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...