Recently in a local financial paper it was said that some local Swiss Traders are stepping out of the soft commodities trade. Some banks have said that they have never even started that trade.
So what was the reason? Ethics…
I have been a naysayer of buying commodities because I equate it to flipping houses. When you buy a commodity where you do not plan on consuming it yourself you are adding no value and making it more difficult for those that do want to run a business. The analysts have been saying the commodity prices are the result of demand, not speculation.
I don’t believe it for a second. When the dollar became stronger did commodities drop? No. When supply surged did commodities drop? No. I don’t believe the market analysts because to me it is like asking accountants if they like the flat tax. Any accountant that would like a flat tax would be out of a job.
Woohoo, it looks like we are buying a house. We negotiated a new deal and one that I think is pretty good. To fund the down payment I had to sell off half of our portfolio. This allowed me to take a look at how good our returns were. Remember this is since beginning of February when I said I was a bull. Net return, 18.5%, which stunned the heck out of my wife and I. She said, “wow you did really well…”
What is the moral of the story? Buying into the abyss is the best buying opportunity. You need an extremely strong stomach, need to manage risk, but when the market turns it’s great. Not everything is golden with my portfolio, there are still some looser’s (GPS), but things are working themselves out.
Yesterday I said that Yahoo will close at 25. How did Yahoo do? It closed at 24.47 but it did touch 25. Pretty close considering that most people said it would close around 30% lower.
But Yahoo’s share fall was not as steep as the 30 percent plunge anticipated by some analysts, indicating there was still an “acquisition premium” built into the stock.
I have not been blogging as much lately, because I have been completely swamped with work. These days I write oodles and oodles of software implementing financial trading strategies using Excel, and .NET. I will be posting a review of Add-In Express which has been helping me immensely. Another thing happening is that I am almost hired as a permanent on-call consultant for a major investment bank. If this materializes I will blog about it later. Why not full time? Because I don’t want to at least not yet.
Implementing dozens of strategies is interesting because it helps me understand the market. One of my deals with my clients is that I don’t talk about strategies and will not even begin that discussion. Though I can say the following:
Of this deal there are two interesting aspects; analysts are pretty much clueless, and Google really stepped into it.
“Microsoft is playing hardball, but I think a deal will still happen,” said Piper Jaffray analyst Gene Munster, “It’s like a couple trying to break up — they say they are done, but you know they will get back together.”
How do you know? Gee last Friday Yahoo stock went up because people thought the deal would happen and look where we are. In fact just as the market closed I glanced at 22.50 PUT options and I told my wife, you know I think I will buy some options on Monday.
Sun posted miserable earnings, and everybody is surprised… As a result Sun is dragging down tech which is completely wrong. This a Sun problem, not tech. I had an hunch that Sun would disappoint quite a bit. Why? Because at the beginning of March I heard whispers that Sun was loosing some major sales. It was a major shorting opportunity (Disclosure: I have not shorted JAVA, and have no intention to do so.)
When an email came through entitled “Conference Call with SEC,” I took notice. It’s sort of like, “Police knocking on your door.” Luckily, it was not that kind of conversation; it was actually something far from it.
I read both books: “Traders, Guns, and Money” and “An American Hedge Fund“. And I had two completely different reactions. I received an early copy of An American Hedge Fund and have not said a word on it. Why? I disliked it, it rubbed me the wrong way, and thought if you can’t say anything nice then don’t say it at all.
On March 23, Mike from UglyChart.com announced that he had “Absolute proof that the Efficient Market Hypothesis is incorrect, that Technical Analysis works, and that I wasted too much time on inspectd.com“.
Here’s a bit of a time line before and since:
March 20, 2008: Inspectd.com is listed in the “links for” post at UglyChart.com.
March 21, 2008: TechCrunch posts an article about a new “Time Waster” called Inspectd.com, and the rest of us notice this site that “has been around for a while”.
March 22, 2008: Ugly posts How to turn $100,000 into $6 Billion+ on inspectd.com, including this video:
[video after the break]
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