portfolio management discipline

It seems so intuitive to "buy low, sell high," but the reality of executing on that simple goal is not easy. It requires both foresight and the discipline to minimize risk while times are sunny; because when the rainy day comes, you'll sell low with everyone else getting wet.

I got out of an Apple position when the market was declining (after the Fed failed to drop the rate enough) to lower my exposure, but unfortunately I did not have the cash-on-hand to readily re-enter an Apple position, which I had desired to be long in until after January's MacWorld conference.

Today I watch the stock continuing its 20 point ascent, breaking through its 52 week high and the 200 mark, and I know I'm late to the party. :(

Financial Industry Regulatory Authority

While the markets are closed, become familiar with FINRA, the Financial Industry Regulatory Authority. About a year ago, the world of financial industry regulation changed, when the NYSE Member Regulation merged with NASD to form this new corporation. I know, yawn, right? But I'm a firm believer in understanding precepts underlying the markets and economy. Merry Christmas!

Fed day

Today at 2:15pm EST, the Federal Reserve Open Market Committee will drop the interest rate. The markets have already full expected and incorporated the drop into prices, so if the Fed does not drop the rate a half percent, there will likely be disappointment and a bear will emerge, tho in the short term euphoria will let the bulls run for two hours. If they do drop the rate by a half point or more, torro, torro!! Expect low volume and not much action until 2:15.

the new cheap PC

This article makes a compelling case that Microsoft (MSFT) shall lose the low end market for PC sales to Linux vendors. Forbes magazine also had an article about this two months ago (specifically about the ASUS Eee Ultra Mobile PC). What public companies will rise on this new tide?

GOOG

My friend Thomas continual reminds me how high Google is going, to my continual chagrin ;). We remember when it was 500 six months ago! How high can it go? The company is well positioned to maintain its leadership in the internet advertising business and expand into new domains as well, such as cellphone, VOIP and internet video advertising. They're beginning to compete with Microsoft Office through Google Apps for Domains, which permits hosting and web-based processing of spreadsheets and documents in Microsoft Office formats, and in low-end consumer desktops sold through Wal-Mart (which are optimized for Google web-based Apps). Small business, goverments, and colleges are adopting Google's software as a service instead of the expense of hosting their own.

Google just continues to grow. At $730 per share, it is cheap!

foreign investors

With the United States dollar declining in value rapidly, and domestic real estate valuations shrinking, America is on sale, for any foreign land speculator who would care to invest.

Is there a public foreign corp with an ADR that trades on US exchanges, so one can take advantage of this opportunity?

short interest

Bernie Schaeffer writes, "Brokerage firms are required to report the number of shares that have been shorted in their client accounts. This information is compiled for each security and then released to the public. By monitoring a stock’s short-interest figures, we are able to get an idea of the level of pessimism toward the stock." (Option Advisor, December 2007, volume 27 issue 12)

YBH? (Yes But How) Where does an individual investor go to retrieve this raw data in a timely manner for any particular stock?

Oil

Cramer insists that investors keep an Energy/Oil stock in their diversified portfolio, because oil is such a powerful force in the world. With limited supply and strong demand, it is perennially "fashionable" on the street, because the black gold commodity is in the news due to the rising cost per barrell (to almost $100!). The Saudis wanted to help their friends by boosting supply, but OPEC decided to keep supply constant, so the price of the underlying commodity will maintain current levels or increase with demand.

Cramer's pick for the best value in this sector was ConocoPhillips (COP), due to its low multiple (price to earnings ratio) compared to its competitors.

Banks (with Fed lowering rate)

Cramer is right, it is a no-brainer that banks will make more money when the Fed lowers the interest rate. (I love his emphasis on risk mgmt being THE key to wealth development. Any fool can get his head blown off; these are powerful things we're playing with; but a real man knows how to contain and limit his risk.) He likes HCBK Hudson City Bancorp Inc because they have the lowest default loan rate; is this the reason to favor HCBK over other bank stocks, for either performance or timeliness?

Copper mining

Cramer is bullish on FCX Freeport McMoran Copper & Gold Inc. because of China's demand for copper in the production of stainless steel, but says aluminum isn't going anywhere fast. This is one miner I need to do more homework on for fundamentals and timing. What do you think about copper?

RIG

Cramer said he likes the fundamentals of RIG (Transocean Inc - an international provider of offshore contract drilling services for oil and gas wells) after a recent acquisition and debt paydown; remind me to investigate this stock, and when it might be popping.

Wrongstock

Welcome to Wrongstock, my blog where I'll post all of my hypotheses & ideas about investing in stocks, exchange traded funds (ETFs), and option strategies thereon. Of course, most of these new conjectures will not belong to my core strategies, because this is where I blog about new things. But whose mistakes are better to learn from, than another's? Well that's an attempt to put a positive spin on it.

Enjoy all my mistakes and miscalculations! :-)