Saturday, December 18, 2010

Stock Market Game is Rigged: Attack of the 'Bots

I can't link or quote - because it's not online yet, but the very latest issue of wired magazine has 2 (or at least 2) very interesting bits of information relevant to investing individuals.

Buy the 'artificial intelligence' issue and look for the article 'Bull vs. Bear vs. Bots'. It won't help you understand why markets behave they do - it will make you come to terms with the fact that you CANT understand it because it was programmed that way.

Another bit found - in the 'Jargon Watch' mini-section (page 38), look for 'Quote Stuffing'.

Makes you realize that 'trading' is a fixed game - and the house always wins. Or is at least programmed to - can you beat the machine?


Thursday, December 16, 2010

Someone really hates perforce

Sure - I'm not 'in-love' with the tool. But I learned to live with it. Our geeky Linux guys LOVE the console and emacs combo. For me? Not so much. I did install the standalone version at home and use it for my free-ware within a visual studio environment. I even managed to use it with a Unity3D project at work. So the devil isn't so bad... except for this dude:

Dear Perforce: f*** you.

... which was forward to me at work.


Wednesday, December 8, 2010

Bonds pummeled today

Safe-haven no more?

Financial Times:US Treasuries hit by biggest sell-off in two years
US Treasuries suffered their biggest two-day sell-off since the collapse of Lehman Brothers, following a torrid month that has seen borrowing costs for western governments soar.

Germany, Japan and the US have all seen their benchmark market interest rates rise by more than a quarter in the past month while the UK’s has risen by nearly a fifth.

Continue reading at link...

Or is it something bigger? Another Lehman type crash?

No cheer.

Tuesday, December 7, 2010

Chrome OS Netbooks are coming

Will you really detach from the offline? Opt to never have your pictures at high res on your hard drive? I made fun of the iPad... until I bought one. So what do I know?


Google lays out Chrome strategy
Google Inc. on Tuesday announced a pilot program for users and businesses interested in sampling the company’s new Chrome operating system, marking a significant milestone in its efforts to wrest control of computing platforms away from rival Microsoft Corp.

Google (GOOG 587.15, +0.01, +0.00%) said at a public event held in San Francisco that it’s not yet ready to release completed versions of its Chrome operating system this year, as had once been anticipated.

Tuesday, November 30, 2010

Depressing of the day: Home prices falling faster in most metro areas

Not out of the woods... not even seeing the edge of the forest.

Home prices falling faster in most metro areas
Millions of foreclosures and weak demand from buyers are forcing home prices down in most major U.S. cities.

Prices are falling even in places like San Francisco and San Diego, which had posted strong increases just a few months ago. Analysts say many markets won't improve until they see fewer foreclosures and more job gains.

"Unemployment is still high, people are afraid of losing their homes and credit is hard to get," said Maureen Maitland, vice president of Standard & Poor's indices.

A report Tuesday underscored the weakness. Home prices declined in 18 of the 20 cities, according to the S&P/Case-Shiller 20-city index. Prices fell 0.7 percent in September from August, marking the second straight monthly drop.

Are we still watching the first steps of this slow motion train wreck in the happening?

No cheer.

Saturday, November 27, 2010

Bought an iPad at Apple's Black Friday sale!!!

Yeeee- haw!

Except, I didn't plan on this sudden splurge. Oh well, it's always said that Apple never put anything on sale. Kinda felt compelled. So now I'm thinking about what it is I should do with this 'magic pad' (as Jobs would say). On the top of my list are the obvious for people on the road:
1. Netflix
2. Skype
3. Kindle
4. My broker's iPad app

Obviously I'll have to somehow setup all of my 11 emails on it - hope it's going to be friendly for that purpose.

Meanwhile, I'm looking into an interesting slide show on PC-Mag, I don't think it's really new:

The 50 Best iPad Apps

A much better list actually, at gizmodo:
Gizmodo essential iPad apps


PS. This is the very first Apple product I'll ever own. I have had some experience, bad experience, with Macs since the 90-s. I have no intention at this point to buy an iMac so I can start creating apps for iPad. I think - perhaps this field is saturated enough with indie developer hopefuls.

Wednesday, November 24, 2010

Happy Thanks Giving

I have no idea - which Mr. Bean episode this came from...


China, Russia quit dollar for bilateral trade

Has everything to do with geopolitical megalomaniac ambitions by both sides as expressed by the following quote:
"China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said.
That's China's Premier Wen Jiabao.

If you go into the article you'd notice that it's also about the complicated negotiation of price of natural gas and other natural resources. My guess - while they'd both like to eliminate the Dollar - they will continue to evaluate the prices of natural resources by it - and adjust their trade agreement as such. I'm not an expert, simply an opinion.

China Daily: China, Russia quit dollar

One more quote, for the heck of it:
Sun Zhuangzhi, a senior researcher in Central Asian studies at the Chinese Academy of Social Sciences, said the new mode of trade settlement between China and Russia follows a global trend after the financial crisis exposed the faults of a dollar-dominated world financial system.

Pang Zhongying, who specializes in international politics at Renmin University of China, said the proposal is not challenging the dollar, but aimed at avoiding the risks the dollar represents.


Sunday, November 21, 2010

The best Black Friday deal is...

You're going to hate this, look - if you already have whatever you need and bought modest gifts for those dear to you - the best thing you can do is avoid all the leaflets and crowds and just don't buy anything you don't need.

Simple - isn't it?

Well - if you must I have a few links for you on the right side bar. Happy shopping.


Thursday, November 18, 2010

The definition of lack of freedom: A tweet in China lands a woman in forced labor camp

Just in case you forgot that the new 'global economic leader' is an oppressive regime.

China sentences woman to labor camp for Twitter post
A Chinese woman has been sentenced to a year in a labor camp for retweeting a Twitter post that mocked Chinese protesters who smashed Japanese products during a recent demonstration, her fiance said Thursday.

On October 17, Cheng Jianping, under the username wangyi09, added a few words to a message written by her fiance, before resending it on Twitter.

Eleven days later on the day the couple had planned to marry, Cheng's fiance, Hua Chunhui was taken away by the police from his office in the southeastern city of Wuxi.

Although he was released 5 days later, Hua hasn't seen Cheng since. He learned from her family that she was taken away by the police from in front of the couple's apartment on the same day as his arrest.

Cheng, 46, was sentenced to one year in a Henan Province labor camp for disturbing social stability.

No cheer.

Tuesday, November 16, 2010

Market crashes, insiders say due to inflation - not Dollar inflation - but Asian markets

Interesting insight I found through one of wall mart related financial news bits:

If You Read Wal-Mart's Earnings, You Know The Real Reason The Market Is Tanking

All day the talk has been IRELAND IRELAND IRELAND and how uncertainty surround the nearly-bankrupt country is what's causing the market to get slammed today.


The real story is out of Asia, where Korea is hiking rates, and fears of ridiculously hot Chinese inflation are causing tightening fears there, too. Shanghai was down over 4% last night.

You can draw a straight line between a cool-down in Asia and the collapse in commodities today since a) Asia is the big driver of commodity demand, and b) it was Asian loosening this summer that got the whole rally going.

What's more, there's not much evidence that the Ireland fears are that significant. Show your hands if you think there's not going to be a bailout. Anyone, anyone?

And the euro has really not taken much of a beating. It's actually up when priced against gold today. Imagine that! This currency that's supposedly on the verge of breaking apart is more desirable than the ONE TRUE CURRENCY today. Even Irish yields aren't to where they were on Friday.

This morning Wal-Mart reported earnings, and they were fine, but it was all Asia growth. The US is glum still. If Asia slows, US stocks hit the wall. And again, there's really NO reason to think that the Ireland silliness would be slamming commodities like oil and copper today. That's all Asia.

Speaking of China/US finances - did you catch SNL sketch over the weekend about Obama's meet with Chinese PM?


Subprime turned financial meltdown, turned to foreclosure crisis

7 sections of financial hell upon us.

Matt Taibbi: Courts Helping Banks Screw Over Homeowners

Throughout the mounting catastrophe, however, many Americans have been slow to comprehend the true nature of the mortgage disaster. They seemed to have grasped just two things about the crisis: One, a lot of people are getting their houses foreclosed on. Two, some of the banks doing the foreclosing seem to have misplaced their paperwork.

For most people, the former bit about homeowners not paying their damn bills is the important part, while the latter, about the sudden and strange inability of the world's biggest and wealthiest banks to keep proper records, is incidental. Just a little office sloppiness, and who cares? Those deadbeat homeowners still owe the money, right? "They had it coming to them," is how a bartender at the Jacksonville airport put it to me.

But in reality, it's the unpaid bills that are incidental and the lost paperwork that matters. It turns out that underneath that little iceberg tip of exposed evidence lies a fraud so gigantic that it literally cannot be contemplated by our leaders, for fear of admitting that our entire financial system is corrupted to its core — with our great banks and even our government coffers backed not by real wealth but by vast landfills of deceptively generated and essentially worthless mortgage-backed assets.

You've heard of Too Big to Fail — the foreclosure crisis is Too Big for Fraud. Think of the Bernie Madoff scam, only replicated tens of thousands of times over, infecting every corner of the financial universe. The underlying crime is so pervasive, we simply can't admit to it — and so we are working feverishly to rubber-stamp the problem away, in sordid little backrooms in cities like Jacksonville, behind doors that shouldn't be, but often are, closed.

Lots to read...


Sunday, November 14, 2010

Xbox Kinect gamers, try not to kick your TV...

This game looks exciting, I'd like to try it out in my living room at some point


Of course, one would need to pay...

That's $350 to boot. Not pocket change in this economy, but it seems that customers are really buying this stuff. Bad economy? Can one explain the continued success of Apple? Same goes for Sony's and Microsoft's game console - it seems there's still lots of discretionary enthusiasm out there.


Tuesday, November 9, 2010

China downgrades US's debt

I had no intention to start a blog documenting the decline of the USA. I know we will see better days.

Chinese Credit Rater Downgrades U.S.
Dagong Global Credit Rating Co., the Chinese rating company that was recently rejected in its bid to be an officially recognized bond rater in the U.S., just downgraded the entire U.S. The always objective Xinhua has the “scoop.”

Was that sarcasm from the Wall Street Journal?!


New York Times Asserts that China Saved the Global Economy

So are we in a global depression or are we saved? Why does it not feel like being 'saved' - especially not by the copyright infringing, reverse engineering, currency manipulating, trade cheaters, slavery industry child workers, politically oppressive China?!

What's Next for China After Saving the World?
The giant fiscal stimulus and bank lending spree that China started two years ago saved the world from recession. What can Beijing do for a follow-up act?

Internationally, the success of the unprecedented pump-priming has accelerated a shift in economic influence that has put Beijing front and center of policy making, as the summit meeting of the Group of 20 major economies in Seoul is likely to show this week.

Domestically, the 4-trillion-renminbi, or $601 billion, package announced Nov. 9, 2008, put a floor under an economy that was in free fall during the global financial crisis. More than 20 million migrant workers who had lost their jobs were quickly absorbed as the government started public works projects.

Two years later, China can boast, among other things, the world’s biggest high-speed-rail network, which is doing wonders for the country’s reputation.

“China’s self-confidence got a big boost from the fiscal program, which goes beyond the immediate economic effects,” said Jonathan Fenby, head of China research at Trusted Sources, an emerging markets consulting firm.

Mr. Fenby said the tangible results of the splurge could only increase China’s pride in its ability to raise its game.

“One cannot help making comparisons with infrastructure in the U.S. and U.K.,” he said. “I am sure the Chinese do.”

Success, however, heightens expectations.

China, which now has the world’s second-largest economy, after that of the United States, is under pressure to shoulder more responsibility for tasks including curtailing carbon emissions and reducing global imbalances.

If the whole 'carbon credit' scam relies on China volunteering to tax themselves, then we can rest assure this idiocy will not pass.


Saturday, November 6, 2010

Funny Wired's Flow Chart: Should you post Yahoo!Answers Questions?

Came across this while looking through latest 'boobies' edition of wired. Pretty amusing, and informative, didn't know all of these even existed:

Click to open full page.


Friday, November 5, 2010

Wow, Microsoft's Kinect has problem with black people?!

Would Kenye West approve?

Lighting affects Kinect's face recognition, report says
It's not even one day old, but the new Kinect video-gaming system was at the center of a potential controversy.

Gaming review site GameSpot reported that two of its dark-skinned employees had problems getting the facial recognition features of the Kinect to work. According to the report, the system recognized one inconsistently and was never able to fully identify the other despite repeated calibration attempts.

A third dark-skinned employee was recognized on the first try, GameSpot said.

However, Consumer Reports tested the Kinect and blamed poor lighting for the facial recognition failures instead of skin tone.

I'm guessing it's probably just a minor issue and bad PR.


Thursday, November 4, 2010

As 'shopping day' approaches: prices go higher, jobless claims higher

Not. Good.

Jobless Claims Turn Higher; Productivity Up, Costs Down
New U.S. claims for unemployment benefits rose more than expected last week while unit labor costs fell in the third quarter, underlining the persistent weakness in the jobs market.

Although other data on Thursday showed nonfarm productivity rebounded at a much stronger-than-expected 1.9 percent annual rate in the third quarter, the general tone remained consistent with a sluggish economy.

Initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 457,000, the Labor Department said, reversing the prior week's decline.

Analysts polled by Reuters had forecast claims rising to 443,000 from the previously reported 434,000. The government revised the prior week's figure up to 437,000.

In a second report, the department said unit labor costs, a gauge of potential inflation pressures closely watched by the Federal Reserve, fell at a 0.1 percent rate after rising a revised 1.3 percent in the second quarter.

"This suggests the labor market is not improving as much as we hoped .... and suggests there hasn't been that much of a change between September and October labor market conditions," said Zach Pandl, a U.S. economist at Nomura Securities International in New York.

Can someone please say the words.... 'the 2nd great depression is upon us'.

Mini bear rally should end soon... a crash to follow?

Thursday, October 28, 2010

Some Reorganizing

I've opened two new blogger blogs for EzBacktest and FreeStocksTicker.

The idea is for both these blogs to concentrate all new feature and release announcements and to somehow have url-s that make more sense:




Gloom and Doom: Retirement Disaster Ahead

The point of the following article is to show we aren't saving enough, but there are more interesting things to deduct from it too, I'll sum a bit after a brief quote:
Warning: Retirement Disaster Ahead
Don't let the rally in the stock and bond markets fool you. Many Americans are still hurtling toward a retirement disaster. Few realize it. Even many of those running the big pension funds don't know.

That's the conclusion of John West and Rob Arnott at Research Affiliates, an investment management firm, in Newport Beach, Calif. In their latest report, "Hope Is Not A Strategy," they have some numbers to back it up.

"I worry a lot about people reaching their golden years and discovering, 'Oh, I should've saved more,' and 'Oh, I don't qualify for Social Security anymore because it's means tested,'" says Mr. Arnott, a widely respected market strategist. "We're headed for a retirement train wreck," he adds, "and it's going to get really ugly over the next 15 years."

Alarmist? Perhaps. But follow the math.

The returns you will get from your stock funds can only come from four things, they note: dividends, earnings growth, inflation and changes in valuation.

The meat of the article is at the part following were I stopped quoting, specifically:
* Low average dividends from stocks
* Inflation implication for stocks prices isn't promising (those who believe hyper inflation is coming will disagree)
* Market average valuation seems overpriced in P/E terms, unlike 70-s and 30-s. (Suggesting market unlikely to rally higher without proven growth)
* Low bond yields suggest very mild long term returns on bond investments (yet the risks aren't priced in due to government intervention)

- All of the items in the brackets are my addition.

So an investor with 60% of his portfolio in stocks and 40% in bonds, a standard, if conservative, allocation, can expect a weighted average return from here of only about 4.1%.

To put this in context, they notice that the typical big pension fund is still expecting to earn about 7% to 8% a year.

When you strip out 2% inflation, that means pension fund managers are expecting 5-6% percent a year in real, inflation-adjusted terms.

But by Mr. West and Mr. Arnott's numbers, investors can only expect about 2.1%.

Suggested lesson:
Bottom line? Neither pension funds nor private investors seem to have fully absorbed the grim lessons of the past decade. Returns are going to be much lower. People need to save more, much more, for their retirement. If the market rally this year has given them false hope, it will have turned out to be a curse more than a blessing.

Interesting reading.

Monday, October 25, 2010

Back from Hong Kong

I was away on my employer's behalf - I'm not a business mogul and won't pretend to blog as such. My impression from the visit is that it's a bustling robust and growing city. Locals complain that real estate is beyond their reach due to influx of corruption money from main-land China. Locals believe that the recession is way behind them and they are facing a steady growth path. Interesting that during my stay there China raised interest rates and the global markets took the opportunity to correct for one day.

On a related note, CNBC provides us with a slideshow of growth companies they recommend looking out in China:
The 10 Fastest Growing Chinese Companies

One thing is sure, it seems there's a lot of new money flowing through China, and that the country's systems haven't adjusted yet - causing major distortions and bubbles. Buyer beware.


Thursday, October 14, 2010

McWedding for 400 bucks in Hong Kong

You can guess what the dinner choices might be... I bet McHaters in the west wouldn't approve.

Consumerist: McDonald's Offering $400 Wedding Packages
With folks now getting hitched in Walmarts, Taco Bells and Home Depot, it would make sense that McDonald's would eventually get around to adding weddings to their menu. And that's exactly what the fast food chain is doing in Hong Kong, where happy couples will soon be able to say "I do" under the Golden Arches.

Starting in January, Hong Kong McDonald's will begin selling a package that includes the ceremony, reception, wedding cake and catering for up to 100 people -- all for around $400.


For Profit Higher Education Stocks Crushed, Updated: Enrollment nearly halted due to Government intervention

Not a good day for America.

Apollo Outlook Weighs on School Stocks
Shares of Apollo Group(APOL_) plummeted more than 20% in the first minutes of trading Thursday, dragging much of the for-profit education sector with it.

Apollo Group, parent company of The University of Phoenix and other for-profit schools, posted better-than-expected quarterly earnings after the closing bell Wednesday, but warned that enrollment would be down more than 40% in fiscal 2011's first and second quarters.

Apollo also warned it would fall out of compliance with what is called the 90:10 rule in fiscal 2012. The rule stipulates that no more than 90% of a for-profit education provider's revenue may be generated from Department of Education's federal student aid program.

Free falling stocks: APOL, COCO, WPO, CECO, DV, STRA, ESI, EDMC

Apollo and others will fail to comply with the 90:10 because the government took over the private lending industry with the healthcare bill. Try as I might to avoid expressing a political point of view on this, I can't: Whoever wrote the Healthcare bill knew he started a domino effect against the free market in industries other than just the health care.

Even if the stock market rises 50% this year, it's highly risky to invest in individual stocks and sectors with this administration.

Hope for better days.

Update: For-profit schools reel as rules affect enrollment
-- The nation's largest for-profit college is changing admission practices to satisfy new government regulations aimed at preventing students from leaving school with staggering debt they can't repay, but the result may be that fewer lower-income students will gain entry to class.
Intentional meddling by the government. You want higher education? Your unelected officials decided that you're too poor to get ahead in life. Unbelievable!


Friday, October 8, 2010

100 Commission free ETFs at TD Ameritrade

Following Fidelity and Schwab. Sooner or later - free or near zero trade commissions for all...

TD Ameritrade Launches Over 100 Commission Free ETFs
TD Ameritrade Holding Corp. (AMTD: 16.25 ,-0.16 ,-0.98%) announced the launch of over 100 commission-free exchange-traded funds, heating up competition with rivals including Charles Schwab Corp. (SCHW: 14.04 ,-0.09 ,-0.64%), which took similar steps beginning last year.

The Omaha, Neb. online brokerage said the ETFs will be available to both retail investors and independent registered investment advisers. ETFs, which trade like stocks, have gained in popularity in recent years as the investment tools track a particular index, sector, industry or even commodity.

The commission-free ETF announcement underscores a broader pricing war among online brokerages. Last year, Schwab, E*Trade Financial Corp. (ETFC: 14.67 ,+0.06 ,+0.41%) and Fidelity Investments all cut their trading commissions. TD Ameritrade has said it has no plans to change its flat fee of $9.99 per trade for all customers.

Pricing battles are also prominent in the ETF space, with Schwab, Vanguard Group, and Fidelity all offering some degree of commission-free trades in an effort to capture market share.


If investors elect to trade out of the ETFs within 30 days, Tomczyk said the customers would be charged a $19.99 fee, but noted that such a fee "works very similar to how an index mutual fund operates."


Short term trading fee for ETFs, and they collect no payment from the ETF companies, odd.


Thursday, October 7, 2010

Glenn Beck Interviewed by Varney on Fox Business Channel

My two cents:

* Fox Business channel is way too invested in a political point of view. They completely lack a balance in the political arena - considering they choose to talk about politics so much. Should a business channel discuss politics? Yes but not all the time.

* I choose not to take political point of views in this site. It's just the kind of controversial topic I don't wish to get my real name and my freeware products involved in. You be the judge of what you see in the following video.

Just to be clear, it was Jim Cramer who claimed that gold is going to 2000, on CNBC:


Wednesday, October 6, 2010

What September Rally? S&P 500 Price in Gold In Downtrend

I mentioned this a month ago, early September. This market does not seem bullish to me.

S&P 500 Priced in Gold

The S&P 500 may be trading at its highest levels in close to five months, but relative to the price of gold it looks like anything but a rally. Back in October 2009, the price of the S&P 500 was actually higher than the price of gold. Over the last year, though, gold has pulled ahead while stocks have gone nowhere. Today, the S&P 500 is trading at 1,157 while the price of gold is trading at 1,337 per ounce, for a ratio of 0.86.

I think I should add a 'price in gold chart' tool to EzBacktest...


Tech bubble popping? What - you didn't know there's a market bubble?

It's almost hard to believe, when the market is well below it's highs before the Lehman crash - but for certain stocks - it has been a huge run up. Some justified, other manufactured. As the economy's 'stimulated' growth subsides, speculators might be running for the hills again.

Pop! Cloud Computing Bubble Bursts; Storage, Software Stocks Battered On Warnings From Equinix, Autonomy
Looks like the cloud-computing bubble is losing some air.

In a move likely at least partly spurred by a warning and subsequent massive sell-off in shares of data center operator Equinix (EQIX), the Street this morning is engaged in a wholesale dumping of the enterprise software and data storage sectors. Also contributing to the pressure on the stocks: a warning this morning by U.K.-listed Autonomy (AU.L). An infrastructure software provider, the company said Q3 revenue will be at the top of its previous range. But the company also indicated that current Street revenue forecasts for the full year are too high, and that there is still “volatility” in corporate IT spending.

Autonomy CEO Mike Lynch said in a statement that the company was “pleased to be at the top end of our range during our traditionally seasonally weakest quarter, but were disappointed not to be in a position to report revenues above this range. There are unique challenges to the summer months with a consequent September catch-up, but we are also noticing customers still showing volatility around their view of the current macro economic situation.”

Lynch also said the company’s internal model suggests current consensus estimates are about 3% too high.

The general thinking, I suspect, is that the intensifying price pressures and increased churn Equinix described - and the uncertainty Autonomy noted - are symptomatic of a broader tightening of the screws by corporate IT buyers everywhere. In short, there are new fears that the corporate IT spending in general is showing a little softening. And with the shares of many stocks in networking and enterprise software sporting fat gains, some of those related to speculation about potential acquisitions, there were plenty of profits for investors to take.

Piper Jaffray analyst Mark Murphy noted in an interview with Tech Trader Daily this morning that the massive sell-off in EQIX “shows you what can go wrong when a company is just slightly light

Read the whole thing. A list of stocks crashing right now mentioned: EQIX, ISLN, RDWR, TDC, CVLT, VMW, CRM, RHT, TIBX, CTXS.


Monday, October 4, 2010

IMF: West stuck in 'near' depression

Was the word 'near' inserted to avoid global panic?

IMF admits that the West is stuck in near depression
If you strip away the political correctness, Chapter Three of the IMF's World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time.

1930-s here we come.

'We have nothing to fear but fear itself' - and reality. Reality is pretty scary I'd say.


Tuesday, September 21, 2010

C# Developers: Shred your forms to avoid memory leaks

If you develop an application which continues running for some time and uses several forms - you might have memory leaks you are unaware of. This might not be a big issue if your forms aren't utilizing too many system resources. In a recent project I was involved in, I had to tackle huge memory leaks due to Forms basic memory leaking faults: events.

Continue reading and view code below fold...

Monday, September 20, 2010

Deciphering the financial headlines while the market rallies

Dow up 1%, Nasdaq 1.28% - some stocks, my favorite ones, are really flying - while I'm sitting on the fence.

So what do the headlines on Yahoo!Finance say?

* Homebuilders' Confidence Stuck at 18-Month Low
* Stocks extend September rally ahead of Fed meeting
* Gold climbs to record on weaker dollar

I think that since gold is rallying, it should be a good exercise to view the value of the dow in gold, since the 'correction' has begun. Perhaps for some good stocks though, there's real 'end of the year window dressing' mutual funds purchasing pressure. This could last to the end of November.

* PS: SPY is breaking above resistance, while hovering above 200 SMA, next technical signal to look for to signify a bullish wave: 50 SMA cross-over. In addition, the last two dips represent a higher low. So technically, a rally is upon us. Fundamentally? Well - check the above headlines again...


Friday, September 17, 2010

Retirement Deficit: 6.6 Trillion, Seniors forced back to job market

No one wants to reach his golden years and discover he can't really retire. The havoc done to all retirement plans in the US over the last 3 years is undeniable and the damage would be long lasting. Allow me to quote two relevant stories:

U.S. Retirement Deficit Reaches $6.6 Trillion: 'God Help the Poor Gen Xers'
America's retirement crisis has reached epic proportions, according to a recent study by Boston College's Center for Retirement Research. The study estimates that the current retirement income deficit, or the gap between the retirement savings of U.S. households and what they need to have in order to maintain their living standards past retirement, is a whopping $6.6 trillion -- five times the projected federal deficit for 2010.

"The key sources of income retirees are relying on are either under attack, in the case of Social Security, or disappearing, in the case of traditional pensions," said Ross Eisenbrey, vice president of the Economic Policy Institute, at a press conference on Wednesday. "The early Boomers are better off than the late Boomers, and God help the poor Gen Xers. Seventy percent of them are on a track that leads to a fallen standard of living in retirement."

According to the latest retirement income data, half of 65-and-older households have an annual income of less than $29,744 -- about half the median income of younger households. Traditional pensions are disappearing in favor of 401(k) plans, which allow employers to shift much of the cost and all of the risk to their employees, and on top of this, Congress is considering cutting Social Security to balance the federal budget.


I'd advise watching out for people with certain agenda giving you these kind of news. There are communists and socialists for whom the solution to the problems we face is confiscate whatever we do have and replace it with some 'social security+' system. Have you ever heard a worse idea?

What do seniors who have not saved enough or were horribly damaged by financial collapse - what do they do? Go to work of course.

Beyond the 401(k): Seniors must work longer
After 30 years studying pension systems around the world, Alicia Munnell knows what works -- and what doesn't. As head of the Center for Retirement Research at Boston College, she warned early on that 401(k) plans would fail to provide the level of income that retirees would need. Not many agreed with her at first.

But by 2006, Congress, other academics, and much of the financial services industry had concluded that defined-contribution plans had some serious flaws. The result: the Pension Protection Act, which mandated 401(k) reforms such as encouraging auto-enrollment and the use of target-date retirement funds.

Those measures, however, aren't enough to fend off a coming crisis, Munnell argues.

With savings and housing wealth below peak levels, workers are less prepared for retirement even as Social Security deficits are expected to balloon, threatening future benefits. How to fix the mess? Munnell, a former economics adviser to President Bill Clinton, calls for broad changes in America's retirement system. She shared her ideas with senior writer Penelope Wang.


Raising the retirement age for full benefits to 70 or higher is something that's being talked about a lot now.


Yikes. That's preventing you from using your retirement funds so that some calculator at an epidemic's basement is happy with global and national studies.

OK - I'm light years away from my own retirement, seriously. I'm bringing these stories here for general info. If you are concerned about the state of your current investments, consider trying my free software: EzBacktest. Back-test your investment choices, and get some peace of mind - as you lay out plans to your far-future of hopeful retirement.


Wednesday, September 15, 2010

CNBC: Stock-Pickers, A Dying Breed?

Short answer: Nope. But current economy and market condition does and should scare the heck out of any thinking person.

Man Vs. Machine: Stock-Pickers, A Dying Breed?
Bob Olstein is a stock-picker's stock picker. He has been at it for 42 years-picking stocks the old-fashioned way: by the numbers.

Still, there are times the mutual fund manager admits to feeling outgunned by the machines and the proliferation of exchange-traded funds. "I absolutely feel like Jonathan Livingston Seagull right now-Okay?"

This has been a tough, confusing time for serious stock pickers, whose investment strategies are based on the fundamentals of businesses.

As stocks get swept into various indexes by ETFs and are actively traded via algorithms and machines, there is genuine concern that these changes are leading to the death of stock-picking as we know it.

"You can't fall in love anymore," says Cleve Rueckert of Birinyi Associates.

That's been a longtime theme of his boss, Laszlo Birinyi, who in 2003 published a controversial report in 2003 titled, "The Death of Long-Term Investing." (Watch video of Birinyi's most recent appearance on CNBC.)

Birinyi's thesis is that the impact of such regulatory changes as the SEC's fair disclosure regulation -requiring publicly traded companies provide material information to all investors at the same time-combined with the creation of new markets and the use of technology in trading would favor short-term thinking.



Tuesday, September 14, 2010

Back to school shopping revives economy?

Or will this number be revised quietly next month too? (yes I'm cynical, there have been WAY too many economic numbers fudged and then revised)

Retail Sales Up 0.4 Percent in August
Retail sales rose in August by 0.4 percent, a one-tenth percent uptick from the previous month, but comfort for retailers worried about a possible double-dip recession.

While retail sales overall rose one-tenth percent from the previous month, which was revised downward after also briefly showing a 0.4 percent gain, the number reported by the Commerce Department is the best since March.

The gains came in spite of a marked decline in auto sales, which took a 0.7 percent drop from July. Still, the 0.6 percent rise in retail sales besides autos is double what economists had expected


Saturday, September 11, 2010

Nintendo losing their edge vs. Microsoft and Sony. PS3 Move bundle available for pre-order

Paying $399.99, is it worth it? Let's do the math: Wii console with motion remotes costs $199.99, Blue-ray player with wireless access (for HD netflix) - costs $250, together you'd pay: $449 - and Wii's graphics looks like stone age compared to Sony's HD. The bigger question perhaps is - are there any more buyers in this market?

I think that those of us who don't yet have a Blue-Ray player - and increasingly disappointed by Wii - would certainly consider it.


Thursday, September 9, 2010

First domino down? Treasuries lower after disappointing 30-year bonds auction

If treasuries lose their 'safe haven' status - what remains?

TLT - 20+ years bonds ETF showing right now a 2% drop. Some might perceive it to be nothing more than a correction on security which is known to fluctuate in value. Short term treasuries still holding well (SHY).

Treasuries Extend Losses After Auction of $13 Billion in 30-Year Bonds
Treasuries fell as the government sold $13 billion of 30-year bonds after economic reports showed initial jobless claims dropped last week more than economists forecast and the trade deficit narrowed.

The bonds drew a yield of 3.820 percent, compared with the average forecast of 3.806 percent in a Bloomberg News survey of 9 of the Federal Reserve’s 18 primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 2.73, versus 2.77 at the auction last month and an average of 2.65 for the past 10 offerings. Today’s sale, a reopening of the August sale, is the final of three note and bond auctions this week totaling $67 billion.

“There’s a lot of supply, not just here, but globally,” said Thomas Tucci, head of U.S. government bond trading in New York at the primary dealer Royal Bank of Canada in New York, before the auction. “There’s concern about the global supply picture and if rates will attract enough buyers.” As a primary dealer, RBC is obligated to participate in Treasury auctions.

The yield on the 30-year bond gained 10 basis points, or 0.10 percentage point, to 3.83 percent at 1:05 p.m. in New York, according to BGCantor Market Data. The yield on the benchmark 10-year note gained 9 basis points to 2.75 percent.

The extra yield that investors demand for 30-year bonds compared with 10-year debt was 1.07 percentage points before the auction. It touched a record high 1.25 percentage points when Fed policy makers met Aug. 10. The five-year average is 0.50 percentage point, according to Bloomberg data.

Spooked yet?


Sunday, September 5, 2010

Quick Tip when back testing with EzBacktest

Finding ETF-s and mutual funds with a long history might be a challenge. It's advised to use alternatives which should generally provide same results. I found that vanguard's index mutual funds are a good replacement for ETF-s when I want to test a period beyond 10 years.

For example:

* Instead of SPY, I change the portfolio to invest in VFINX
* Instead of SHY/AGG etc, I change the portfolio to invest in VBISX

Now testing with a bull/bear strategy simulator - I get the following stunning result:
(Image above: setting up bull/bear simulation, image below: the results. Green triangle indicates bull signal and purchase of bull portfolio, pink X signals bear, star signals rebalance or other - visible through tool tip)

Could investing be this simple? Follow one simple signal and alternate between bull and bear portfolio? Try for your self - download the software and experiment with your desired allocations.


And I thought I knew programming threading...

It seems Microsoft went a few steps forward with the release of .Net 4, and have created a much more extensive parallel paradigm. I thought it was a parallel extension for loops and linq, but then I came across 'Task', and noticed Microsoft is recommending from here on to stop using Threads and ThreadPool, and instead use tasks:

             .NET Framework 4

The Task Parallel Library (TPL), as its name implies, is based on the concept of the task. The term task parallelism refers to one or more independent tasks running concurrently. A task represents an asynchronous operation, and in some ways it resembles the creation of a new thread or ThreadPool work item, but at a higher level of abstraction. Tasks provide two primary benefits:
  • More efficient and more scalable use of system resources.
    Behind the scenes, tasks are queued to the ThreadPool, which has been enhanced with algorithms (like hill-climbing) that determine and adjust to the number of threads that maximizes throughput. This makes tasks relatively lightweight, and you can create many of them to enable fine-grained parallelism. To complement this, widely-known work-stealing algorithms are employed to provide load-balancing.
  • More programmatic control than is possible with a thread or work item.
    Tasks and the framework built around them provide a rich set of APIs that support waiting, cancellation, continuations, robust exception handling, detailed status, custom scheduling, and more.
For both of these reasons, in the .NET Framework 4, tasks are the preferred API for writing multi-threaded, asynchronous, and parallel code.

I'm still more comfortable with the Visual Studio 2008 environment and am not porting my applications to yet more extensive .Net framework. But I am researching to allow future upgrades which should utilize the framework with the best practices. Continue reading about Tasks at MSDN:
Task Parallelism (Task Parallel Library)


Friday, September 3, 2010

200 year old beer discovered at bottom of sea

No sexy Bud/Coors commercials...

World's 'oldest beer' found in shipwreck
First there was the discovery of dozens of bottles of 200-year-old champagne, but now salvage divers have recovered what they believe to be the world's oldest beer, taking advertisers' notion of 'drinkability' to another level.

Though the effort to lift the reserve of champagne had just ended, researchers uncovered a small collection of bottled beer on Wednesday from the same shipwreck south of the autonomous Aland Islands in the Baltic Sea.

"At the moment, we believe that these are by far the world's oldest bottles of beer," Rainer Juslin, permanent secretary of the island's ministry of education, science and culture, told CNN on Friday via telephone from Mariehamn, the capital of the Aland Islands.

"It seems that we have not only salvaged the oldest champagne in the world, but also the oldest still drinkable beer. The culture in the beer is still living."

Juslin said officials had talked to a local brewer about whether the new-found beer might be able to yield its recipe after experts decipher the brew's ingredients.

The newest find came as divers unearthed bottles separate from the earlier champagne find. While lifting a few to the surface, one exploded from pressure. A dark fluid seeped from the broken bottle, which they realized was beer.

All the cargo on the ship -- including the beer and champagne -- is believed to have been transported sometime between 1800 and 1830, according to Juslin. He said the wreck was about 50 meters deep (roughly 164 feet) in between the Aland island chain and Finland.

The cargo was aboard a ship believed to be heading from Copenhagen, Denmark, to St Petersburg, Russia. It could have possibly been sent by France's King Louis XVI to the Russian Imperial Court.

"Champagne of this kind was popular in high levels [of society] and was exclusive to rich groups -- it was not a drink for common people then," Juslin said.

Experts estimated the exclusive bubbly to be worth tens of thousands of euros per bottle. The value of the beer has not been determined. It is also unknown whether the beer went flat while sitting at the bottom of the Baltic for such a long time.

Some of the bottles of champagne were originally produced by Juglar, a premium champagne house no longer in existence, according to Juslin.

He said the cold sea water was a perfect way to store the spirits, with the temperature remaining a near-constant 4-5 degrees Celsius (around freezing temperature in Fahrenheit, or 32 degrees) and no light to expedite the spoiling process.

I wouldn't drink it...thanks. Interesting that treasure hunters are still out there digging up - not gold - but beverages.


Tuesday, August 31, 2010

Netflix Streaming on iPhone and iPad, rumors of Droid

Domination. Being there first, being the standard for every other to follow - if they dare.

Netflix Now Playing on an iPhone Near You

Netflix has been streaming movies for instant viewing of movies for some time on PCs and game machines. As of Thursday, Netflix is on the iPhone as well.

A Netflix app for the iPhone puts movies instantly on the phones of anyone with a least a minimum $8.99 a month Netflix subscription. (That minimum plan also gets you delivery of one DVD at a time.)

The app, however is free. From within it you can browse for films to watch by genre, or do a search for a specific title.

The Instant Queue tab takes you to films you have placed in in your personal queue on the Netflix Web site.

The app works via 3G or Wi-Fi on an iPhone or Wi-Fi on an iPod touch running iOS 3.13 or later. In a test videos played clearly and smoothly even on 3G. (An Android app is rumored to be coming soon.)

If you stop the film midstream, the app recalls where you were and lets you resume from that point. Or, you can also begin from that point on any other device that streams Netflix.

One glaring oversight, while the app lets you watch movies, it doesn’t let you manage your Netflix account. I look forward to the update. Or is that the sequel?

Well - as a user of Netflix on my Wii - I could have told the author that they don't support account management on other devices as well. I'm wondering though regarding the TV-s with pre-installed applications - such as Samsung with Netflix. Can these things get updates/upgrades over the net? Anyways - just seeing Netflix everywhere and on everything makes me certain of their unshaken dominance and stance in the market for the foreseeable future.


Next Free Stocks Ticker features

I'm thinking of adding the following feature on next release of 'Free Stocks Ticker':

* When hovering over a stock quote and showing tooltip, also show latest updated quote (still 20 minutes delayed) with volume and other details...

New version - when I get the free time to develop it and publish. Perhaps next week.


Friday, August 27, 2010

Some scientific scare mongering regarding 2012..

MASSIVE!!! 'Force of 100m bombs' - causing - a few hours of power outage? Some text messages not reaching destination? Surely - no John Cusack using his feet to outrun a super volcano?

Massive solar storm to hit Earth in 2012 with 'force of 100m bombs'
Astronomers are predicting that a massive solar storm, much bigger in potential than the one that caused spectacular light shows on Earth earlier this month, is to strike our planet in 2012 with a force of 100 million hydrogen bombs.

Several US media outlets have reported that NASA was warning the massive flare this month was just a precursor to a massive solar storm building that had the potential to wipe out the entire planet's power grid.

Despite its rebuttal, NASA's been watching out for this storm since 2006 and reports from the US this week claim the storms could hit on that most Hollywood of disaster dates - 2012.

Similar storms back in 1859 and 1921 caused worldwide chaos, wiping out telegraph wires on a massive scale. The 2012 storm has the potential to be even more disruptive.

"The general consensus among general astronomers (and certainly solar astronomers) is that this coming Solar maximum (2012 but possibly later into 2013) will be the most violent in 100 years," quoted astronomy lecturer and columnist Dave Reneke as saying.

"A bold statement and one taken seriously by those it will affect most, namely airline companies, communications companies and anyone working with modern GPS systems.

"They can even trip circuit breakers and knock out orbiting satellites, as has already been done this year," added Reneke.

No one really knows what effect the 2012-2013 Solar Max will have on today's digital-reliant society.

Dr Richard Fisher, director of NASA's Heliophysics division, told Reneke the super storm would hit like "a bolt of lightning", causing catastrophic consequences for the world's health, emergency services and national security unless precautions are taken.

NASA said that a recent report by the National Academy of Sciences found that if a similar storm occurred today, it could cause "1 to 2 trillion dollars in damages to society's high-tech infrastructure and require four to 10 years for complete recovery".

Doomsdayers don the darnest titles. Economists, pundits, CNBC hosts, 2012 lunatics, and a few astronomers.


Tuesday, August 24, 2010

Great, you can't sell your home. Home builders stock up

The stock market isn't supposed to make sense.

Existing Home Sales Hit 15-Year Low; Housing Market Weakens
Sales of previously owned U.S. homes dropped more steeply than expected in July to their lowest pace in 15 years, an industry group said Tuesday, implying further loss of momentum in the economic recovery.

The National Association of Realtors said sales dropped a record 27.2 percent from June to an annual rate of 3.83 million units, the lowest level since May 1995. June's sales pace was revised down to a 5.26 million-unit pace.

Traders site adds:
Housing Stocks Moving Higher Even Though Existing Home Sales Are Horrendous
Let’s get right to the point: There's nothing good that can be said about the report that came out earlier. Existing home sales dropped off a cliff -- it's that simple.

But, once the news broke that homebuyers are nowhere to be found, a strange thing happened; several of the companies within the homebuilders space started to run higher.

Is it bears sensing a 'couldn't get worse' and fleeing their position? Or are they manipulating markets (I have no clue how) - to get a better position to pounce and tear it all to shreds in a way worse than we've seen thus far?


Saturday, August 21, 2010

Pre-Order XBox 360 Kinnect Bundle - $299.99

OK dear family, so let's assume you missed my post a few months ago about getting dear Daddy an X-Box, no biggy. The good news? You can still spend your lunch money and allowance to make me a happy Daddy-O.

On Amazon, you can now pre-order for November 4th the brand new XBox 360 Kinnect Bundle. Will cost you (me) $299.99


Saturday, August 14, 2010

EzBackTest version 1.2.0 released

New features include:

* A tool to simulate bull/bear strategy, where different portfolios are purchased based on moving average technical signals.

* Graphs now have markers to show when a re-balance was made. You can also hide the S&P500 comparison red line.

Download here.


Wednesday, August 11, 2010

Trojan Virus Empties Your Bank Account

From what we're told, it has been active only in the UK in one certain unnamed bank - so it sounds like the virus was on the bank's computers and not at home users'. Stunning and scary.

Pretty sure this won't help anyone but worth mentioning, you can get free anti-virus from Microsoft: Security Essentials.

Also, for USA's Comcast internet customers - you can get Norton anti-virus for free...

Daily Mail: Thousands of online banking customers have accounts emptied by 'most dangerous trojan virus ever created'
* Trojan is still at large and may strike again, experts warn
* Bank affected has still not been named

Thousands of British online banking customers have fallen victim to a sophisticated attack by cyber criminals who have stolen thousands of pounds from their accounts.

About 3,000 online banking customers have been victims of a computer virus attack that empties their accounts while showing them fake statements so the scam goes undetected.

Experts have described the attack using a 'trojan' virus as the most sophisticated and dangerous malware program ever created.

The cyber criminals stole an estimated £675,000 between July 5 and August 4 and the attack is still progressing, experts warn.




Thursday, August 5, 2010

Publicly pondering next EzBacktest feature

I'm thinking of adding yet another tool to allow back-testing a combination of portfolios used under simple technical signals to invest differently for Bear, Bull and Uncertainty environment.

The idea is simple, once SPY breaches 200 DMA the market is either bullish, bearish or uncertain. If this interest you, stay tuned and feel free to comment.

I'd like to thank all those who have recently participated in supporting this software financially. I won't pretend it financed a lot - but it is very much appreciated and encourages me to continue development.


Monday, August 2, 2010

Dow 14000 in 2010?!

Scratching my head, mumbling - are you serious?!

Dow 14,000 in 2011? Battered Bulls Feel Vindicated
A jagged July ends positive, and two battered bulls feel vindicated.

First, a proprietary word: The Hulbert Stock Newsletter Sentiment Index (HSNSI) — which the reflects the average equity exposure among a subset of the short-term market timing newsletters tracked by the Hulbert Financial Digest — stood on Friday night at 35%, down from 47.5% on Thursday.

Earlier this month, Mark Hulbert argued that the HSNSI's relative slow response to the market rebound off its July 2 low was bullish from a contrary point of view.


Cabot is now 65% invested and has added two new buys: Riverbed Technology Inc. (NASDAQ: RVBD - News) and Inc. (NYSE: CRM - News)

Cabot concludes with a surprisingly strong (for such a judicious service) endorsement of the venerable "Presidential Election Cycle" theory. It writes: "From the market's low point in the year of the midterm elections (like 2010), to its high the following year (2011), the major averages have averaged a gain of nearly 50%. It's true!"

Based on past performance, it projects: "With a Dow low of 9,687, a rally into 2011 could carry the index well above 13,000 and even to 14,000. It might sound crazy, but history suggests it's not just possible, but likely!

So... the Bush tax cut are set to expire and the market will rally above 14000? I doubt it. But what do I know. At least they didn't say the Volt is going to be a hit - and totally not a waste of tax payer funds...


Thursday, July 29, 2010

New Kindle to Arrive on August 27, Only $139 !!! - Wife says: We're Buying

Can you feel the excitement?

New wireless Kindle, $139!!!

Interesting points I noticed:
  • Wifi, instead of cellular wireless
  • Integrated twitter and facebook
  • Audio-books, blogs and FREE 1.8 million out of copyright books
  • Battery life: 3 weeks to a month! (depending on wireless usage)
  • Wikipedia

Sharing passages on twitter/facebook...

A quick tip: If you don't yet have an Amazon credit card - you can order the new Kindle for just 99$ when you open a new account.

Sounds like a winner to me. I wonder if the rest of the internet is accessible too - or will become available.


Monday, July 26, 2010

Lifelock CEO published SSN on billboards, claiming his is secured; Identity stolen 13 times and fined for false advertising

Some people might find this amusing. It is certainly ironic. However, it bears bad news for most of us and the following article just piles on the depressing: we aren't protected, and our identity has probably already been stolen but not used yet. Hackers broke to most financial and big online outlets where most of us store credit card information. I know my credit card was used by thieves - I can only hope to never have worse things happen to my identity. To be sure, I have no intention publishing my social security on a billboard...

Do Identity-Theft Protection Services Work?
at least 13 times. The controversy over LifeLock's advertising ultimately cost the company $12 million in fines.

Granted, most of us won't plaster our Social Security numbers all over billboards. But real threats exist out there, and it is important to protect your identity. Are online identity-protection services worth the cost? Can you trust them? Are there more-effective ways to protect your personal information without the services of a specialized company? We did some digging, and here’s what we found.


Worth reading the entire thing, an important link to be found is where you can get your credit reports for free:

Unlike the scammers with that annoying singing commercial on TV who have been known to sell your personal details down the line...


Thursday, July 22, 2010

Netflix and Amazon beat market expectations, stocks get crushed while market rallies

Not a good day if you own both NFLX and AMZN ...

CNN-Money: Amazon shares tumble despite 41% sales growth
Amazon shares plunged 13% in after-hours trading Thursday after the company's second-quarter earnings came up far short of analyst expectations.

Amazon's sales are still growing fast: The company had revenue of $6.6 billion in the quarter ended June 30, up 41% from a year ago. Amazon's profit also rose, increasing 45% to $207 million.

But analysts hoped for better, and are keeping a close eye on Amazon's bottom line to see if intensifying competitive pressures knock the e-commerce giant off its game.

Forced by Barnes & Noble (BN) into an e-reader price war, slashed the price of its flagship Kindle to $189 last month. It later cut its high-end Kindle DX price tag by more than $100, to $379. Meanwile, Apple's (AAPL, Fortune 500) popular iPad -- which can store thousands of e-books -- could obliterate the entire stand-alone e-reader market within the next year or two.

Amazon tried earlier this week to draw attention to its bright spots. The company announced that sales of e-books for its popular Kindle reader now outnumber Amazon's sales of hardcover books. The company also said Kindle sales have picked up since last month's price cut, though it once again refused to disclose how many Kindles it has actually sold.

Amazon (AMZN, Fortune 500) said it expects third-quarter revenue to come in between $6.9 billion and $7.63 billion in revenue this quarter, in line with analyst estimates

Seriously, Amazon is in more markets than just E-Readers... the analysts and funds are going wild these days.

Let's divert our attention back to Netflix:
Barron online:Netflix Customers Love Streaming; Investors, Not So Much
The catch phrase of the day for Netflix (NFLX) analysts today was “priced for perfection” - at least three of them today used those precise words in their research notes to explain that the sell-off in the stock that started after-hours yesterday was simply a reflection of the fact that the company’s ethereal market cap left little room for anything other than super-human Q2 results. And they note that the numbers, while impressive generally, had a few blemishes; ergo, the stock is sliding.

The initial takeaway was that revenues were a little light of expectations, but there was more going on here than that. Average revenue per subscriber was down 5% sequentially, and 8% from a year ago; subscriber acquisition costs were up 13% sequentially and 2% year over year; and churn was up 20 basis points sequentially. On the other hand gross margins jumped 530 basis points from a year ago.

What seems to be happening here is that customers simply love the company’s streaming service - you can see it in the numbers.

* The lower ARPU reflects more and more customers choosing the low-end one-DVD-at-a-time $8.99-a-month plan in order to access the streaming service…
* …driving strong subscriber growth from new customers who want to join the all-you-can-eat streaming fun…
* …while customers are requesting fewer DVDs per month, thus cutting postal costs and boosting gross margins…
* …and driving EPS above estimates…
* …But the company also is seeing increased churn and higher subscriber acquisition costs.

Bottom line, investors believe that while there's room for growth in number of subscriptions, the earnings growth (which is what really matters for investment purposes) shows worrisome signals. Still - despite rising costs, imagine Netflix doubles it's customer base and maintains subscribers within a year - would the market still punish Netflix for costs?


When markets make no sense - the rallying side

10:39AM, 7/22/2010 - S&P500 up 2.48% hmmm, let's check the headlines:

Existing Home Sales Fall 5.1 Percent
Most Americans think economy yet to hit bottom
Job seekers' latest hurdle: Credit checks
Fed ready to ease if economy weakens: Bernanke
Jobless claims jump in latest week

Meanwhile, netflix beats expectations and falls 11%... (reasons found: analyst downgraded - increased cost of doing business)

Investing is synonym with putting your money in risk, and continuing recognition that you don't understand why things go up or down. To recap, at end of April the only headlines you'd find were overly optimistic - followed by a 15% correction in May June. By the end of June - the news cycle focused on a double dip recession and a long term depression. Mid July - and here we go again... makes no sense.


Tuesday, July 13, 2010

Stocks rally as unemployment rate still crappy

The title you should be reading on financial sites if they allowed themselves to utilize the word 'crap'...

New York Times blogger notifies us that the situation in the US is still worse than many other developed world countries.

The Unemployment Rate Race
Among developed countries, the United States still has an above-average unemployment rate, according to data released today by the Organization for Economic Cooperation and Development.

The chart above shows the standardized unemployment rate across organization countries for May, though for a few countries (including the United States) more recent data are available.

In May, the average unemployment rate among industrialized countries was about 8.6 percent; it was lowest in South Korea, at 3.2 percent, and highest in Spain, at 19.9 percent.

In the United States, the rate was 9.7 percent in May, and fell to 9.5 percent in June.
Hopefully, some day - in the not so distant future - things will improve. Just hopes - not an outlook.


Foxnews yellow journalism website wants us to feel good about what time did to our looks

If you're above 30, you're as likely as I am to be over your looks-peak. Gaining weight seems to be more likely, loss of hair, turning gray - you know the deal. Enter the horrible site representing Rupert Murdoch's empire in the US: Fox-News.

A collection of random photos was collected to give us a 'then and now' presentation of some celebrities. Let me warn you in advance though - they got it totally wrong on more than one occasion. Johnny Depp and Misha Barton? Well... never mind. It's yellow and bottom feeding 'journalism'.

Stars Who Lost Their Looks

How lame and overdone - Cristy Ally. Please, like we haven't noticed the gazillion late-night jokes about this pretty much forgotten star.


Monday, July 5, 2010

Designing a portfolio using EzBacktest

Let's start by a simple question. Imagine that you (a) had money, (b) it's all in cash, (c) wish to invest it all. OK - what should you invest in? Well - it's frankly none of my business and will not advise you on what you should do in that regard. But for the sake of argument, let's say you choose out of the blue a few companies you know and trust, and wish to quickly review how investment in these companies over several years would look like. For example, let's pick a few:

McDonald's (MCD), Wallmart (WMT), Netflix (nflx), Intel (INTC), Apple (AAPL), Teva (TEVA)

That's a nice pack IMHO, somewhat diversified across industries, brings some dividends, has some growth, some staples and the best part as far as I'm concerned - these are all big companies I know and interact with on a daily basis. For most of you this is also true. You take lunch brakes at Mickey-D, shop on a budget at Wallmart, dumped the video store for Netflix, use a computer, talk on your iPhone and medicate yourself with Teva products. OK, enough justifying the picks. Let the pros sort fundamentals and the traders care about charts. This isn't my goal in this post.

Open EzBacktest and type each ticker, click the 'down' button to move to next line even if it isn't there, or tab/right button to fill in a percentage allocation:

Now click F8 to distribute the allocation equally (as shown above) and F5 to run a quick test. (you will need to wait for Yahoo quotes to download historical data for all equities in the portfolio)
Not a terrible result at all. To get a better big picture, go back to the portfolio editing window and change the 'Months to test' to 120. Click F5 again (or 'Back Test' button).

Wow Nelly - that's impressive. Click on 'Show declines' checkbox and uncheck 'Show Legend'
Note that the starting date is after the requested date. The software will truncate to the first available date for each equity in the portfolio. In this case, Netflix is the latest to go public.

OK, so now I'm looking at this portfolio and observing its bigger declines and I'm thinking - would I have held long during these scary days. Especially if I had bought at the highs and watched my savings shrink by 30%, 19.5%, or 35%. Ask yourself this question, would you? I'm pretty sure I wouldn't have. While on first glance this portfolio seems inviting, it is very volatile and risky. Sure the end result kicks the S&P 500 - but it is only in a back view mirror. One cannot tell where tomorrow may lead, and it is imprudent to wily-nilly play with graphs and buy risk with your life savings.

I'll go back to the portfolio editing window and will try to reduce my risk. To do so, I just add:

Intermediate term treasury bonds ETF (IEF), and least risky short ETF (SH).

I readjust the allocation manually this time to achieve:
MCD - 7, WMT - 7, NFLX - 7, INTC - 8, AAPL - 8, TEVA - 8, IEF - 40, SH - 15

Hedge and income in a second, click F5 and get the following graph:
Note this time the graph begins somewhere in 2006, when SH first became available. If you take a peek at the right side of the window you'll notice few statistics, pay attention to 'Sharpe Ratio'. In this case it is 2.24, compare it to the first graph at 1.24 (where no hedging was added and equity allocation was distributed equally). Over the last few years - most portfolios yielded much worse 'Sharpe Ratio' - which is a measurement of risk/return. In our case, an annualized return of 15.6% with risk of 6.4 standard deviation gives us an almost fictional risk return ratio of 2.24. I'm sure I'd be happy had I invested in this portfolio years ago - I didn't.

Let's save this portfolio quickly, first - type a title: 'hedged tutorial 1', now click the save toolbar icon. A save file dialog will appear - and will allow you to have different file name than title.

Let's continue our voyage here. From the menu, pick tools and select 'show status log'. As you can see, SH is preventing us from verifying our portfolio over a longer period of time. Since there aren't any ETF-s from earlier periods which provide 'short' opportunities, I'll switch SH to SHY. SHY is short term treasury ETF and will simulate cash for this tutorial. Instead of shorting, we will hold cash.

Change SH to SHY and click F5.

The resulting graph (not presented here), provides us with more history. The Sharpe ratio is 1.51, the annualized return is 15.0%. Not much worse. Declines are a bit steeper, at most 14.6% during the Lehman brothers crash.

Change the title to hedged tutorial 2, and from 'File' menu select 'Save As'. Save as a new file name as well.

Moving on, now we have at least two portfolio files in our documents folder. We can compare the two. From the 'Tools' Menu, select 'Compare Portfolios'. On the new screen, double click on portfolios you wish to compare, or select and click on the 'move to the right' UI button. Add the two tutorial portfolios and click 'Begin', or press F5.

Review the comparison tabs. Note that in 2008, the year of the crash, the 'short' hedged tutorial portfolio returned 4%, while the cash-hedge portfolio lost -0.1% .

Hope this was useful, enjoy - spread the word and don't be shy to reciprocate at the tip jar.

Download EzBacktest here.

Friday, July 2, 2010

Mixture of scholarly theoretical economics with hard line politics is deadly, Krugman wants to punch critics

This is getting ridiculous. Talk about emotionally vested. Either he's right, or he's wrong - the problem that most critics have with Krugman is that he's highly suspected of being politically motivated. As such - a highly crucial debate regarding where the economy is headed and what ought to be done is becoming a circus show.

Great depression or not - debate continues.
Angry Keynesian: Krugman Threatens to 'Punch' Detractors 'In the Kisser'
Paul Krugman is known for throwing a bomb or two from his platform in the New York Times, but it's really tough to take him for a violent fellow.

In his July 2 blog post, "I'm Gonna Haul Out The Next Guy Who Calls Me ‘Crude' And Punch Him In the Kisser," Krugman lamented criticism of his support for more stimulus spending. A July 1 editorial in The Economist noted that the economy needs more private spending, not more government spending.

"Mr Krugman's crude Keynesianism underplays the link between firms' and households' behaviour and their expectations of future tax and spending policy," the editorial said. "For example, firms across the rich world are hoarding cash. Their reluctance to invest may have more to do with regulatory, financial and fiscal uncertainty than weak consumer demand (see article). If governments address those worries, businesspeople may start spending."

But Krugman argued he does get it, but disagrees - although he didn't seem to address this argument of long-term spending. Instead, he called for more Keynesian medicine.

"All through this debate, a recurring theme among anti-Keynesians has been that Keynesians like me or Brad [DeLong of Grasping Reality with Both Hands] are ignorant primitives who don't know anything about modern macro," Krugman wrote. "It's really hard to see where that comes from, since I've done plenty of intertemporal optimizing in my time. Part of the problem seems to be that the people saying this are taken aback by what we're saying because they don't actually understand the implications of their own models."

Over the past couple years, Krugman has been an outspoken advocate of government stimulus spending, criticized a $775 billion stimulus plan for being too small, called for a second stimulus, and even claimed in 2008 that "we probably have $10 trillion of running room" when asked how much the government could spend to turn the economy around.

But that begs the question - could a conservative economist get away with suggesting he wants to "haul out the next guy who calls me ‘crude' and punch him in the kisser? Doubtful.

Even if he'd get what he calls for - it would still create one massively dangerous market. I fail to see how the market can find upper momentum in the near term with all this absolutism regarding a second dip recession or depression. Merely raising this notions in every forum causes them to materialize. Spooky market to react accordingly IMHO.


Happy 4th with hopes for a better financial future

What are your plans for this nationally patriotic weekend? Some fireworks, some patriotic music played by bands, some grilling, some history channel viewing - I assume.

Here's a big cheers to America, the American spirit and to capitalism. May those who wish ill on any fail miserably again and again.

Let's watch some men in wigs.


Monday, June 28, 2010

Upcoming EzBacktest release, UPDATE: Released v1.1.0

I planned to release the next version over the weekend but was sidetracked. Per a request from a user - you will soon see:
* Larger plot chart markers
* Correlation matrix tool.
* Use multi-window environment to allow editing more than 1 portfolio at a time.

UPDATE: Released, download here.


Entering a depression?

Krugman - a highly controversial political shill which happened to receive a Nobel prize says we are entering a depression.

The Third Depression
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.


Crap. He goes on to say we must spend more money the government doesn't have to fix the situation. History is being written, and I'm not sure Krugman will be remembered favorably for his ideas.


Thursday, June 17, 2010

The Metro-Sexual Stocks Trader Probably Uses an iPad

Cool example of eTrade platform on iPad:

Other platforms for the iPad: Best Stock Trading Applications For The iPad

2 Million iPads sold within weeks. I'm guessing that trading might not have been a first priority. Are you more comfortable using your fingers? Shouldn't butter fingers scare you when dealing with your money? On the other hand - this post is about those who spent their dough on an iPad.


Saturday, June 12, 2010

EzBackTest 1.0.4 release

I'm happy to announce yet another version for my freeware. This one adds a yearly returns table at the portfolios comparison tool.

Download here.

Enjoy, Cheers!

Friday, June 11, 2010

Retail sales plunge by largest amount in 8 months

Is this news as bad as it sounds?

Retail sales drop 1.2 percent in May
Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery.

The Commerce Department says that spending fell 1.2 percent last month. Auto sales were down 1.7 percent but there was weakness in a number of areas. Excluding autos, sales fell 1.1 percent.

The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity. Economists are concerned that households will start trimming outlays as they continued to be battered by high unemployment and a swoon in stock prices.

Investors have sold off stocks for more than a month because of concerns that Europe's sovereign debt crisis will slow a worldwide economic rebound. The Dow Jones industrial average fell 7.9 percent last month, the worst May for the blue chip index since 1940.

The 1.2 percent decline in May sales was the largest decline since sales had fallen 2.2 percent in September. Analysts had been forecasting sales would be weak but remain in positive territory.

For May, the 1.7 percent drop in auto sales followed a 0.6 percent increase in April sales and was the poorest showing in this category since a 2.5 percent February decline.

Sales at hardware stores plunged 9.3 percent. That could reflect an impact from the end of the homebuyer tax credit, which had spurred home sales earlier in the spring.

Department store sales fell 1.8 percent while sales in the broader category of general merchandise stores, which includes big retailers such as Wal-Mart, fell 1.1 percent.

Gasoline stations sales were down 3.3 percent, a drop that reflected in part lower gasoline pump prices during the month.

The Federal Reserve reported Thursday that households' net worth rose for the fourth consecutive quarter, but since then stock prices have been tumbling. Economists say it may not be until 2012 or 2013 at best before Americans' wealth returns to its pre-recession levels.

Rocky road for investors continue.

Friday, June 4, 2010

The reality of Double-Dip Recession

Tainted queso...

Why We’re Falling Into a Double-Dip Recession
We’re falling into a double-dip recession.

The Labor Department reports this morning that the private sector added a measly 41,000 net new jobs in May. But at least 100,000 new jobs are needed every month just to keep up with population growth.

In other words, the labor market continues to deteriorate.

The average length of unemployment continues to rise – now up to 34.4 weeks (up from 33 weeks in April). That’s another record.

More Americans are too discouraged to look for a job than last year at this time (1.1 million in May, an increase of 291,000 from a year earlier.)

Of the small number of jobs created by the private sector in May, many came from temporary help services.

Which is one reason why the median wage continues to drop.

Why are we having such a hard time getting free of the Great Recession? Because consumers, who constitute 70 percent of the economy, don’t have the dough. They can’t any longer treat their homes as ATMs, as they did before the Great Recession.

Businesses won’t rehire if there’s not enough demand for their goods and services.
I believe the rest of the article is a political excuse making for current administration. I don't really think I want to touch on politics in this blog.

Hold on to your seat, it's going to be a wild and scary ride again.