Archive for October, 2008
It's Halloween Time!
Oct 30th
With Halloween fast approaching, have you had a chance to checkout all the halloween costume stores yet? Halloween Adventure can help you locate a store in your local area that specializes in Holiday Costumes. Just type in your zipcode and you’ll get a listing of all their stores in your town or within a short distance.
Last year I found a terrific “evil jester” costume at a local store that I wore to a haunted house at the Boys & Girls Club that I volunteer at. In fact, that particular costume was so scary that I had to remove the mask to avoid freaking out the small children walking through the section I was in. The costume was relatively inexpensive, costing about $40 from the store I purchased it at. Some things I just prefer buying in person and Halloween costumes are one of those things. Not only can you save money on shipping charges, but you can try it on, or at least see how it looks versus trying to imagine it from a small picture on a website.
However, sometimes you can find some incredibly good deals online that could even save you a considerable amount of money after including shipping and handling charges. But, in that event I still like to see the item in person before placing an order for the exact model online at a cheaper price. Use Halloween Adventure to find the best deal for what you’re looking for this year!
Wells Fargo Earnings
Oct 14th
Wells Fargo (WFC) is announcing earnings and probably forward guidance before the market opens on Wednesday. WFC was up over 10% today and I took that opportunity to buy Nov 33 put options in the company because I see a lot of downward pressure on the stock over the coming weeks. The market rally on Monday will be remembered as a day that you should have taken profits because there is a lot more downside to this market as the economy continues its decline.
Wells Fargo will undoubtedly benefit from the federal government’s bailout plan and will be receiving a large investment in soon-to-be-issued preferred shares to the feds as well. However, I don’t see these actions as benefitting the shareholders in the near-term, especially because WFC will likely need to dilute shares further with a common stock offering to raise capital. That dilution and any surprises could easily push the stock down into the 20′s and create a large profit on the Nov 33 puts.
Technorati Tags: wells fargo, put option, earnings announcement, shaun carter, banks, financials, investing, stock market, options, bailout
Dow and Nasdaq Soar Over 11%
Oct 13th
Today will be remembered as a historic day of trading for the US stock markets. The Dow Jones Industrial Average closed up over 1,000 points, the largest point gain in history.
I used this rally to sell aggressively out of some of the smaller, riskier stocks and keep money in the strong, high dividend yielding stocks that will surely weather the coming economic storm. This rally was surely pushed by short covering and could quickly reverse this week and continue a downward trend heading into tough economic numbers that are surely coming.
The movement is due to the coordinated global effort to stabilize the markets by financially supporting banks and ensuring that they will not be allowed to fail and thus cripple the global economy. However, I don’t think this will avert a large scale recessionary period that we will experience through 2009.
Technorati Tags: stock market, dow jones, nasdaq, rally, investing, shaun carter, recession, dividends, economy
Wall Street Crash Continues
Oct 9th
The seemingly unending decline in the stock market will most likely continue into Friday as few investors will want to hold their stocks through the long holiday weekend. Already the selloff has stretched six straight trading days, with each day ratcheting up triple digit losses of the Dow Jones Industrial Average.
Today’s market saw the Dow fall over 600 points, closing below 9,000 and at its lowest point in five years. It would not be a surprise to see Friday’s market close down another several hundred points as everyone gets out before the weekend. Dow component GM’s stock fell 31%, which largely contributed to sending the index 7% lower on the day.
Meanwhile some of the short ETF’s I discussed in yesterday’s post performed very well today including the UltraShort Financial (SKF) up 21%, UltraShort Dow 30 (DXD) up 11%, UltraShort Consumer Goods (SZK) up 12.5%. These ETF’s will surely be highly active during Friday’s session as more investors look to hedge their exposure to more downside potential in the market.
Technorati Tags: investing, economy, market crash, dow jones, ultrashort, etf, shaun carter, gm, general motors, financials, dow 30, consumer goods
Emergency Global Interest Rate Cuts
Oct 8th
In a coordinated effort, central banks around the world have lowered their respective interest rates to try to save off a worldwide financial calamity. But, it is beginning to look like it is too little, too late. Even after this extraordinary measure, the Dow Jones Industrial Average ended down nearly 200 points. I took the opportunity in the morning, when the market was up, to take some profits. I will be doing this on any upcoming rallies or bounces to get out of most equities.
The Bank of America Oct. 35 put options I bought have gone from 2.95 to 13.40. A profit of over $1,000 per option contract. The overall financial sector still looks messy and there are still more large banks expected to fail, which makes the Ultra Short Financials ETF (SKF) look very attractive right now. I’ve also gone long Silver (SLV) and expect to see a resurgance in metals like Gold and Silver as a safe-haven for all the money that will be flowing out of the market over the next year.
Here is a list of short ETF’s that may be a wise investment for the near term:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| Short QQQ | PSQ | Nasdaq-100 |
| Short Dow 30 | DOG | DJIA |
| Short S&P 500 | SH | S&P 500 |
| Short MidCap400 | MYY | S&P MidCap 400 |
| Short SmallCap600 | SBB | S&P SmallCap 600 |
| Short Russell2000 | RWM | Russell 2000 |
| UltraShort QQQ | QID | Nasdaq-100 |
| UltraShort Dow 30 | DXD | DJIA |
| UltraShort S&P 500 | SDS | S&P 500 |
| UltraShort MidCap400 | MZZ | S&P MidCap 400 |
| UltraShort SmallCap600 | SDD | S&P SmallCap 600 |
| UltraShort Russell2000 | TWM | Russell 2000 |
UltraShort Style:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| UltraShort Russell1000 Value | SJF | Russell 1000 Value |
| UltraShort Russell1000 Growth | SFK | Russell 1000 Growth |
| UltraShort Russell MidCap Value | SJL | Russell MidCap Value |
| UltraShort Russell MidCap Growth | SDK | Russell MidCap Growth |
| UltraShort Russell2000 Value | SJH | Russell 2000 Value |
| UltraShort Russell2000 Growth | SKK | Russell 2000 Growth |
UltraShort Sector:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| UltraShort Basic Materials | SMN | Dow Jones U.S. Basic Materials |
| UltraShort Consumer Goods | SZK | Dow Jones U.S. Consumer Goods |
| UltraShort Consumer Services | SCC | Dow Jones U.S. Consumer Services |
| UltraShort Financials | SKF | Dow Jones U.S. Financials |
| UltraShort Health Care | RXD | Dow Jones U.S. Health Care |
| UltraShort Industrials | SIJ | Dow Jones U.S. Industrials |
| UltraShort Real Estate | SRS | Dow Jones U.S. Real Estate |
| UltraShort Semiconductors | SSG | Dow Jones U.S. Semiconductors |
| UltraShort Oil & Gas | DUG | Dow Jones U.S. Oil & Gas |
| UltraShort Technology | REW | Dow Jones U.S. Technology |
| UltraShort Utilities | SDP | Dow Jones U.S. Utilities |
Technorati Tags: investing, stock market, rate cut, central bank, shaun carter, interest rate, dow jones, bank of america, put option, short, etf
The Bailout is a Disaster
Oct 6th
The bailout is a disaster, or will be in short order because of all the pork barrel spending heaped onto it in order to get the needed votes to pass in congress.
- Extended rebate on excise taxes paid by Puerto Rican and Virgin Island rum producers, also applied retroactively. Cost – $192 Billion
- Income averaging for plaintiffs of Exxon Valdez settlement. While this may seem like a good cause, why not also offer this income averaging to American’s who have to raid their retirement accounts to make ends meet? Cost – $49 Million
- State and Local Sales Tax Deduction extension. Cost – $3.3 Billion
- Seven year cost recovery for motorsports track facility. Cost – $100 Million
This is just stupid, this bill should not have any pork spending and should purely be designed to rescue the financial sector and restore credit liquidity in the marketplace.
Technorati Tags: economy, economic bailout, shaun carter, congress, house, senate, vote, pork barrel, government spending
Wachovia Wants Deal With Wells Fargo
Oct 5th
In an interesting turn of events, Wells Fargo has made a bid for Wachovia after the Federal Reserve brokered a deal with Citibank to help unload the banks assets with the help of the government’s recently passed $700 Billion bailout package.
What is so trubbling about this development is that a judge has moved to block the deal by Wells Fargo citing an exclusivity clause in the government brokered deal. First of all, this is an extreme overreaching by the government because they did not even try to find a better suitor for Wachovia, which Wells is. The deal with Wells Fargo will require NO use of government bailout funds, while the Citi deal will rely heavily on it. Why is the government so adamant about screwing over the taxpayers even more than they already have?
Technorati Tags: wachovia, wells fargo, government bailout, citibank, shaun carter, federal reserve
