Bay Area Homeowners in Trouble

According to The SF Chronicle and Zillow.com, around 20% of California Bay Area homeowners have no equity in their homes:

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/11/11/MNN0142MCG.DTL&

Zillow's estimated prices are not 100% accurate (that's the nature of an estimate), but it's very hard to price houses in this market; therefore, Zillow might be the closest thing we have to getting what I call the "misery numbers."

Hat tip to Barry Ritholtz for linking to the SF Chronicle article first.

Poem by Judith McCune

I keep this poem in my wallet. It's from The Atlantic magazine (March 2000, page 96), and I've kept it there for eight years. Like my eight-years-old wallet, it is fraying and may soon become unreadable. I wanted to post it here so that others may read this little-known poem. Click on the link below to read the entire poem:

http://www.theatlantic.com/unbound/poetry/antholog/mccune/theguest.htm

I can't post the entire poem because of The Atlantic's copyright (a question for the IP and copyright lawyers out there: once the author is dead, does the copyright to her work diminish in any way, even though the owner of the copyright is the magazine, not the author?). In any case, I will quote the last stanza only to entice you to read the poem:

Now when Chiqui asks me how I've slept, I lie: Just fine, I say, though by this time I've learned the Spanish word for shame.

Copyright © 2000 by The Atlantic Monthly Company.

The poem neatly summarizes my old-fashioned world view. It has hard-working immigrants, caring family members, and a continuity of time (expressed through different generations of the same family). It also juxtaposes old-fashioned values against modern values in a way that makes the new values subservient to the old ones. Whenever I read McCune's poem, I fall in love with its style and content all over again.

Ariel Investments

Ariel Investments CEO John Rogers, Jr. beat Michael Jordan in a 1-on-1 game back in 2003. The video is here:

Ball Don't Lie

WSJ Link

Just for this, I am going to buy some Ariel funds someday (http://www.arielinvestments.com/). I love the way Mr. Rogers Jr. calmly walks away after the game instead of getting excited or trash talking. That's the temperament--calm but determined--a good mutual fund manager should have.

CEO Lanni Leaves MGM Mirage

MGM's CEO Lanni is leaving MGM Mirage:

http://www.reuters.com/article/marketsNews/idINN1338744220081113

Jim Murren will likely replace him. Here is an old transcript of a 1998 interview with Murren:

http://www.fool.com/foolaudio/transcripts/980813_mgg.htm

Mr. Murren seems much more candid than Mr. Lanni. Earlier this year, I posted a review of the 2008 MGM shareholder meeting--see 2008 MGM Shareholder Meeting--in which Mr. Lanni seemed far too sunny and upbeat about his casino's prospects. You can't blame the man for trying, though.

I hope next time I'm in Vegas, I won't get a horse's head in my hotel room after this blog entry. An experienced dealer in Reno once told me, "Back when the mob was running Nevada, things ran much more smoothly." I bet.

General Electric at 12 Year Low

General Electric (GE) stock hasn't been this low since July 1, 1996. GE stock went as low as 14.58 per share today.

Yesterday, the stock tanked because the federal government suddenly reversed course and said it would not be buying bad debts. GE issues debt and also owns various financial subsidiaries, including insurance companies. Absent a government guarantee, various pieces of GE's financial portfolio would be less attractive to buyers. However, GE immediately issued a press release noting that the Federal Deposit Insurance Corporation approved GE Capital Corp. to participate in the Temporary Liquidity Guarantee Program--meaning up to $139 billion in short and long-term debt is going to be guaranteed by the federal government. (See AP article.) I guess when one door closes, another opens.

Today, GE's stock tanked because of rumors that GE was cutting its dividend, which stands at a hefty 7%. GE denied the rumors, but its stock fell anyway.

I am a major buyer at these levels. I picked up three thousand shares yesterday and just bought another thousand shares this morning at around 15.24 per share. My average buy price is around 16.25 per share.

Update on November 13, 2008: I sold my 4000 shares of GE at 16.74 today. Had I waited just five more minutes, I could have sold my shares at 16.90, meaning I would have made another $600+. That's fine--I'm not greedy. GE stock closed today at 16.86. It will probably go up more tomorrow, but I had too much invested to sleep comfortably if I held my shares overnight.

If you go back and look at my "Stocks Update" posts, you can view my short-term trading record. I also sold the GOOG and AMAT shares I bought yesterday.

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.

Techcrunch on Yahoo

Yahoo's share price is almost in the single digits:

Techcrunch

It's like watching a train wreck. Susan Decker needs to call Warren Buffett and get some advice.

Buying Opportunity?

If you are a high risk trader, today's volatility might create a good entry point for short and long term trades.

Today, I bought GE, AMAT, and GOOG. My largest purchases were in GE--I now own over 3000 shares of GE at around 16.55 a share.

Traders still have twenty five minutes to buy (or sell) before the market close.

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.