Sunday, November 30, 2008

My Black Friday

crowded shopping centers

Despite the fact that I absolutely hate crowds, and I hate fighting to get a parking spot, the last few years I have gone out on Black Friday.  I never buy anything, but I like to get a sense of the crowds and to see what people are buying.  I have never actually bought anything because of one simple fact.  While there are great deals to be had on Black Friday, they are usually for things I don't need.  Now there is the part of me that loves a good deal.  I see something at 50% off, and it instantly piques my interest.  However, I find the whole thing rather sad as people line up more than twenty-four hours in advance to take advantage of doorbuster deals.

I only went to a few places.  I went to a Best Buy, a Borders, and a Macy.  I also just glanced in a few others.  While some pundits have predicted this to be a horrible shopping season, there were some pretty significant crowds at the Best Buy. The parking lot was quite full, with several cars continuously circling for a parking space.  I ended up parking pretty far away but I at least did not have to wait for my spot. I walked in and it was pretty crowded.  There was however no line at the registers.  It was kind of odd.  It was the first time I have not seen significant lines at a Best Buy on a Black Friday.  It might mean that Best Buy is getting really good at getting people through the line.   This is entirely possible because all the registers were opened and they had several makeshift registers throughout the store.  It might be also that there are lots of people like me, looking just not buying.

The same thing at Macy's and Borders.  It just was not all that crowded.  It seemed even lower on Saturday and Sunday.  This is in contrast to what is being reported in the news as most news outlets are reporting higher foot traffic this year than in years past.   It will be interesting to see how this news will be digested by investors.  It will really show how much bad news is actually baked in into the equity markets.

Friday, November 28, 2008

I'm Engaged

Engagement Ring

This weekend, on my vacation, I proposed to my girlfriend of almost four years.  She tearfully accepted.

I cannot explain how happy I am to embark on this part of my life.  There is no doubt that the last several years of my life have been the best they have ever been and this is due in large part to her.  While it may not have happened as quickly as she would like, like all things of this magnitude, I think it is important to be absolutely sure.

While my proposal itself was relatively simple, it was months in the making.  You see, the most important thing about it was that it needed to be a surprise.  The problem was exacerbated because she picked out her own ring (shown above) and thus knew that the proposal was soon to follow.  Given the way my fiancee's mind works, she would always be expecting it given any thing special that we did.  So I have very purposefully made sure that we have gone places and NOT proposed, so she would stop expecting it.

Another tricky thing I had to do was to be sure that it seemed that everything we were doing was HER idea., not mine.  I needed her to go to a very specific place, the location of our first kiss, but I needed her to get us there.  So as we planned out our vacation I wanted her to choose to go to San Diego.  She wanted to go to all sorts of places, but I had to keep guiding her to go to San Diego.  She eventually decided that was where we should go, so I was halfway there.

The trickier part was to get her to want to recreate our first date.  I was not sure how to get her to do this, but she opened the door for me on our way down to San Diego.  She suggested that we go to restaurant On the Border, the location of our first dinner together.   From there, I just recreated our first date, taking her to where we played mini-golf and then the same bar where we had drinks afterward.  I took her to the exact spot where she dropped me off at my car that first night and where we shared our first kiss.  I had a whole speech planned out, most of it did not make it out of my mouth.  Although I'm a good speaker, it is hard to remember everything when you are nervous :)  I told her how this was the location of my happiest memory, and I hoped to make it hers too.  I pulled out the ring and proposed, and she happily accepted.

We do not have a date yet.  It will almost certainly be sometime in 2009 and it will be an event wedding.  We will of course keep people posted.

Thursday, November 27, 2008

Happy Thanksgiving

Got back from Vacation.  It was fantastic.  More on that later.

Decided to do the traditional Thanksgiving post and list all the things I'm thankful for.

  • I seriously have the best girlfriend in the world.  She cooked up a fantastic Thanksgiving meal and did not complain about it once (she never does).

  • Everyone I care about is happy and healthy right now.

  • I have some awesome friends who are always there for me and are fantastic to hang out with.

  • I have a job that pays me well and that is helping me get to my career goals.  No small thing given this horrible economy.

  • I have the ability to have this site.  By this I have not only the means to do the activities on the site, but I have the knowledge to do it as well.

  • I am never in want of anything.  While I do deny myself several things because I like to save money, in reality I could buy pretty much whatever I want whenever I want.  I've actually learned to loosen the purse strings a little bit.  Just this year I bought the digital Camera and a plasma TV.

  • I don't live in Seattle anymore.  :)  Was reminded how much I do not miss it when it rained very heavily in California this weekend.

  • The Lakers are 12-1.


There are probably several other things off the list, but this is all I can come up with off the top of my head.  I hope everyone had a good turkey day.  Back to posting on a regular basis tomorrow.

Tuesday, November 25, 2008

One Positive in the Financial Crisis

So there is definitely one positive thing happening because of this financial crisis.  People are talking about it.

I love talking about financial matters.  It is one of the reasons this blog exists.  My ears perk up whenever someone around work starts talking about saving, investing, and the stock market.  I love sharing the wisdom I have learned over the years with people just starting out.  It is one of the reasons I keep this blog up even though my original goal has gone out the window.

Because of the financial crisis, I have talked more about finance, money, and the economy at work than I ever have before.  People are interested in what is going on and don't always understand what is really happening.  I don't expect anyone to be as into it as I am, so I try and explain my perspective as much as I can so I can educate others.  The benefit of this is that often times, I can get someone interested enough that they start seriously thinking about their future.  I believe I have convinced more than one person to at least start putting away some money in their 401K.  I think I may have even convinced someone to dabble a little bit in the stock market.

At the very least, I hope this crisis gets people talking and interested in money and the economy.  I believe we are probably in for some rough times ahead, and the more people who take an active interest in their own financial matters, the better off I think we will all be.

Monday, November 24, 2008

On Vacation

Shamu

I'm taking the week off to take advantage of the Thanksgiving holiday.  So I'm going to write some post ahead of time and post them throughout the week.

I do not take vacation too often.  It is especially odd that I'm essentially taking a week off of work, although I'm really only taking three days of vacation.  It just seems there is never a good time to take vacation and now is particularly tough for me.  There has been some upheaval at work.  While many people get stressed out in these types of situation, I always take it as an opportunity.  I have made the most progress in my career in such chaotic situations.  It is in these times that great leadership is needed and those who demonstrate it stand to do well.

To exacerbate the situation, I'm very interested in trading this week.  I really do think there are some great buying opportunities right here so long as you are in it for the long term.  There are several things on my shopping list that are very good buys here.  I still think the market could go down from here.  But I don't think it is down another 40%.  We might have 10% more to go, and then there will probably be a leveling off.  No need for me to pick the bottom, also no need to chase the market up.  I just wish the market would settle down for a few days.   If I can, in between catching some sunrays and watching out for any killer whales, I am going to try to do some trading and of course some blogging.

Sunday, November 23, 2008

The Last 10 Years - Gone

S&P chart

Take a look at the above chart (Click on it to see the full picture size).  It is a picture of the S&P 500.  On Friday, the S&P closed at 800 but it touched 740 intra-day.  The S&P has been at this level twice.  Once in 2002 and before that in 1997.  Is this the real state of our world?  Have we really made no progress in the last 10 years?  Is this at all realistic?

It is hard to say.  I'll be the first to say, I never thought we would get this low.  I thought 850 was reasonable level for us to come back to.  But we fell right through that and kept on going down.   I knew this correction was coming.  I knew it was coming for a very long time.  In fact, I have been in a cash position for a LONG time because of this.  When I transferred my 401K almost three years ago on my way to Microsoft, I left most of it in cash because I though the market was so overvalued.  It is why I'm in such good position today to buy up assets.

But it is hard to imagine us right back where we started 10 years ago.  The prevailing wisdom espoused by so many experts, including Warren Buffet, is that buy and hold works.  It certainly did work when Buffet made his billions, but it has not worked if you have been in the market for the last ten years.  Granted, if you go twenty years back, or you go ten years in the future, you might be OK.  What do you think?  Do you really think we should be at the same levels we were at 10 years ago?   An age which just saw the explosion of the internet?  An age where most people did not own a cell phone?  Then again, it was the age when 20% down and 30 year fixed mortgages were the standard.  So maybe we do deserve to be here.

Thursday, November 20, 2008

Breaking My Own Rules

I did something stupid today, I broke my own rules.

I've been, rather successfully, playing the volatility in the market.  I have avoided playing the long side since it is extremely hard to do in this market , but when the market touched a low and bounced, I decided to go long the market.  I bought SSO at $21.62 a share.  I was willing to take a 10% haircut on this,  which would have put me at $19.42.

But one thing I have followed during the last few weeks was to not be on the wrong side of momentum in the last hour.  You see, this market has consistently accelerated in the direction of the day in the last hour.  That is, if the market was up the whole day, it goes even more up in the last hour.  If it was down, it goes even more down.  When I bought the stock I told myself I would not be on the wrong side of the momentum at the end of the day.  If the stock was down, i would get out before the last hour.

The stock actually touched $22.71, and I should have gotten out when it did.  Unfortunately, I was waiting for $23 and it never came.  Well it became noon, the last hour of trading, and I froze with indecision.  I couldn't decide what to do, even though my own rules told me to get out.  At noon, the stock was right around $20.80.  The trend was down, and I should have taken my losses and gotten out.  I didn't.  The stock, predictably kept going down.  I did a rookie mistake, and kept waiting for the stock to go up just a little more so I could get out.  It did not.   The stock went right though my out point and did I sell?  No.  I held on to it and saw it touch $19.10.   Some sense finally did return to me, and I sold half the position at $19.62.  That actually ended up being a local maximum, and the stock dipped below $19.00 before settling at $19.10 for the day.

One day, about $1000 lost.  Pretty sad if you think about it.  I really should have limited my losses better but I did not.  I could still lose even more considering I'm not out of the position yet.

The moral?  Know your rules.  Stick with them.  They are there for a reason.

Wednesday, November 19, 2008

Death by Date

I'm going to take a little break from talking about the market today. I will say one thing, the market spiked down and this is a very bad sign.  The S&P is now hovering around 800, and if it breaks it, I really don't know how far the market will head down.  Hold on to your hat here folks, it could get interesting.

I wanted to write this post to teach people something they will find useful at work.  If you are not responsible for dates, do not give them out to other people.  It will be the death of you.  Let me explain.

I am in charge of dates at my company.  That is, when someone wants to know when something is going to be delivered, they come talk to me.  This is my job.  I've had a few instances at work now where people freely give up dates to senior level executives.  This is a very very bad idea.  Senior executives love it when individual contributors give dates.  Why?  Because they are almost always understated.

Most workers at the ground level do not see the big picture.  Take for instance a software developer.  They may be experts in coding and debugging, but many do not understand what has to happen to get a project out the door.  QA resources need to be lined up.  Other projects may be prioritized ahead of yours.  There may be code freezes in place.  Lots of things can prevent code from being shipped, and most of them are out of sight of these developers.   Now, when most people think about "done" they think about it when they will be "done".  They do not consider what else it may mean to be "done".  I have now had a few intances at work where a developer freely offered up a date for "done" to a senior executive.  This got the senior executive very happy.  They can not wait until Feature X is out and live.

Of course, reality sets in.  They eventually come talk to me for the real story and I of course tell them the truth.  This never comes out good.   Now we get upset executives.  Now we have to hear rants about how we can't execute or why we cannot get it done on the "original" timeline.  I am usually able to mollify the situation, but it comes at a price.  Trust and goodwill is eroded.  Believe me, the person who originally opened their mouth is now looked at unfavorably.  In one particular instance, an entire project might be canceled because expectations were set incorrectly.  It is felt this person, through no real fault of his own, does not "get it".

So please, keep your mouth shut.  Just act dumb and point to whomever is asking you in the direction of the person who actually sets the date for you.  You will save yourself a lot of grief, trust me.

Tuesday, November 18, 2008

Automakers Come Begging

Hadout

The Big 3 automakers went to Capitol Hill to beg congress to give them a $25 billion bailout package.  To their credit, congress questioned these CEOs about why the government should come to the aid of an industry that is clearly in decline.  I caught clips here and there throughout the day of their testimony.  Let's look at some of the finer points.

 We are about to turn the corner.  We are in the middle of restructuring

The CEOs made it a point to mention that they just needed a "bridge loan" to make it through these difficult times.  It reminds me when Herbert Hoover said, in 1929, that "prosperity is just around the corner".  Of course the Great Depression followed next.  Anytime that someone tells you, "just a little bit longer" or "just one more time" you know things are not good.

Further, why the hell did you wait so long? If you are so stupid that you did not realize that you need to restructure earlier, why on earth should we believe you are gong to do it right now? We bailed out one of them just a few decades ago, and yet they are back again.  What the hell is that?

 If we go, so will two million other jobs which are related to the auto industry

This is just pure scaremongering.  First off, if the government let things take their natural course, I highly doubt that all three of the car companies would go under.  In fact, if one were allowed to fail, it would actually strengthen the other two since more consumers would buy cars from the other three.  Also, do you really want me to believe that not as many industries are tied to real estate and finance.  Several large companies, like Lehman Brothers, have gone bankrupt. Financial companies affect all parts of the economy.  Real estate employs all sorts of workers from carpenters, contractors, and machine operators.  These industries have seen total collapses in their markets, and yet we haven't reached Armageddon yet.  Why is the auto industry special?

It's the economy!

I love this one.  Time and again, the CEOs used everyone's favorite excuse, it's the economy!  Yea, so what?  I've said it before and I will say it again, if you cannot run your business without being able to weather an economic downturn, you should not be running your business.  Everyone knows there are economic cycles.  CEOs know this better than anyone else.  Every single person is affected by this economy.  I know my industry is.  We are heavily dependent on ad revenue, which declines sharply when the economy goes south.  Should my company be able to ask for a hand out?  No.  It is up to plan for it, tighten our belt when it happens, and figure out to succeed in any environment.  We have to do it, so should the car makers.

The bottom line is that there is no way we are seeing this money back if we give it to the automakers.  Seriously.  If these guys actually had a legitimate plan, they would have no problem raising capital to  fund their plans.  They could go to any bank or investor, show them their plan, and people would be jumping in to invest.  The fact is that they don't have a real plan, they are just waiting for some miracle to save them.  Unfortunately for us, I think this miracle will materialize in the form of the US government.  It probably won't happen in the next month, but it wil before it is all said and done.

Monday, November 17, 2008

Time to Rebalance

balanceSo I did a quick inventory of my assets this weekend.  As I've written in this blog before, I'm very heavily weighted toward cash right now.  I stopped buying stocks about a year ago because I was sure the market was overpriced and did not want to buy at the top of the market.  I'm looking like a genius right about now with that call.

However, I'm now way too overweight in cash at this point.  If you add up all my non-retirement assets, I'm about  77% in cash and the rest in equities (I don't own any bonds or bond funds). For someone my age, this is a pretty silly to be this far into cash, even if you are as bearish as I am.  I am still not ready to jump totally into this market, I do think there is probably some more room to the downside, but I definitely should not have this much cash on hand.  Some of this has been caused by the shrinking value of my equity portfolio.  I'm probably down at least 40% over the last year or two.  But most of it is simply staying on the sidelines and continuously earning more money which just turns into cash in my savings account.  Yes I know, its a nice problem to have.

So I need to start looking very hard at my shopping list.   There are some things that are extremely interesting to me at the current prices.  There are some things that are extremely scary too.  For example.  Goldman Sachs.  I thought it was a buy if it were to ever hit $120, and now that stock is trading close to $60.  Was I right before, or is this stock going down even more?  In this market, it is extremely hard to say.  That's why I won't deploy all that cash, probably just a third of it over the next few weeks.  If the market becomes more stable, I might look to divest another third of the cash.  Not sure if I will deploy that last third anytime soon unless I really think the market gets into bull mode, which I honestly don't see happening in the next few years.

So what is the first thing I should buy?  So hard to make a decision right now ...

Thursday, November 13, 2008

How Bad Is the Economy?

Cat in a bag

So bad, my cat has moved into a paper bag. I'm actually not too sure why he likes to do this, but he seems to like to get himself into small tight spaces like paper bags or boxes.  It's odd.

Just a quick post tonight.  Lots of things going on at work, some of which I will blog about later, but don't have the energy to do it tonight.  One thing, the market rallied on almost no news.  I was about to go long, since I had closed my short position yesterday as I mentioned in my last post, but all the turmoil at work once again got in my way of making any trades.

No way to play the market where it is right now.  I will just wait and hope we rally a bit more before I go short again.  Another 5% up from here, or the S&P 500 being at about 950, and I will look to get short again.  Until then, I'm probably out and won't make any trades.

Wednesday, November 12, 2008

Hank Pauslon - Please STFU

Hank PaulsonI really hate Hank Paulson.  I seriously think this guy is either evil or completely inept.  Just a little over a month ago, the bailout package was announced.  Not even two weeks after he was able to trick everyone into giving him almost unlimited control over a vast amount of money, he announced he was changing tactics and going a different way.  Instead of buying all the assets of banks, they would inject new capital into banks by taking an equity.  Well today he also announced a change to the plan.  Instead of focusing on the banks, he will use the money to focus on other financial institutions that extend credit to consumers. Does anyone actually think the government knows what it is doing?  Is it any wonder why I hate government plans as much as I do?

The market promptly dropped testing the lows of the market.  The S&P is now close to the lows we saw on October 10th.  That day, the market reached a low of 839.  The market closed today at 852, leaving it just  1.5% away from the low.  If the market is able to break through that, we have a very scary situation.  The problem becomes that in bear markets, you continue to go down if you create new lows.  The reverse of this is true, in bull markets you keep making new highs.  Considering the S&P is already 42% down, thinking it can go down more is pretty painful.

I honestly think we will break through that low.  After the market close, Intel announced that it had a very bad quarter, and the market is for sure going to open down.   Unfortunately for me, I closed out my short position today.  I had made a 15% profit in that position in a little over four trading days, it was a pretty good trade for me.  However, I did not want to be greedy, and decided to get out even though I was pretty sure the market was going to go down from there.  This market is hard, and anytime you can take a quick 15%, you take it and don't look back.  I don't feel bad about covering, it was the right move, but now I have no downside protection.  If the market tanks, my portfolio will go with it since I no longer have a hedge.  So I'm a little worried about what will happen in the next few days.

Every time Hank Paulson, or anyone from the government for that matter, opens his mouth, the market does crazy things.  Just please stop talking.  While you are at it, please stop doing anything.  The more you do, the worse things get.

Tuesday, November 11, 2008

US Unveils Idiotic Mortgage Plan

Home Mortgage

In another stupid move, the US government outlined a plan to help borrowers get better terms on their mortgages.  The basic gist of the solution is that through Fannie and Freddie, the US government will encourage loan modifications.  They won't allow for an outright reduction in the amount owed, but they are willing to allow the mortgage to be extended say from 30 years to 40 years, and they will allow the interest rate to be lowered, which will temporarily make payments more affordable.  Before I go criticize this plan, because I will, there are some things that are not all that horrible.

First off, I have no real problem with private institutions making loan modifications that actually reduce the amount owed on the mortgage.  While I tend to think all homeowners who took out a loan for an overpriced home are responsible for the full amount, I have absolutely no issue if two private parties want to sit down and negotiate new terms.  If it is in the best interest of both parties to keep the person in the house, and one side is willing to take a loss in the deal, then so be it.  A lot of private banks are deciding to do this, and I'm all for it as long as they do not do it with my tax dollars.

So that being said, I also have no problem with what the government is doing here.  They are extending the length of the deal and the interest rate temporarily, but the overall deal remains the same.  Now, I'm sure they are taking a small hit in profitability here since the term is longer and the terms of the deal probably favor the homeowner, but overall, the deal is still a net positive (assuming the borrower doesn't eventually default which is probably a bad assumption).  Further,  the government is not putting any tax payer money directly in the hands of borrowers.  Something I am sure that will eventually happen but at least not with this plan.

But of course this plan has its problems as well.  And, like the GM situation it comes down to one fundamental problem.   You can not, over the long haul, create demand for a product at an artifically high price.  This is exactly why we have a housing bubble.  Houses are STILL overpriced.  Just look at some of the statistics in the Los Angeles market.  The median sale price is around $375,000 (look at the average listing price for a good chuckle).  While that may sound like a bargain compared to prices before, this is still way overinflated.  The median sales price in 2000 was just around $160,000.  Are you trying to tell me that given all the turmoil we have seen recently, that prices deserve to be double what they were just 8 years ago considering that salaries are relatively flat?  A family making $50,000 a year, which is the California average (the Los Angeles average is even lower) can nowhere near afford a mortgage to buy a $375,000 house.

There is nothing the government can do to fix this fundamental affordability problem.  In fact, the government is actually making things worse with every action they take.  If the market doesn't just correct, and wipe out this fake equity, the market will languish for years. No doubt, a lot of people will be hurt, but how many more will be hurt if we just stay like we are over the next decade?  We will have an entire generation which won't be able to buy affordable housing while we prop up an overinflated market.  The vast majority of people who own their homes did not buy them in the last 5 years and have mortgages they can afford. Should all of us suffer because of the small minority that did and can't?

Monday, November 10, 2008

What Should We Do With GM?

GM Logo

Now that we have given even more money to save AIG and the rest of the financial industry, should we listen to those calling for us to save GM from bankruptcy?  To hear the arguments, GM is too big to fail.  If they fail, they take the whole economy with it. By some estimates, GM is responsible for a few million jobs.  Let them fall and all the ancillary industries like car dealerships and car part makers will go with them.  This causes a domino effect that will bring down the rest of the country with it.

What a load of crap.  There is no company too big to fail.  Do we really have so little faith in the rest of the American population to think that these resources couldn't be redeployed into something more useful?  Give me a break.  GM failing does not mean people will stop buying cars.  A lack of supply does not mean demand just evaporates.  These buyers will find other cars to buy.  The better parts maker will find a way to retool and provide parts to either service the cars out there now or to whatever company replaces the cars that GM would have sold.

No matter what the bailout entails, it can't do one key thing.  It can't make people want to buy GM cars.  This is the heart of the problem.  Nothing else matters. GM is failing not because of a bad economy; they are failing because not enough people want to buy their product at the price they are offering it.  GM is a failed business model and proves it over and over again.  Any company that can't survive an economic downturn, does not deserve to be in existence.   It is exactly in these circumstances that the strongest companies rise to the top while those who are weak fall into bankruptcy.  Without this cycle, horrible inefficiencies, like GM, are allowed to persist.

Of course, the automobile lobby is a strong one.  They will convince those in Washington how crucial they are to the entire economy.  They will convince them that they should be allowed to make crappy products that too few people want at prices that can't compete with their better competition.  Of course, that will mean that America will continue to deploy resources in an industry it is not suited to win.  Forget trying to deploy these resources in things that America actually does have a competitive advantage in like software development, medical research, and alternative energy engineering.  Let's try and prop up old and dying industries that have no chance of winning in a global marketplace.  Is that not the best way to run a business?  Do not most business invest their capital in projects that have the lowest return?   When resources are tight, is it not best to forget where your strengths are instead be more inefficient and focus on the things you have no chance of succeeding in?

If we are going to give them money I would like a few things answered.  Let us treat it like venture capital.

  • What are your prospects for success?

  • What is the likely return on investment?

  • What is your business plan to get you to profitability?

  • Why are you likely to succeed vs. your competition?

  • Why should I give you the money rather than directly investing in the people and business that will be hurt if I let you fail?


All should be fairly simple to answer.  I suspect none of the answers would likely satisfy anybody actually looking to invest in the company.

Sunday, November 9, 2008

Buying a Digital SLR Camera

Canon Rebel XSi Digital SLR

I've decided to buy myself a digital SLR camera. I, like always, did a lot of research on what to buy, and I ended up deciding to buy the Canon Rebel XSi. I've been interested in photography for quite a while. I owned a Canon Elan 7E and was pretty happy with it so I decided to stick with the Canon line.  It has the additional benefit that I can use most of my old lenses on the new camera, so I should save some money since I won't be buying all new gear.

This is actually a little unusual for me.  When I buy electronics, I almost never buy the entry level.  I'm a firm believer that you should basically buy the upper middle of a product line.  You should not buy the best because usually the price premium is too great to justify the benefit you get out of the extra features.  You usually should not buy the entry level either because the manufacturer often saves the better, more useful features for the step up models.  The upper middle of a product line tends to be where the sweet spot is in terms of price and performance, so it is what I generally recommend people do.

Now while I could have afforded to buy the step up model, either the EOS 40D or the EOS 50D, I decided that this time the entry level model just made more sense to me. The step up features did not seem to mean too much to me.  The step up models have better construction, higher ISO settings, and a few more controls to tweak.  None of these are a show stopper for me, and not worth the price gap of over $300, or over a 50% premium.  The resolution of the XSi is actually better than the 40D and slightly under the 50D but I don't expect this to make much difference.  Photography at high levels depends much more on your lenses than it does on the camera body, so for me I think it is all a wash.  So this time, I decided to save the cash and hopefully use the price difference to buy a nice lens or two.

I also decided to just save some money on this purchase.  It is not as if I'm worried about my finances, far from it, but it cannot hurt right now to be a little cautious just in case.  In fact, I'm saving money mostly because there is a host of other things I want to buy and I did not want to go overboard buying too much photography equipment; especially when you consider the fact that I've taken a few years off from this hobby and I'm not so sure how much energy I'm going to put back into it.

So if anyone has any experience with this camera, or any of the other ones I've mentioned, let me know what you think.  I'll be buying it off Amazon soon, much like I will be for most of my purchases going forward, to get around some of the things going on in California.  More on that later ...


Thursday, November 6, 2008

Jobless Rate Soars - Fade the Rally

Jobless rate increasesI woke up to find that the market is rallying because we lost only 240,000 jobs in the month of October.  The market reacted by going up 200 points in the Dow.

240,000 jobs is an awful number.  6.5% unemployment is high when compared to where we have been in the last decade.  There are now 10 million people who are considered unemployed.  This is the same number of people in the state of Michigan.  The scary part, it really is going to get worse.  Like I said in my last post, there are more and more employers announcing layoffs.  So this will easily get worse before it gets better. I don't expect depression like numbers, but I do expect unemployment to continue to rise through the end of the year.

The play here, fade the rally.  For those who don't understand it, it basically means you should start selling your stock into rallies because the general direction is down.  You are getting a short term bounce, so you should use it to your advantage.  There is one caveat here.  I think the market could easily rally depending what comes out of Obama's economic summit.  If he came out and gave news that was very investor friendly, like he would extend the capital gains rate past the 2010 expiration, I can see the market having a violent rally upwards.  These types of moves are why most investors should stay out of this market.  It just isn't a market that amateurs should be messing around with.

Markets Still Going Down

S&P Plunge

As the Market rallied somewhere around 18% this past week, I held on to my short position.  I had no doubt in my mind that the market would eventually reverse and have a violent move down.  That's what we have seen in the last two days with the market down over 10%.  Do people really understand how crazy this is?  You usually don't get double digit moves in a year.  We are seeing them regularly over days.  The thing is, the market is going to go down from here, so I will continue to hold on to my short position for at least a few more percentage points.

I'm very short term bearish on this market.  If you can hold on to stocks for years, it might be a good time to buy, but the news coming out is consistently bad.  Earnings are bad at almost every company reporting, layoffs are being announced almost hourly, and the governmetn can't seem to get anything right.  I find it very hard to believe that any of the professional investors out there are going to put much capital in the market until at least the beginning of the year.  Most if not all will attempt to liquidate any positions they have remaining on every market rally.

So here is the recipe that I'm using.  When the S&P drops to around 880, you want to be out of any short position.  If you are brave, you might want to go long at this point.  When the S&P gets to around 950 its time to short.  You play this range, and be disciplined, and you will probably do just fine.  If you are smarter, you just stay out all together.

Wednesday, November 5, 2008

Is Jerry Yang on Drugs?

The Google-Yahoo deal has fallen apart.  For those not following this too closely, Google was interested in providing much of the advertisement that shows up on the Yahoo search results.  Yahoo pursued this deal after the negotiations with Microsoft fell apart.  Microsoft offered to buy Yahoo for $34 a share.  Jerry Yang was convinced this was way too low despite the fact that his company's stock was trading at $20 before the deal was announced.

So now, after Google has left the party, and Yahoo stock is trading around $11, Jerry Yang has the nerve to say that it is in Microsoft's best interest to buy Yahoo? What world is he living in?  I mean seriously, Yahoo is on the verge of going under.  They have no real business model going forward. Especially not one that can survive a severe downturn in the U.S. Economy.  After all is said and done, Microsoft will still be around and so will Google.  Yahoo will not be unless it finds someone to buy it.  And yet Jerry Yang is going to tell Microsoft that it's best option is to buy a company that has a failing business model, a stock that price will continue to get cheaper, and a culture and technology that probably won't integrate all that well with Microsoft?

If Microsoft was smart, they pass on this one.  They already turned the page and it is best to leave it turned.  If they really feel compelled to make an offer, just wait it out.  Yahoo isn't going anywhere.  Best to leave it be and let it get on the brink of bankruptcy before you buy it.  What is the rush now?  Does anyone, even Yahoo, really believe it will get stronger as the economy gets weaker?  How is Jerry Yang in any position to tell Microsoft what is best for it?

Jessica Alba

That would seriously be like me telling Jessica Alba that her best option would be to date me after I had ditched her to go on a date with Jessica Simpson.  And my statement would have more truth to it than what is coming out of Jerry Yang's mouth.   While I'm a great guy, I'm sure Jessica has plenty of options without me.  And would it really be reasonable for me to expect her to consider me after I went on a date with another woman, even one as hot as Jessica Simpson?

Tuesday, November 4, 2008

Obama - The 44th President

Obama

I did want to say Congratulations to Obama.  Although I don't agree with all his politics, I do believe him to be an honorable man and a good leader. One thing that struck me in this campaign was that I really did believe that both candidates were good people.  I disagreed with parts of both parties platform, but in the end, I didn't hate either candidate.  This was a welcome relief when compared to someone like George Bush who I just couldn't believe ever rose to the highest office in the land.  Even in defeat, I thought John McCain was pretty gracious.

I think Obama will be a good President.  I am happy to witness this watershed moment in American History.  Let there be no mistake, this is a truly historic moment that I wasn't sure would happen any time soon.  A black man will be President of the United States.  A minority has made a meteoric rise against some pretty big odds.   It fills me with some pride that we as a nation have gotten to a point where this is even possible.  I just hope he treats this opportunity for what it really is and rewards the American people for the faith they have bestowed upon him.

Where Does the Republican Party Go From Here?

republican_donkey.jpg

I'm sitting here on the cusp of an Obama victory.  Although not all the polls are closed yet, it is pretty apparent that he is going to win the Presidency.  Congratulations to him.  Also, the Democrats look to be gaining seats in both the House and the Senate

Although I am not a Republican, and I am not sad to see their downfall, I find their fall from the ranks of power to be very very interesting.  In theory, I should be a Republican.  I strongly believe in small government, a hallmark of Republican policy.  But this is NOT what the Republican party is about now.  Actually quite the opposite.  I find it ironic that the last time we saw a budget surplus was when we had a Democrat in the White House.  And the worse budget deficits we have ever seen were when a Republican was at the helm.  So what is wrong with the Republican party and what do they need to do to fix it?

  • Realize that the Demographic of the United States is changing.  Not every one is a white, middle aged, male

  • Get back to their roots.  Can they honestly say they are the party of fiscal responsibility?

  • Stop thinking the United States is the center of the Universe.  The Iraq war killed you.

  • Stop denying science.  Are you seriously going to tell me you don't think Global Warming is actually happening?

  •  Stop pandering to the Religious right.  While clearly an important part of your base, it strongly turns off a large number of fiscal conservatives.


The Republican Party just got their ass kicked.  They have to take a hard look in the mirror, and figure out how they became so detached from the rest of the country.

I for one am glad to see this election over.  I'm tired of hearing about it on the radio, TV, and everywhere I go.  This will hopefully be the final Political post I have for a while.

Sunday, November 2, 2008

Time to Vote 3rd Party?

election2008.jpg

I have voted Democratic in the last two Presidential elections.  I have done this not because I believe in Democratic politics but because I simply can't get behind the affiliation that the Republican party has with the Religious Right.  You see, I'm an arrogant son of a bitch.  I'm pretty sure I know what is best for me.  Notice I said for me.  I believe others know what is best for them.  I can not stand the idea that others think they know what is best for me.  This includes who I decide to sleep with and if I decide to have kids.  Now John McCain had been more in the middle for lots of these social issues, but he has had to move decidedly to the right to appease this faction of his party.  This act does not sit too well with me because I believe a leader has to stand for what he believes in and have others follow, not the other way around.

The other problem I have with McCain is his age and his health.  However awful that may sound, it is a serious concern for me.  It wouldn't normally be except for one thing, Sarah Palin.  This women seriously scares the hell out of me.  I can't imagine her being the leader of the free world.  We would be one heart attack from her in the Oval Office.  She is simply not qualified to be there and there is no way I'm going to put her that close.

Unfortunately for me, in this country, I have a problem with the other side, the Democrats.  While Republicans want to tell me I'm evil for my moral beliefs, Democrats tell me I'm evil for my financial beliefs.  One party wants to tell me how to live my life, the other wants to tell me how to spend my money.  If you know me, you know that these are pretty much the same thing to me.  Obama's plans to put a punitive tax on the oil companies, to tax "the rich", and to eliminate taxes for a large group of Americans.  All these ideas just drive me crazy, and put us down a very slippery path to a managed economy.  I might be able to overlook these except for the last one.  I strongly believe in broadening the tax base, not shrinking it.  This does not mean tax the poor, but it does mean that we are all in this together.

Even given these major problems I have with Obama, I still might give him my vote.  He is, at the very least, charasmatic and a strong leader.  For someone to be a great leader, you don't necessarily have to believe in  everything they believe in.   None of the third party candidates really excite me.  The Libretarian Party is the one that is closest to my beliefs, but I'm unaligned with them on other issues as well and I just don't know enough about them to be convinced they deserve my vote.  The biggest benefit of me doing this would be to throw my support behind a third party to hopefully show that a third party is actually viable in this country.  I think we would be much better off if we had three major parties rather than two.  The way we have it today forces the candidates to pander to the middle and often give us what we have today, the choice of whichever is the lesser evil.

I would love to not cast a vote for any candidate, but that would be the easy way out, and I don't like taking the easy way out.