Archive for December, 2006

I have recently decided that I am going to buy a different vehicle.  I currently drive a 1995 Honda Accord that is in very good shape but has a lot of mileage (270,000 kms).  Even though I am certain I could get a couple of more years out of it, it is better to sell too early than too late; the stock market has made that fact brutally aware to me.

Furthermore, my car has some rust around the wheel-wells, plus it has a large crack across the windshield that’s been there since I got it 2.5 years ago.  The high beams don’t work, either.  That stuff could all be fixed, of course, but again it simply is time to upgrade.

I’m looking at getting a Toyota, either a Camry or a Corolla.  I’d definitely prefer the Camry but would probably be okay with the Corolla.  The problem is that checking out the dealer prices, a newer Camry costs around $5000-$8000 more than an equivalent year Corolla.  For that reason I’ve been considering getting a Camry that is only a couple of years old, perhaps a 2003.  Those run around $17,000 – $20,000.  A 2006 Corolla, by contrast, runs upwards to that but average around $15,000, maybe slightly less.

I’m in a bit of a quandary.  I have no intention of buying new.  In a year’s time the vehicle can depreciate in value 30%.  I’ve bought stocks that have moved against me by 10% in one day, let me tell you I hate buying stuff that loses its value that quickly.  So, I’m left with buying a pre-owned vehicle which is fine by me.

The quandary I’m in is whether or not I go with the slightly more expensive and slightly older Camry, or the newer and slightly cheaper Corolla.  The Camry is probably a better car but the extra $4000 it would cost is money I could put to use in the market.  Even if my loan is a difference of $100 per month, that’s still $100 per year I could invest in the market or save up for a trip.  On the other hand, I like the look of the Camry and reviews in forums usually put it a little higher than the Corolla.  On the other hand, it logically makes sense to spend money on things that go up in value.  If I go with the cheaper car I can put the difference in a security that could be worth more in a year’s time.  The car definitely won’t be worth more in a year’s time.

Ideally I’d like a Camry with less than 80,000 kms for around $15k.  It’s basically buying an undervalued car at a good price (kind of like how I buy stocks).  Sigh… this is a tough decision.

One thing that has occurred to me is to buy the cheaper car and invest the different in Toyota’s stock.  Now there’s an interesting idea except that Toyota doesn’t pay a dividend (unlike Honda).  If I held the stock for 1 year I’d ideally like it to pay a dividend as well as have it go up in value.  It’s extended right now, but maybe that’s the route I will go.

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A couple of months ago I downloaded Windows Live Writer.  As far as blog publishing tools go, this is the all the blogging software that I need.  I can pick which blog I want, write a post, and then click upload.  Other than editing posts later on (which the software seems to be fairly limited in doing, it’s a Live Writer not a Live Editor or Manager), it does what I need.

However, I recently picked up a Mac laptop.  I didn’t replace my Windows laptop, I just wanted to have a Mac as well.  Now I need some blogging software for it that is similar to Live Writer.  I need it to be able for me to pick which blog I want to upload to and press Publish to upload it.  That’s what Live Writer does, that’s what I want my Mac blog software to be able to do at a minimum without having to start a new blog.  I have two; I’m not starting one more.

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2006 has not been a great year for the big cap tech stocks.  Apple is up 13% YTD, Microsoft up 12% YTD, Google up a mere 6%, and Dell is down 16%.

Cisco, on the other hand, has had a great year.  It’s up 56%!

But, Cisco appears to be the anomaly.  The high-flyers of 2005 (Apple and Google) didn’t do much this past year.  You had to have great timing in order to capitalize on their moves throughout the year.

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Not so painful anymore

I recently wrote that I had noticed some injuries that I didn’t even know I had while playing sponge hockey recently.  I had a game on Saturday, one on Sunday, and then another game on Tuesday.

I was feeling a little sore on Tuesday but I was quite amazed at at how quickly I had recovered.  I had some soreness in my hamstrings but it wasn’t nearly as bad as my first three games last year (or previous years for that matter).  It used to take me three days between games to get better, but one day after my Tuesday game and I am feeling pretty good.

Even my knee isn’t so sore anymore.  It didn’t bother me at all during the game, and my lower back has made great progress.  I figure I’ll be back to 100%, or close enough to it, once the regular season starts in January.

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I have made 12 trades since July and 8 of them have turned out to be winners.  These winning trades are Apple (AAPL), Celgene (CELG), Google (GOOG), Digital River (DRIV), Intercontinental Exchange (ICE), American Eagle Outfitters (AEOS), Garmin (GRMN) and Knight Capital (NITE).  Not all of these positions are open but all of them were winning trades.  Some of them I got out of due to adverse moves against me, but the average position is up over 15%.

The losing trades are EZ Corp (EZPW), down -6.7%, Psychiatric Solutions (PSYS), down -5.9%, Hansen Natural (HANS), down 7.0%, and Tenaris (TS), down -6.43%.  All of these trades I got out of when they started moving against me and triggered my stop losses.

The problem is that all of these trades would have gone in my favour had I stayed in them.  EZPW would be up 13.4%, PSYS would be up 7.1%, NITE would be up 11.8%, and TS would be up 34.8%.  For those first three, those percent gains are after the pullback in the past two weeks.

In addition, in each of those trades, I was initially up before they turned around and moved against me.  In fact, a lot of my losing trades started out as small winners (<5%) before turning around and shaking me out.  This means I have a problem on my hands: my stock selection is reasonably good but my timing has issues.  How do I stay in a stock without violating my stop loss?

As it turns out, I think that there are two methods: either improve my market timing or adjust my stop loss without increasing my position size. 

I don’t plan to improve my market timing much.  I sometimes buy on pullbacks and sometimes it works.  But precision timing is quite difficult.  I think the other solution is better.  I use a 6-8% stop loss based on a 1.5% position size.  I could probably increase that stop loss to 10-12% but keep the same position size.  This means I will be buying fewer shares, which means my transaction costs are now going to be a larger and larger part of my position.  This means that I need to increase the size of my account or find a cheaper broker.  But at least I have a plan to correct my "mistakes." 

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For years, Canada has been the United States’s number 1 trading partner.  We ship more exports to the United States (and the US imports more from us) than any nation in the world.  Only the combined EU is a larger trading partner.

However, that coveted position is about to be surpassed by China.  China is less than 10% away from exporting more goods to the US than Canada.  With cheap labour and goods available from China and huge US-China trade deficit, is it any wonder that they are taking over (so to speak)?

If the price of oil goes up, however, that gives Canada an edge.  Supposedly, the US imports more oil from Canada than any other nation.  Oil is down about 20% since the summer so that is contributing to the trade gap narrowing between us and China.  The contest continues.

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It’s been nearly two weeks since my ordeal in Fiji.  My throat infection has gotten a lot better, and many of my bruises have started to go away.  The scratches on my arms are all gone, and the ones on my left leg are mostly gone.

The problem is that while my bruising injuries have mostly gotten better, I found out that my knee (which I hurt on my first fall down the waterfall) is a lot more sore than I realized.  With the cold weather here this past week, I found that the outside of my left knee ached a lot.  I didn’t realize that I had hurt quite that much.  I pretty much ignored it after I got it but it came back to haunt me this week.

This past Saturday, I discovered a brand new injury.  My sponge hockey season has started this week (and I had three goals in two games this weekend), and as I was putting on my left shoe my ankle experienced a sharp pain.  This caught me by surprise because I couldn’t figure out where the pain came from.  The only thing I can think of is that when I hurt my knee in the first waterfall, I must have landed awkwardly on my ankle as well.  I still managed to play the game, but I had to be careful jumping over the boards.

To summarize, all of the damage to soft tissue has been healing quite nicely, but damage to ligaments or tendons is not going nearly as well.

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