Saturday, January 27, 2007


I'm trying to figure out what to do today. I'm feeling lazy, but I want to get outside. Just for giggles I checked the temp in IN. 34. Screw that. Now I know I need to get out just because I can. Maybe take the beach cruiser out. Like you care. Come out and you can ride it too.

Anyway, I've been more and more active in the stock market and I've become convinced the market is one of the best ways to retire early. I'm not going to go into great detail, but to me it seems like the purest way to make money (aside from laundering it). I mentioned this idea to Morgan and she mentioned selling goods seemed more "pure" most likely because you are dealing with something tangible. I am a proponent of real estate ownership, however, I don't see how you can hedge against your house losing value in a declining market. True the house will bounce back in the long run, but why play the zero sum game with your money in the mean time? If your stocks are heading lower you can hedge against loss or even bet on it.

Until the computers take over trading, you are essentially buying and selling human sentiment. And I thought human sentiment was dead in the US... History and science have also show that human sentiment is also an easy system to game. What if you could remove your sentiment but include the concept in your decisions?

Thursday, January 18, 2007

Why I like Level 3 Communications (LVLT)

I'm a bull on Level 3 (LVLT) because of the underlying intrinsic value of their broadband infrastructure. The stock got rocked the last couple of days along with the whole technology sector. I think this is a critical tipping point. Sink or swim scenario for some of tech. Back to LVLT. I ignored Cramer the first couple of times he went over Level 3 . Then I did the research. They OWN the network. Well, not all of it, and we're talking about broadband, not that VZ network. As the demands increase companies like Level 3 and Akamai (AKAM) will be well positioned.

Well what if something happens, like competition, you ask? In terms of Akamai, that is a very real scenario. To catch up to Level 3 companies will have to build, or buy and neither of those happens overnight. In terms of buying, that's what Level 3 does, buys everyone, it's called slash and burn like Sherman's march to the sea!

Now lets talk about profit. They've got NONE. With a young company that is to be expected, so you have to judge them by sales. Judging by the ratios, it's not bad.

What about the debt, they got BILLIONS of it. They are paying it down quickly, trading in for better rates, and trading it down. Level three has been trading down their bond debt with stock. Doesn't this dilute the shares? Yes, but it puts value back in the company, which is what I as a shareholder want to see. To top it all off, think of it like this; The BOND GUYS are asking for stock! Here, take our guaranteed profit, WE WANT SWEET SPECULATIVE STOCK.

It's on sale right now, but I'm in a holding pattern. If it bounces off the 50 day average I'm in. If it slides below $5.70ish, it will most likely keep on going.

Karma Police

Good news and bad news. Good news; I did my homework correctly and Apple blew away the earnings estimates. Bad news; That there is no more good news. In the stock market that only means one thing; DOWN. I watched the stock quickly rocket and suddenly dive like never before and in that moment 95% of my investment GONE! I guess that's how it goes sometimes. I learned about the values of hedging the hard way and fortunately didn't lose much. So here is to cheap education and another day in the market.

Monday, January 15, 2007

Consider it done.

Could I double my money again by the end of January? Yes, thank you Apple Computer. On the morning of the iPhone Keynote address the price of Apple (AAPL) dropped. I swooped in and bought stock options predicting a rise. Ten minutes later Jobs demo'd the "phone."

Well, pretty simple math there...

I'm out to do it again when Apple reports on Wednesday. We'll see.

Friday, January 05, 2007

Where is my mind?

Running I guess. Me too. Cycling is still better. Too bad my mind doesn't cycle. Just run.

My brain has been stuck on stocks too. I think I'll be there for a while. I made a stock speculation play today that doubled in a 3 hours. It was probably luck. Hopefully I'll know the difference soon. I knew it was hot so I sold half and then watched the house's money double... Can I do it again by the end of January?