Archive for November 2011

End of the month or the world? Ed’s Daily Summary for November 30th   1 comment

I took my lumps on the last day of the month today, as I set up my portfolio for the end of the world tomorrow: I am short on gold (DZZ), short on the euro (DRR), short on the S&P 500 (SPXU), and short on small caps (TZA). Come on, snake eyes…

DRR: -0.83 to $42.40 (-1.92%, 0.24% overall)–bought at $42.30
DZZ: -0.02 to $4.48 (-0.44%, -0.44% overall)–bought at $4.50 today
NNVC: -0.04 to $0.66 (-5.71%, -14.29% overall)–bought at $0.77
SPXU: -0.16 to $13.85 (-1.14%, -1.14% overall)–bought at $14.01 today
TZA: -0.66 to $28.20 (-2.29%, -2.29% overall)–bought at $28.86 today

OVERALL: -0.45%

In the immortal words of that great philosopher, Meat Loaf, “Now I’m praying for the end of time…”

Posted November 30, 2011 by edmcgon in Portfolio

Sell Google (GOOG) temporarily   3 comments

Right now, I am not feeling comfortable about tomorrow, the 1st of December. The 1st of the month has not been kind to the markets this year, and it has been a mixed bag for December 1st in recent years.

I have a limit sell order on my full Google position at $597.00, although I will chase it later today. I know the old rule about “you shouldn’t try to time the market”, but my gut says get out of equities. I could very well be wrong about this, and the markets could have a perfectly wonderful day tomorrow. But they will do it without me. (except for NNVC, but that’s a teeny position)

UPDATE: Google sold at $597. The final line:
GOOG: +14.07 today, +6.88 overall to $597.00 (+2.41% today, 1.17% overall)–bought at $590.12

Posted November 30, 2011 by edmcgon in Portfolio Moves, Strategy

Would you like to play a game?   25 comments

Let us play a game. I call it “Solve the world’s problems”. First, I will give you a list of all the major problems in the world, and then a list of news stories which are contributing to the run-up in the markets today.

First, the problems (in no particular order):
1. Europe’s debt
2. Europe’s economic woes
3. U.S. debt
4. U.S. economic woes
5. China’s economic “hard landing”
6. Japanese debt
7. Japanese economic woes
8. Oil prices
9. Iranian nukes

Now, the news stories that the market views as solving the problems above:
A. Central banks lower currency swap rates
B. China lowers bank reserve requirements

ANSWERS (no peaking!): If you matched “B” and “5”, you would be correct, except the Chinese markets were down significantly in overnight trading. On the other hand, if you matched “A” with anything, you win! As the markets are telling us, the cost of currency swapping is really the only problem in the world today. Thanks for playing!

Posted November 30, 2011 by edmcgon in Economy

Daytraders corner   62 comments

If you need a lesson in why you should never hold daytrades overnight, take my SPXU…please! (with apologies to Henny Youngman)

Seriously, after the news came out about the world’s central banks opening the swap spigots, thereby increasing liquidity in the world economy, the markets were off to the races. I had to dump SPXU in pre-market, because I think the markets could have a monster day today. I sold SPXU at $14.60, for a 7.5% loss. Actually, I got off cheap on that, as I expect the S&P 500 could easily pop for 3% or more today.

My guess for today is the S&P 500 will easily make it past 1205 and 1215, and close around 1230. This is legitimately good news for the world economy, but don’t overrate it. We could easily return to the dumps tomorrow.

Posted November 30, 2011 by edmcgon in Daytrading

Ed’s Daily Notes for November 30th   6 comments

I have an early meeting this morning, so you folks will have to settle for an abbreviated notes for today. Sorry.

1. It just got cheaper to swap currencies, as the world’s major central banks cut the swap rate. Markets applaud.
2. Businesses plan for the end of the euro
3. Samsung beats Apple in Australian court
4. It could be time to get into gold mining stocks
5. Good news as fewer job cuts were planned in November

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

Ed’s Daily Summary for November 29th   2 comments

I decided to keep my daytrade on SPXU for another day. Although I could have sold it at the end of today for a small profit, I prefer holding it into tomorrow’s opening. Surely Europe can find something to disagree about overnight?

Mon portefeuille:
DRR: -0.06 to $43.23 (-0.14%, 2.20% overall)–bought at $42.30
GOOG: -5.26 to $582.93 (-0.89%, -1.22% overall)–bought at $590.12
NNVC: 0.01 to $0.70 (1.45%, -9.09% overall)–bought at $0.77
SPXU: 0.03 to $15.81 (0.19%, 0.19% overall)–bought at $15.78 today

OVERALL: -0.14%

Posted November 29, 2011 by edmcgon in Portfolio, Portfolio Moves, Strategy

The Facebook Line   19 comments

If Facebook’s IPO goes off as planned, Facebook will have a starting market cap of $100 billion. A lot of people are questioning this valuation, saying Facebook will then have a greater value than Cisco (CSCO) at $96.8 billion. Facebook is expected to make an estimated $4 billion this year, as opposed to Cisco which made $43 billion as of the trailing 12 months ending in October. But let’s see what other companies would fall under Wall Street’s version of the ”Mendoza Line” (with their market cap/gross revenues in parentheses, in $ billions):

Pepsico ($98.4/$64.5)
McDonald’s ($95.9/$26.4)
Anheuser-Busch InBev ($93.4/$38.6)
Schlumberger Limited ($92.9/$37.6)
Rio Tinto ($92.1/$61.0)
QUALCOMM ($90.6/$14.9)
Amazon.com ($88.2/$43.5)
Citigroup ($73.2/$65.7)

This begs the question: If Citigroup was “too big to fail”, what happens if Facebook ever goes bankrupt?

Posted November 29, 2011 by edmcgon in Stocks