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.