Weekend Ramblings – always a work in progress!
by Phil - January 13th, 2007 6:43 pm
Here’s a great chart from MyMoneyBlog – he was using it to point out, correctly, how homeowners are more or less in denial and we may be a long way from the bottom of that market (think about where you are with your own home’s price) but I think it applies to almost every stock we buy!
This is a great example of how the 20% rule can save you a fortune as you are generally not mentally prepared to sell when you give up 20% of your trade’s profits but that 40-60% pullback range runs smack-dab into denial and by the time you pass there, fear and desperation have you in their clutches, followed closely by panic, selling for a loss and depression. ONLY BY TAKING IT OFF THE TABLE "EARLY" ARE YOU LIKELY TO EXPERIENCE "THRILL" AND "EUPHORIA," those are fleeting experiences with a stock (especially an option) and are quickly replaced on the downside.
Cash out early, cash out often – cash is good!
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I know we’re all weighed in with our opinions re. the Cisco/Apple IPhone dispute. You know I only work with the best, so I went straight to Harvard Law, where they gave me the skinny as to what constitues trademark infringement. Key points discussed are:
- The standard is "likelihood of confusion."
- Is it likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods?
- Factors under consideration will be:
- (1) the strength of the mark
- (2) the proximity of the goods
- (3) the similarity of the marks
- (4) evidence of actual confusion
- (5) the similarity of marketing channels used
- (6) the degree of caution exercised by the typical purchaser
- (7) the defendant’s intent
Apple knows all about trademark law, one of the most famous cases in trademark history is Apple Computers vs. Apple Records, an issue that resurfaced as Apple moved into the music business. The bottom line is they already had all the best lawyers on the planet on speed-dial so don’t go writing off the name IPhone too quickly!
It’s too late anyway – they’ve already rolled out the first IPone commercial!
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Just…
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DiggBurn Dollars to Fight Gravity?
by Phil - December 9th, 2006 5:31 pm
While I respect and use the “bullish sentiment” indicators and, in fact, just commented on it last week I’ve also started thinking about the “herd mentality” as it applies to rational decision making.
Please do not take this as a BUYBUYBUY opus, but let’s think about where we are in the universe (see Tuesday’s post).
Starting with our spaceflight motif. I see the market as skimming along the upper atmosphere, the bottom of the ship buring red hot as we pick up speed but with the pull of gravity and the resistance of atmostphere slipping away. As any rocket scientist will tell you (and I know some), physics are a real bitch if you ignore them. So cutting the boosters, or running out of fuel, when you still have .001% of the Earth’s gravity to fight off may feel good for a while and you will float – but you will also EVENTUALLY, INEVITABLY experience ORBITAL DECAY!
So here we are in our shuttle craft and the thrusters are easing off a bit and we’re starting to feel a little weightless and some people want to get up and mess around but some people are still clinging to their seats, still thinking we could come back down at any minute.
Now the physicysts (analysts) are debating whether we can coast into orbit or do we need more fuel and, as you can tell from the padded walls, it’s a well known fact that gravity can catch you by surprise if you miscalculate but, at some point, probably after a few people (bears) throw up – everyone may have to admit we have finally left Earth orbit.
That’s where I see us now, right at the outer end of Earth’s gravity well, ready to head off into space on a quest to go where no market has gone before (Dow 15,000). It just so happens we are launching a shuttle mission this week and, while it is now fairly routine, those of us who still watch such things still get the same feeling that any bear might have watching the markets take off.
They pick a launch time, they delay it. They pick another launch time, the weather is no good. They pick another launch time, there’s a stock option scandal. They pick another launch time, Microsoft delays Vista…
Finally, the rocket is on the launch…
Weekend Wonderings
by Phil - November 25th, 2006 9:03 am
After coming off a no data week last week, we have an overload of information on deck for the next one.
Coming into the home stretch, with just 28 shopping days until Christmas, we will be hearing numbers, numbers, numbers all week to digest with the last of our leftover turkey.
Monday is relatively benign with the usual 3 and 6 month T-Bill auction but, with the M3 shenanigans on everyone’s mind, they will take on a very new significance.
Tuesday hammers us with the weeked UBS Store Sales report, Durable Goods Orders, the Redbook (before the bell), Consumer Confidence and Existing Home Sales at 10. At 1pm we have the 2 year note auction and Bernanke speaking in NY.
More housing data comes Wednesday morning with the MBA Purchase Applications report but who will care with the GDP at 8:30 and actual New Home Sales at 10. They are looking for just 1.8% on the GDP, which seems very low to me and I wonder how an upside surprise will be taken…
Just as we are trying to absorb that bit of news we get hit with a Petroleum Report at 10:30 followed by a dead serious 5-year note auction at 1 which will all be forgotten an hour later when we see the Beige Book.
Just in case Wednesday doesn’t leave us in a total state of data overload they are ready to hit us again on Thursday with Jobless Claims, Personal Income and Outlays, the Chicago Purchasing Index at 10, Natural Gas at 10:30, Farm Prices at 3 and the government’s spin on the Money Supply at 4:30.
Before you start thinking the Money Supply is just coincidentally after the market closes on Thursday – Uncle Ben is scheduled to spin speak about monetary policy Friday at 9am at the Fed. At 10 we get Construction Spending and the ISM numbers and right at the closing bell we get Motor Vehicle Sales to mull over for the weekend.
Ben will be backed up during the day by Philly Pres Charlie Plosser and Richmond’s Jeff Lacker so we will get a pretty good view of the party line by then. If the M2 is as bad as I think, expect to hear from Greenspan on Friday as well.
I forget where you find them but the play of the week next week may be on those VIX calls, because if…
Weekend Ramblings
by Phil - November 5th, 2006 11:58 am
It’s going to be a tough call on the economy for the Fed.
4.4% unemployment and rising wage pressures say tighten but home sales data says we just can’t take it any more:
Inventories are just starting to level off but, at this stage it’s hard to tell whether that is due to demand picking up or if people are just unwilling to list their homes at 10% less than they were worth last year.
Builders have stopped building and are working their inventories down but, as we reported on October 12th’s note on Kara Homes, it just isn’t enough to save them all.
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The fact that investors are “excited” about the probability of gridlock in Congress shows how short-sighted Wall Street really is.
We have major pressing issues of deficits, social security, Medicare, global warming, peak oil (if we are to believe them) and, of course, Iraq, Iran, Afghanistan, Nigeria, North Korea and so many Mexicans coming in we need to build a wall…
Our military budget alone has gone from $289B in 2000 to $462B this year and that does not include Iraq and Afghanistan which are funded from a “special” budget (ie. not counted in the deficit).
How much is that “special” budget? Guess.
Guess again. No, much higher. No, higher. Really, higher…
$549Bn through 2007! Ka-Ching!
Maybe another two years of ducking our heads in the sand isn’t going to be the best thing.
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The most surprising market statistic I’m looking at is that, out of 3,300 NYSE companies, only 20 made new lows yesterday vs. 104 that made new highs.
I don’t usually watch the RUT but they added a third of a point yesterday after being down almost 2% on the week.
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I’m still dumbfounded by the jobs numbers. They added 97,000 jobs to September’s 51,000 reported (190% off) and they added 42,000 jobs to August’s 188,000 (22% off).
Is the administration manipulating the reports or are they genuinely grossly incompetent?
One thing they are competant about is timing! Saddam will be found guilty (oh sorry, I mean the verdict may be decided) tomorrow, just in time for the pre-election papers.
Whatever you do, don’t question the fact that this trial, which started in December of 2003, is suddenly drawing to a close.
Zalmay Khalilzad, the American ambassador to Iraq, last week denied the verdict was set to coincide with U.S.…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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