Category: General

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

Whenever I am way off the mark I take a step back, watch and think. It is hard for me to be this way off the mark with respect to the Fed. I was wrong, and I mean WAY wrong on Bernanke’s and the Fed’s decision on how their decision (1,2,3).

When I am this way off I figure that I must have missed something. I must have not considered a certain factor. Thus I need to see how things play out. And what I privately feared with the 50 basis cut is coming true. I thought that they would not cut 50 basis points due to the ramifications of a weak dollar.

I listened to Bernanke speak live at the German Bundesbank and I REALLY liked his speech. I am going to cut Bernanke some slack.

Listening to his talk here is my guess on what Bernanke and maybe the Fed will do next.

• 25 basis point cut – 35%: If he cuts he will give a stern talking that this is not the start of a series of cuts.
• No cut – 45%: He will say that he is watching the market closely and will react if , and he will say that he is watching the market closely and will react very quickly if things go wrong.
• 50 basis point cut – 20%: I not guessing he will do this.

TraderFeed, and bzbtrader have been talking about how large orders are split into smaller orders. TraderFeed wrote:

In other words, if you were to simply look at trades and trade volume, you’d conclude that small traders were dominating the marketplace. The reality is, however, that large traders continue to hold sway, but have succeeded in disguising their presence.

This is not new, and in fact my broker supports it and calls it the iceberg order. I talked to some Investment Banking folks and they told the iceberg order is pretty run of the mill type stuff.

Dell posted earnings that seemed pretty good and yet the stock dropped. Right after the earnings report the general opinion was as follows.

Dell said the strong results in the quarter reflected strength in enterprise products and services, improved average selling prices and favorable component costs.

The company did not provide specific guidance, but did say near-term results could be hurt by a slower decline in component costs in the second half.

Tom at Neural Market Trends asked:

Nice, I was planning on using Excel to build an interface with their API as well. Was it hard to do? Do I need to learn Visual Basic?

What I want to do is address this question from a trading perspective.

Kudlow, and a few others have chimed in on how having the fed ease would be good for the economy and the strength of the dollar. Since I thought that this is an interesting thought experiment and why not do some research.

WallStrip is touring the Google campus today. I just opened a position in GOOG a few days ago and have some more money slated to invest in it if the price drops from here or breaks up from here (and forces a MA crossover). Christian asks why I feel the need to invest in GOOG. The simple answer is that I think the price is going to go up… a lot.

People are scared off by the $500 price tag, but GOOG is actually a value play by my calculations. Let’s try this. E*Trade has GOOG’s 2006 EPS at $10.58. So what would GOOG’s EPS growth rate and average PE need to be to warrant a sticker price of $515? The answer is a 20% growth rate and average PE of 30. Here’s the math:

Rating: Two Thumbs Up, Required Reading, with a note of caution.

This book review is hard for me to explain. On the one hand I want to say, go, go, go buy this book. On the other hand this book is not like Fooled By Randomness. Fooled By Randomness I feel was a book written because Taleb had some interesting musings. A book to amuse. The Black Swan is when Taleb gets on his soap box, explains, teaches, and rants.

It was funny at one point in the book Taleb points out how Merton Scholes sent Taleb a seven page discussion on how Taleb was a bozo, at least that is how I interpret the comment. I have people sending me email and comments on how I am a bozo, but I have as of yet not received seven pages. When you receive seven pages you pushed on somebody’s hot button.