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EverydayInvestor (< 20)

February 2008

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8

Feeling Smart about Idearc

February 29, 2008 – Comments (6) | RELATED TICKERS: VZ , IAR

I used to be a Verizon (VZ) shareholder, and I received shares of Idearc (IAR) in a spinoff two years ago. I immediately sold it, because I foresaw future sales decreases for yellow pages, plus it was not valued very cheaply by the market then.

As you can see by this graph, I made a smart move. 

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8

Feeling the pain

February 28, 2008 – Comments (2)

What hurts most is missing the easy money: ECOC.ob decided to decline by 50% or so today. I closed my small short position in it just a few days ago (with only a 30% gain) and I pinched the pennies by submitting a limit order this morning to short it just below the ask (that order did not get filled). The problem with worthless companies like this is that they can go up and down a lot on no news.

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8

My revised mortgage bailout proposal

February 27, 2008 – Comments (4)

In response to critiques of my previous proposal, here is my current one. Don't do anything. House prices will fall, many people will walk away from their homes and declare bankruptcy. The savings rate will increase. We will go through a recession. Many companies will go bankrupt. That's fine. It's called capitalism. People always need houses, so vulture investors will buy houses out of bankruptcy, fix them up, and sell them (cheaply) to new homeowners.   [more]

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7

My mortgage bailout proposal

February 27, 2008 – Comments (9)

The best way to bailout subprime mortgages and anyone else losing money in the housing market is this: allow losses in residential real estate to be deducted for the purpose of income taxes and allow any losses to be carried back OR forward up to 3 years. Also, the government should not tax forgiven mortgage debt as income. I know I'd feel a lot better about my $30k loss on my house if I could use it to reduce my taxes by $10k this year.  [more]

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6

An immaterial disclosure

February 26, 2008 – Comments (3) | RELATED TICKERS: LVLT

If you aren't reading him yet, you need to start reading David Milstead of the Rocky Mountain News. I like his take on a filing by Level 3 Communications.  [more]

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6

A rude shock for Zillow users

February 26, 2008 – Comments (3) | RELATED TICKERS: DHI , CTX , PHM

As some of you may know, my house will go on the market in just a couple days. Whereas Zillow estimates my house to be worth $188,500, it will be listed at just under $170,000. I paid $185,000 for the house 3.5 years ago and put over $10,000 in upgrades into it. That is a price decline of at least 13%. If you look at the price decline from the peak (similar homes sold a year after I bought mine for around $200,000), the price decline is 20%. This would wipe out 2/3 of a normal buyer's equity (if he or she had put down 20% as a down payment). For most of the buyers in the last few years, with less than 20% down payments, current price declines will send them way into negative equity.  [more]

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5

Cheap stock of the day: Pomeroy IT Solutions (PMRY)

February 25, 2008 – Comments (0)

Pomeroy is cheap cheap cheap (or, as they say in the Lou, "Cheap Cheap Fun Fun"). It isn't very profitbable, but it isn't losing money. Currently has a mico-sized market cap of $80 million. If I weren't too busy with other things I'd finish my DD and buy this company. My CAPS pick of it is down 17 points, but that means it is even cheaper now.  [more]

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6

DIE DIE DIE DIE

February 25, 2008 – Comments (2)

ONJP.ob took a bit of a dive today, on huge volume of 2,000 shares traded. I'm actually short this in real life to the tune of 1200 shares, with a cost basis of $2.72 and all my profits (after tax) pledged to charity.

This is nothing more than a shell company built for pump and dumps. This will head back to $0.10 or less, but the waiting is killing me. 

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5

My portfolio weightings right now

February 25, 2008 – Comments (0)

I am 89% long, 98% short, 44% levered (which is backup funding on my shorts and is currently all in cash). Including proceeds from my short sales, the uninvested equity, and my loan, I am 150% in cash.

The problem with fancy financing and investing is that it sure makes tracking things a lot tougher!

A new ETF I added to my portfolio is MGV, Vanguard's mega-cap value ETF.

 

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7

The Cheap Stocks 21 Net/Net Index

February 24, 2008 – Comments (5) | RELATED TICKERS: SXCLD , FINL , VOXX

Below is info on the Cheap Stock 21 Index of companies trading below their net current asset value. See the performance info.  [more]

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6

The return of the stockster

February 24, 2008 – Comments (3)

To penny stock fraud afficianados, TheStockster.com holds a special place. It is now back (under new management, supposedly), and better than ever. I am subscribing so as to get some short ideas.

See its sordid history.

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10

It pays to track performance

February 23, 2008 – Comments (8)

 This is yet another pitch for Icarra.com. If you do not accurately track your performance, how can you know whether you should change your investment strategy. Another site that could be useful is Covestor.com.   [more]

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6

Yeah, I was bullish on FLI

February 23, 2008 – Comments (4) | RELATED TICKERS: FLI

But I didn't do anything about it.

See my Foolish take from last September

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8

Another OTC Junk Company to Ride down for easy points

February 21, 2008 – Comments (4) | RELATED TICKERS: CREE

To all those who want easy points, feast your eyes on Lighting Sciences Group Corporation.   [more]

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8

Things are starting to "suck"

February 21, 2008 – Comments (3) | RELATED TICKERS: LAD

Wow, Lithia Automotive (LAD) had horrid earnings and a bad forecast, and even that assumes the second half of 2008 picks up. Zale saw its net fall 30%. This is definitely an indication of recession, as consumers start to pull back on discretionary spending.

Now is the time to pair down debt and hunker down. But on the other hand, worries of stagflation (see WSJ or FT today) would mean that we should hold lots of debt. Arrgh! I'm confused! 

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9

I'm Famous ... in Canada

February 20, 2008 – Comments (1)

The Globe and Mail had an article about social investing and I was their lead in. Interestingly enough, the reporter never contacted me--if he had done so he would have gotten a better quote than the one he lifted from CAPS (or my blog, not sure which). I also would have told him that I am NOT a psychologist, just trained as one.  [more]

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11

Housing will get worse ... much worse

February 17, 2008 – Comments (15) | RELATED TICKERS: DHI , CTX , SPF

In July 2004 I bought a house for $187k. I put about $6k into it and a little bit of sweat equity (not too much). I am now selling it, after putting $5k into some cosmetic improvements. That puts my total cost basis at $198k. The listing price will be $170k. If I get my listing price (something I doubt, although I do think it is priced appropriately), I will have had a loss of 14% over 3.5 years. Oh, and this is an a nice area of St. Louis that continues to improve; housing was never crazy here like it was in California or Florida.  [more]

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6

Double your money in six months!!!!!

February 15, 2008 – Comments (3) | RELATED TICKERS: CNA , MVC , BRK-B

Following is the performance of a real-life portfolio of mine, started last August.  Not exactly AIMR-compliant, but reasonably accurate. Needless to say, I am doing well since I started this portfolio back in July. My outperformance has primarily come from shorting OTC stocks.   [more]

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9

It pays to be hardcore

February 14, 2008 – Comments (7)

I love earnings season! RMDX.ob got killed today. So what if I had $20k in losses in it up until last week? I knew I was right, shorted a bunch more, and now I am seriously in the black. Just two more OTC companies left that I massively shorted. If they tumble then my big bet (borrowing a huge chunk of change to short more) will have paid off handsomely.  [more]

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7

Buy my book!

February 13, 2008 – Comments (0) | RELATED TICKERS: BRK-A , BRK-B , MBI

Okay, well it is not my book, but I co-authored a chapter. Plus, it is an interesting book. Are We Free? Psychology and Free Will gives the opinions (and research) of some of the world’s top psychologists (and one of the world's top CAPS players) on whether (and how) humans have free will. I have not read any chapter but my own, but I am familiar with many of the authors, and their research is intriguing and sometimes disturbing. If you have ever wondered whether you were truly free, this book will be of interest.   [more]

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6

Oh, Nouriel!

February 12, 2008 – Comments (3)

It's nice to see when smart people who know what they are talking about agree with me. Read Roubini's article on financial disaster in 2008. Then read mine (on my real blog), written earlier.  [more]

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7

Undervalued stock of the day: CNA

February 11, 2008 – Comments (0) | RELATED TICKERS: CNA , MBI

It is hard to go wrong with profitable insurers selling below book value, as long as their insurance risks are not too great (such as the monoline bond insurers such as MBIA) and as long as they don't delve into crazy assets. It also helps to have good management, and I trust the Tischs of Loews (LTR) which owns a majority of CNA.

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5

Kiplinger's recommends target date funds

February 08, 2008 – Comments (1)

As do I. Investors in target-date funds will spend less time on their investors and outperform 80% of their peers. Not bad. See Kiplinger’s article.

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10

What I own right now: mostly ETFs

February 08, 2008 – Comments (7)

Here are the stock ETFs that make up 85% of my long portfolio:  [more]

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9

You're not hardcore unless you live hardcore

February 07, 2008 – Comments (7)

And in the stock market, levering up to make a big bet on a couple stocks means you are probably hardcore (and probably dumb). I guess I now fit the bill on the first, hopefully not the second.  [more]

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7

Undervalued stock of the day: KCLI

February 05, 2008 – Comments (0)

What is not to love about a life insurer trading at 80% of book value? I wouldn't long this in real life without a lot more DD, because KCLI does have significant mortgage and RE related assets, but those are likely low-risk.

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