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reddingrunner (92.11)

October 2007



Assets vs Earnings

October 30, 2007 – Comments (1)

Balance sheet or income statement?

Assets or earnings?

If you can generate earnings without assets, fine with me.

If your pile of assets isn't generating increasing profits, what stinkin' good are they anyway?   Can Eddie turn Sears' assets into earnings?  If not, look out below! 

I'm an earnings guy.  Assets generally depreciate, earnings generally increase.  

If your business isn't overpriced at the moment, and your earnings continue to go up faster than the average, your stock price WILL outperform.  How could it not?

OTOH: assets are much more stable than earnings.   Invest in a high growth company and if the quarterly results or projections drop a hair, things can get really dippy, really fast.  Assets go up and down nice and slow and steady and predictably.  It's a smooth, safe, boring ride.  Great for old folks.   Great for recessionary times.  Not so great for generating wealth in a growing economy.

I've got some nice value funds for stability.  For my stock picks, I'm looking for zest. If that means volatility (and it do!), just close your eyes and hang on for the ride.   [more]



Apple's Revenge

October 22, 2007 – Comments (5)

(Full disclosure: author is long- waaaay long, Apple)

Some of my favorite recent CAPS comments on Apple:

Highly overrated! ($170)

overpriced (170)

I hope you guys who own it would consider taking some profits. (171)

the price of the stock can't keep up (170)

Overvalued (166)

It's priced for perfection ($165)

Overpriced and ready for a fall. (163)

Apple is near it's peak (158)

I think it's at least worth 80-100$/share, just not much more than that.

wouldn't be surprise if it dropped to $122 or so.

Time for a pullback. (147)

Look for AAPL to miss its lowball targets in the upcoming quarters and eventually get to a more reasonable valuation. (137)

The iPhone isn't going to be the breadwinner Apple touted it to be (127)

Priced like a growth company, but it is not. (129)

I think Apple has just about maxed out on the beauty of the stock. Maybe about $160, tops.


Boldly calling the AAPL top...competition is coming/here. I'm just not a fan of overblown media darlings, this is one of them. (137)

Too much expectation built in (139)

Reached full valuation, time for a pull back. (137)

Apple is going back to $100, before it goes higher (120)

I would put this share at $85-100 max. (141)

there is no fundamental basis for the move from 90 to 125 in the last quarter.

Overpriced currently and will drop near $100 in the coming months.

AAPL survives on hype, and once the cries of the fanboys die down, the substance behind that hype rarely lives up to it. If anything, consider investing in AAPL investing in a cult - and you can mark my words (121)   [more]



Time to buy: Advice sought

October 20, 2007 – Comments (4)

I've got some cash and I'm ready to do some buying (real-life) as soon as I make sure the bleeding has stopped (I'm pretty confident that today was a short-term over-reaction).   

I'm looking at:


I've only got enough cash to add two.  I'm looking for long-term buy-and-holds that have the potential to add a little zing to my returns.  

Recommendations? (from the above list only, please)  [more]



Who you are is how you invest

October 08, 2007 – Comments (3)

Emotions- including fear, lust, greed and insecurity- affect how we invest.  What risks we take, how we react to news, etc.

Our biographies affect our emotions.  The facts that I am immersed in Scripture, am a happy, contented person who doesn't really have many material needs or desires; and have been humbled by the market in the past, all affect how I manage my investments.

My main hobby is running ultramarathons.  I've run about 40, ranging from 50K (31 miles) to 100 miles, including the Hardrock 100, one of the toughest races on the planet (you could look it up!).  To successfully complete an ultramarathon, you have to start slow and pace yourself properly and be patient.  You have to be disciplined and patient about your training and preparation also.  If, instead of running ultras, I was into high-adrenaline sports that give a quick rush, I would probably be a much different sort of investor.  

Lessons from the trails (thousands and thousands of miles) carry over into my investing.  Next Saturday I'm running in the Dick Collins 50 mile race, but it's really only a training run for the ultra-tough HURT 100 mile race in Hawaii in January.

You don't have to run ultras, but what you do with the rest of your life will determine what kind of investor you are.  [more]



Nice Chart! (JRJC)

October 03, 2007 – Comments (0)

If I was half as smart as I think I am I would have invested $10K in this a year ago and would be sitting on $100K today.  Well, no, not sitting.  I'd probably sell it all except for $10K worth.  Oh well.




October 02, 2007 – Comments (1)

OK, lords of CAPS, that was great fun- up 200+ points in one day.  Indeed.

How about fixing that little stock-split bug now; I'm ready to return (gently, please) to reality.



Beat the Market: 4 ways

October 01, 2007 – Comments (0)

First, you cannot beat the market the way most people try.  EVERY thing there is to be known about a stock, it's trends, management, statistics, ratios, prospects, etc - EVERY thing- has been studied by hundreds of highly trained experts, people who have risen to the top of their profession in the face of intense competition, and has been run through every imaginable complex computer screen possible and all of this has already been factored into its price by the mega-investors (mutual funds, etc).  You are totally outmatched.

Here's how you can beat the market:

1.  Sheer luck.  I mention this first because it is the way most people, including most professionals, beat the market.  It's why mutual funds with great records for the past three years rarely have great records for the next three.  Anyone can have a hot streak for awhile and with so many investors there will always be some who are currently beating the market.  They think it's because they're smart, but check back in five years.

2.  Micro caps.  Stocks that are too small (market cap) to be practical for mutual fund purchase offer opportunity as my opening paragraph doesn't apply to these.

3.  Short-term investors can take advantage of long-term investors strategies.  If you can identify stocks that are likely, in the short-term, to move opposite of their long-term movement, you can make money.  A stock may be priced low because it's long-range prospects aren't appealling (no moat, for instance) but you may spot short-term possibilities if you get in and get out quickly.

4.  Long-term investors can take advantage of short-term influence.  There are a lot of greedy traders, practicing strategy #3 and other short-term attempts to make a quick killing: these traders affect stock's prices and by looking for long-term winners that are currently out of favor with short-term traders you can, with patience, take advantage of the fact that the stock's price is not fully reflective of its long-term value.

My own investing is mostly based on #4, perhaps with more of #1 than I care to admit.  I'm beginning to get more involved with #2 type investing but will continue to avoid #3 and i've never had any delusions that I could beat mutual fund managers at their own game (and 99% of them can't beat the market!).  [more]

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