Monthly Archives: April 2009

Stock misconception: volatility is not always bad

We often from financial experts that volatility in our portfolio is bad. Or in other words, not only do we want good return, but we also want the path to that is smooth. I think most people would agree with that. My CFA preparation book also talked about this idea in “Portfolio Management” section. So basically this “less volatility” is preached and accepted in investment community.

But in Poor Charlie’s Almanac, Charlie challenged that less volatility notion and I think I agreed with him. Bascially he was arguing that this is very similar to (in old days) the Chinese women tied their feet, obviously that would not help them walking.

In another instance, volatility is good for the investment banks in this past Q1, as they made a lot of money selling the bonds (wider spead yield). I think they made money from selling stock options too (more volatility, more expensive the options).

For me personally, I am still learning about this volatility thing. Like “buy and hold”, I need to get out of this old habbit of “less volatility bias”. In late March I bought some Patroit Coal (NYSE: PCX), but I sold it after 2 days after it went up then down. Today the stock traded about 80% above what I bought :-(

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PBS NewsHour doing weekly series on Saint Louis

Yesterday was series one. The series is about the new stimulus package, economy and comparison of (1930s) new deal with current stimulus package. The first one showed many St. Louis landmark, such as St. Louis zoo, Forest Park (Jewel Box). I did not know many of those were built in 1930s (the New Deal).

StreamVideo link here.

It’s said that President will be here for a Townhall tomorrow (Wednesday), to get some feedback for his first 100 days. Suddenly, St. Louis is under spotlight.

Here is a link to “recent programs” at PBS NewsHour.

How many banks are too big to fail?

Week in review 042009 – 042509

According to Obama administration‘s stress test, the magic number is 19. Basically they are saying the US gov will do whatever necessary to keep the big ones afloat because they are systematically important. Or in laymen’s words, they are too big to fail. Sorry, those smaller ones, I mean not so small regional banks such as Regions Financial, SunTrust, and Keycorp.

How many banks seized by FDIC this year so far?
29 (according to CNNMoney). But this is not the point, the point is many banks are taken over by stronger ones (such as First Idaho bank branches taken over by US bank), before the seizure of FDIC. As explained in CBS 60 minutes (video) couple weeks ago, FDIC will try to sell a bank asset and deposit (secretly) when it finds the bank cannot survive. If it cannot find a buyer, then it will take over. In this case, FDIC will not run a bank forever. Like in the case of IndyMac, it sold the operations to private investors after certain period. So, the right question is, how many banks failed this year? I guess only FDIC and OTS (Office of Thrift Supervision) knows.

Who is the next Sun Microsystem
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CIT group

(Update 24Apr09 afternoon) Sold my position. Moody just downgraded its debt rating: reminds me of the WaMu debt rating downgrade shortly before its fall.

(Original) Warning: this is a very speculative play. Also don’t confuse this with CitiGroup (NYSE: C). The ticker of CIT group at NYSE is CIT.

CIT group at NYSE pic

(Source: NYSE)

4 Analysts downgraded this stock this morning (source: theflyonwallstreet, also Yahoo Finance).

Wiki entry for CIT group, noticed it was a part of Tyco (a smaller GE if you will) at one time. Chinese news on CIT (about one year old). The company recently coverted to a bank holding company so that it could get fund access to TARP, FDIC, and more importantly bank deposits.

Q1 2009 earning release. Conference call.

This silly earning thing

First Quarter earning reports for the stocks I own (as of this writing, it could change without notice). This is mostly for my own benefit, I want to collect them in one place rather than go to different IR web sites. Listening to conference call is a mixed experience, sometimes it’s fun, sometimes it’s boring. The most interesting part is the Q&A session, where the analysts and management goes back and forth: and I get the most out of things there (most of time).

US Bancorp USB beat slightly
Conference call (audio and slides)

McDonald MCD (barely according to CNBC)
Conferece call (for some reason it’s not working for me).

CNBC report (link).

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War against spyware: I

My old laptop was hosed. Couple weeks ago I noticed something strange going on, particularly sometimes it will pop up IE windows when I have not clicked on anything. The situation got worse, when I tried to do a system restore on XP, reboot, and a “Spyware Protect 2009” program automaticlaly started up. This user interface very much like a Microsoft anti-virus program. Then it says my laptop was infected with all kinds of programs: such as LdPinch key logger blah blah blah.

Hmm, being a software engineer, I know something fishy is going on there. So I stopped the process and googled “Spyware Protect 2009”, and here is some information (one and Looking through task manager, I found sysguard.exe. Killed the process. Delete the sysguard.exe.

I don’t know how my laptop got infected with sysguard. Restoring XP appears to be the direct cause, but I think another reason could be I was using uusee (a Chinese online TV program), so I went ahead and un-install it too (sorry no bias against my home country, but there are too many spyware/adware going on in some Chinese web sites).

Mission not complete yet

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A legend is a legend

(Update) Many people (such as DBANotes) think IBM is the ultimate loser in the Sun/Oracle deal. I think the deal is not necessarily bad news for IBM. Here is my rationale. IBM did not win because:

1) Anti-trust concern. Sun and IBM together will have a very high share of both UNIX server and storage tape markets.

2) Oralce CEO Larry and Sun CEO McNealy are very good friends (source: WSJ).

Negatives for Oracle:

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