Google admits that they are developing a new "search platform" but deny that it will go after Ebay, which also owns Paypal. The service looks to be a free online listing database. The "free" part will kill Ebay, especially since Ebay plans to raise fees again in February. The Ebay killer is termed "Google Base." If you type in you get redirected to And if you try you get a log in screen. When they launch this thing I believe Google's stock could easily shoot up 25-50 points in a single day.

Picture from:
Note: I am long Google (GOOG)

Consolidating Stock Portfolio

I own too many stocks and I am too diversified. I have been doing some selling the past couple of weeks along with some buying. I am trying to have between 12-17 stocks.

October Stock Sales
AIG (AIG) (Sold @ $63.47) Had a profit and took it-stock might go higher
Axonyx (AXYX) (Sold @ $1.03) Big speculative loser luckily only had 100 shares
Qualcomm (QCOM) (Sold @ $44.79) I decided I had enough cell phone exposure with Motorola. Plus it reached my price target of $45.
Tyco (TYC) (Sold @ $26.50) (Will NEVER buy this company again)
United Health (UNH) Sold (Will buy back position under $54)

October Stock Purchases
Chesapeake Energy (CHK) Added to position- reports earnings Monday
Gilead Sciences (GILD) New postion-Avian flu play plus has other great drugs
Motorola (MOT) Added to position
Titanium Metals (TIE) New position-reports next week

Future Transactions....
Cerner (CERN) Want to add to position under $83
Gamestop (GME) I want to add this stock to the portfolio under $32
Another energy stock??

Coca-Cola (KO) When it hits $45 I am out. There is no growth at this company
Maxim Integrated (MXIM) Wish I sold it yesterday
Pfizer (PFE) Another terrible stock
Qlogic (QGLC) See Pfizer & Maxim
Westar Energy (WR) Ready to sell it-consolidate portfolio (might buy back)

Stocks Finish Day Higher

Stocks rally on GDP growth. We haven't seen the market have a one day move like this in a long time.

S&P 5001,198.41+19.51(+1.65%)
10-Yr Bond4.567% +0.01
NYSE Volume2,404,211,000
Nasdaq Volume1,902,092,00

Stocks Rally on GDP Growth

US stocks are rallying with the good economic news put out this morning. Gross Domestic Product for the third quarter was 3.8%, which includes Katrina and Rita. In the second quarter the economy grew at 3.3%. Also "core" inflation rose 1.3% compared to 1.7% in the second quarter. Core inflation excludes food and energy.

Wednesday, October 26, 2005

Stocks Reporting Earnings 10/27/05

Today was kind of a rough day for stocks earnings wise. Bidu (BIDU) and Amazon (AMZN) tanked. While Boeing was down two points. I sold the United Health (UNH) at $56.20 and will soon look to get back in. The Nasdaq Company (NDAQ) beat estimates and traded higher in the after hours today. Here are some stock stocks to watch for 10/27/05 that report earnings.

Aetna (AET) $1.17
Allegheny Energy (AYE) $0.38
Apache Corporation (APA) $2.30
Bankrate (RATE) $0.14
Bebe Stores (BEBE) $0.13
Burlington Resources (BR) $1.73
Cabot Oil & Gas Corporation (COG) $0.79
California Pizza Kitchen (CPKI) $0.33
Cannon (CAJ) $0.95
Elan (ELN) $-0.22
Exxon (XOM) $1.38
Hilton Hotels (HLT) $0.20
Life Time Fitness (LTM) $0.28
Marathon Oil (MRO) $2.38
Martha Stewart Omnimedia (MSO) $-0.30
Maxim Integrated Products (MXIM) $0.39
MetLife (MET) $0.93
Microsoft (MSFT) $0.30
Petro-Canada (PCZ) $0.99
Phelps Dodge (PD) $3.98
Verizon (VZ) $0.64
XM Satellite Radio (XMSR) $-0.66
Yellow Roadway (YELL) $1.43

Tuesday, October 25, 2005

Stocks to Watch

Lots of earnings reports will be out tomarrow. The Nasdaq Stock Market (NDAQ) will report after the bell (estimates are $0.12 w/the hope of an exchange status coming). I have been recomending the stock since it was trading in the $19-20 range and I own it. NDAQ is in a really hot sector with other exchanges including Chicago Board of Trade (BOT), Archipelago/NYSE (AX), and the Chicago Mercantile Exchange (CME). The NYMEX and Chicago Board of Options are also looking to go public.

Earnings To Watch 10/26/05
Allegheny Technologies (ATI) $0.82
Allscripts (MDRX) $0.06
Amerada Hess (AHC) $3.31
Baidu (BIDU) $0.06
ConocoPhillips (COP) $2.57
Corning (GLW) $0.21
Diamond Offshore (DO) $0.40
EnCana (ECA) $1.12
Exelon (EXC) $1.07
Kerr-McGee (KMG) $2.61
L-3 Communications (LLL) $1.09
T. Rowe Price (TROW) $0.82
Boeing (BA) $0.80
The Nasdaq Stock Market (NDAQ) $0.12
WellPoint (WLP) $1.01

Note: I am long NDAQ

Stocks Trade Lower on Oil

Stocks sold off in trading today because of higher oil and natural gas prices. As I stated before, I am close to 20% weighted in energy stocks, so I outperformed the market today.

S&P 5001,196.54-2.84(-0.24%)
10-Yr Bond4.508% +0.06
NYSE Volume2,339,223,000
Nasdaq Volume1,643,567,000

Goldman Initiates Coverage on Chesapeake Energy (CHK)

Goldman Sachs initiated an "in-line" recommendation on Chesapeake Energy (CHK). I bought more shares above my cost basis yesterday and have a nice 6% gain from that trade. I will continue to hold CHK in my portfolio until I feel that the stock is overvalued. The price of natural gas is also up over a dollar today, which also contributed to the spike in stock price. I will reiterate that energy stocks should have an overweight (Greater than 10%) weighting in your portfolio, especially after they have sold off 10-25% from their highs.

Monday, October 24, 2005

Bought More Chesapeake Energy (CHK) for the Portfolio

I bought a few more shares of Chesapeake Energy (CHK) this afternoon. I bought more shares despite having a 50% gain in the stock. I added to my position at $30.27. The cold weather is now upon us for a while and Chesapeake Energy is the best natural gas stock that is publicly traded. So the trade seemed obvious to me.

Hallibuton (HAL) reports earnings tomorrow, they should be good. I was either going to buy shares in CHK or HAL. I decided to go with CHK, but I believe both will increase in valued of at least 20% over the next year.

Sunday, October 23, 2005

Energy Stocks Ready to Run Again

I think the sell-off in energy related stocks was healthy, but the numbers are too low and the stock prices are also too low. Picking energy stocks to me is like going to a candy store for a kid. There are so many great options in energy stocks to buy and it tough to decide.

I am looking to increase my energy weighting to 20% in my portfolio. I will probably by more of what I own (CHK, HAL, TSO) and look to add another energy stock to my portfolio.

Here is my wish list of energy stocks to buy

1. Chesapeake Energy (NYSE: CHK) (Own)
2. Ultra Petroleum (Amex: UPL)
3. Encana (NYSE: ECA)
4. EOG Resources (NYSE: EOG)
5. Halliburton (NYSE: HAL) (Own)
6. Tesoro Petroleum (NYSE: TSO) (Own)
7. National-Oilwell Varco (NYSE: NOV)
8. Cheniere Energy (Amex: LNG) - Not yet profitable (US liquefied natural gas play)

Saturday, October 22, 2005

What is Shareholders' Equity?

Each day for the next month or so I will post information to help you understand what a company's balance sheet is, what are income statements, and what are cash flow statements. This information should help you become a better investor and hopefully make you a lot of money.

Balance Sheet
- Provides an overview of a company's financial health

Assets - Resources that have the potential to provide future economic benefits for a company

Liabilities - Creditors' claims on assets of a company

Shareholders' Equity - Investors' claim on all assets that are not owed to creditors
  • Shareholders' Equity = Assets - Liabilities
  • Ex: $30,000 (S. Equity) = $40,000 (assets) - $10,000 (liabilities)

Friday, October 21, 2005

Google's Stock is Going Higher

The stock market is a very difficult "game." But if I have ever seen a "sure thing" for a stock, it would be Google (GOOG).

3% of Advertising dollars is spent online
15% of People's time is spent online

Not until the adverting dollars equal the amount of time people spend online is when this stock stops growing as quickly. Most stocks always find a way to grow, but Google won't have to struggle to find new areas of growth for a while.

Think about this... Coca Cola didn't have to introduce another product (Fanta) until 20 years after their IPO in 1919

Google is still so young and has plenty of price appreciation ahead.

Note: I am long Google

Top Performing ETFs (Exchange Traded Funds)

Here is a list of today's top performing (intra-day) exchange traded funds (ETF)

iShares MSCI South Korea Index (EWY)
Vanguard Emerging Markets Stock VIPERs (VWO)
iShares MSCI Emerg Mkts Index (EEM)
iShares MSCI Brazil (Free) Index (EWZ)
Energy Select Sector SPDR (XLE)

Exchange traded funds (ETFs) provide an easy way to diversify your portfolio and have a lower expense ratio than most mutual funds.

Thursday, October 20, 2005

Free Credit Report

Checking your credit report and score regularly is extremely important. Your credit report dictates more than just being able to obtain a loan. It can affect your insurance premiums, credit card options, ability to open a savings account, and your ability to gain employment. Many sites offer information on obtaining a free credit report. I have created a site where you can gain more information regarding how to obtain a Free Credit Report.

Google (GOOG) Beats Estimates

Google (GOOG) earned $1.51 beating Wall Street estimates of $1.36 per share. The stock is up $31 points in after hours trading (10%).

Record Revenue of $1.578 Billion (Up 96% YOY) (14% Sequential Revenue Growth)
Google Owned Sites Revenue: $885 Million (Up 20% from Q2)
Partner Sites (Adsense Revenue): $675 Million (Up 7% from Q2)
Just another great quarter for Google.

Goldman Sachs after the earnings report said the stock could hit $398

Source: Reuters

Note: I am long Google (GOOG).

Wednesday, October 19, 2005

Amgen's GAAP Earnings Below Estimate

Amgen (AMGN) is selling off a bit in after hours trading. GAAP (generally accepted accounting practices) earnings were $0.77 for the quarter. The street was looking for $0.83. Non-GAAP adjusted earnings beat the street's estimate by $0.02 ($0.85). So depending on which way you calculate earnings it can be looked at as either a miss or a beat.

Amgen has a relatively low forward P/E which some investors might find attractive and believe there is limited downside. I am going to continue to hold Gilead (GILD).

73.66 Down 4.43 (5.67%) (Yahoo Finance Quote)

Note: I have no position in Amgen & I am long Gilead (GILD)

Amgen (AMGN) Trading Higher Ahead of Earnings

Biotech giant Amgen (AMGN) is trading higher before they release earnings after the bell today. There is a lot of activity in Amgen's October 80 Call Option today. Over 12,400 contracts have been traded with an open interest of 39,480. The option contract expires on Friday/Saturday and is up about $0.15. Amgen is trading near $77 a share, off from its 52 week high of $86.92.

Keep Amgen on your radar.

Altria Beats Estimates - Earnings Up 9.3%

Altria (NYSE: MO) reported Q3 earnings this morning. Altria earned $1.38 compared to estimates of $1.33. Full year guidance is now $5.05-$5.10 (earnings per share). Q3 earnings were up 9.3% year over year ($1.28 vs. $1.38).

"Overall, 2005 is shaping up to be a year of robust progress for Altria," said Louis C. Camilleri, chairman and chief executive officer of Altria Group, Inc. "During the third quarter, particularly strong results in our tobacco businesses were partially offset by continuing challenges at Kraft.

Altria is one of my stocks picks for 2005-2006.

Note: I am long Altria

Sold Remaining Shares of Tyco (TYC)

I sold the rest of my position in Tyco (TYC) this morning. I am kicking myself for not buying Gamestop (GME) at $30, now it's at $33. I will just have to wait for the stock to come in a little and then I will do some buying.

Other notes:
Oil stocks continue to sell off today with a build in crude inventory.

Yahoo is seeing a nice pop today after selling off in after hours trading yesterday.

Tuesday, October 18, 2005

Yahoo & Intel Stocks Sell Off

Despite a good earnings report, Yahoo (YHOO) sold off in after hours trading. This also sent Google's stock lower in after hours trading. Intel had a disappointing quarter and I believe the sell off was justified. Intel's stock has been in bear mode for the past three months (see chart).

Motorola (MOT) Jumps on Record Sales

Motorola (MOT) beat estimates by 2 cents excluding items. EPS were $0.30 (ex-items) or $0.69 (including items) compared to earnings of $0.20 a year ago. Reveune came in at $9.42 billion beating estimates of $9.1 billion. Earnings for Q4 are estimated to be between $0.32-$0.34 which is about in-line with current estimates. Motorola now has a 19% global market share (up 5.5%). They also shipped a record 38.7 million cell phones in the quarter. The stock traded up about $0.70 (3.47%) in after hours trading.

Note: I am long Motorola (MOT)

Gilead (GILD) Beats Wall Street Estimates

Gilead Sciences (GILD) beat estimates by a penny. Earnings grew 58% compared to the same period a year ago. Gilead earned $0.38 beating estimates of $0.37. Gilead also beat estimates on revenue, which came in at $493.5 million (up 51%) while consensus was $488 million.

There was some profit taking in after hours trading on Instinet, as the stock dropped $1. I believe Gilead will trade higher in the coming weeks, especially if other biotechs and drug companies continue to report stellar earnings. So far Genentech, Genzyme, and now Gilead all beat Wall Street expectations. Keep an eye on Amgen (AMGN).

Note: I am long Gilead (GILD)

Genzyme Beats Wall Street Estimates

Genzyme (GENZ) reported earnings of $0.61 vs. Wall Street consensus of $0.58 (excluding items). I said yesterday and Sunday that Genzyme stock would trade higher as they would beat earnings. I also believe that Gilead (GILD) will beat estimates this afternoon. I bought some shares of Gilead yesterday at $47.68.

Monday, October 17, 2005

Top Performing Mutual Funds (Large Growth)

Top Performing Mutual Funds: Large Growth

Top Performers - 3 Month (out of 1457)

Fund NameSymbolReturn
ProFunds UltraOTC Inv
Rydex Velocity 100 A
Rydex Velocity 100 H
ProFunds UltraOTC Svc
Rydex Velocity 100 C
ING Partners Salomon Bros Aggr Gr I
Merrill Lynch Focus Twenty I
ING Partners Salomon Bros Aggr Gr S
Smith Barney Aggressive Growth Y
ING Partners Salomon Bros Aggr Gr A

Top Performers - 5 Year (out of 842)
Fund NameSymbolAnn. Ret.
Dreyfus Premier Alpha Growth T
Dreyfus Premier Alpha Growth C
Dreyfus Premier Alpha Growth B
Fidelity Fifty
Fidelity Advisor Fifty I
Legg Mason Growth Trust Primary
Old Westbury Mid Cap Equity
Fidelity Advisor Fifty A
AIM Leisure Inv
Fidelity Contrafund

Source: Yahoo Finance

Bought Gilead Sciences (GILD) For A Trade

I purchased some shares of biotech company Gilead Sciences (GILD) today. This is a short term trade as they report earnings after the close on Tuesday. Gilead has a solid history of beating earnings estimates and the stock trading higher after the earnings release. I have no reason to doubt that the same won't happen again come Tuesday. For more information on what is in Gilead's pipeline click here.

I sold some more shares of Tyco (TYC) to fund the above stock purchase.

Altria (NYSE: MO) Trading Higher on Court Ruling

Altria (MO) is trading higher today when the US Supreme Court rejected a $280 billion penalty against tobacco makers. The stock is up over 6% and is near all-time highs. Altria is the best performing stock of all-time with dividends re-invested. If Altria can avoid big lawsuits, it will be able to break up the company which is valued at $105-$110 per share. I was about to buy some Altria last week when the stock fell under $70. I obviously was not quick enough.

Note: I am long Altria (MO)

Sunday, October 16, 2005

Energy Stocks Set To Open Higher

Fears of another hurricane will push energy stocks higher in trading on Monday. Crude is up $1.14 and natural gas is up $0.68 in overnight trading. It should be interesting to see what the market impact will be on retail stocks and the rest of the broader market.
For overnight trading in energy visit

Bullish on Biotechs, Not Banks

With earnings due out in less than twenty four hours I am going to stick my neck out and say that the banks like Citigroup (C), JP Morgan (JPM), and Commerce Bank (CBH) will all disappoint next week. Just by going with history, Commerce has not missed the last five quarters compared to Citigroup which missed the last one, and JP Morgan which missed 2 out of the last 5. Keep in mind that estimates have been lowered for all the financials.

Now for the biotech stocks...
I believe that Gilead (GILD) will beat estimates and I am considering it for a trade. I also think Genzyme (GENZ) will beat estimates. Looking at the numbers, both of their estimates are too low in my opinion.

Other upside surprises or upward guidance might include General Dynamics (GD), Schlumberger (SLB), St. Jude Medical (SJT), Oakley (OO) (20% of float is short), Cerner (CERN) (35% of float is short), and J2 Global (JCOM) (17% of float is short).

I would not be surprised if Texas Instruments (TXN) missed.

Note: I am long C, SJT, & CERN
I have no short positions

Online Brokerage Consolidation

If you have an online brokerage account you could soon find out that your brokerage account has been sold to Etrade, Ameritrade or Charles Schwab. There is so much consolidation in online brokerage firms that there are some potential takeover candidates. JP Morgan's Brown Co. online brokerage firm was sold to Etrade for an average of $8,000 per Brown Co. account. Also, Ameritrade is about to close a deal to acquire more accounts from TD Waterhouse. OptionsXpress (OXPS) and TradeStation (TRAD) look like good takeover canidates. I especially like TradStation because the fundametals are good, the DARTS (Daily Average Revenue Trades) are growing faster than Etrade or Ameritrade, and their software is popular with active traders.

If you are interested in finding, changing, or comparing online brokers check out my article on comparing online brokers.

Saturday, October 15, 2005

Too Much Negativity in Retail Stocks

I think the negativity in retail is overdone. Below are some bullish signs that retail stocks are about to take off.
  • Gamestop (GME) is starting to move their higher priced XBOX 360 bundles
  • BestBuy (BBY) announced on Friday that they would add 27,000 jobs for the holidays
  • Sears Holdings (SHLD) announced it will buy back $500 million worth of stock
  • Chairman of American Eagle Outfitters (AEOS) bought $21 million worth of stock on the open market

"Because everyone is expecting a weak Christmas, the market is in for a surprise because I don't think American consumers are going to cut back on spending," said Ted Parrish, a principal at Henssler Asset Management (Source: Reuters)

Why You Can't Buy and Hold Anymore

(Chart of AT&T)
Many investors think they can buy a stock and forget about it. The bubble, Enron, Worldcom, and now Refco are all examples that you can't just buy a stock and hold it, even if the company is an "established bluechip." One of my goals for the next year is to take on a more trader oriented approach to investing in stocks. If you are down 20 or 30% in a stock and hold it for five years for it to come back then that is lost opportunity. That is one of the reasons why I sold some of my position in Tyco (TYC) this past week. Then there is the dilemma of "buying down" or "averaging down." I have done this successfully and unsuccessfully. You really have to believe in a company and feel that the decline is only temporary. I know individuals who set stop losses at 5% and exit positions after a gain of 5-10%. My best advice is to do your best to avoid major blow-ups and don't be afraid to take a loss.

Slew of Earnings Reports Next Week

Notable Earnings to Watch
All of the below stocks should be interesting to watch. A lot of banks report Monday and by the end of the week you start to see earnings from energy stocks like XTO & Schlumberger. I will do a little research and see if I can come up with any upside surprises.

Monday 10/17
Citigroup (C) ($0.99) Pre
Commerce Bank (CBH) ($0.45) Pre
General Motors (GM) (-$0.87) 8:30 AM
HDFC Bank (HDB) After
IBM (IBM) ($1.13) After
W.W. Grainger (GWW) ($0.91) Pre
Wachovia (WB) ($1.08) Pre

Tuesday 10/18
3M (MMM) ($1.08) Pre
Forest Labs (FRX) ($0.56) Pre
Genzyme (GENZ) ($0.58) Pre
Gilead (GILD) ($0.37) Pre
Intel (INTC) ($0.33) Pre
Johnson & Johnson (JNJ) ($0.86) Pre
Kraft (KFT) ($0.46) After
Linear Tech (LLTC) ($0.33) After
Merrill Lynch (MER) ($1.19) After
Motorola (MOT) ($0.28) After
Novartis (NVS) ($0.72) Pre
Peabody Energy (BTU) ($0.83) Pre
United Technologies (UTX) ($0.79) Pre
Yahoo (YHOO) ($0.14)

Wednesday 10/19
Abbot Labs (ABT) ($0.58) Pre
Altria (MO) ($1.13) Pre
Amgen (AMGN) ($0.82) After
Etrade (ET) ($0.27) After
Ebay (EBAY) ($0.20) After
EMC (EMC) ($0.12) Before
General Dynamics (GD) ($1.76) Before
Honeywell (HON) ($0.56) Before
Illinois Tool Works Inc (ITW) ($1.36) 8 AM
JP Morgan (JPM) ($0.72) Before
Juniper Network (JNPR) ($0.18)
Netflix (NFLX) ($0.15)
Qlogic (QLGC) ($0.34) After
St. Jude Medical (SJT) ($0.39) 8 AM

Thursday 10/20
Armor Holding (AH) ($1.00) After
Broadcom (BRCM) ($0.38) After
Capital One Financial (COF) ($1.67) After
Cerner (CERN) ($0.55)
Cypress Semiconductor (CY) ($0.05) Pre
Ford (F) (-$0.09)
Google (GOOG) ($1.36)
McDonalds (MCD) ($0.54) Pre
Nokia (NOK) ($0.22)
Oakley (OO) ($0.22) After
Pfizer (PFE) ($0.48)
Coca-Cola (KO) ($0.53) Pre
Hershey (HSY) ($0.74) Pre
McGraw Hill (MHP) ($0.95) Pre
XTO Energy (XTO) ($0.83)

Friday 10/21
Caterpillar (CAT) ($1.06) 7:30 AM
Maytag (MYG) (-$0.02) Pre
Reebok (RBK) ($1.33)
Schlumberger (SLB) ($0.86) Pre
Weyerhaeuser (WY) ($0.99) Pre
Wyeth (WYE) ($0.76) Pre
Xerox (XRX) ($0.18) Pre

United Health Update (NYSE: UNH)

I sold into some strength on Friday a portion of my position in United Health (UNH) to fund my purchase of Titanium Metals (TIE). UNH had another outstanding quarter. So far the trade has paid off. I plan on buying back my position in United Health at a lower price (closer to $54). If you look at the chart, the stock is in a major upward trend, but has pullbacks. If it pulls back to $55 I would consider buying back my position and even adding to it.
United Health remains one of my stock picks for 2005-2006 with a target price of $60 (split adjusted).

Friday, October 14, 2005

Energy Stocks See a Mid-Day Reversal

(Chart: Yahoo Independent Oil & Gas Index)
Occidental Petroleum Corp (OXY) makes a 3.8 billion dollar takeover bid for Vintage Petroleum (VPI). Clearly energy stocks are still undervalued otherwise there would be no takeover activity.
Oil and gas stocks have rallied nicely in afternoon trading (See chart above).

Stock Pick: Titanium Metals (NYSE: TIE)

I initiated a position in Titanium Metals (NYSE: TIE) today. We are closing in on the end of the first year in a three year aerospace cycle. Titanium prices have skyrocketed as demand continues to rise. Titanium Metals is a supplier to Boeing and many other companies across the globe. Only one analyst follows the stock, so there is plenty of room for upside "buy" recommendations. Earnings will be blowout and there is lots of insider buying, which is always a good sign. The stock is volatile, so be careful, and if it pulls back 3 or 4 points I will add to my position.

I sold some of my position in Tyco (TYC) and United Health (UNH) today to fund this purchase.

Thursday, October 13, 2005

Stocks On My Radar

Here is a list of stocks that I am considering buying. I probably won't add more than two.

Titanium Metals (TIE)
Rio Tinto (RTP)
Metal stocks are hot

Gamestop (GME)
Would consider under $30/retail is so brutal right now though

Cerner (CERN)
If it pulls back to $81-82 I will add to my position

Fording Canadian Coal (FDG)
Dividend is about $1.50 USD per qtr/15% annualy

General Dynamics (GD)
Stock is undervalued and underappreciated

Rough Start to Quarter for Portfolio

Things have started to look ugly in the portfolio compared to on 9/30/05. I have seen a lot of my gains significantly reduced over the past two weeks. I have been overweight energy and everything energy related has sold off at least 8% since 9/30. I see this as a nice buying opportunity because earnings will be fantastic for energy stocks. Retail and just about every other sector is also taking a beating, just not as bad as energy stocks over the past two weeks. I added some Motorola yesterday. I would look to add to my positions in Altria (MO) or Chesapeake Energy (CHK). I am also considering initiating a position in Activison (ATVI) or Gamestop (GME).

Wednesday, October 12, 2005

The Crave for High Yield Savings

Everybody wants a high yield on their savings accounts. I just transferred some money to my Paypal Money Market account which currently yields 3.76%. I also have a savings account at ING Direct. Emigrant Direct is yielding 4.0%, which seems to be the highest non-money market account rate. I don't recommend a CD longer than 3 months right now. I can easily see Greenspan taking rates up to 5%, and of course I think he could have stopped tightening in June. The best way to invest cash that you have sitting on the sidelines is to put it into a money market account or high yield savings account.

Here is a list of the highest yielding savings or money market accounts with a $1 minimum

EmigrantDirect 4.0% (Savings)
UFB Direct 3.80% (Money Market)
Paypal 3.76% (Money Market)
Capital One 3.75% (Savings)
HSBC 3.75% (Savings)
Western Financial 3.55% (Money Market)

Bought Some More Motorola

Bought some Motorola (MOT) stock down at $19.74. The numbers were raised by Citigroup today.

Tuesday, October 11, 2005

Apple (AAPL) Misses Ipod Targets

The street seemed to have set the bar too high for Ipod sales in Apple's most recent quarter. Despite record earnings, shares of Apple were off 10% in after hours trading. Also Ipod suppliers like Sigmatel (SGTL), PortalPlayer (PLAY), Cypress Semiconductor (CY), and Sandisk (SNDK) all were off significantly today. Apple shipped 6.45 million Ipods in the quarter while the street was looking for 7 million. Some were expecting as many as 9 million. Non-Ipod Nano sales also seem to be slow, but no inventory specifics were given.

I wish I posted the unusual Put activity in Apple's October 50 and October 45's today.

My take on Apple is to let it come in a little more. I believe their are a lot of margined players holding Apple that will send the stock lower.

Monday, October 10, 2005

Got the Gamestop (GME) "Buy" Correct

Yesterday I wrote that I believe that Gamestop (GME) is going higher. Today, it got upgraded by Wedbush Morgan to a "buy" with a $40 price target. I would wait for a pullback under $30.50 to do some buying.

Note: I currently do not have a position in Gamestop

What is going on in the stock market?

I am no stock market oracle but I still think we are heading lower. With oil off its highs you would think that retail and the broader market would start to show some life. Generally when things look ugly it is a good time to buy. I still think too many people are bullish about Q4. I believe that the Dow will lose another 100-150 points in the coming weeks. Many traders have seen big gains erased and are selling at every little sign of strength. One notable group is the homebuilders. Take a look at the Toll Brother's 6-month chart. Basically it has round tripped back to where it was in early June. I honestly don't know what to say, except I hope I am wrong about where this market is going.

Sunday, October 09, 2005

Is Gamestop (GME) Ripe For A Buy?

Gamestop (GME) completed its merger with Electronic Boutique this weekend. Gamestop becomes the clear leader in video game retail. With the release of the XBOX 360 on November 22nd, Gamestop will see a significant boost in Q4 earnings. There is already a shortage of XBOX 360 units for Christmas. Microsoft will only be able to produce about 1 million units for North America due to supply issues. This leaves Gamestop to profit by bundling the XBOX 360 system with other items that increases price and profts for Gamestop.

Gamestops bundles range from $800-$4500(includes 42" Dell Plasma TV).

Electronic Boutique (Sold out of their bundles) Sold Out of Bundles

Sam's Club Sold Out

Sold Out

I think you get the picture. Plus 34% of the float is short! I see at least $35 a share by January 1st.

New Motorola Phone Expected Early

In a report from the MOTO Q is expected to be available in December, ahead of its January expected release. It might even be available before Christmas. Motorola also announced that it will release a pink colored version of the popular Razr phone. In Q1 2006 Motorola will release the PEBL and the Razr Vx3.

Lots of exciting new products will continue to come from Motorola. This is a company I am proud to have in my portfolio.

Note: I am long Motorola (NYSE: MOT)

Saturday, October 08, 2005

Web 2.0: Another Tech Boom?

There has been a lot of talk about what Web 2.0 is. Is it a faster internet? More streaming video? New companies? New products? Honestly, I don't care what it is going to be. I just want to look for ways to make money off of it. I have been very negative on tech and I am starting to look for some good tech names to add to my portfolio. Right now I own Google, Cerner, Qualcom, and Motorola. There is a big Web 2.0 conference this weekend and it should be interesting to see what emerges. Right now, the best way to play Web 2.0 is to own Google (Nasdaq: GOOG). Here is a company that is taking Microsoft's (MSFT) business faster than Microsoft can spell Google. As more details emerge, I would look into other tech companies. The real conservative way to play it is to own the Nasdaq 100 (QQQQ) or the Nasdaq Composite (ONEQ), but that is heavily weighted with Microsoft. We could see another tech boom and I want to be in the right stocks before everyone else.

Interesting Web 2.0 Plays
Google (GOOG)
Yahoo (YHOO)
IAC/Interactive Corp (IACI) (Looks undervalued here)
Akamia Technologies (AKAM)
News Gator (If it goes public or company that acquires it)

Web 2.0 Conference Page

Note: I am long Google (GOOG).

Friday, October 07, 2005

Must Read Investing Books

Here is a list of books that I either read this past summer or that I am currently reading. I recommend reading them all if you get a chance. Some of the books are costly and can be had at discount prices at,, Amazon Marketplace, or

The Intelligent Investor by Benjamin Graham

The bible for value investing.
Warren Buffett Speaks by Janet Lowe
Easy read
Jim Cramer's Real Money: Sane Investing for an Insane World by James Cramer
Hate him or love him, you must read this book.
How to Make Money in Stocks By William O'Neal
Founder of Investor's Buisness Daily
The Motley Fool Money Guide By Selena Maranjian
Provides a good overview on investing.
Getting Started in Options By Michael Thomsett
Should be the first book on options beginners read.
Option Volatility and Pricing By Sheldon Natenberg
Bible of options trading

Stock Pick Corner: Nasdaq Company (NDAQ)

On July 3rd I alerted readers that I bought some shares of The Nasdaq Company (NDAQ). It was near its 52 week high and rather unknown. I initiated a position on 6/30/05 and added to my position on 7/14/05. If you bought along and held with me you would be up 40%. The stock is getting more attention as Lehman recently initiated an "overweight" on Wednesday. The stock will see more upgrades since only two other analysts follow it. A lot of comparisons are being made between CME and NDAQ. CME is currently valued five times greater than NDAQ by market cap. Lots of upside here. If NDAQ falls below or near $25 I will add to my position

"We believe the biggest impact will actually be in the area of market data fees, and to this extent, becoming approved as an exchange should have a positive bottom line impact on Nasdaq," Lehman Brothers

Top Financial Blogs

Recently made CNN Money Best Financial Blogs. To see the article click here.

"5. Big Ben's Investing Blog - This site, although anonymous, is called Big Ben's Finance and Investing Blog. There's good, specific information on certain stocks here, including profit expectations and results. Other recent standout posts include advice on finding an online stock broker, and specs and photo of a new Motorola device reportedly in the works."
-October 7, 2005: 10:15 AM EDT
-By Carrie Lee, CNN/Money contributing writer

Thank you CNN

Wednesday, October 05, 2005

Savings Accounts

With interest rates going up, savings accounts become more attractive. I especially like the savings accounts offered by online banks that offer higher yields than local banks. Money market accounts are also a good place to look for high yields. Remember money market accounts are not FDIC insured. The easiest choice right now is to go with an Emmigrant Direct savings account.

Savings Accounts
Emmigrant Direct 4%
Paypal is yielding 3.76% (Money Market account) 3.55%
ING Direct 3.40%

Tuesday, October 04, 2005

Top Performing Domestic Exchange Traded Funds

Top Performing ETF's (Exchange Traded Funds) YTD That Hold Domestic Stocks

SMH ML SEMICOND HLDR1240 11.06 26.42 15.48 -17.77
ICF ISHARE CS RTY MAJ IN 10.60 28.35 25.12 NA
RWR STREETTRKS SER TR 10.33 27.13 24.14 NA
IWS ISHARE RS MC VAL FD 9.76 27.89 21.46 NA
IGW ISHARE GS SEMICD INX 9.38 28.49 15.85 NA
Source: MSN Money

Sunday, October 02, 2005

Electronic Medical Record Stocks Are Undervalued

Electronic medical records are the future. Currently only 25% of US hospitals have electronic medical records. Then throw in international demand and the royalty/service fees these companies will collect for servicing and updating existing customers.

GE just bought IDX Systems (Nasdaq: IDXC) for a 25% premium. IDX is the company that is two steps behind. They lost a $1.6 billion contract with Fujitsu to Cerner in June. Look for other companies to try to grab a share of the market by acquiring the below companies. Cerner is the best company but also has a $3.25 billion market cap compared to Allscripts & Quality Systems which have market caps under $1 billion.

Takeover Candidates
Cerner Corporation (CERN)
Takeover Price (40x 2006E = $105-115) (35.8% Float Short)

Allscripts Healthcare Solutions (MDRX)
Takeover Price (25% Premium = $23) (23.3% Float Short)

Quality Systems (QSII)

Takeover Price (25% Premium = $85-90) (19.3% Float Short)

Potential buyers: Microsoft, Tyco, Johnson & Johnson, Siemens

NOTE: I am long Cerner

Top Performing Mutual Funds

Here is a list of the top performing mutual funds over the past five years. Courtesy of Yahoo Finance.

CGM Focus
BlackRock Global Resources Instl
BlackRock Global Resources Inv A
U.S. Global Investors Eastern Europe
BlackRock Global Resources Inv C
BlackRock Global Resources Inv B
Alpine U.S. Real Estate Equity Y
U.S. Global Investors Global Res
ING Russia A

Portfolio Return for Q3 and Year to Date

I just finished calculating my portfolio return for the third quarter and year to date. I had a darn good third quarter. My success was mostly due to being overweight in energy related stocks and taking losses in some "dogs" and making it back in energy or option trading.

Return in Q3 (Including Dividends & Commission Costs) = 12.3%
Return YTD (Including Dividends & Commission Costs) = 6.00%

Top Ten Holdings for Personal Account
1. Tyco International (TYC)
2. Chesapeake Energy (CHK)
3. The Nasdaq Company (NDAQ)
4. Lennar Corporation (LEN)
5. Altria Group Inc. (MO)
6. Citigroup (C)
7. Tesoro Petroleum (TSO)
8. Cerner Corp (CERN)
9. Coca Cola (KO)
10. Motorola (MOT)

Other contributors include Halliburton (HAL), Qualcom (QCOM), and America Movil ADR (AMX).

Closed Positions in Q3: Meridian Resource (TMR) & Cabela's (CAB) for a loss