Archive for January, 2007

For months now, I’ve been running Office 2007 Beta.  I’ve been planning on upgrading to the released version on my work computer but I’ve been putting it off.

Well, yesterday, Windows Update installed an update and my version of Excel started crashing.  I have an important spreadsheet that I need to update every day, but every time I tried to save it crashed.  Sigh (rolleyes.gif)…

So, I decided to install Office 2007.  I get it for free (since I work for Microsoft).  I decided to let it run overnight, but when I got to the office this morning it said there was an incompatibilty with Windows Powershell, which I first had to uninstall.  So, I shut down the installation (urgh) and went to uninstall Windows Powershell.  But, that program had no uninstall feature.

I went to Add/Remove programs, and guess what? There was no uninstall there, either!  So, basically, in order to install this software that I need, I first have to uninstall a program that I can’t uninstall.

Of course, Office 2007 installation didn’t fail completely.  It did manage to remove my previous Beta version of Office 2007.  I did a System Restore to roll back to before when I installed Office 2007, but that didn’t work.  Word and Excel are there but they don’t load up (they can’t find a file and subsequently crash).  So the situation is this: I have no version of Office 2007 running (Beta or Release version), I can’t uninstall the piece of software that is standing in the way, and it takes forever to reinstall Office 2007. 

I decided to remove the registry key for Powershell.  I couldn’t get it entirely removed; there is an error message that is not helpful — "Could not remove registry key".  Gee, thanks.

So, I’m trying to reinstall Office 2007.  Hopefully it will work.

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About 3 weeks ago I posted that I thought that commodities had a ways down to go before they hit bottom. At the time oil was trading around 56/barrel. It eventually went down as low as 51.50.

I actually think the low we reached earlier this month is as low as things are going to get. The reason? This morning, in the front page of the local newspaper in my city they had a story that gas prices today are 15 cents a litre less this month than they were last month. Furthermore, they predicted that gas prices were likely to stay low for the rest of the winter.

Newspapers make great contrarian indicators. There’s an old saying: When Main Street talks, Wall Street walks. In other words, when something has become obvious to everybody, the trend generally changes. Well, how obvious can it be when a local newspaper publishes on its front page that oil prices are a lot lower than they used to be?

Oil surged up 5% today, the chart looks quite bullish. It’s going to be testing resistance, but if I were a betting man I’d bet that oil is going to test 60 before it tests 50. What does that mean to you? It means the low price of gas is not likely to persist.

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In my current sponge hockey season, here are some of my current thoughts:

1. Will the drought ever end? In the preseason, I was scoring quite a bit of goals. I scored more for my one team than in all my other preseasons combined (in fact, I was the leading scorer on my team for the preseason). However, since my second game for my second team, I haven’t been able to get my name on the score-sheet at all. I’m doing the same things I did before but now they’re not going in for me. On the plus side, I have been able to generate some scoring chances (quite a few, actually) but I haven’t been able to put them in. And, at least my +/- stats are slightly positive. I may not score anything, but at least when I’m on the ice nobody scores against us either.

2. My two teams, a reversal of fortunes – Last season, I played for two teams. One finished higher than the other but it was never a leapfrog (ie, one pulled ahead of the other, then the reverse, then one pulling ahead). My first team was ahead of the other for the entire season. This year, our fortunes have reversed. My second team is playing much better than my first team and I would expect them to finish better come year end. The good news is that they probably won’t play each other in the playoffs. The bad news is that the better team might finish in the A-side, which is a tougher road to the championship.

3. A reversal of fortunes, part 2 – As I say in point 2, my second team is playing much better this year; as I write we are 5-3-1 for 11 points, good for second in the division. I think it’s because we are playing much better defensively. We control the puck a bit more, and when our entire team is out (ie, no playing short-handed) that’s when we’re at our best. We don’t score a lot of goals but we allow even fewer. This may seem to be a rather obvious winning strategy but my point is that we don’t win games through high-scoring affairs.

4. Fewer injuries this year – Last year (and in year’s past) I used to experience injuries either to my lower-back or to other parts of my body. Examples include an ankle injury last year which I had for the entire season, bruises to my shins due to slipping and falling, and a sore lower back. This year, I actually feel fine. The only recovery time I need is for sore hamstrings due to running so much. Even then, I make quicker recoveries. It’s because I stretch my hamstrings in my off-days and I believe that has contributed to fewer lower-back problems. I can get my legs up to about shoulder height, which is an incredibly good stretch and gets them ready for the games ahead.

5. Subjective elements – And now, to end things on the lighter side, this is a pattern that was true in the last season also, but it bears repeating: after having played every other team in the division (either with my first team or my second), I can definitively state that in our co-ed division, the female players on my team are the best-looking ones in the division.

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Two weeks ago, the power outlet on my laptop died (my other laptop, I’m writing this on my iBook). I figured it would be expensive to fix but without it, the laptop is a fairly clunky paperweight.

So, I decided to take it in to a local repair store to get it fixed. It’s now been two weeks and I haven’t heard anything from them. Seriously, how long does it take to fix it? I’m lucky that I have my backup computer (plus a desktop at home… plus my computer at work) but that laptop has my stock charting software on it. I haven’t been able to do in-depth analysis in over two weeks. I’m starting to get a little bit antsy (not to mention annoyed that I haven’t been contacted in any way).

On the plus side, I have been able to use my Mac to learn how to get around on it a bit more. I can do almost everything I can on my PC except for a few things, including: (1) Finding an equivalent of the Start bar (2) Right-clicking (3) Finding a Home key when in a web browser to scroll back to the top of the page (4) Figuring out where the Home function is in Safari so I can quickly jump back to Yahoo Finance (my homepage).

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As myself and some friends of mine on their own blogs have discovered recently, be careful what you write on your blog, even if you don’t think anyone is reading it.

I wrote on my blog about an incident a couple of weeks ago and I was a little surprised to discover that some of my co-workers found it so quickly. This blog gets very little traffic, and my co-workers never read my other blog, so the fact that they found this one so quickly is unusual (unless they were actually looking for it… hmmm…)

Anyways, the fact that I wrote about the incident on my blog demonstrates that the story was not exactly a secret. The fact that I spoke about it publically proves that. It was a secret prior to it occurring, however. But afterwards… not so much. I did, after all, come clean to my coworkers, they just didn’t believe me even if I am a master of misdirection.

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The stock market has been in rally mode since late summer. It’s unusual to go for such a long time without a correction but that’s what the market has done.

Being a market timer, I try to get in on market rallies when it is going up and get out (and go short, usually) when it is going down. Now, there is no way to know for sure when a market is going to top and roll over. Markets usually rally for longer than I think and they usually go down for longer than I think. But, this market is making me suspicious.

First, the market has gone a long time in rally mode. The life span of this intermediate movement has surpassed its historical average. In trading, you want to get in closer to the beginning of the trend, and you can measure intermediate movements by comparing them to previous movements. Second, some of my stocks are showing signs of trouble, like Apple and American Eagle Outfitters (which has been more or less a waste of time). Third, we’ve seen a number of distribution days latetly. And finally, the market is usually strongest from Nov – Jan. We’re now coming up on February. January 2004 the market started decline. It did the same thing in Jan 2005 and Jan 2006. I would not be surprised to see an encore performance.

The odds are not with me at the moment. The only thing working in the bulls’ favour is that we are in the third year of an election cycle. Those are historically the best years on the market. Come on, historical records, don’t fail me now!

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In this year’s regular season sponge hockey league in which I play, the teams on which I play on collectively have six wins, four losses and one tie.  However, I have missed a number of games.  In games where I play, we are 4-0-1.  In games where I don’t play we are 2-4.  So, that means that this year in the regular seaon I am undefeated.

I have two games this evening.  One is against the top team in the division and the other is against the lowest team in the division.  I think the odds favour a win against the lowest team and a loss against the top team.  Wouldn’t it be something if it were the other way around?

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A few days ago, Jon Stewart on his program The Daily Show made a joke that the President of the United States, George Bush, doesn’t consider the Constitution binding. Obviously, this is in reference to legislation like the Patriot Act and NSA wire-tapping. Of course, his own party, the Democrats, don’t seem to mind trampling the Constitution when it suits them.

Some Democrats are trying to pass legislation to allow American protectorates like Puerto Rico, American Samoa, Washington D.C., Guam and the Virgin Islands limited voting rights in Congress. What’s wrong with giving them voting rights, you ask? It’s unconstitutional, that’s what is wrong.

The American Constitution only gives Congressional voting rights to representatives from the States. The writers of the Constitution didn’t make an oversight, they deliberately omitted districts like DC. If people from D.C. want voting rights in Congress, move to a different city. The Constitution is a legal document; it says some things and doesn’t say others. It is not a living document that changes with the times, it is a document that the framers wrote such that ordinary people could understand. It is not subject to reinterpretation that depends on the time period of the reader (or legislator), it means what it meant when it was written.

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Oops! Held too long?

As I was saying in my other blog post, I bought a put option on ICE but it appeared to be the wrong one. Well, my position was profitable but if you ever wanted a textbook example of what not to do when buying options, then learn from my experience. ICE reversed today and closed up nearly 5 points. My option lost 2.6 points (ie, $260). It went from 6.9 to 4.3 in one day. That’s a little frustrating; you’ll notice that the stock went up 5 and the option went down 2.5 for a delta (2.5/5) of 3. But, when the stock went down 5 points the other day, the option only went up 1.7 for a delta of 0.33. In other words, my gains move up slowly but my losses add up quickly. It’s very aggravating.

In reality, I should have sold out yesterday. I keep telling myself that but I have trouble pulling the trigger on short-term trades like this. As a New Year’s resolution, I need to master swing trading with options better.

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Venezuelan president Hugo Chavez is leading his country down the slow but inevitable path to ruin. Within a decade’s time I predict that the country will have gone through a currency crisis with either severe deflation or hyperinflation, or probably both.

Chavez is on a national buying and spending spree – confiscating private property by nationalizing all sorts of industries (energy, telecoms to start, banking is probably next), and using the revenues to throw a few crumbs at the poor and middle class. He is promising lots of cheap oil abroad and claims to want to help the poor.

His policies will not help the poor. Instead, by stealing private property and giving away natural resources, coupled with ultra-inflationary spending programs for the poor (which will never actually be delivered, only promised), his country will be drained of private capital. Bureaucratic inefficiencies will reign supreme. In order to pay for all his programs Venezuela is going to have to inflate their currency. Saudi Arabia is increasing their oil production which will cause oil prices to fall. Venezuela does not have the infrastructure to ramp up production and cannot compete in the world against Saudi oil. Because their economy is so heavily dependent on oil exports, and because the Saudis are going to increase production, this will put a real squeeze on Venezuela.

Having no choice, in order to pay for his extravagant programs, Venezuela will devalue their currency even more by printing more of it. And when rampant inflation spirals out of control, it always results in massive deflation. The man is going to ruin that country. Mark my words…

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Did I bet wrong?

As I have written in another post, I’m currently holding five stocks – Intercontinental Exchange (ICE), Apple (AAPL), Google (GOOG), American Eagle Outfitters (AEOS) and Philadelphia Holdings (PHLY).

Last week, I bought two put options on ICE. A put option gives you the right to sell shares at a predefined strike price. If the stock falls in price, the value of the put option increases. I bought the put options with the idea of fading ICE. The stock moves up and then pulls back, moves up and pulls back, and so forth. If I can catch it on a pullback, I can make a quick profit on a put option rather than selling the stock and buying it back later. This is a somewhat risky strategy and requires precise timing, but I figured I could pull it off.

ICE has pulled back but not as much as I thought it would. I figured it would go down to 125 (and it has) but it seems to be finding some support there. I figured it would drop a bit more. My put options are profitable but not as much as I would like (plus TD Ameritrade’s fees are outrageous, which is why I am switching to OptionsXpress… eventually). By contrast, Apple has pulled back $12 in the past 5 days, Google is down $33, PHLY is going to shake me out of my position and I don’t like the chart pattern of AEOS. The only chart pattern that I do like for a trade on the long side is ICE. How is it that I managed to have 4/5 odds for picking a stock to fade, and picked the wrong one?

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As it turns out, my wonderings in my previous post may be solved for me.  Apple today sold off 4%.  A 4% move in any direction is a lot for most stocks, but it’s especially true for large caps. This was in response to Apple’s blowout quarter but lowered guidance for the next quarter.

I don’t normally trade on Jim Cramer’s recommendations, but of the five tech stocks he says he would hold, Apple is one of them.  Cramer was saying that technology is always strong in the fourth quarter (and he was right) and that when January comes it’s time to sell.  However, he made exceptions for Apple, Microsoft, Google (which I all own), Cisco and Hewlett-Packard. 

Two things are going into my decision.  First, Cramer may not get specific stocks right but he is typically right about general trends (I sold Digital River last week and should have sold it earlier).  He says he would hold Apple throughout the year, at least until August when tech picks up.  Second, I am trying to learn to think like a contrarian.  Instead of selling on retracements, I need to think about pyramid-ing into my existing position.  This pullback gives me a chance to add a few more shares into my position in anticipation of a strong rest-of-the-year.

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As a part-time stock trader, I have a trading strategy that allows me to work at my day job full-time and put in as much effort into trading in my spare time as I can.

One of the major questions I have to deal with is how many stocks I want to hold at a time. In general, I like to have no less than 5 stocks and no more than 8. This allows me to diversify my portfolio without holding onto too many stocks, as holding onto too many is difficult to follow without being a full-time trader. As a natural consequence of this, I sometimes have the opportunity to add to my existing positions. If a stock pulls back, do I want to add more shares, or should I avoid doing so to keep to my principle of diversification?

If I add to my existing positions, I run the risk of making one position too large and if the stock tanks, I could do damage to my overall portfolio. On the other hand, I have found that once I have followed stocks for a while I get a good idea of how the stock behaves. Furthermore, adding to an existing position in smaller amounts is a winning strategy practiced by the experts.

My current portfolio consists of Apple (AAPL), Google (GOOG), Intercontinental Exchange (ICE), American Eagle Outfitters (AEOS) and Philadelphia Consolidated Holdings (PHLY), my most recent purchase. I’d like to add shares to Apple, but I just finished closing part of my position. I have enough money to add two small positions or one large-ish position. I’m not sure which direction I’m going to go yet. I feel that I have the tech sector covered, retail and finance are both there, now what’s next? To add to a position or open up a new one, that is the question.

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The sixth season of the Apprentice is now airing. I watched an episode yesterday (because it was after 24) and the gimmick this year is that it is shot in Los Angeles, and the losing team gets to camp out by living in tents in the yard of the nice hotel where the winners stay.

When The Apprentice first came on in 2004, I really liked it. Now, it’s the sixth season and I found it kind of boring. Trump says over and over that his show went to number 1 (I don’t know if it actually did), but it certainly isn’t there anymore.

I wonder about Trump sometimes when he boasts about his accomplishments. In his current row with Rosie O’Donnell he insulted her by saying that her show was a disaster. What is he talking about? I never watched her show either, but when O’Donnell had her own talk show it was rated number 2 after Oprah’s (another show I don’t watch). How can a number 2 show be a disaster? Also, some of Trump’s compliments seem less than genuine. Afterwards on the finale of the Apprentice, Trump will refer to a contestant as great, but that just seems to be a way of saying something nice without actually meaning it. Sometimes, I think Trump is using a lot of words without saying anything.

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As I have noted on my blog in the past, I play on a couple of sponge hockey teams.  Both teams play in the same division and when they play each other, I have a decision to make: which one am I going to play for?

It’s a tough decision, so I flip a coin.  Oddly enough, the last three times it’s come up, I’ve played for the same team.  I wonder what the probability of that is?

Anyways, we played yesterday evening in -29 C weather.  At one point, the score was 0-0 in the first period and one of my teammates passed it across to me.  I didn’t one time it, rather, I controlled it and decided to go upstairs on the goalie.  Incidentally, this is my new strategy; I don’t one-time passes across, I find the timing too difficult and it’s tough to get a good shot off.  Instead, I control it for about a half-second and then aim my shot.  That’s what I did this time.  It’s a strategy that has been working well for me this year and the last half of last year.

The only problem is that while I had an open net and had the goalie beat, I shot it over the net.  I was completely stunned for about one and a half seconds.  I couldn’t believe I had just done that.  I have never, in the past, shot overtop of the net.  When I miss, I miss wide, not high.  Going over top caught me by surprise.

I’ll try not to let it happen again.

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I figured out how to make line breaks work while writing a post to this blog on my Mac. I have to manually write the HTML.

See? This sentence is on a new line, because I typed out a [p], but I used angle brackets instead. Next up is to figure out how to customize the images on this blog a little more.

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So I did go out and buy a car two weeks ago.  I bought myself a 2004 Toyota Corolla.  After driving it for a week and evaluating my decision, I believe that I made the correct one.
I originally planned to spend between $10k and $15k on the vehicle.  I know that there are always hidden costs so I figured I would likely be spending more, and I was right.  The car cost about $17k.  After taxes and fees (there’s always fees) the price came to $19.5k.  I thought that was a reasonable amount as the car was only three years old, with a mere 52,000 kms on it.  If the average is 20,000 per year, that’s driving it less than average.  The car handles well, it’s in good shape, it’s a good size for me and I liked the colour.  I was planning on getting a new vehicle, so that’s what I did.
I put $7000 down and am financing the rest, which will cost me $250 per month.  Again, that’s reasonable.  I could actually afford to put down a lot more, but I didn’t for the following reason: putting down twice as much money would have severely depleted my capital reserves.  That would have left me about $2000 or so in the bank (not quite, I didn’t have that much cash in hand).  I have quite a bit of money tied up in my brokerage account, some overseas savings accounts, and a whole bunch of RRSP accounts.  So, while I do have more money, none of it is very liquid.  It would take a while to get it and I don’t want to take money out of accounts that are going up in value (assets) and put it into something that is depreciating in value (a liability).  It does not make sense to take money from securities that go up and put it into things that go down in value.  So, I was left with the decision to take whatever amount I felt was necessary from my chequing account.
I was going to put a lot more down when I thought "Wait.  If I put down a huge amount, my monthly payments will be smaller but I’ll have only a little bit of money left in my chequing account.  What happens if an unexpected expense comes up?  I may not have enough.  What happens if a good investment comes my way and I don’t have enough cash on hand to spend on it?"  Basically, I didn’t want to deplete my capital reserves.  Undercapitalization is a reason why many stock traders fail, and while this isn’t stock trading, I think that the principle holds true.
I decided to do the following: I would put down $7000, which was the most I could put down to get a special rate of financing (it had to be at least $12,000).  I would put down $4000 from my checking account and then take $3000 from my line of credit.  That would be $250/month for the car + $90/month line of credit = $340 per month.  I got a raise in salary last month, and that payment is less than my raise.  I still come out ahead, and my capital is not depleted.  I can then pay off that line of credit whenever I want and I can make extra payments to the car whenever I want.  I am quite happy with this arrangement.
There’s an old saying: you should only ever borrow money when you don’t need it.  I don’t need the money, but I borrowed it anyways.  I have enough capital just in case something goes wrong, and I have plenty in case something else comes up (like needing $1600 to fix my old car, $100 for my laptop, $25 to lose in San Francisco, and a pile of money on tickets to the theatre).

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So I’m beginning to learn that Macs and blogging to this live space do not work too well together. My last two posts have been written on my Mac, and as you can read, the line breaks have all been removed and what is posted is one big block of text. Trust me, I didn’t write it that way. I always include nice, pretty line breaks in all of my posts. Curse this Safari web browser!

Update: I logged on my desktop PC in Internet Explorer and fixed the line breaks.  I like Live Spaces, but I don’t like how you have to use Internet Explorer for best results.

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This is turning out to be an expensive month. As I mentioned in my previous blog post, I went to San Francisco this past week (and my co-workers don’t believe me, despite me showing them a picture of Mac World and a picture of San Francisco from the air, which I snapped while I was on the plane). Since I am Canadian, I had a bunch of Canadian cash with me. In my hotel room, I decided to keep my Canadian cash separate so I put it in my hotel room drawer next to my bed. But, when I left, I forgot to take it with me. That’s about $25 down the drain. Sigh…

Then, after I got back, I got my old car safetied (in the province where I live, you have to get a car safety checked before you can sell it, or the purchaser can get it safety-checked). It turns out I have a bunch of repairs I have to do to get it to pass the safety inspection. There is no one thing seriously wrong with it, just a bunch of small things. I asked the mechanic how much it would cost to get it fixed and he estimated between $1000-$1200. I translated that as between $1400-$1600.

Then, the other day my laptop broke down! It no longer runs on A/C power. I noticed that it was running on battery power the entire time, regardless of whether or not I plugged it in. I disconnected the power cable and plugged it in but the batter continued to tick down. Finally, I removed the battery in order to "force" it to run on A/C power. Well, that worked… once. But after that, it wouldn’t work anymore. It now will not boot up regardless of whether or not I have it plugged in and if there is a batter in there. I think it’s a loose connection in the power socket since I tried it with my friend’s power adapters and I got the same result. I still have my Mac laptop but I need my PC laptop because that’s where I have all of my stock trading software.

Then, if that weren’t enough, I purchased some very expensive tickets to the Rocky Horror Picture Show. I procrastinated buying tickets and these expensive ones were the only ones left. I missed David Copperfield so I guess I’m going to this show instead. I won’t reveal how much it was, but suffice to say it’s costing me more money than I had planned, since I planned to get the cheap seats. None of these repairs or inconveniences are going to break me. In fact, I can absorb the costs fairly easily. When I do my budgeting, I have long since learned the following axiom: You will always spend more than you think, and you can always count on unexpected expenses to pop up. Because I have learned this, I always make sure I have cash reserves just in case (ie, inevitably when) something comes up.

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I’m so good I amaze myself

Update: I have decided to temporarily remove this post for security reasons. I’ve been discovered, so it’s time to go into hiding. All will be restored in good time.

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