The (negative) power of quarterly reports

All the turmoil we are seeing in the markets lately are, in my opinion, caused by short term thinking. CEOs are so tied to short term quarterly thinking they are willing to do anything to make their companies look better. This includes over leveraging and huge debt burdens which look nice on paper, but are really just the tip of a giant ice burg. Then Wall street only really looks at the quarterly numbers and doesn't really rate a company on it's long term viability, only on its most recent quarter. Completely missing the 90% of the iceberg below the surface.

This seems really strange to me. I wish there was another financial report for the sane people in the world. Every year a company should have to come out with a "ten year report". If I could see one of those every year I would have a lot more confidence in these companies as I would at least feel like they are thinking of long term survival. Thinking for the long term, just like I want to invest for the long term. Then all bonuses should be tied to ten year results. This golden parachute thing is ridiculous. You get a bonus even though you caused the company to tank a few years later? What kind of mindless knucklehead thought of that?

So, what we really need to keep our economy on track is a long term mindset. A yearly "ten year report" and all executive bonuses time to the companies financials ten years in the future. Wow, I would go "all in" with a company like that!

Too buy or not to buy.

I loved this article Stocks look cheap, but that doesn't mean you should buy. My favorite part is the secondary title "Are stocks cheap? It depends on earnings", then goes on to say that "many market pundits think expectations for 2009 are way to rosy". Imagine the industry that gave us AAA ratings on on mortgage backed securities telling use that earnings are "Rosy"! Who does Wall Street think we are?

Let me lick my finger and put it in the air. Oh, hey, look at that, earnings look like they are going to be down significantly based on job losses and all the turmoil! I don't have any doubt that this is going to get worse. It's already well below where I got out so I'm staying out. I lost way too much in the dot com bust looking at prices and hearing people tell me "how much lower can it go? Just hold it, the market always goes up eventually." While they are probably selling.

Then you hear them say things like "USG Shares Soar on Warren Buffett's "Expression Of Confidence". There is some serious snake oil in that one. Warren is buying special shares and real ownership in the company. If it does go bankrupt, those shares still have value in company assets. The real stock which you and I own turns into vapor. Of course Warren wants you to follow him on this deal, just like he wanted you to follow him a few months ago when he was buying it at 40 last May! Don't do it. If you are wondering how low it can go, it can go to 0! Then Warren walks away with the bag. I really like Warren and think he's a great investor and has a good morality to him, but in all the cases of his current buying spree he's getting real value. All in all markets don't behave rationally, the behave with individual greed.

Most of us suffer when companies like Loral zero out there stock and reissue the next week at the same value. Yes, the SEC let this happen back around 2003. Most people would call this fraud, the SEC calls it acceptable. Yes, I lost some money on that one.

The two significant downturns I'm looking at and comparing this too are the 1929 crash and the 2000 .com bubble burst. Both of those took two or three years to reach their bottom. I've already shown the chart pointing at 6000 for the Dow as the balancing line (the mean) over an 80 year period and over that period there have been a number of times when it's below the line. So do you think it will stay above that line? 4000 anyone? If I'm wrong I'm willing to miss out on all the money you make and get back in when this starts behaving like a long term market again. If I'm right I'll get back in when this starts behaving like a long term market again. Either way, I play the market with a long term mindset, I just happened to take a little breather when payments for fraud and deceit came due.

Bad Forecast

My mom sent me a link to this site and I responded to her and then forwarded this message to two investment friends.

Watch the video and ignore the text. Granted this is hosted on a website that was built by conspiracy theorists that use completely invalidated information to claim that the government had a hand in 911 and it is an interview from Fox News which is broadcast from a bar which is not my most trusted news source, but I do tend to agree with a lot of what he's saying. If you remember I was buying gold and silver in 2007 because I kept expecting the dollar to devalue significantly, but it just hasn't happened yet. He's saying the same thing as I am, he's just a lot more of a pessimist.

http://www.infowars.com/?p=5938

It doesn't look like this is going to be pretty in any way shape or form. People keep comparing this situation to the Great Depression, but I don't think anyone has any sort of concept of how bad it really was. They just say the words without any comprehension of the fear that it should include.

Sold AMD

I knew it was a mistake going into it and should never have bought that second round of AMD. I know that AMD doesn't have a lot of cash and a new chip takes a while to see revenue so it must be that a lot of people wonder if AMD can even survive in this economy. I almost put in a stop loss at 2.10 last night and this morning it was at 2.00. I put in a stop loss to sell everything at 1.94 and it triggered late in the day. I fully expect it to bounce back at some point, but I'm through with this market and was done with it at the end of November. I'm really glad I sold out then as things are a lot lower now then when I sold. Everyone says this is a long term market, and that $10,000 invested in 1929 would have been worth $6,000 in 1935, but the market didn't bottom out until 1932 and what if you invested your $10,000 then? It would be worth $25,000!!! Not to mention that a lot of stocks went to zero and shareholders almost always get zeroed out in a bankruptcy. Long term is a way for others to get you to help stabalize the market while they play the game. Sure, Warren Buffet is buying a lot of stuff, but he's making deals we can never get and getting all kinds of options and preferred stock. He's in a different league and can lose a few billion without any sort of pain.

So, I'm out of the market (and mostly have been since mid-NOV early OCT) except for a little STMP, the ashes of FNM, FMC and a tiny bit of JAVA just to get financial reports from a company I used to love until Jonathan Schwartz messed up Java really badly (by bloating it and ignoring client apps) and then got the CEO spot to everyone's disappointment. Other than those, I'm out for a while. It took almost 3 years for the market to bottom in 1932 after the 29 crashes so I don't expect this one to take any less time. I'm waiting until this feels like a long term market again...

AMD purchase

I bought a 2.8% of my total account purchase of AMD just now. I'm still holding a 2% interest that I purchased at 13.69. The new brokerage system I moved my account to sucks so I can't see what the actual price was but I think it was around 2.43 (2.63 is the official number). I did this based on this article AMD Shanghais the Server Market. It's too bad they really flubbed the Barcellona release since I think they are a good and very innovative company. I invested because they had that new chip coming out and I didn't expect them to miss it so badly. This new release shows that they still have game and can take on Intel.

More napkin analysis

I looked at what I sold early last month and compared prices to today and I made a good choice in most cases. EIX is the only one that is above where I was, but USG is way way down. I'm still about even where I got out of my second half of ATVI and that is really the only stock I would consider at this point, but for now I'm just sort of watching unemployment. I didn't just sell all those stocks. I put in 10% drop sell orders and every one of them triggered. In most cases I put in 10% and 15% selling half at each point.

I did a couple of more looks at charts and these are two I found interesting from the max s&p500 and DJIA. I've already stated in the previous post (October 10) that it looks like we are in a 30 year bubble since 1985. I'm trying to figure out where the bottom might be and I'm really most interested in unemployment as the measure for recovery and bottom, but for now looking at these two images makes me think it can go a whole lot lower.

DJIA 1995-2008

S&P500 1995-2008

"A" is where we are at currently. "B" is where we were in 2003 after the dot com crash. This is interesting to me because the 2003 dip was caused by two things. A big bubble burst in the dot com industry and 911. Given that the 911 event was a short term cycle and not completely related to the economy I'm looking at position A and B on the charts and thinking that current events are much much worse than they were in 2003. So, are we at the bottom? I seriously doubt it since at this point we have virtually every industry in a significant down turn. To me that should look a lot worse on the chart than a dot com burst and a terrorist event. All signs point to this being a recession that is much worse than the 2003 recession and unemployment is looking to be worse than it was in 1992 and some are saying we have to go back to 1980s to see this sort of magnitude. So, will it go below where were were at "A" on the chart? I don't see how it can hold the current level. That is really disappointing.

So why have a "C" on the chart? I keep thinking about unemployment levels being the lowest they've been in 14 years and that puts us at "C" on the chart. That doesn't mean that the economy is smaller in any way, but it does point to a place on the chart. Looking at my previous post, my pen was pointing at 6000 on the DJIA for the non-bubble growth line and if that is the mean then I guess I would expect a true correction to go below that line and 4000 does seem like a balancing point on the two curves.

It doesn't look pretty and it isn't very precise, but it does make some sense to me at this point in the procession.

TTWO sold

I sold the other half of my TTWO today. It sold at 13.35.

Half of my ATVI sold

I sold the other half of my Activision ATVI holdings. It was about 15% of my account and sold at 11.86.

TTWO sold

I sold half of my TTWO holdings today. It was still a profit at this point, but everything is suspect in this market. It sold at 13.29.

USG sold

I sold all of my USG holdings today. Warren Buffet can have it as he has enough cash to prop it up. It sold at 19.23.

DRIV sold

I sold half of my Digital River today at 27.03. It was a 4% holding.

Half of Activision Sold

Half of my Activision ATVI sold off because of a stop today. It sold at 10.14.

How low can we go?

All of my positions except for STMP and AMD have sold. I had a sell on the last of my SNE, but it was input incorrectly so it will sell first thing on Monday. I'm not just getting out for no reason at all, I just want to take a breath and look for a bottom. A bottom to me will be when things stabilize and loans start to be issued by Wall street. If Wall street doesn't trust itself to be given a loan between them selves I don't think I should trust them with my investment.

That said, after doing some reading on the 1929 crash a few days ago I again went back and looked at the DJIA chart from max time. This time I held up a pen to see the line that it made if it moved up in a uniform fashion.

Yes, that's my hand holding my pen, taken with my phone. The pen is pointing at 6k. I had previously estimated 7500 so 6k now doesn't look much farther down. Here is a clearer image of the same chart showing the pen replaced by a green line. You should be able to click on it to see it full size.

Not very scientific, but I do think it is reasonable. What do you think? Based on the 29 crash we'll see a few more up days and some more rich people buying stocks to try and stem the red flow, but overall we are going to see a downward trend until the banks start to lend money again. If we start seeing a bunch of bankruptcies in big companies I think it will mean the banks will be even less likely to lend money (since they lost it) and we'll see the next tier of companies failing. Not much different than the housing market drying up. People could no longer refinance their houses and ended up defaulting. Companies will not be able to refinance their payroll and end up defaulting or cutting back. This is not a good place we have come to and I hope I'm wrong!

IBM sold

The IBM stop triggered this morning at 95.34 and sold all my shares.

IBM Sold

I sol my IBM holdings today. This market is going down too steeply for me. It sold at 95.34 and was a 8% holding

Sony Sold

I sold all my Sony, just don't like where this market is going. It sold at 25.23.

Bleeding badly

My account has been bleeding badly as I'm sure yours has to. A few days ago I put a bunch of 3% lowere stops on many of my positions and they have been selling off. I also bought some more gold and silver. My account is in transition from one brokerage to another and I have a more limited view of my account. It has a lot of cash in in now and I'm planning on keeping more "real" assets for the near term.

I wrote an e-mail yesterday to my dad about my thoughts on the current market problems.

So, if this is as bad as everyone is saying which is that it is the worst market conditions since the great depression I decided to do a comparison to then and now and maybe try and figure out where this thing will bottom out? (if it really is that bad?)

http://finance.yahoo.com/echarts?s=^DJI#symbol=^DJI;range=my

October 1, 1929 343.45
April 1, 1932 42.82

A drop of -88%

July 1, 2007 13,895.62
January 1, 2010 1667.47

Let's hope it's not as bad as everyone is making it out to be!

My guess was that it would drop to 7500. 1667 seems inconceivable, but I'm betting it seemed pretty inconceivable back in 1929 as well.

The one thing that really got me thinking about this was seeing Bank Of America stumble yesterday. That set off some alarm bells for me.

I found this to be a good article after I wrote this e-mail.
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

Sony news

This is good news on Sony,

Sony says PlayStation 3 sales better than expected
http://news.yahoo.com/s/nm/20081001/tc_nm/us_sony_1

It's not a surprise since I've been saying that the PS3 would start to gain momentum because of the availablity of more games and the BlueRay win.

That said, the price is in the toilet since the market has been hammered so badly and the end of the article talks about possible problems with TV and camera sales. I might be missing the point, but I also might buy some more to lower my cost average. The fact that the price went down even more today after this announcement yesterday has me wanting to hold onto my cash though.

I think I may have sold some of my TTWO yesterday. I put a stop on about half of it a few days ago. I can't look at my account because I'm switching brokerages and there is hold on it, so I can't make any trades for five days or so.

Big Changes

I made some big changes to my IRA about an hour ago. I have been looking at GLD and SLV which I made a lot of money on earlier in the year and got out at their peak. They've both dropped back down, SLV more than GLD, but with all the turmoil and the cloud of AIG hanging over the market I figured this would be a good time to get back into some things that had real and tangible value.

What I sold.
Half of my DRIV holdings
EDD
TIVO

I then purchased what I can only estimate at this point as a 10-12% each in GLD and SLV. I bought a little more SLV than GLD.

What I kept and why.
ATVI,TTWO,SNE. Headed into bad times entertainment is always a good choice. When reality sucks people still spend money to take their mind off of it and entertainment for me at this point is a good hold. ATVI is a for sure with a lot going on with them. I expect more from TTWO than what has happened over the last month and SNE is making me mad, but I still like the my strategy for the long term.

IBM is a strong company in my opinion. I have a vested interest in them so your mileage may vary.

I still have some cash around and may put more in SNE, GLD or SLV depending on what I see over the coming weeks.

Current Holdings Starting September 2008

It's been a while since I posted. I was in Africa for a few weeks in August and I've been slowly coming back to the real world. We work in some really poor communities there and it is always hard to come back to the "ME" place when you've seen such spirtual wealth in the face of such extreme poverty. I know which one I would rather have and it doesn't have anything to do with this account. Overall I'm only down 6.5% for the year. I think it's been a hard year for everyone in the investment community and I'm pretty happy with that at this point. I think it's all going to come back by the end of the year. Especially after we get this election over with.

That said I've really ignored my account and have not looked at it in over a month. I knew it would be down some, but thought it would be worse. I mostly have not changed it because I don't think anything has fundamentally changed with my holdings. I know FNM and FMC crashed, but it doesn't seem smart to sell them at this point. If they go to zero it's not much farther than they are now so I'll just continue to hold them and make me look bad.

I was looking at SLV (Silver) this morning and see it is at a 1 year low. Glad I sold it, but since there is inflation in the air I'm thinking of buying some of that back for the same reason I made a killing on it last year. It seems odd, but it needs some more analysis.

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	33	31%	146%
TTWO	$16.18	23.52	17%	45%
DRIV	$47.72	44.27	10%	-7%
SNE	$43.88	37.45	8%	-15%
IBM	$117.07	116.2599	7%	-1%
CASH	$1.00	1	5%	0%
USG	$38.33	27.26	5%	-29%
AMD	$13.69	6.17	4%	-55%
EDD	$19.43	14.4	3%	-26%
STMP	$12.98	14.1675	3%	9%
EIX	$53.56	44.93	3%	-16%
FNM	$24.52	7.3	1%	-70%
TIVO	$5.89	8.87	1%	51%
FRE	$23.11	5.04	1%	-78%
JAVA	$17.27	8.905	0%	-48%

Ericsson and Sony

I'm still bullish on Sony, but this bad news from Ericsson is something that needs to be watched.

http://techland.blogs.fortune.cnn.com/2008/07/22/ericsson/

It was good news that the handset sales in the Sony/Ericsson joint venture were flat, but trouble at Ericsson could mean some red for Sony as well. I think the PS3 and BlueRay future will outshine the handset side of the business. As long as that at least remains flat I'm still bullish on Sony over the next year.

Video game sales soar 53% in June

This is great news and the fact that Sony hardware sales were up goes with what I've been saying aboutn Sony/SNE.

Sony Corp.'s PlayStation 3 bested Microsoft Corp.'s Xbox 360 console in June. The PS3 sold 405,500 units compared with just 219,800 for the Xbox 360. The higher PS3 sales were fueled by the launch of the highly anticipated "Metal Gear Solid 4," which is available exclusively for Sony's console. The game sold 774,600 copies, not including those bundled with the PS3.

AP Video Game sales soar 53% in June

I think PS3 sales are going to continue to rise over the coming year and they are going to start seeing some real momentum. If you are going to buy Sony, you better do it now. It was up 10% before the recent market correction and are back down to that 2 year low. We are not going to see this price again for a while.

zero for the year!!

Hard to believe I would be really excited to be at 0% gain for the year, but really I'm excited that I'm at 0% loss for the year. This is after one month of being up 12% for the year to -8% in less than a month and back to 0% today. The market this year has been a killer and I'm just happy to be breaking even, but I know that could easily change again. FNM and FMC are really a big part of the problem for me, but ATVID (Activision) has really come back strong and I'm not planning on selling any of it right now, even the FNM and FMC.

I wanted to do some profit taking on ATVI when it became more than 30% of my account, but now I'm looking at the future for them and I really want to ride it out a while longer. I know it is dangerous to have such a large holding, but I feel like it is one I know really well and I'm confident in it moving forward. I don't recommend following me in such a huge stake and I'm not sure I would buy more ATVI since it has seen such a big uptick in recent months. Be your own judge, but to me they are hitting on all cylinders and the merger with blizzard puts together two stellar companies.

Game On For Activision Blizzard

ATVI has bounced back nicely and since it is my biggest holding it tends to swing my account a lot. I have not checked it recently, but I'm sure it is finally recovering from the blood letting.

I'm still really bullish on ATVI and I'm glad I didn't do any profit taking at 36 even though it dropped back down to 31. This article Game On For Activision Blizzard is exactly what I've been saying for a while. The fact that the article talks about the Activision lineup and barely mentions the Blizzard side.

Blizzard has its sight set on 2009, where it plans to disseminate the next chapters for World of Warcraft and Starcraft, two online game titles that have fanatical followings globally.

Is even better since I think the Blizzard side has a lot more potential for huge successes than the Activision side. I don't think I've seen a better pair of companies combined into one. This is going to be big. This is one I'm going to be holding for the next nine months or so. Unless of course it triples, then I'll probably get worried and sell a bunch.

Why Sony?

If you are holding Sony, I don't think you should sell. If you don't own any, this is a great time to buy. It went up and down 10% over the past few weeks and it is again sitting at a two year low. I think they have a great product story over the next few years and will start to reap the benefits of some expensive and early stage investments. This is the type of news I'm talking about and this is just one of the three home runs that Sony is currently controlling.

http://videogames.yahoo.com/events/e3-2008/e3-2008-blogs/1227326

A Bear Market

Yes yes yes, all profits are gone for the year and what was looking like a stellar year may be a negative at this point. I took a real beating on FNM and FMC, but now that the blood letting is mostly over I'm willing to hang onto them. Edison took a giant leap back in the Enron days and they came steadily back over next two year (Just look at this chart and see the drop in 2001 and stellar 3 year return). I don't see why this will be any different. I'm planning on holding what I have and maybe buying some more in a few months if it starts to recover. As I've said before I like all my investments and I'm in them for the long term. Nothing has really changed except a general downturn in the market. FNM and FMC are not huge holding.

I agree with this article on dealing with a bear market.


Most of the negative has come from ATVI (Activision) dropping back down after a meteorific upturn. I'm excited about the Blizzard merger and hanging onto it especially since Blizzard is set to launch some refreshes to some of their most popular titles.

Current Holdings Starting July 2008

ATVI	$13.44	34.07	30.34%	154%
TTWO	$16.18	25.57	17.31%	58%
SNE	$43.88	43.74	8.57%	0%
DRIV	$47.72	38.58	8.25%	-19%
IBM	$117.07	118.53	6.33%	1%
USG	$38.33	29.57	5.27%	-23%
CASH		–	4.98%
FNM	$24.52	19.51	3.47%	-20%
AMD	$13.69	5.83	3.32%	-57%
EDD	$19.79	15.24	2.95%	-23%
FRE	$23.11	16.4	2.92%	-29%
EIX	$53.56	51.38	2.75%	-4%
STMP	$12.98	12.48	2.22%	-4%
TIVO	$5.89	6.17	0.88%	5%
JAVA	$17.27	10.88	0.39%	-37%

Wow, what a crummy month. I went from being up 10.3% for the year to 1.5% for the year. I've been burried in work so I haven't really paid close attention, but I think this was really a market correction and not a problem with my actual holdings. I'm very worried about FNM and FMC since they seemed to have dropped so much, but I'm willing to stick it out a little bit longer. Hey, it's all fun and we are bound to have up months and down months.

Sony Ericsson sees strong handset demand

This was not really on my radar for Sony except that I thought they were hanging in there as a handset manufacturer. This latest news (Sony Ericsson sees strong handset demand) is just an added bonus to the reasons I bought sony (2 year low, blu-ray win, ps3 starting to hit). To me it is still a great buy and I may buy some more in another non-ira account.

Funny TTWO/ERTS article

I got a good laugh out of this article (Electronic Arts Can't Be This Stupid?!) and agree with it 100%. I think this deal could be the worst thing that could happen to Take-Two if it goes through.

USG purchase

I made another USG purchase this morning. It is a building materials (mostly wall board) stock that I have been holding for the past six or so months looking for the bottom of the housing market. I just bought some more about a month ago. I think Warren Buffet was also getting in at around that time. It has gone down more (-9.6%) since then, but I'm looking at it as a really long term buy and trying to hit the bottom with consecutive purchases to bring my cost average down as it continues to drop. With the flooding in the mid-west I'm betting there will be a lot of wall board purchased in the next six months so I'm buying more and may do another purchase in a week depending on what the stock does in the next few days.

This was a 2.2% (of my account) purchase of USG, and puts my complete USG holdings at 5.5% of my account. Before this purchase it was down around 15% and now it is down around 11%. Think long term...

I also really like the 5 year chart.

My account has continued to fluctuate. It opened yesterday at +8.2% for the year and is sitting today at +10% for the year. There was a big drop in FNM and FMC and I'm continuing to look at it. GE dropped a bunch more and I'm really glad I sold it when I did. Wouldn't go near it right now. I got the papers for the Activision/Blizzard deal and voted for the merger last night. I rarely proxy vote so this is one I'm really excited about.

Buy Apple/AAPL Now?

A friend and I were talking on the phone yesterday about Apple/AAPL and whether he should buy it now. I talked about my owning it at 14 and selling it the day before it jumped to 40 on iPod sales news. I bought it again at 90 and it went to 180. I sold half at 180 and the other half in the 145 range. Now it's sitting at 180+ and I'm thinking I left some money on the table, but I also have been sleeping better. Once a stock feels like the speculators have moved in I tend to sell it and stay away from it and AAPL seems like the speculators have moved in. I love Apple and think they are hitting on all cylindars (which is great), but I also like things that go up at a nice steady pace. Once they go off the chart there really isn't a lot to back up and look at from a historical perspective.

One thing you can look at is P/E ration. I use Yahoo Finance to look at these. Anything in the 15-20 range is reasonable. How do I know this? I don't, it is just something I picked up somewhere. I barely even know what the P/E (Price to Earnings) is or how it is calculated so if you are reading this, eat some salt.

Take a look at the P/E for AAPL. (Today 38.18. Estimate in 1 year 29.20).
Take a look at the P/E for MOT. (Today 22.65. Estimate in 1 year 21.44).
Take a look at the P/E for NOK. (Today 8.61. Estimate in 1 year 9.25).
Take a look at the P/E for IBM. (Today 16.38. Estimate in 1 year 13.09).

Compared to the two cell phone manufactures MOT/NOK, Apple is very high. MOT is only high because they are doing so poorly financially that it looks like it should be going down even farther...? The NOK P/E ration seems really low, but this is the nature of the cell phone industry, no one is really making much money.

Compared Apple to IBM from the computer side and you see the P/E is over double IBMs. To me, all these signs point to an over inflated stock and that speculators are buying for no solid reason except that they know Apple is hitting on all cylindars. Apple is a great company that I love, but to me it is even more dangerous because even though they are making a really cool phone, they are getting into a market that has some big giagantic companies who are all struggling to make a profit. I'm staying away, but I don't see any reason why it won't got to 220 soon.

Why Sony/SNE is a good stock.

I just saw this article:

Singulus says Blu-ray take-up faster than DVD

This Blu-ray and PS3 thing is going to really make a difference for Sony over the coming year. With the stock sitting just 10% up from a 2 year low this is still probably a good time to buy as much as you can. While this looks like it will be the last generation of optical disk (everyone is moving towards downloading), it is sure looking like it will be well adopted and Sony holds all the cards at this point.

Ups and Downs

I was in an all day training class both Wednesday and Thursday and spent every break working on a big presentation I have to give next week. I didn't look at my account until late today. I was initially shocked to see that it had dropped 2% today, then I looked and saw that it was sitting very close to the record. So it must have spiked big time yesterday and dropped again today. I like that I have a new high water mark because that makes me feel like it is going in the right direction and continues to push the envelope. Right now it is sitting at 10.1% for the year, but yesterday it was sitting at 12.7%. I'm still happing with the holdings and need to find something to do with that cash left over from selling out of GE.

Current Holdings starting June 2008

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	$33.75	28%	151%
TTWO	$16.18	$27.07	17%	67%
SNE	$43.88	$50.39	9%	15%
DRIV	$47.72	$40.06	8%	-16%
CASH	$1.00	$1.00	7%	0%
IBM	$117.07	$129.43	6%	11%
FNM	$24.52	$27.02	4%	10%
FRE	$23.11	$25.42	4%	10%
AMD	$13.69	$6.88	4%	-50%
USG	$40.82	$34.05	3%	-17%
EDD	$19.79	$17.80	3%	-10%
EIX	$53.56	$53.23	3%	-1%
STMP	$12.98	$14.60	2%	12%
TIVO	$5.89	$8.41	1%	43%
JAVA	$17.27	$12.95	0%	-25%

Big big month. The account is up 9.4% for the month and 10.3% for the year. Mostly this was a big jump in Activision. The Sony holdings are already starting to pay off and DRIV has finally started to make a big swing back up. I should have bought more DRIV at the bottom, but then again, I shouldn't have bought it so soon. Lesson learned, I don't buy DRIV until it has a big drop since it has done that for me twice in the past and this is the third round and I missed it by buying too early. I like the holdings. If ATVI goes up a little more I'll need to do some profit taking and take 5% back out of it.

Sony/SNE up sharply

Sony SNE is up sharply today (+4.02% at 50.47). I looked at the news and there is nothing to explain it yet. A short blurb about falling oil prices and the falling yen, but it is much to big of a jump for that. Maybe people are finally starting to figure out that the Ps3/BlueRay is really going to be a big home run? Just crossing the 50 barrier is good news at this point. Overall I'm up 15% on Sony.

Waiting and watching

I'm still here, I've just been letting my account ride for a while. I go through trading spurts and the most recent two months was one of the biggest I can remember. Right now I'm happing with the holdings. The account reached a high of 11.2% up for the year and dropped back down to 7.9% at the beginning of the week. It is currently sitting at 9.2% so all seems well. The biggest swings are currently caused by Activision since it is my biggest holding.

I still have to decide what to do with the cash from the GE sale. I just don't have any ideas right now and like to have some cash available when I do have an idea.

Looks like I'll have to give a monthly update tomorrow after the market close. As of today it has been a very good month.

GE stop triggered

My stop on GE triggered today at 31.79 and I sold the entire amount. It closed at 31.72. It ends as an 8.5% loss for me and could have been a lot worse. I think the credit crisis (GE Capital) is effecting them a lot more than anyone is letting be known. This was something I didn't think through when I invested in it last year as a hedge against inflation. I now have 6.7% in cash to figure out what to do with. I don't have any solid ideas, but I may make another 1% purchase of EIX. I tried to make this a few weeks ago, but didn't realize that my cash had gone into the USG purchase.

As for GE, I do think it will recover, I'm just not willing to take any more chances with it. Anyone involved in credit, that hasn't corrected is suspect at this point.

Over all, my account has pulled back a little bit from the most recent gain, but it is holding most of it pretty well. The GE loss is hopefully just a footnote since it wasn't a big holding.

There must be something wrong..?

My account keeps going up, like crazy for the past two weeks. As of today I'm up 11.2% for the year and just two weeks ago I was up 2% and two weeks before that I was -2%. No really, this is how it usually works. My account takes huge swings and as long as more of them are up than down, the long term aspects are positive. Also, you have to be willing to take some big downs (like my holdings in AMD, DRIV and GE) and even miss some opportunities (like selling Apple/APPL) too early.

For now I'm happy with my holdings and I'm sticking with them. DRIV and AMD seem to be returning. GE is a mess, but at least it has stableized. If it has more credit issues I'm selling it and I still have a stop on it a few points below where it sits now.

You have to believe in the companies you hold. Especially the leadership. Until six months ago I had been holding Motorola at around 18. It is a stock that I watch. I liked it even more because the CEO was Ed Zander who was an exec at Sun Microsystems when I was there. I had met him briefly a few times on a sales call and at some training/sales meetings. I really liked the way he worked so when he took the CEO job at Motorola I bought in. The stock didn't change much and when I learned he had left (that Icahn guy causes a lot more problems than he solves) I sold the stock. I didn't actually sell it because Ed Zander left, I sold it because there was a leadership hole and organizations without good leaders don't do well (especially when Icahn is stiring the pot). Now it's sitting at 10 (Icahn must really like to lose money..?) and I don't have much interest in it. Mostly because I don't watch it as closely and I don't understand what their strategy is going to be. You can't say enough about a hot performing company, or a company with a great leader. Both are signs of a stock to hold and most of my current holdings fit that bill.

Also I should have sold all my Sun Microsystems (JAVA) when Jonathan Schwartz became CEO since I never liked his strategy with Java (turn it into the biggest piece of bloatware imaginable because we have to be all things to all people) and from what I could see he was devisive with people. I could have told you (and should have told myself) that a devisive leader was the last thing Sun needed. The stock did a reverse split (annoying), renamed itself to JAVA (very annoying) and is now continuing to spiral down to the price it was before the reverse split (he needs to be held accountable). Sun needs a new leader and I'm only holding a very small amount in my account so I can watch it.

Anyway, here's to good leaders and my account being up 11.2% for the year. I expect it will probably drop back down to 5% before it goes up more, but for now I'm pretty happy. :-)

Sony (SNE) posts a profit

Loving my account today. Everything is up big and I crossed a milestone I've been trying to reach for a few years now (2/3) of my pre .com crash value! Exciting, but sad at the same time. I'm sitting at +9.7% for the year.

Anyway I received this news blurb in my e-mail.

*Sony returns to profit*Sony Corp., the world's No. 2 consumer electronics maker, reported a quarterly profit of $277 million, after a loss a year ago, as it trimmed losses from its PlayStation 3 video game business. For the full fiscal 2007, Sony posted a better-than-expected profit of $3.5 billion, a record for Sony. (AP in CNNMoney.com ) However, Sony had an unexpected operating loss of $45 million in the quarter, amid losses in its financial services unit. (Reuters ) A forecast of 20 percent growth in operating income this year, including profitability at its PS3 division, sent its stock up early today. "I don't think we have to worry about Sony's game business anymore," said Naoki Fujiwara at Shinkin Asset Management. (Bloomberg )*

Isn't that what I said a few weeks ago? ("I don't think we have to worry about Sony's game business anymore")

Anyway, Here is another article.
Sony Returns to Profit, Lifting Shares

This one isn't as good and shows that Sony is struggling with swings in currency values.
Sony has 4Q profit, but expects decline this year

The analyist target estimate shown on yahoo shows a price target of 75. The price today is sitting at 49.39 with a lot of room to go. If you are going to get in you just missed one of the biggest jumps we are going to see for a while, but I expect it to continue to climb as the PS3 finally starts gaining ground. It really is an amazing piece of hardware and it is nice to finally see some games that can take advantage of it. Pair that with the fact that it is also the next generation DVD player called BlueRay (HD-DVD is now officially dead) and it is a double home run for Sony.

Watch for the next big jump when we see an increase in PS3 sales caused by the recent release of GTA4, then in June when Metal Gear Solid hits expect and even bigger increase in PS3 sales. Also, there are a bunch of blueray licensees waiting in the wings. Come on people, this isn't rocket science...

EA, Take-Two

I really like this article on why Take-Two is so valuable and why EA shouldn't get them for so cheap.

Your Money's No Good Hear, EA

I especially like the part at the end where someone finally started talking about the Activision(ATVI), Blizzard merger.

My account is sitting at an all time (post .com bust) high and feels like it is strong. Yesterday ATVI dropped a bunch, but a lot of my other holdings went up. Today a bunch of those holdings are down and ATVI is back up 3%. Both days the account has grown and I'm sitting at +7.2% for the year. I really don't like when it goes up as quickly as it has since it always means it will probably fall back some, but in this case I'm liking what I see. ATVI is sitting at 27% of my account and I'm really thinking about doing a small amount of profit taking, but I said I would wait until it reached 30% and take it back to 25%. Decisions, Decisions...

ATVI/Activision - That's what I'm talking about

I love it when a stock takes a gigantic leap forward, especially when it is my biggest holding.

Activision shares soar after 4Q results fly past estimates.

What I like most about this is that this doesn't even take into account the fact that Blizzard is becoming part of Activision. For years I wanted to invest in Blizzard, but was unwilling to do so through Vivendi since I just don't believe in the movie business at this point. Blizzard is set for another hit with the next generation of StarCraft and already has the biggest game of all time in World Of Warcraft (do the math on a game that cost $8 million to make and now has 10 million subscribers paying $15 a month). This is a stock I'm going to be holding for a while, but I may have to do a little profit taking. It is now at 25% of my account and I think that is a bit too much, but I may hold out until it is 30%, then take some of the profit out of it. Decisions, decisions...

TTWO/GTA4 - Video games don't create killers - Harvard study

A number of people have expressed concern with my own promotion of GTA4 (Grand Theft Auto 4) and investment in TTWO. Every time I have heard this it has been from someone outside the game industry and has never actually played the game. At a basic level it is just like the movie "The Godfather", except you are playing one of the characters, not just watching them. The Godfather in shows up on the Time magazine top 100 movies of all time and makes their top 5 list since it shares the image banner with Psycho, E.T, Laurence of Arabia, and It's a wonderful life.

This article that addresses the topic.

Video games don't create killers, new book/harvard study says

The book is called Grand Theft Childhood.

Here are a couple of my favorite quotes from the article:

Many video game fans have embraced the pair as champions of the industry, a label that makes them uncomfortable.

"We're not comfortable doing pro and con. We've been asked to do the pro-game side in debates, and I don't consider myself a pro-game person. Video games are a medium," Olson said.

-

The researchers also try to place video games in a larger context of popular culture. The anxiety many parents voice over video games largely mirrors the concerns raised when movies, comic books and television became popular.

"One thing I like about their approach is that they've tried to historicize the whole concept of a media controversy and that we've seen this before," said Ian Bogost, a professor at Georgia Tech known for his studies on video games.

The book urges a common-sense approach that takes stock of the entire range of a child's behavior. Frequent fighting, bad grades, and obsessive gaming can be signs for trouble.

HIV/AIDS OC AIDS Walk

I'm walking in the OC AIDS Walk with RockHarbor. If you would like to help in the fight against HIV/AIDS, please sponsor me (before May 10).

I am also co-leading an HIV/AIDS community development and relief trip to Cape Town, South Africa this summer. We will be working in one of the poorest communities I have ever been to. Working with orphans and vulnerable children, business development and training in the community and HIV/AIDS relief, training and support. I've committed to raising $3500 for that trip and could use prayer and monetary support. If you would like more information on that, please send me an e-mail: wood@side8.com. I will send you a letter with more information. All donations to both trips are tax deductable.

Thanks,
Wood

EIX (Edison) on Buffet watch

Looks like Warren Buffett may follow me again. The last time he did this was on TTWO and that did really well for me (and him).

5 Stocks on Buffett Watch

Speaking of EIX, I do have one more purchase to make and I was considering making it today since it did go up (finally). I went to make the purchase and it looks like the USG purchase took most of the cash reserves and I'm now fully invested. I'll have to sell something to buy something and currently I'm happy with all the positions. Looks like I'm on the wait and see for a while (hopefully).

TTWO - GTA4 tops $500 million in first week sales

That's what I've been talking about for months when you could still buy TTWO at 13.

"Grand Theft Auto" first week sales top $500 million.

The price held steady because people already expected this to be huge, but I don't think anyone expected this to be that huge. The previous record for an entertainment release was Pirates of the Carribean which brought in around $400 million. That beats the previous record by 25%. I don't think the entertainment industry has figured this stuff out yet, but gaming is huge. Looking at the $2 billion dollar offer from EA to buy TTWO last month I start to wonder what people would think of a $2 billion dollar offer for Universal Pictures? I know they are much more diversified than TTWO or EA, but do the math and it doesn't take long to figure out that TTWO is going to be worth a lot more than it currently is.

USG

I've been holding a small amount of USG (building materials) for a while now. I bought it too early, but I do think that building stocks are going to recover at some point and the best time to buy stuff is when it is low, right? So, after the close yesterday I decided to tripple down on my USG holding taking it from a 1.2% hoding to a 3.6% holding. It was currently down about 20% so this will definitely offset the loss a little.

The Next Big Bargain

Buffet followed me on TTWO so I figure we both must have similar investment strategies??

How do you know an investment is probably safe...?

I don't know much about investing except buy low and sell high, but I do know one thing. When you see an article like this.

Fannie Mae posts loss, to cut payout, raise capital

And then the stock goes up 8.91% you are probably holding something that has hit bottom. Plus if it drops 20% the next day you are really only out 11.09%.

I'm kicking myself because I almost bought some more AMD, just a small amount (<1% of my account) and it went up today by 9.04%. Looks like I might finally recover some of my losses in AMD so my account is feeling good today, but as usual, tomorrow is another day and it'll probably be down again. It is really nice to have an account that I don't take too seriously.

Another EIX (Edison) purchase

I added another 1% (of my account) purchase of EIX/Edison. This puts me at 3% and I'm trying to get to 4%. It has been falling since my first purchase and I'm going to make the last 1% purchase when it has an up day. Earnings are announced on Thursday and we'll see what happens then. It isn't looking good, but I'm holding this to fight inflation and I think this is a long term holding.

EIX (Edison) purchase

I'm missing my GLD (Gold) and SLV (Silver) hedges against inflation. I did some digging and found that big caps are good and I've been buying those lateley, but I also learned that utilities are good since they also just raise prices with inflation. So I made a 1.9% of my account purchase in EIX (Edison) at 53.09. I almost made it a 4% purchase, but I'm going to split it into two purchases so you'll probably see another buy next week.

My account did a nice uptick yesterday thanks to DRIV, SNE and ATVI. I don't expect it to hold, but it is nice to see positive days.

Current Holdings Starting May 2008

Symbol	Paid	Cur	Acct Pct	Gain/Loss
ATVI	$13.44	27.05	24%	101%
TTWO	$16.18	26.24	18%	62%
SNE	$43.88	$45.79	9%	5%
DRIV	$47.72	32.85	7%	-31%
GE	$34.70	32.70	7%	-6%
IBM	$117.07	120.70	7%	3%
FNM	$24.52	28.30	5%	15%
FRE	$23.11	24.91	4%	8%
EDD	$19.79	$7.57	3%	-11%
AMD	$13.69	5.96	3%	-56%
STMP	$12.98	13.71	2%	6%
USG	$46.99	$5.31	1%	-25%
TIVO	$5.89	8.23	1%	40%
JAVA	$17.27	15.66	1%	-9%
CASH		–	6%

Those are the current holdings as of the end of trading on April 29, 2008 and the beginning of Trading on May 1, 2008.

That is up 1% for the month and up 8.1% for the year. The account has been fluctuating up and down by 2% all month. It was up about 2% up until just before the market closed. All and all a good month. GE got hammered and I held it. STMP made a huge recovery. SNE went up 5% since I've owned it for just a few weeks and I can't complain. It offset the loss in GE. TTWO passed the week I've been waiting a long time for. IBM made a move and dropped back down a little and I'm very happy with it. I shouldn't have sold AAPL, except for the fact that I sleep better.

Why DRIV

A few years ago DRIV got hammered hard when it was rumored that Symantec, their biggest customer would choose a different provider. They did not and if you bought in after the plunge I think it was 100% profit. This news today:

Symantec beats estimates with sharp profit gain.

should bring back some memories and give you a reason to like DRIV. In any case, DRIV is well diversified with thousands of customers, so even if Symantec did choose another provider it would be far from a death blow.

Another Sony/SNE purchase

I made another 1.5% purchase of Sony/SNE this morning at 46.19 It is up and I'm half kicking myself for not setting up the 3% purchase last night. So I will buy it in two increments today. My cost average is now at 43.88 for the 8.5% that I am holding in my account. Looking back, my purchases all line up in order as the prices has been climbing so I should have gone with my gut and made the 10% purchase back on 3/31.

Sony, GTA4 and may buy more shares

I almost bought another 3% Sony/SNE to take my total holdings to 10% of my account. I liked this article on the console shootout. and agree with Sony in this regard since I would be one of those PS2 owners who would finally like to purchase a PS3 and some of my earlier posts related similar stores of other PS2 owners.

Sony's also expecting "Grand Theft Auto IV" to drive sales of its PlayStation 3 console, although Steinberg is quick to point out that it's just an "exclamation mark" in its 2008 lineup.

Over the years, only a few brands really affected sales of the Playstation 2, Steinberg says. "Grand Theft Auto" happens to be one of those titles. Sony's cherished hope: PS2 owners, who have been waiting for "Grand Theft Auto IV" before they traded up for a next-generation console, will now head to the stores--but will stick with the Sony brand.

The fact that is not mentioned in this article is that Metal Gear Solid is waiting in the wings for a June launch. To me this is a one two punch that will finally make the PS3 a more popular console than the PS2 and get a lot of people to upgrade. Add the Blue-Ray win on top of that and I think that Sony hit a grand slam home run that no one has noticed yet and the stock is hovering at a two year low, always a great time to buy.

Another thing to think about is if you buy an XBox360 you get an HD-DVD player which is now only useful for XBox games and you have to buy a separate bluyray player to get next generation movie content so the PS3 is actually cheaper than an XBox in the long run.

I'll probably purchase that last 3% tomorrow to make SNE a 10% holding in my account. This would be a big holding and I rarely get to or go above 10% unless I really believe I have a large upside with limited risk. This fits that in my outlook.

TTWO, today is the day

The reason I'm holding TTWO all comes down to today. The headline from yesterday, "Will GTA IV Be The Biggest Game Ever?" sort of sums it up for me. The fact that Yahoo has a special site for the game and everyone thinks it has a chance to be the biggest entertainment launch of all time and could potentially beat The Pirates of the Caribbean: At Worlds End which brought in $401 in it's six day opening. I'm very happy that the EA deal didn't go through and I've been anticipating this week for a long time.

Sony/SNE Purchase

The Sony/SNE purchase went through this morning at 45.58. That makes SNE about 7.1% of my portfolio.

Back from Vacation. SNE and IBM

Back from vacation and liking what happend with Sony while I was gone, up about 8%. That limit order didn't fire at 44.02 like I thought it would. Not sure what happened, probably some amateur mistake. I just placed another order for that added 1.5% at 45.92. The markets are now closed so it will go through tomorrow.

Read this article saying there would be Big Problems At IBM, but I'm not holding IBM as a massive growth stock, I've got those in SNE, TTWO and ATVI. I'm holding it as something that will maintain value in a troubled economy.

SNE limit order

I decided to split the difference and create a +1.5% of my portfolio. limit order on SNE for 44.02. I want it to go over 44, but not necessarily trigger with other 44 orders if there are any. Mostly this just comes from my stop order strategy of beating others to the punch, but I don't have a good reason for doing it on the upside. This will put SNE and 8% of my portfolio.

On Vacation

I'm on vacation next week and will not be posting. I'm very happy with where my holdings stand right now so I'm not worried. I have one stop in on GE just in case it decides to tank any more. I've got 9.5% of my account in cash which I would like to do something with, but I'm not sure where to put it. There has been a ton of trading in my account over the past month which is competely abnormal so I'm looking forward to letting this stuff ride again for a while.

SNE did some nice movement today on news that video game sales are up. I can't wait till people start figuring out that the PS3 is really going to be the platform of choice soon. This article sumarizes the console game industry right now and I like the quote.

PS3 sales doubled from a year earlier, and Sony said new and upcoming games such as its "Gran Turismo 5 Prologue" racing game and Konami's (9766.T) "Metal Gear Solid 4" stealth action title would drive sales in the coming months.

Doubling sales from a year ago is just the inflection point where the curve points upwards and doesn't stop. SNE looks very close to crossing the 50 day moving average at which point I will buy some more. It is currently 5.3% of my account and I'm willing to take it up to 10% when it crosses the moving average. As I write this I guess that price is around 44 and I could place a limit order at that price to buy another 3%. I may do that before I leave on vacation.

The TTWO and ERTS thing is still playing out and I'm glad I'm holding it and hope ERTS doesn't win the bid. Lowering the price doesn't make any sense to me, but if they want it they need to pay more. This would be like Yahoo trying to buy Google when it was really starting to ramp up. They could almost aford it and should have paid a big premium, but a few years down the road it was a completely different story. This is how it will play out if ERTS doesn't win the buyout.

Otherwize, my account is sitting at +1.5% for the year which is good seeing that GE tanked this week and the market has been volitile. I was +2% and -2% this week so my account is swinging wildly as usual. Par for the course. You have to remember, I am diversified elsewhere and this is an agressive account.

Placed GE Stop

I finally decided to at least place a stop order in on GE in case it decided to slide even more. I put it at 31.78 and I'm selling all (~9%) in my account if it drops to that number. I came up with that number looking at this three month chart. Which shows the low at 31.70 on March 10 and 31.75 on April 14. I wanted to be a little above those marks thinking maybe other people would choose those as their sell point and I wanted to jump the gun a little if it headed that way. I may still sell this in the near term if I see more of this type of infighting in the leadership or if I see more bad news about possible spill over from the credit crisis.

GE Sneezed and didn't bounce back

I'm really changing my stance on GE.

GE: Quintessential American Finance Company

No bounce back?

I was holding it because it is a solid big cap manufacturer and not thinking how much of a hold they have in the finance arena. The fact that it didn't bounce back even a little while the market made a huge bounce is very troubling to me. Especially since other big caps (IBM/Intel) announced great earnings. This tells me that something else is going on here and maybe the credit crisis is about to pummel them. I will probably sell in the next few days if it goes down any more or doesn't come back a little. Right now I'm down 7% which isn't all that bad, but if it is part of the credit mess things could get much worse very quickly.

IBM looks to continue streak with earnings report

Market watch article on IBM.

I'm holding IBM for three reasons.

1. I think it's a good hedge against inflation and the dollars since it is a globally diverse company.
2. I am trying to hold larger cap stocks because of the turbulance in the marketplace and the fact that most large caps have not risen with the market over the past 5 or so years.
3. I work there and like the way the company operates. I arrived there in a buy out of the company I worked for and expected it to be a really bad experience, but overall it has been completely positive and so I'm a believer.

Looks like the price hit $119.33 the last time I looked.

Sony PS3 sales will soon ramp up

Videogames Keep Olympic Shot-Putter Busy

This is what I'm talking about when I give reasons for having recently put 5% of my IRA into SNE (Sony).

Although he's a devoted gamer, Hoffa hasn't made the jump to next-gen systems yet. "Once I find four games on the next system that I really like, then I'll buy the system," he says. "The PS3 is a little bit newer system, so there's not quite as many cool games for it yet."

He may change his mind when Metal Gear Solid 4 is released, however. Hoffa says the series' blending of story with gameplay is what makes him such a huge fan.

The PS3 was way ahead the technology curve and there really wasn't a good reason to buy one. Now, some games (Grand Theft Auto 4 launching April 29 and Metal Gear Solid launching June 6) are finally catching up with the amazing PS3 platform and the BlueRay drive as an added bonus. Why buy a BlueRay Player for $399 when you can get a PS3 for $399? It is just going to add up to a lot of future PS3 sales for Sony.

Here is a fool article stating that GameStop is a better buy than a console maker because the Wii beat the PS3 in February. All I'm saying is that the playing field changed drastically in February when all the movie studios dropped HD/DVD for BlueRay and the next generation games requiring a PS3 that are finally hitting the market.

Fannie (FNM), Freddie (FRE) could hurt U.S. credit rating

In case you are following me blindly, which I doubt anyone is since there isn't much traffic here, this is just to prove that this is all basically betting.

Articles like these: Fannie,Freddie could hurt U.S. Credit and Fannie, Freddie regulator sees perilous road ahead, still worry me, but if the U.S. has to bail out these GSEs (Government Sponsored Enterprises), which they would since they are "Government Sponsored", then it doesn't really matter where your money is (unless it's in Gold, Silver and commodities), it is going to hurt and hurt bad. My bet is that the home credit crisis has played itself out and these two companies are set to fill in some hug gaps left by some fallen giants.

This quote from the second article:

Their market share of total originations grew to 75.6% in the fourth quarter of 2007 from 37.4% in 2006, OFEHO said.

shows that they are definitely taking up that slack, let's just hope they are checking the credit and the paperwork of those they are giving the loans to. They couldn't be dumb enough to do what got them all into this mess, could they?

Link between war and credit crisis

This is a great article about the ongoing debate on a link between the war and the credit crisis.

Those price increases are self-perpetuating, Stiglitz argues. Oil-rich Persian Gulf states are so awash in money that they are not sure what to do with it all. By holding back oil production, they make more off what they do produce and keep their greatest asset -- oil -- in the ground as they search for ways to spend their cash.

That cash, through state-owned sovereign wealth funds, has flowed into stocks, bonds and other investments, creating incentives for lenders to offer low-interest loans, many of which have now gone sour.

But that is only one factor, by Stiglitz's accounting. The federal government has sunk deeply into debt, first with tax cuts, then with accelerating war expenditures that have easily topped half a trillion dollars. That limited the government's ability to keep the economy on track through tax cuts or domestic investments, so the Federal Reserve Board used low interest rates and the free flow of money to keep the economy growing. Cheap credit sparked rash loans, a housing bubble and the current crisis.

If you go into debt to allow yourself to spend more in hopes that your spending will fix your debt problems you are in for a tailspin. It just seems that our government has been printing more money for the past 30 years as a way to alleviate budget and economic crisis's. That doesn't seem like good policy to me.

I think investment and economic development is good policy, but that seems to have turned into giving your political friends money for development that doesn't always develop anything. I don't have a solution, but a little more honesty and openness at the top would lead to a lot more honesty and openness in the general population. Leadership through smoke and mirrors and divisiveness has lead to more and more of the same and that is 'waste'. We used to be a country where people cared about each other. That was what made us great. Now we just look for ways to own a fancy car no matter the cost to those around us.

AAPL stop triggered

I had placed a stop on AAPL (Apple) a few weeks ago at 147.50 and 145.50. Each one selling half of my AAPL holdings. The first one triggered, then the price went up. The second one fired this morning. I love AAPL and have been holding it for a year. I don't usually buy and sell, but I'm expecting this to do down some more and I'm planning on picking it up again later. I think my buy back in price is 125-130.

GE drops

GE took a big drop this morning after announcing an earnings of 44 cents a share, seven cents short of expectations (does some quick math 14% below expectations). The share price dropped 12%. I'm still holding it and it did drag my account down significantly, but I'm not willing to sell in fear. The whole economy is taking hits and it's no surprise that companies are going to report lower earnings. For me it's just a matter of where to keep my money and during tough financial times it seems to be either big chip stocks or commodities like gold (GLD) and silver (SLV). Since those are at record highs and I already took a health profit I'm sticking with the big cap stocks. At least for now. One thing I have noticed, that after big drops like this stocks usually come back pretty quicly the next day so maybe I'll buy more!

I was already up 5% since I purchased it last year so now I'm down 7% on GE. Not a bad number for me during a sketchy economy.

They say this is the biggest drop since 10/19/1987, but if you look at this chart it doesn't even register.

My overall account is at -1.4% for the year now when it was up 2% a week ago. It's always a wild ride, hang on and don't be afraid. I was down 10% for the year at one point in February I think.

TTWO articles

I saw two great articles on Take-Two (TTWO) today.

The Cheapest Stocks I know

A tale of two botched buyouts

Both reiterate my BUY rating on TTWO. I just hope the EA (ERTS) takeover doesn't happen since as I've probably said, GTA4 revenue will probably be severly diluted on an EA balance sheet and as an investor I want what is best for my investment. If EA does somehow complete the buyout I'll probably have to sell since I don't believe in EA management any longer. It will be time to find another up and comer in the game industry.

Market seeing red

The market has seen red for two days now and my account is back at even for the year. Am I changing anything? No, but I am eyeing more Sony (SNE) since it dropped back down to just over 40, but I told myself not to pick up any more until it crosses the 50 day moving average.

Why so much interest in Sony since it's at a two year low and under so much downward pressure? As I said before, the Blue-Ray win and the PS3 will finally start taking off. The biggest boost will be from Grand Theft Auto IV which will ship on April 29th. This is the first huge blockbuster title that will only be available on XBox360 and PS3. Meaning that if you want to play it, you need one or the other. Plenty of people have waited out the console war and want to play this game when it launches (me included) and I don't think the XBox360 is attractive any longer as a console. At least not to gamers like me. The fact that the PS3 also gets you into the next gen DVD (XBox 360 puts you in the HDDVD/betamax camp) is a huge incentive. I expect this single game to drive a lot of PS3 sales. You still have 20 more days to start accumulating SNE.

I was holding ERTS (Electronic Arts) for most of last year and finally sold it. I almost made some money on it if I just wouldn't have held it so long and taken my own advice and sold it in early January. I still think they have a lot of issues in moving forward. I just hope the TTWO deal doesn't go through because I want to reap the benefits of GTA4 sales, not have it lost on some red ERTS balance sheet. The longer TTWO is able to delay the ERTS take over attempt the better.

Also, AMD didn't go down today and remained steady. That tells me that it bottomed and at some point they'll get their groove back on and start selling some chips. To me, holding stocks that sit at their bottom is a lot better than holding something expensive that has a lot more capability to go down. It's sort of like stashing your money in the mattress, but at least it doesn't go down in value. Sometimes all I hope for is that things don't go down!

Considering AMD

I purchased AMD last year thinking the new Barcelona chips were going to put them back on track against Intel. Instead it dropped like a rock and I don't watch it close enough to catch it.

Last night they announced further bad news with layoffs. The first should drive the price down, the second should drive it up so it does seem to have balanced out, although it dropped 5% it is still hovering at what I think is a bottom. So, I like the company and think they have stumble a lot recently, but it also seems to be at a bottom so any good news will make it jump. I'm still on the fence and going to hold it a while longer. I should buy some more to lower my cost average, but I'm in deep enough at this point.

Why hold DRIV?

You can see that I am down 30% in DRIV and might be wondering why I'm still holding it. I think DRIV is a good solid company and I've made a lot of money on it in the past. My biggest ride was in 2004 when it went from the teens to the 30s and I was holding it as about 30% of my portfolio. I sold off after that and bought back in after it seemed to stabalize around 30 and it jumped again to over 50 and I sold it off. I kept watching it as it held just a little over 60 for over a year. When it dropped below 60 I purchased a bunch thinking it was due for another jump and it fell. I still think it is a great stock and solid company so I continue to hold it. What I should do is to buy some more at the lower price to reduce my cost average, but I'm in deep enough at this point and I'm just seeing it as a current value, not a current loss. I'm holding it for the long term.

Current Holdings

Just to catch up with my account, these are my current holdings.

SYMBOL	Paid	Cur	Account Pct	Gain/Loss Pct
ATVI	13.44	27.40	26%	104%
TTWO	16.18	25.61	18%	56%
GE	34.70	37.56	9%	8%
DRIV	47.72	33.48	8%	-30%
IBM	117.08	115.76	7%	-1%
FNM	24.52	30.34	6%	24%
SNE	42.25	41.90	6%	0%
FRE	23.11	27.60	5%	19%
AMD	13.69	6.23	4%	-54%
EDD	19.85	17.18	3%	-14%
AAPL	90.10	153.08	3%	70%
STMP	12.98	10.96	2%	-15%
USG	46.99	37.10	1%	-22%
TIVO	5.89	8.96	1%	53%
JAVA	17.27	16.00	1%	-8%

YTD Results: +2%

I probably need to talk about why I'm still holding AMD and DRIV and I'll address those in later blogs. Some might even ask why I'm still holding onto ATVI and TTWO, so I've still got a lot to write about. I did do some profit taking on ATVI a few months back.