Archive for November 2010

Ed’s Daily Summary for November 30th   4 comments

BZQ: 0.18 to $17.45 (1.04%)–bought at $17.90
FAZ: 0.01 to $12.56 (0.08%)–bought at $12.55 today
INTC: -0.17 to $21.16 (-0.80%)–bought at $18.52
JUBAX: NA to $10.36 (NA%)–bought at $10.17
LYSDY: -0.05 to $15.35 (-0.32%)–bought at $13.03
NEWN: -0.39 to $7.78 (-4.77%)–bought at $7.25
SIVR: 0.92 to $27.97 (3.40%)–bought at $22.00

OVERALL: -0.63%

Posted November 30, 2010 by edmcgon in Portfolio

Buy Direxion Daily Financial Bear 3X (FAZ)   32 comments

As if all my sales lately aren’t a tipoff enough, I have been feeling rather bearish. However, I couldn’t find the right bear play (other than BZQ), until I read this (from CNBC.com):

While the leaked diplomatic cables published this week by Wikileaks have been roiling the global political scene, bank executives should be on guard. Wikileaks founder Julian Assange just announced that he has a trove of documents revealing unethical behavior at one of the largest banks in the US.

In an interview with Forbes, Assange declined to name the bank. But he hinted at its identity. It is one of the biggest banks in the country. It still exists—ruling out Bear Stearns, Merrill Lynch or Lehman Brothers.

That leaves us with a handful of candidates: Citigroup, JP Morgan Chase, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs.

Would YOU buy a major U.S. bank stock knowing this? I wouldn’t either. But with the market caps of all these players combined, you have to call them the collective 800 pound gorilla in the financial sector. And that makes the Direxion Daily Financial Bear 3X (FAZ) an outstanding play.

Of course, there is plenty to dislike about the financial sector, and being bearish on banks is about as normal as breathing. But to know that ONE of the major banks is about to get “wikileaked” is enough to keep the entire sector down.

I set my limit buy price on FAZ at $12.55 for now. I might go higher.

NOTE: This is a short-term play. FAZ is a triple-leveraged ETF, which means it carries much greater risk than your normal investment.

UPDATE: I got FAZ at $12.55.

SECOND UPDATE: It looks like the bank involved might be Bank of America.

Posted November 30, 2010 by edmcgon in Portfolio Moves

Sell China Integrated Energy (CBEH)   29 comments

One good stock sale deserves one bad sale, so let’s toss out some dirty laundry. China Integrated Energy (CBEH) broke through the 50 day moving average to the downside like it wasn’t even a speed bump. And it is far too close to my absolute loss limit of 20%, so it is time to sell, as I really don’t see the end to this yet.

I am setting my sell limit price at $7.75, but it will be gone by the end of today regardless.

UPDATE: It sold for $7.65. Sadly, it broke my 20% limit.
The final line for CBEH: -0.31 today, -2.00 overall to $7.65 (-3.89% today, -20.73% overall)–bought at $9.65

Posted November 30, 2010 by edmcgon in Portfolio Moves

Sold Atlantic Power Corporation (AT)   2 comments

I got a pleasant surprise this morning when I opened my portfolio and saw that Atlantic Power Corporation (AT) hit my sell target price of $14.

The final line on AT with dividends included in the original cost: +0.05 today, +1.55 overall to $14.00 (+0.36%today, +12.45% overall)–bought at $12.45

Without dividends, the gain was +1.38 overall, for a 10.94% profit.

There is one more added bonus not included in the numbers above: I still have TWO dividends coming to me, one today (as shareholder of record on 10/29), and one on December 31st (as shareholder of record today, since the ex-dividend date was 11/26). Cha-ching!

Posted November 30, 2010 by edmcgon in Portfolio Moves

Deutschland über alles: Ed’s Daily Preview for November 30th   4 comments

All Europe, all the time: That is a good way to describe the markets recently. I guess the markets don’t want to take solace in the fact that German unemployment is down, currently at a 7.0%rate. No, now that Ireland is out of the way (for now), we have to look at Portugal and Spain. With Spain specifically, the Spanish banks are looking at possibly needing a bailout next year about the size of the entire Irish bailout (85 billion euros). There is even some talk about Italy being next in line.

Unfortunately, the whole world economy is starting to get that “dominoes falling” feeling to it. For example, the problems with European bonds are starting to spread out to corporate bonds. The overnight equity markets are taking their hits too, with Europe, China and Japan all dropping.

In the U.S., home prices are down 2% from a year ago, 1.5% in September alone.

The great fear monitor, otherwise known as gold, is up in spot trading by over 1%. All of the other precious metals are up too.

Amidst all this, German unemployment is down. There is something to be learned there, and it is called Kurzarbeit (from RTTNews.com):

It is better to have something than nothing at all. Validating this view, Germany’s short-term working allowance scheme called Kurzarbeit successfully supported the labor market during tough times. Work sharing schemes exist in several economies, but the German one has been touted the most successful.

Under Kurzarbeit, the German government compensates as much as 67% of the foregone net wages of an employee, if the employer needs to cut wage cost and working times amid economic slowdown. When an employee is covered under this scheme, his/her social contributions such as pensions, health care, longtime care, jobless benefits are fully met by the Federal Employment Agency.

Further, if there is no work for an employee, he/she has to undergo training and skill development, costs of which are borne by the agency. Such training and development could come in handy at times of booming business. Temporary workers are also eligible for the scheme.

This sort of employment policy serves as an alternative to cutting jobs. The advantage to employers is that they can retain their trained staff during periods of economic slowdown as the government meets the salary cost. Employers can also avoid the cost of rehiring once the economic situation improves.

The main advantage, as described by Michael Warren at The Weekly Standard: “It makes more sense for the government to spend money on workers that are working less than to spend it on workers that are not working at all.”

And nobody in Washington is paying attention

Posted November 30, 2010 by edmcgon in Economy, Editorial/opinion, Market Analysis

Ed’s Daily Summary for November 29th   5 comments

AT: 0.26 to $13.95 (1.90%)–bought at $12.45 (price adjusted to reflect dividends received)
BZQ: -0.17 to $17.27 (-0.97%)–bought at $17.90
CBEH: -0.37 to $7.96 (-4.44%)–bought at $9.65
INTC: -0.01 to $21.33 (-0.05%)–bought at $18.52
JUBAX: NA to $10.38 (NA%)–bought at $10.17
LYSDY: -0.66 to $15.40 (-4.11%)–bought at $13.03
NEWN: 0.29 to $8.17 (3.68%)–bought at $7.25
SIVR: 0.34 to $27.05 (1.27%)–bought at $22.00

OVERALL: -0.12%

Posted November 29, 2010 by edmcgon in Portfolio

A gift idea for kids?   17 comments

I had an interesting idea for a Christmas gift for my kids (they are 13 and 11), and since they don’t read my blog, I figured it would be safe asking you folks if this is a good idea or not.

I was thinking about buying each of my kids a 1-troy ounce bar of silver. It occurred to me they could get a taste of commodity investing, since that is the standard for which silver is priced. I could teach them how to look up the value online, and with the appreciation I expect silver to have in the near future, and possibly for years to come, this could be a good way to get them interested in commodity investing. For about $60, that could be a worthwhile investment.

Also, unlike a stock investment, this would also give them something to hold, which would make the investment a bit more real to them.

So what do you folks think?

Posted November 29, 2010 by edmcgon in Investing Education