Archive for June 2011

Ed’s Daily Summary for June 30th   7 comments

EMLC: 0.17 to $27.45 (0.62%, -0.44% overall)–bought at $27.57
GPE_PA: 0.05 to $25.40 (0.20%, 0.42% overall)–bought at $25.295
PFF: 0.03 to $39.66 (0.08%, 0.08% overall)–bought at $39.63 today
TYO: 0.42 to $40.17 (1.06%, 0.96% overall)–bought at $39.787

OVERALL: +0.16%

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Posted June 30, 2011 by edmcgon in Portfolio

Buy iShares S&P U.S. Preferred Stock Index (PFF)   20 comments

It is time to go ahead and buy iShares S&P U.S. Preferred Stock Index (PFF) from my stockwatch list. They will most likely be announcing their dividend for July today, with their ex-dividend date tomorrow. With it’s low volatility, there is no reason to wait. I am setting my buy limit order at $39.55, although I might chase it today.

UPDATE 12:05: I kicked my limit price up to $39.60.

UPDATE 3:04: I bought PFF at $39.63.

Posted June 30, 2011 by edmcgon in Portfolio Moves

Happy QE2 Day! Ed’s Daily Notes for June 30th   49 comments

1. Today is the “official” end of the Federal Reserve’s second round of quantitative easing (known as QE2), But don’t worry. With all the money they are getting from the treasuries they have already bought, the Fed has announced they will be buying about $300 billion more treasuries in the next year. Think of it as the Fed voluntarily rolling over U.S. debt, not unlike what the German banks have just agreed to do with Greek debt. Rolling, rolling, rolling…get that bad debt rolling…

2. What is the deal with all the banks cutting jobs? With both American and European banks seemingly on a job-cutting binge, it seems the banksters aren’t very profitable when it comes to their investment activities. If for no other reason, we need to split the too-big-to-fail banks from their investment banking divisions for their own good, because they suck at it.

3. Bad news for one of my old investments:

Lynas Corp.’s Malaysian rare-earth refinery may be delayed by a government review that called for higher safety standards, further limiting supply of rare earths as China curbs exports.

Adding to Lynas’s woes: Brazil’s Vale is looking into doing some rare earth mining of it’s own.

For Vale, this is a good news-bad news situation. One of the worries which Vale has had has been China’s economy. If China’s economy slows down, the amount of iron ore Vale exports to China could go down with it. While rare earth mining won’t replace the lost income from iron ore in a worst case scenario for Vale, it would at least help. Unfortunately, it could take many years for Vale to get up and running in rare earth mining, so don’t jump on this ship yet.

4. Finally, an IPO I can sink my teeth into: Dunkin’ Brands Group (DNKN), operator of the Dunkin’ Donuts chain. It could happen as soon as next week. Personally, I am partial to Krispy Kreme Doughnuts (KKD), although I would like to see that stock drop a little first, at least closer to $8.75-9. KKD does have some good technical momentum now, but I only see it as fairly valued at the current price.

Posted June 30, 2011 by edmcgon in Economy, Market Analysis

Ed’s Daily Summary for June 29th   5 comments

EMLC: 0.04 to $27.28 (0.15%, -1.05% overall)–bought at $27.57
GPE_PA: 0.02 to $25.35 (0.08%, 0.22% overall)–bought at $25.295
TYO: -0.04 to $39.75 (-0.10%, -0.10% overall)–bought at $39.787 today

OVERALL: -0.03%

Posted June 29, 2011 by edmcgon in Portfolio

Buy Direxion Daily 10-Yr Treasury Bear 3x (TYO)   2 comments

I know I said I wasn’t going to buy anything, but the treasury market may be in the middle of an implosion right now. The combined whammy of Greece being fixed (yeah right, but that’s what the markets think) and the end of QE2 coming tomorrow have the treasuries acting like red-headed stepchildren in the investment world. Along that line, I am added a small position in Direxion Daily 10-Yr Treasury Bear 3x (TYO) at $39.787 (thanks Hal!).

Posted June 29, 2011 by edmcgon in Portfolio Moves

Reading assignment of the day   7 comments

During my morning reading, I came across arguably the best summary of the world today: “Just Four Global Events Will Determine Investors’ Fates“, by James Shinn over at The Institutional Investor.

To briefly summarize, there are four ongoing events which global macro traders are looking at in making their investment decisions: U.S. monetary policy, European peripheral debt problems, China’s economy, and Arab unrest (aka “The Arab Spring”). While they don’t all agree on the outcomes of these events, they do agree these are the events which will determine the direction of the world’s economy in the foreseeable future.

Although Shinn’s article is long, it is a must-read.

Posted June 29, 2011 by edmcgon in Economy, Investing Education, Market Analysis

Ed’s Daily Notes for June 29th   23 comments

1. Stock index futures are up this morning, so we should have a good opening. Intriguingly, precious metals are also trading up in the early morning spot trade. Oil is up too.

2. The positive market opening is a direct result of the positive view that the Greek government will pass the austerity measures, in spite of what the people want. This political suicide means we will be revisiting this issue again, either later this year or next year. This can is getting pretty dented from the number of times it’s been kicked down the road…

3. Is the education industry entering a bubble phase? Considering the only significant credit expansion we have seen in the past few years has come in college loans, it is a valid question. To use some anecdotal evidence, I work with a woman who doesn’t have a college degree, yet knows her job better than most of her co-workers, including the ones with college degrees. Yet it took many years for my company’s management to finally recognize her abilities with a simple promotion to the senior level of her position, constantly passing her over for less qualified and less knowledgable college graduates. I don’t even blame her direct manager for this situation: How do you sell the promotion of an extremely qualified worker to upper management? It becomes easier when the worker in question has the college degree.

We as a society have blinders on when it comes to college degrees. While I am not suggesting they don’t have value, I also don’t believe they are worth what many people pay for them. Considering our tax dollars are going to subsidize the majority of student loans, and considering we have many college graduates now unemployed, and finally considering how much our government is in debt itself, we need to ask if we are getting our money’s worth from this expenditure? Even if you believe in the value of a college education, this is a legitimate question to ask.

Posted June 29, 2011 by edmcgon in Economy, Market Analysis