Here’s my latest post about AMD. Here’s an excerpt from a Frobes article: “Intel’s latest desktop processors have faster clocks speeds and use smaller transistors–45 nanometers as opposed to 65 nanometers–that allow them to do more work with less power, _all else being equal_. “We think that Intel is consolidating its performance lead in desktops,” (more…)
This two-part series by Bryant Urstadt is some of the best investing writing I’ve ever read. Bryant gives a run down of exactly what-the-f happened this Summer 2007. After reading these two pieces, "it all makes sense, man". Part 1: The Blow Up Teaser: On Wednesday, August 8, not long after the markets closed, 200 (more…)
1. We have a new author! His name is Alex, and he’s already published a great article on alternative energy that is getting some attention in the comments. View the great discussion over there. 2. People are signing up for the mailing list. Good. I still have no idea what we’ll do with it. In (more…)
You may notice a new widget in the right sidebar. There’s a little form for you to join our mailing list. Do it now, and then I’ll tell you why. What do we mail out over our mailing list? Nothing yet. We’re still figuring it out, but it will likely have to do with updates (more…)
Question: are we in a bull market or bear market? What if there was a third option? In Active Value Investing, Vitaliy Katsenelson makes a case that the current market is actual a "range-bound market" and then gives you the tools to take full advantage of the fact.
What is a Range Bound Market?
Range-bound markets are characterized by their roller-coaster-like volatility and the fact that despite this volatility, money invested in the beginning of the cycle will have close to 0% gains by the end of the cycle. In fact, range-bound markets are more common than bear markets. Katsenelson says:
"…if you look at the U.S. stock market during the entire twentieth century, most of the prolonged (greater than five years) markets were actually bull or range-bound markets. Prolonged bear (declining) markets happened in the past only when high market valuation was coupled with significant economic deterioration, similar to what was going on in Japan from the late 1980s through 2003 or so."
This chart from the book shows the past 107 years bull, bear, and range-bound markets as labeled by Kevin A. Turtle.
Lots of hub bub in the poker community about some apparent cheating that has been going on at AbsolutePoker.com. Bobby has a nice comic about the cheating at PlusEV.net, and probably the best place to get info and updates is Absolute Poker Cheats blog that was setup just for the occasion.
Traders will appreciate this chart showing how much of an outlier one suspected cheater is. That red dot in the upper right corner represents the win-rate of the suspected cheater. The trading analogy would be a trader who trades 90% of the stocks on the market and correctly predicts the stocks movement 90% of the time. With stats like these, you could make an insane amount of money. And that’s exactly what these guys have done, reportedly making hundreds of thousands of dollars in a short time.
For the poker illiterate, VPIP stands for “variably put money into pot”, which is a statistic that tracks what percentage of hands you play. Good players are in the 15-30% range. The cheaters are in the 70-90%.
BB/100 stands for “big blinds per 100 hands”, which measures how profitable you are. So if you were playing $100/$200 poker with a 1BB win-rate, you would win on average $200 every 100 hands. Winning players can make about 1-3BB/100 at the medium and high limits. In the short term (across a small number of hands), lucky players can make about 100BB/100 hands. The cheater graphed makes 500BB/100.
The graph is pretty damning, but probably most damning of all (at least to a poker player with a bit of knowledge) is to go over some of the actual hand histories that leaked for this player. You can read some play-by-play analysis with some guesses as to the cheaters thinking here or see a video replay of the hands here (requires a free registration). The short of it is that the villain is playing uncannily like he/she can see the other players cards.
Is there cheating like this going on in the stock market?
Obviously, Martha Stewart-style insider trading goes on, but what I’m thinking about here is the kinds of cheating available to unethical brokers. Unlike the online poker rooms, many of the big brokers have their own traders “playing” in the same market as their clients. This creates the same kind of conflicts-of-interest that the poker sites try to avoid.
My father-in-law is nearing retirement and looking to get into some real estate plays to diversify his investments. I’ve already referred him to The Millionaire Maker: Act, Think, and Make Money the Way the Wealthy Do and Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Finish Rich Book Series), (more…)
My cousin Candice, who just moved to Toronto, ran in the Canadian Breast Cancer Foundation CIBC Race for the Cure last week. InvestorGeeks donated $300 on her behalf, and Candice was able to raise $525 total to help fund breast cancer research and awareness programs.
Since last Fall, InvestorGeeks has been donating 100% of after-expense profits to charity. So far we’ve contributed $700 total to a couple of great causes and have some good stuff lined up for the end of the year. I think I’ll start keeping track of the donations in the sidebar somewhere. Look for that soon.
If you like what you read here, and want to support InvestorGeeks, I think you can still donate to the CBCF on Candice’s behalf through this link. Show your support.
While you wait for the rest of my Google analysis (it may be a while), you can read this article over at Forbes that closely matches my own thinking. Google Still Cheap Atop Tech Heap by Georges Yared. Peace out, Investor Geeks.
WallStrip is touring the Google campus today. I just opened a position in GOOG a few days ago and have some more money slated to invest in it if the price drops from here or breaks up from here (and forces a MA crossover). Christian asks why I feel the need to invest in GOOG. The simple answer is that I think the price is going to go up… a lot.
People are scared off by the $500 price tag, but GOOG is actually a value play by my calculations. Let’s try this. E*Trade has GOOG’s 2006 EPS at $10.58. So what would GOOG’s EPS growth rate and average PE need to be to warrant a sticker price of $515? The answer is a 20% growth rate and average PE of 30. Here’s the math:
