Stocks Update: October 13, 2008

The market went up dramatically today, but because it went down 20% last week, most people are still down at least 10% or more.

I made over 600 dollars with my short term Morgan Stanley trade, but it didn't reach the 2000 dollar mark, so the trade is not included below. I had bought only 100 shares at 8 dollars/share last Friday.

I sold my GOOG too early. Had I sold just two hours later than I did, I would have made 2000 dollars, but I dumped as soon as I broke even. As they say, better luck next time.

(I hold EMC and Yahoo in two different accounts, so the percentages below for those two positions are slightly inaccurate.)

Open Positions
CCT = -16.77
EMC = -12.41
EZU = -25.52
GXC = -15.23
MMM = -5.32
SWZ = -22.24
VPL = -22.49
YHOO = -21.52

[Average of "Open Positions": losing/negative average 17.69%]
[141.5 / 8]

Closed Positions:
Held more than seven days but less than one year (from May 30, 2008):
CNB = +10.0
EQ = -8.83
EWM =-11.61 [sold 9/22/08]
EWS = -12.98 [sold 9/22/08]
GE = -6.4
GLD = +8.61 [sold 9/22/08]
IF = -49.00 [sold 10/13/08]
INTC = 0.0 (excluded from average; insignificant movement)
KOL = -10.36
MGM = - 4.17 [10/3/08 - 10/13/08]
PFE = -5.5
PNK = -16.7
PPS = -2.8
VNQ = +2.37 [sold 8/7/08]
WFR = +0.9 (approx; based on partial sales week of 8/4/08 in two separate accounts)
WYE = +2.4

[Overall Record for 7 days+ trades: lost an average of 6.94%]
[-104.07 / 15 trades]

Held less than 7 days:
DUK = 0% (excluded from avg) [8/07/08 - 8/14/08]; GE (1.0%); GOOG (0.8%) [7/28/08 - 7/29/08]; GOOG (5.4) [9/29 - 9/30]; GOOG = 0% (negligible percentage, excluded from avg), [sold on 8/13/08]; GRMN (-6.2%) [Sold 8/5/08]; ICE (2.0%); KOL (13.2%) [9/17/08 to 9/19/08]; MMM (0.5%); MOS (10.4%) [10/6/08 to 10/8/08]; MRK (0.1%); NVDA (8.0%) [8/12 to 8/13/08]; PFE (1.3%), SCUR (15%); SO (-0.3%) [Sold 8/5/08]; STT (2.68%) [10/1/08 to 10/3/08]; STT (0.4%) [10/3/08 to 10/7/08]; TTWO (4.3%) [partial sales on 8/5/08, 8/7/08, and 8/8/08]; TTWO (2.2%) [9/9/08 to 9/12/08]

[Overall Record for ultra short-term 2 to 7 days trades: gained an avg of 3.57%]
[60.78 / 17 trades; as of 10/8/08]

Daytrades:
C = +11.49 (09/01/08)
PFE = +0.5%
GE = +0.5% (Updated on July 14, 2008; bought at 27.15, sold at 27.30)
STT = +0.3
XLF = +4.3% (Updated on July 15, 2008)

[Overall Record for daytrades: Gained an average of 3.35%]
16.79/5

Compare to S&P 500: losing/negative 29.57%
[from May 30, 2008 (1385.67) to late-day October 13, 2008 (975.89)]

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

Up, Up, and Away?

It's a good day. The Dow and Nasdaq indices are currently up over 6%, but so far, most of my long-term trades are still in the red. I did very well on a Morgan Stanley (MS) trade, but I only had 100 shares. When the dust settles on Friday, I will feel more comfortable about celebrating.

G-7 to the Rescue? Don't Bet on It

The news that the G-7 is meeting is not great news. The G-7 is Canada, France, Germany, Italy, Japan, United Kingdom, and United States of America. With the exception of Canada, Japan, and possibly Germany, none of the other countries' consumers can pull us out of this morass. For example, the average British consumer is more in debt than the American consumer, and even the German consumer is barely keeping his head above water (or did you forget all those formerly East Germans needing jobs?).

We need normally isolationist China and Russia to step in, and it's insulting to them that the G-7 is not already the G-9. WWII is long over, but the financial and political paradigms are all based on a post-WWII world. It's time to grow up and get the players with the most cash reserves and natural resources into the game. This crisis won't be over till China and Russia get officially invited to the club. Personally, I would invite Singapore and make it the G-10. With those three new players, the G-7 can exchange political capital for hard cash. Then, we can show them the advantages of being part of the club. Perhaps then, Russia might feel less inclined to continue to occupy Georgian soil and will avoid establishing a consortium of natural gas producers, which would include Iran.

Bridgewater Report from 2003

Words of doom: "At this point [2003], the U.S. makes up only 30% of the world economy but sucks up 80% of the world's savings."

Here is the link to the whole report (PDF file):

http://www.rapp.org/wp-content/112203-bridgewater.pdf

(copyright belongs to Bridgewater)

HTML version here:

Bridgewater 2003 Report

(copyright belongs to Bridgewater)

Nassim Nicholas Taleb

From Conde Nast's Portfolio.com comes a fantastic interview with Nassim Nicholas Taleb :

http://www.portfolio.com/views/columns/the-world-according-to/2008/08/14/Interview-With-Nassim-Nicholas-Taleb

Here is one excerpt:

The structure of uncertainty in the world is vastly greater than we think. So let's stop playing the narrative fallacy. Take economics, for example. How many economists figured out that when people go to the store to buy products from China, they're raising the price of oil at the pump? How many people thought of that? They raise the price at the pump just by going there.

Interesting fellow, this Mr. Taleb. His book, The Black Swan, received rave reviews, and I liked it but wouldn't necessarily recommend it over Wheelan's Naked Economics, Malkiel's A Random Walk Down Wall Street, or Greider's Secrets of the Temple.

Random Thoughts

With GE reporting decent earnings and no corresponding effect on the overall market, I have only three thoughts in my head:

1. The beatings will continue until morale improves.

2. The market can stay irrational longer than you can stay solvent.

3. Omnia munda mundis. (All things are pure to the pure in heart.)

I'm not sure why the last one popped in my head, but perhaps it's my subconscious asking for divine intervention. After today's buying, my retirement accounts are now fully invested. From December 7, 2007 until today, my retirement accounts have decreased 22.6%. The S&P 500 has fallen 42.8% during the same time period. My retirement accounts need to increase 29% to get back to December 2007 levels (a decline of 1% in your portfolio requires more than 1% to get it back to the pre-existing level--it's counter-intuitive, but true). I would say today is the bottom, but I've been wrong before.

Debt Clock

The national debt has become so large, the debt clock can't keep up:

http://www.mlive.com/flintjournal/voices/index.ssf/2008/10/and_the_debt_clock_says_time_t.html

You have to love the title: What time is it? "Time to kiss your future goodbye."