Archive for July, 2007

www.tradingconceptsinc.com

Tuesday, July 24th, 2007

What is emini?

Apparently, this is a kind of trading system that you can learn by paying for a course. Now the course says it’s realistic and proves this by not making outlandish promises. But does it tell us what exactly the system is?

After reading all about emini trading, I know it’s supposed to be ‘a “trading methodology” that simply makes good logical sense.’

I know you’re supposed to get trading “methods”, “strategies” and “techniques”, and that these “if so desired, can also be applied to any other market you decide to trade.”

But I can’t find anything about what these methods, strategies, and techniques are based on. Investopedia comes to the rescue:

An electronically traded futures contract on the Chicago Mercantile Exchange that represents a portion of the normal futures contracts. E-mini contracts are available on a wide range of indices such as the Nasdaq 100, S&P 500, S&P MidCap 400 and Russell 2000.

For example, the E-mini S&P 500 futures contract is one-fifth the size of the standard S&P 500 futures contract. Advantages to trading E-mini contracts include liquidity, greater affordability for individual investors and around-the-clock trading.

So here we have a site promising to teach you a system for trading these mini future contracts. We still have no idea what the system is based on, however.

There is some affordable housing in America

Thursday, July 19th, 2007

You’d have to call Ohio the big winner after looking through CNN Money’s 25 most affordable places to live.

Of course, this has prompted some local articles. A short one on Boardman and a longer one on places near Pittsburgh.

What to do with Wal-Mart stock? WMT buy or sell?

Friday, July 13th, 2007

Question:

I’m not an experienced stock trader by any means, but I do follow the markets somewhat. Just want to get some input from those in the know. About 10 or so years ago my father in law bought my wife 100 shares of WalMart at around $50 as an investment. The stock has languished since then – it’s been stuck in the mid-to-high 40s for as long as I can remember. It’s at 48.82 as of 2:43 pm today.

Analysts have long looked down upon its practice of building stores too close to each other and thus cannibalizing each other’s sales, leading to a decline in sales growth in existing stores. In addition, they’ve had to pull out of a few foreign markets for lackluster sales. And there’s the issue of WalMart getting a lot of bad press because of the union and health care issues.

We basically don’t take this stock into account in our financial planning, so I’m thinking that I wouldn’t mind being a little bit risky in trying to take that money out of a languishing stock and making it grow.

Does anyone in the know foresee a turnaround for WalMart stock? Or should I bail and park the money in something like biotech, or in a commercial REIT?

Unprofessional advice:

1. If you’re satisfied with you less than 2% dividend yield then hold on. If not, sell it and gamble on a stock that might grow (or not) or put it into a CD for 5%. Or you can sell it and go to Vegas. I am not a financial advisor, but there is no way anybody here can advise you without doing a review of your financial picture. I would discuss it with a broker or financial planner.

2. The stock has done nothing to warrant any loyalty. It has been underperforming the market since 2002, and underperforming its peers since 2003. The bottom line is all that counts, so sell it and buy something better.

3. I would have sold it a long ago. When a mass retailer gets that big… and has a giant target painted on them from every direction…. imo it’s time to look elswhere.

4. I sold it a while back. It’s actually down from about $67 in 2000. Wish I had dumped it all then. You’ve got a stock that will give you a small capital loss if you sell, and a dividend well below what a money market account would provide. It’s PE is well below what it was in 2000, but the market doesn’t want to value it higher.

I’d beware of REITS given the current real estate woes, but it seems to make sense for you to sell the WMT. It might be worth parking it in a MMF until you get clear signals that real estate is turning back around and then buying a REIT.

5. Short term, it’s a pig. Long term could be very different. Wal-Mart has screwed the pooch recently with their merchadise selections, forgetting who their real customer is. That screw up will be rectified. They have also bailed out of some unprofitable grocery store activities in Europe.

On the other side of the coin, they have the lowest cost, most efficient distribution model in the retail business along with the economies of massive scale and a corporate culture that values hard work and thrift in operating the business.

They have the grocery industry sh!tt!ing in their drawers from coast to coast.

They are getting into banking for their legions of customers who are underserved or not served at all by traditional banks.

Sooner or later the socialists and the unions will realize that they can’t drive Wal-Mart out of business.

And unlike their near-disaster in Europe, their Asian expansion seems to be going very well.

This is a powerhouse operation going through some relatively down times.

It’s tough to make any money churning stocks, but there are times when you just have to say “enough is enough.” Bottom line is that it depends on your patience and tolerance. They could be a high flyer again somewhere down the pike.

6. I just sold mine 2 weeks ago. With only 100 shares, upside is limited. There are many options available– ie one of the energy ETFs, or EMC, a data storage play about to spin off a very hot property, VMWare. Its selling over 19 now, upside range to 25 with the spin off; fundamentals also look good for a longer term investment. Many, many choices for you.

Anyway, I like EMC because of their RSA acquisition, and VMWare’s positioning in the whole server-virtualization market that’s red hot right now, means they’re poised to make a run.

Some will argue it’s too late for EMC. Two months ago, when it was 13-14 would have been the right time.

7. I seriously reccommend investing it all (and more if you have) in SPY or QQQQ….If your not familiar with investing, all they are, are microcosms of the market itself. The SPY is a microcosm of the S&P 500 (Top 500 Stocks) its basically a veryyyyyyyyyyyy small slice of each piled into this one stock the moves with the market….and if your familiar with the market, it avg about 12% increase per year….from last june to this past june, it made 21% so that approx. how much you would have made had you owned this ETF (exchange traded fund its called, but its basically a stock)….The QQQQ is the same thing about 1/3 of the price and is a microcosm of the Down Jones Industrial (again 30 top, blue chip stocks). These are both safe slow upward moving investments you wont have to worry about. GL with your investing.

8. I read a nice article on Garmin GRMN back in Feb saying that GPS was going to be in everything. Bought some at $49. Bought some more a couple weeks ago a $69. It hit $82 today. This stock could be going for a while.

I hate the WalMart stock and have hated it for years. Their low cost model works because they can generate enormous inventory turnover in their big box stores but that only works if they are not cannibalizing their stores. With today’s excess retail space, WalMart is moving to 150,000 sq foot stores which are even more dependent on foot traffic. Personally, and I’m not advocating that you sell, but I believe those bigger stores will ultimately lead to diseconomies of scale as they won’t be able to drive enough traffic through those stores to cover their fixed overhead.

WalMart made the mistake of trying to be a growth stock after their lifecycle passed them by. Opening up new stores is fine when you’re the only game in town, but they are going up against other retailers that have spent years learning how to combat WalMart.

If consumer spending turns down like I expect, WalMart will get crushed by their fixed overhead.

9. I’d sell. This is a company that’s too big to growm much. So either it’s a value play or it’s a sell. The PE is relatively low, and they may have some valuable real estate so you might consider it as a value play. Frankly I don’t bother with that kind of research so I have no idea if its real estate is under valued according to the stock price.

What to do with the money is another question and I’m not sure you sad how many shares we’re talking about. A commercial REIT sounds like a fine idea especially if you need it to diversify. I like having some REITs, precious metals, and other stocks that don’t normally follow the broader market…

Expensive urban real estate equals decline of Chinatown

Tuesday, July 10th, 2007

Here’s an interesting article on Philadelphia real estate, particularly Center City. Real estate is still going strong there, and this article shares some statistics in an effort to explain why.

Urban real estate in general has become so valuable that Chinese immigrants can often not afford to live in Chinatown anymore. This article looks mostly at Boston’s Chinatwon where there simply aren’t many options for low-income people.

Because urban real estate is so expensive, many families end uo in the susburbs and workers have to deal with a commute. This article talks a little bit about some areas around Philadelphia that are decent for commuting.

Good advice, bad advice

Friday, July 6th, 2007

Here’s an interesting article with some good advice and some that’s a bit questionable. They say that young people shouldn’t have 6 months worth of cash on hand. I have no trouble with this advice (as long as it’s for young people) although as we age having cash makes sense. Once you hit 30, you probably earn enough to put some cash aside without messing up your retirement plans and the like.

I also don’t mind the don’t buy a big house and don’t buy more life insurance than your family needs advice. My big issue is with the 60% stocks and 40% bonds advice. Sure they say switch to 90% stocks after a couple of years but this seems strange to me.

Consumer spending = commercial real estate = residential real estate

Monday, July 2nd, 2007

Here’s an article on consumer spending, commercial real estate, and residential real estate. It basically says that commercial and residential real estate are entertwined so if Americans stop spending too much (they are in debt) the real estate market could change.

Speaking of real estate, here’s an article on several areas in and around Philadlephia. The Manayunk, East Falls, and Roxborough areas of Philadelphia are worth watching for me.

Warren Buffet on US tax unfairness

Sunday, July 1st, 2007

Something that Warren Buffet first said a long time ago (around when Bush first talked about not taxing dividends) is now making the news in a fairly big way: “Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.”

It seems that democrats are more willing to take advice from Buffet than republicans considering that at least Bush and Schwarzanegger have ignored Buffet’s advice. Does anyone know of any republicans who have followed Buffet’s advice or democrats who ignored it?