Archive for October, 2007
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 the meantime, you can win a chance to get some free books and know that we won’t be giving away your email address or selling it to spammers, etc. Please sign up. I want to keep in touch with y’all.
3. Speaking of keeping in touch, we’re thinking of ways to bring the forums back. We may hire someone to spam protect the old forums or move to a thirdparty solution. If you have suggestions, speak up in the comments.
4. Also, we’re considering updating the blog design and layout. It’s something we’ve dreamed about for a while. We even have a v2 that is 80% complete, although totally outdated. We’d start from scratch to build a better site that will help you navigate all the good content we’ve built up over the years.
5. I AM the real Jason Coleman. This guy is the Fake Steve Jobs.
6. Ugly got a job and I miss his Investing posts at UglyChart.com. He has been posting links more often, and even just linked to DateSpaces. He’s supposed to start "position trading" November 1st.
7. DateSpaces.com is a site that could work. It’s a location search engine with a focus on dating. If you live in New York City, check it out. If not, complain and get them to expand to your city.
Wednesday, Oct. 31, 2007
by Jason
With oil prices hitting $92 a barrel and could possibly go higher, corn and soy ethanol are sounding pretty cheap and are beginning to be a real alternative, not just something we talk about. E85 can even be found for under $2.00 a gallon in cities scattered across the United States, where gasoline sits almost a whole dollar higher.
Companies like Archer Daniels Midland Company (NYSE:ADM) and U.S. Global Investors Global RES (MUTF: PSPFX) are hitting highs on rising gasoline prices. While oil supplies are disappearing at a rapid pace, ethanol has finally become a cheap alternative to oil. Companies like Pacific Ethanol Inc. (NASDAQ:PEIX) and MGP Ingredients (NASDAQ:MGPI), which are trading at lows, could be staged for a comeback if oil prices continue to stay at highs.
It’s easy to forget about these renewable resources when oil comes back down, but remember renewable resources never go away. Prices can only get cheaper as interest grows and new technologies are invented to produce ethanol as well as other sources or energy cheaper.
Rising oil prices have also brought more attention to alternative energy such as solar power. Just recently HelioVolt raised $101 million for producing their flexible solar panels. SunPower Corp. (NASDAQ:SPWR) as well is making solar panels for homes and businesses that want to become more energy efficient. While in the past alternative energies have not been embraced, this could be the time to start noticing their benefits to society. Historically oil prices have increased during the winter seasons and that is what we are heading into.
Tuesday, Oct. 30, 2007
by Alex
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 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 on what’s going on with the blog and stuff we’re giving away. One thing you can be sure of is that we will never give, sell, or rent your email address to someone else. We hate spam and don’t want to contribute to your inbox problems. We’ll never send more than a couple emails per month… if that.
We’re just looking to bring our community together in new ways. If you are an InvestorGeeks reader and support the articles we’re writing and the stuff we’re doing for charities, then sign up and become a “member”.
Speaking of give aways. People who sign up for the mailing list over the next month will have a chance to win a free copy of Active Value Investing, by Vitaliy Katsenelson (see our review here). We will choose a couple (exactly 2) winners at random. The grand prize will be a signed copy of Active Value Investing. One runner up will receive a non-signed copy of the book. It’s a great book that y’all should read and will look great on your trading desk (you do have one of those don’t you?).
Monday, Oct. 29, 2007
by Jason
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Marc Faber was on CNBC yesterday. You might not know him, but as I live in Switzerland he is the Warren Buffett of Switzerland. What I like about Marc is that he is both a speculator, investor and very much a realist.
Yesterday he said the real problem was the financial industry that is in a massive bubble that needs to be deflated. Squawkbox looked at him and thought, Huh? Marc is actually quite right because there is an investing bubble like the dot.COM bubble.
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Tuesday, Oct. 23, 2007
by Christian
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.
from the Absolute Poker Cheats blog
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.
You hear the news in the industry that you should buy global companies! Global companies with a weak dollar means more earnings! Folks, wrong, wrong, wrong! If you do the numbers quickly sure this argument sticks, but if you look a bit deeper then you will see the problems. The canary in the mine is Canada.
“Shopping is so much better here,” said Sam Theriault of Hartland, N.B., as she headed into the Wal-Mart in Houlton, Maine - just across the border from Woodstock, N.B.
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Friday, Oct. 12, 2007
by Christian
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), both great books on general wealth-building.
I was hoping someone out there might point us towards some good online resources though, especially ones dealing with real estate investing in particular. Thanks for the help. If we get some good info, I’ll do a round up later.
Wednesday, Oct. 10, 2007
by Jason
Barry said something about inflation and how Bernanke is not measuring it correctly. Then another blogger jumped on it and replied that Barry does not get it. The problem with this discussion is that it is a discussion of concepts and no illustrations.
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Friday, Oct. 5, 2007
by Christian
Whenever I look at stats, and numbers I like to compare it to the little things. I find the little things usually make all the difference. HP has an update from Casey, and I advise you to read it. In particular the following made me take a close look.
Not sure what I’m gonna do about the approx 500K of debt still in my
name. That figure includes both credit cards, deficiencies on
mortgages and a private loan. Its just an estimate as I won’t know
until all my bank-owned properties get sold.
What does this tell you? Before I tell you what I think let’s look at Casey’s track record and see how the numbers add up. On his Wikipedia page I calculated he took on debt of 2.419 million, and has a valuation of 1.6 million. This leaves a net debt of 773,000. If Casey says he has about 500K including credit card, etc I think we could safely say that mortgage debt is about 400K
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Friday, Oct. 5, 2007
by Christian
