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.