Archive for February 2013

February 28th: Ed’s Daily Portfolio Summary   5 comments

The indexes tanked at the end of the day, giving me a victory, which is 3 out of 4 days I beat the indexes this week:

NNVC: 0.04 to $0.48 ( 9.09% , 2.13% overall)– bought at $0.47
SPXU: 0.26 to $30.99 ( 0.85% , -4.79% overall)– bought at $32.55
TZA: -0.03 to $10.67 ( -0.28% , 0.19% overall)– bought at $10.65

OVERALL: +0.68%


Posted February 28, 2013 by edmcgon in Market Analysis, Open Thread, Portfolio

Update: NanoViricides (NNVC)   Leave a comment

I sold half my NanoViricides (NNVC) position at 47 cents/share this morning. Because the average purchase price was actually 46.45 cents/share, I could call that 1.18% profit, but for the semi-final line, it doesn’t really matter:

NNVC: +0.03 today, +0.00 overall to $0.47 (+6.82% today, +0.00% overall)–bought at $0.47

Also, I will add a limit order to sell half of the remaining shares at 52 cents, but it is only for today. Nothing like a quick 10%, if I can get it!

In case you are wondering, here is why NNVC is popping today:
NanoViricides Announces Retirement of Its Series C Convertible Preferred Stock Held by Seaside 88, LP – Company Reports Having More Than Two Years of Cash on Hand

UPDATE 4:00 pm EST: Sorry, I forgot to post this earlier, but I also cut my price on the last limit order, and sold half of the remaining NNVC at 48 cents/share. Here is the semi-final line:

NNVC: +0.04 today, +0.01 overall to $0.48 (+9.09% today, +2.13% overall)–bought at $0.47

Posted February 28, 2013 by edmcgon in News, Portfolio Moves

Traders Corner   35 comments

Stock futures are up this morning, but will that hold? Watch what happens at the end of the day today, since it is month-end. A high-volume drop at the end could be a strong indicator that tomorrow will be bearish. The reverse holds true too, and a large volume pop at the end could be bullish for tomorrow.

The S&P 500 levels to watch today:

UPSIDE: 1522-1525 (5 data points), 1530 (2 data points), 1531 (top of the Bollinger Bands), and 1552 (the S&P 500 all-time high from 2000).
LAST CLOSE: 1515, inside the 1511-1520 (18 data points, including the 10 day moving average) range.
DOWNSIDE: 1510 (20 day moving average), 1509 (February 8th’s low), 1504 (February 6th’s low), 1502 (February 22nd’s low), 1494-1498 (7 data points), 1490 (the bottom of the Bollinger Bands), 1487 (February 25th’s low), 1485 (February 26th’s low), 1480 (50 day moving average), 1474 (2012’s high), 1470 (October’s high), and 1410 (200 day moving average).

Posted February 28, 2013 by edmcgon in Daytrading, Investing, Market Analysis

Ed’s Daily Notes for February 28th   6 comments

Bloomberg: Wal-Mart Struggles to Restock Store Shelves as U.S. Sales Slump

Are Wal-Mart’s sales problems “self-inflicted”?

Wal-Mart Stores Inc (WMT), already struggling to woo shoppers constrained by higher taxes, is “getting worse” at keeping shelves stocked, the retailer’s U.S. chief told executives, according to minutes of an officers’ meeting obtained by Bloomberg News.

“We run out quickly and the new stuff doesn’t come in,” U.S. Chief Executive Officer Bill Simon said, according to the minutes of the Feb. 1 meeting. Simon said “self-inflicted wounds” were Wal-Mart’s “biggest risk” and that an executive vice president had been appointed to fix the restocking problem, according to the minutes.

Once a paragon of logistics, the world’s largest retailer has been trying to improve its restocking efforts since at least 2011, hiring consultants to walk the aisles and track whether hundreds of items are available. It even reassigned store greeters to replenish merchandise. The restocking challenge emerged as Wal-Mart was returning more merchandise to shelves after a previous effort to de-clutter its stores.

Wal-Mart’s inability to keep its shelves stocked coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Simon said in the company’s Feb. 21 earnings call.

Full Disclosure: My wife works for Wal-Mart.

I won’t comment on this story, except to say I wouldn’t buy Wal-Mart stock.

The Washington Free Beacon: Subway Founder: Subway Would Not Exist If Started Today Due to Government Regulations

President and founder of Subway Fred Deluca described some of the challenges payroll tax increases and Obamacare have presented small business franchisee owners Wednesday on CNBC.

Deluca said the number one issue facing Subway franchisee owners is how Obamacare will impact their expenses, noting any increase in costs will be passed along to the consumer through higher prices.

Additionally, when asked about the modern business climate for young entrepreneurs, the Subway founder stated “Subway would not exist” if he started it today due to onerous government regulations:

SIMON HOBBS: It’s 13 years since you wrote the book “Start Small, Finish Big” which was about grass roots entrepreneurship. Do you think the environment for those chasing the American dream by setting up their own business has gotten worse or better in those 13 years?

FRED DELUCA: It’s continuously gotten worse, because there’s more and more regulations. It’s tougher for people to get into business. Especially a small business. I tell you, if I started Subway today, Subway would not exist, because I had an easy time of it in the ’60s when I started. I just see a continuous increase in regulation.

Home Depot co-founder Bernie Marcus said the same thing about Home Depot a little over a year ago. But this problem isn’t limited to just retail and restaurants:

Bloomberg: Too Big to Fail Rules Hurting Too Small to Compete Banks

Investors such as Joshua Siegel, founder and managing principal at New York-based StoneCastle Partners LLC, see bigger changes at the other end of the spectrum. Small banks will seek mergers because their management teams are aging and new regulations are too costly to bear, he says.

“If you need one major overriding theme of the industry in the next three, five, seven, 10 years: massive consolidation, thousands of banks,” says Siegel, whose firm managed $5.1 billion as of the end of last year and invests in small banks. In the U.S., “I do see probably anywhere from 2,000 to 4,000 banks being swallowed up, and what you’ll see then is a more- concentrated system.”

JPMorgan’s Dimon, a critic of regulations he views as unnecessary or excessive, has recently touted the benefits. He told Citigroup analysts this month that new rules will help banks such as JPMorgan, the largest in the U.S., win market share from smaller competitors, the analysts wrote in a report.

In Dimon’s view, they wrote, the changes will “make it more expensive and tend to make it tougher for smaller players to enter the market, effectively widening JPM’s ‘moat.'”

The new rules, it turns out, may be doing more to shield banks from competition than to make them safer.

The more you regulate, the bigger the companies become. As I said when Dodd-Frank was first passed, instead of putting burdens on TBTF banks, the TBTF banks will become bigger and more moated from smaller competition. Even Jamie Dimon admits this.

From an investment perspective, as distasteful as this might be, the TBTF banks are the place to have your investment funds, at least until they screw up again.

France 24: Brin sees Google glasses hitting market this year

A little more detail on Google’s Glass, scheduled to be released later this year:

[Sergey Brin, Google co-founder] described Glass as the first form factor to deliver on a vision he had from Google’s inception that one day search queries would be outmoded and information from the Internet would come to people when they need it.

Glass frees the eyes as well as the hands when it comes to connecting to the Internet on the go, according to Brin.

“That is why we put the display up high, out of the line of sight,” Brin said, wearing the Glass eyewear he is rarely seen without.

“If I wore a ball cap, the display would be on the brim and not where you are looking,” he continued. “And sound goes through bones in the cranium, which is a little freaky at first, but you get used to it.”

Glass wearers can speak commands to the eyewear, and built-in camera technology allows pictures or video to be captured from first-person perspectives while people take part in what is happening.

While I would love to own one, there is one simple problem: I already wear prescription lenses. Until they come out with a prescription version, I am out of luck.

Fox News: Millionaire Dennis Tito to send couple on manned Mars mission on Jan. 5, 2018

A maverick millionaire obsessed with space travel vowed to send a manned mission to Mars, even announcing the date the rocket carrying one man and one woman would set off for the Red Planet: Jan. 5, 2018.

On that date, a preferably married couple yet to be chosen will enter a tiny space capsule for the longest date in history — rocketing into the heavens and the record books, promised Dennis Tito, the brains behind The Inspiration Mars Foundation and the American businessman who paid about $20 million to visit the International Space Station in 2001 aboard a Russian spacecraft.

Who will the couple be? “This is humanity’s first flight out to Mars, and humanity should be represented by both genders,” Dennis Tito said.

“We hope that we can find a married couple. When you’re out that far and the Earth is a tiny blue pinpoint, you’re going to need someone you can hug. What better solution to the psychological problems you’re going to encounter with that isolation?”

After a trip of about 140 million miles, the brave couple will be the first humans ever to peer out a window at Mars — but not set foot there.

Their spacecraft will not stop on the surface of the planet, instead orbiting around the Red Planet at a distance of 100 miles out before using the planet’s gravity to slingshot back to the Earth, he said.

I am trying to imagine spending 501 days with my wife in a cramped capsule. The ONLY reason I would do it is for the historic purpose.

But kudos have to go out to Dennis Tito for paying for this trip.

Posted February 28, 2013 by edmcgon in Market Analysis, News

February 27th: Ed’s Daily Portfolio Summary   2 comments

NNVC: -0.01 to $0.44 ( -2.22% , -6.38% overall)– bought at $0.47
SPXU: -1.19 to $30.74 ( -3.73% , -5.56% overall)– bought at $32.55
TZA: -0.33 to $10.71 ( -2.99% , 0.56% overall)– bought at $10.65

OVERALL: -1.34%

Posted February 27, 2013 by edmcgon in Open Thread, Portfolio

Traders Corner   25 comments

The S&P 500 levels to watch today:

UPSIDE: 1502 (February 22nd’s low), 1504 (February 6th’s low), 1509 (February 8th’s low), 1510 (20 day moving average), 1511-1519 (17 data points, including the 10 day moving average), 1522-1525 (5 data points), 1530 (2 data points), 1531 (top of the Bollinger Bands), and 1552 (the S&P 500 all-time high from 2000).
LAST CLOSE: 1496, inside the 1495-1498 (6 data points) range.
DOWNSIDE: 1489 (the bottom of the Bollinger Bands), 1487 (February 25th’s low), 1485 (February 26th’s low), 1478 (50 day moving average), 1474 (2012’s high), 1470 (October’s high), and 1409 (200 day moving average).

Posted February 27, 2013 by edmcgon in Daytrading, Investing, Market Analysis

Ed’s Daily Notes for February 27th   24 comments

The Guardian: Eurozone crisis live: Italy passes bond auction test amid political deadlock

Don’t we all want to follow live blogging of the Eurozone crisis? Thankfully, we have The Guardian doing just that!

Seriously, Italy had a semi-positive bond auction today. But the main takeaways:

1. The yield was higher (3.59% versus 2.94% at the last auction of 5 year bonds, and 4.83% versus 4.17% at the last auction of 10 year bonds), which indicates a lack of interest.
2. There is uncertainty as to who bought the bonds. Italian banks? The ECB?
3. The bid-to-cover ratio went up (“the amount of bids compared to the amount on offer”) to 1.6% from 1.3%.

Overall, I would be careful calling this auction “positive”, because it is definitely showing a weaker demand for Italian bonds.

Daily Mail: Yahoo! boss Marissa Mayer under fire for building personal nursery next to her office – before telling employees they can NOT work from home

I wasn’t going to get into the whole “working from home” scandal around Yahoo, until I read this:

Yahoo CEO Marissa Mayer built a nursery in her office so she could bring her baby to work, which has angered some stay-at-home employees following her demand that all remote workers report back to the office.

The former Google Inc. executive took the demanding top job at Yahoo! when she was five months pregnant and stirred up controversy when she took only two weeks of maternity leave after giving birth last fall.

But at her own expense, Mayer built a nursery adjacent to her office to be closer to her son.

I would call this a major faux pas by Mayer, because it reeks of “do as I say, not as I do” hypocrisy. Even though she did pay for the nursery herself, that doesn’t absolve her, unless she is willing to do the same for other working mothers in the company. If she is willing to do that, she could even come out of this smelling like a rose. Otherwise, she creates a layer of distrust between herself and some of her employees.

Bloomberg: Gold Miners Come Clean on Costs After Lost 6 Years

Here is one reason I have never been fond of gold miners:

The gold-mining industry, which has underperformed the precious metal for each of the past six years, is pledging to report costs more accurately as part of its efforts to win back investor confidence.

Barrick Gold Corp. (ABX) and Goldcorp Inc. (G), the two biggest producers by market value, have begun reporting “all-in sustaining costs” for the first time. The new measure averaged $941 an ounce between the two companies in the fourth quarter. That’s 50 percent higher than the $626 average so-called cash cost they disclosed in the preceding three months.

The largest gold companies are seeking to lure investors back to the $300 billion industry after a string of money-losing multibillion-dollar takeovers and over-budget projects. Barrick and its competitors are vowing to focus on margins and to get a grip on soaring production costs, rather than boosting output.

Gold producers “have really done themselves a huge disservice by effectively walking around for the last 12 years promoting the gross margin as opposed to the net or the operating margin,” said Joseph Wickwire, the Boston-based manager of Fidelity Investments’ $2.9 billion Select Gold Portfolio fund. “The managements and the boards of the gold companies really have no one to blame but themselves for some of the negative sentiment and disappointment.”

Earnings statements had previously carried so-called cash costs, based on a standard developed in the 1990s that excludes expenses such as exploration and waste-rock removal.

The 55-member S&P/TSX Global Gold Sector Index (SPTSGD) trailed gold each year in 2007 through 2012. The index declined 6.9 percent during that period while gold futures more than doubled in New York. Gold traded at $1,612.20 an ounce at 12:27 p.m. in Tokyo.

Gold has advanced for 12 successive years, driven at least in part by demand from investors looking for a store of wealth amid concern about inflation. Despite benefiting from that rally, gold producers’ margins have come under pressure from rising prices for labor, equipment and raw materials.

The average cash cost of 10 of the biggest gold miners was $694 an ounce in the third quarter, 49 percent higher than in the same period two years earlier, according to data compiled by Bloomberg. The average gold price rose 35 percent in the same comparison.

“Everyone was trying to run through the funnel of building these new projects as big as you can, as fast as you can,” Kinross Gold Corp. (K) Chief Executive Officer J. Paul Rollinson said in an interview Feb. 13. “There was huge competition for people, competition for steel, competition for tires and spare parts.”

Just because you have a gold mine is no excuse for running your business sloppy. Generally speaking, the only time a gold miner has good financials is when gold has had a large run-up during the quarter, and sometimes not even then.

Posted February 27, 2013 by edmcgon in Economy, Market Analysis, News