Off to Berlin... Placing some trades...

I'm heading off to Berlin for a few days. I'll be back next Thursday, but I'm interested in a few things I think might happen.

So I'm placing two REED orders. I sold mine today 1000 @ $2.55/$2.54, profiting $217 on my initial purchase of 1000 @ $2.34/$2.32. (Since there is such low volume on REED, you can't typically complete your entire order for the price set. When my SELL triggered today at $2.55, there were only 500 bids at that price; the BID then shifted to $2.54 leaving me with an extra 500 shares. I moved my sell order down to $2.54 to move them and they sold.)

My order book also has some Tessera in it since it's due for a bounce. Their Amkor arbitration is hitting on June 10th, so I'm watching to see what happens there. I think they already won and are just determining settlement stuff but that's a big deal and if it's great news, we'll see a huge spike. My play is a mid-term, but if it doesn't auto-sell by the 10th, I'm going to cancel a sell and/or buy it if it didn't trigger to begin with. We could see a $5 (20-25%) bump on good news about this.

I am also still in 40 AAPL @ $184.35. Watch to see what happens on the 9th with iPhone chatter. I don't know how much of it is priced in but I think "amazing features" and "available immediately en masse" could be enough to push this past its support. There's been chatter of it for months but the steady increase hasn't been related to pricing in on that. I think it can break $200. Let's see what happens.

Here's my order book:

TIME		DESCRIPTION	STATUS
6/7/08 04:21:07		SELL -250 TSRA STP 14.00 GTC TRG BY #48238739 OCO #48238740	WAIT TRG
6/7/08 04:21:07		SELL -250 TSRA TRSTP MARK-.17 MARK GTC TRG BY #48238739 OCO #48238740 WHEN TSRA MARK AT OR ABOVE 19.65	WAIT TRG
6/7/08 04:21:07		BUY +250 TSRA TRSTP MARK+.17 MARK GTC WHEN TSRA MARK AT OR BELOW 18.75	WAIT COND
6/7/08 03:14:22		SELL -1000 REED @2.55 LMT GTC TRG BY #48238495	WAIT TRG
6/7/08 03:14:22		BUY +1000 REED @2.10 LMT GTC	QUEUED
6/7/08 03:12:47		SELL -1000 REED @2.50 LMT GTC TRG BY #48238484	WAIT TRG
6/7/08 03:12:47		BUY +1000 REED @2.25 LMT GTC	QUEUED

REED woes and cheers...

So I watched REED tank to $2.00 the other day. I held on, knowing it'd bounce back. But I didn't buy my belief: I should've bought in another 1,000 shares in if I really believed it'd hit the $2.50 range and average in. Instead, I just sat back. It bounced up to $2.47 in the mean time. Bad call; would've been up $470. Can't let that slip again.

Once it breaches $2.50, I'll sell. And once it hits $2.10-$2.25, I'll buy in again. This one might be my new fun time.

I'm also in AAPL, 40 shares @ $184.something. I'm hoping it pushes up past the $190 resistance we've been seeing.

Next time, read the damn email... (Wanting AAPL, can't buy...)

So thinkorswim has been bugging me about getting my signature card in. I haven't done that since I established my account and I guess the USA PATRIOT Act requires that. So I got this charming message when trying to buy 40 shares of Apple: "On this account you cannot open new positions." Great.

Time to send the card in. Also, time to hold Apple for a medium play. Their price targets are in the $225 range and they're about to announce something big—almost everyone assumes the 3G iPhone. This is only good news, since there's no gap 'til profit as there was with the last iPhone announcement. It's only going to further entrench the brand with an already successful product. And I think it could surge past $200 and stay that way.

I want to buy in at the $185 point (which is hilarious, considering my first trade was to buy a single share of AAPL @ $123.35 three months ago... Man.

Long TSRA, Short MOS, missed on AAPL

So I bought 20 AAPL at $162.60 right before close yesterday. And then I watched it spike amazingly to the $171 point in after-hours. And I didn't hit sell. As I was walking around the office a few minutes later, and then back to my desk, I was wondering why I hadn't at that point. By the time I had come back, it had gone from a ~$160 profit to ($133). Awesome. Ended up leveling out, but I don't want to hold it long.

I've loaded up an interesting play in Mosaic Company (MOS). They had a rough day yesterday and a quick look at their 6-month charts shows that every time they've had a pretty rough day, they've continued to slide the next day, sometimes to much greater effect. But they've always bounced up enough to trigger an upper-limit buy-to-cover, so I've pushed it up a bit high.

My order looks like this:
Sell -20 MOS @ 131.50 LMT
Buy +20 MOS STP 136.00
OR
Buy +20 MOS TRSTP MARK+.10 WHEN MOS MARK AT OR BELOW 129.00

Basically, I want to sell short almost immediately when the market opens. If the stock turns around and spikes up to $136, I'll buy to cover my position, total loss: $100.

If the stock flies through the $129 mark, a trailing stop will take effect such that if it rebounds by more than 10 cents at any point, a buy to cover will take effect and lock in some profit. If that hits, minimum locked in profit: $49 or so.

Might turn out that I'm fucking up how I place limit orders with shorting, but I'm learning the platform and figure my stops are in place to protect me from my own stupidity.

This will be my third roundtrip if it executes, so it's a good thing I'm leaving. I need to liquidate my Scottrade positions or convert them into something more stable. Maybe try the DJIA; see if we can see some gains in 19 days. We're past the nasty bank stuff and the rough earnings period, so we might see some bounceback and growth. Berkshire is also trading at a near-6-month low, but I won't be here to lock in the profits on that and Scottrade doesn't have logical/bracketed trades.

We'll see if I keep losing with my position ideas. I need to get the hell out of AAPL as well. I'm going to put a stop on that to make sure it doesn't tank.
Edit: AAPL exit positions:
SELL -20 AAPL STP 156.00
SELL -20 AAPL TRSTP MARK-.26 WHEN AAPL MARK AT OR ABOVE 164

AAPL Earnings...

Every once in awhile, I set out to do something that I know is probably dumb, but I'm determined to do anyway. Most the time, this is a losing proposition.

There's all manner of speculation on AAPL's earnings coming out after hours today. Some are saying they'll at least meet, others are saying they'll exceed. Since there are expectations they'll exceed, they have exceed by something of a landslide in order to break past the priced-in pre-expectations game already being waged. An analyst downgrade today helped cool it down a bit by bumping it down about 8 points, settling in at 160. (You'll recall I bought AAPL in my first stock move; an ill-advised single share at 125 last month.)

It's been slowly trending up as we've been approaching earnings; again the market can price things in based on their abstracted layer of expectations. A meet or lightly exceeds is probably pretty tightly priced in right now.

The flip side of this of course, is if that fail to meet. I don't think this is likely, but if they pull a GE, watch out: The Qs will drop and you'll see the NASDAQ as a whole take a slide. It will be a bad thing.

I don't think they'll fail. I think we'll see some sell off heading into it in anticipation of missed expectations. And then hopefully that'll take some of the priced-in effect off and they'll post good numbers in the call. Apple is a strong brand that has become considerably more price-competitive and is outselling, in terms of growth, their competitors by a 10-to-1 ratio. This helps make them recession-resistant, but in any "splurge" item, we could easily see Apple issue crap guidance for Q3. Poor forward-moving guidance can take the wind out of any positive earnings announcement and can even cause a stock to slide heavily in the face of amazing earnings increases, as seen last week in Intuitive Surgical (ISRG).

There, the market had priced in some sky-high expectations and the guidance shifts scared investors who felt it an indication of hospital belt-tightening and further anemic growth to come in the "recessiveish" market.

We'll see if AAPL follows the same trend.

I'm thinking we'll see some impressive numbers. If AAPL sells off pre-earnings and hits $153, I have an order for 20 shares, STOP @ 152.00, TRSTPLMT MARK-.30 @ 167, which means either it'll stop sell $1 down at $152, or it'll initiate a trailing stop of -.30 cents if the market price hits $167.

We shall see. Most I can lose is $20.

GOOG spikes dramatically...

Damn. 17% in aftermarket from $445 to $525. Should've jumped on board, but it was looking kinda scary with their new quality controls. Be greedy when others are fearful, though...

ABT is just festering for no good reason. I'm going to hold it a few more days and then dump it if we don't get Xience news. Sad that it beats expectations, beats guidance and posts strong numbers and still drops. Worse still that it's doing this in the midst of plenty of other pharmas posting bad numbers and it's not able to pick up slack from them.

Still waiting on Amkor news from TSRA... Still have high hopes.

I think I'm going to buy into AAPL for next week's earnings call and go long, perhaps for the trip. We'll see how risky I'm feeling. For now, I'm still down about $100 total. Kinda sucks. (The Coverstor shows the return on my brother's in-and-out movement, so that's why it's showing a positive return.)

Trailing stops triggered: GOOG & AAPL sold

SELL	1	AAPL	$141.47	$134.46			3/27/2008	1:38:28 PM	4/1/2008
SELL	1	GOOG	$446.00	$438.99			3/27/2008	9:30:01 AM	4/1/2008

The trailing stops I had established for both Google and Apple triggered today, at $446.00 and $141.47 (or $438.99 / $134.45 after commission.) I had purchased GOOG at $435.94, leaving a whopping profit of $3.05, and AAPL at $130.35 leaving a profit of $134.46. I specifically set the trailing stops to trigger once I had hit my near-breakeven point, after commissions.

In the end, Scottrade made more on these than I, with $28 in total profit. This is why I need to be entering in at more than one share a trade volume.

Visa's next on its way out and then we'll see what happens with Berkshire. My extra, boosted deposit cleared its withdrawal after settlement, putting me firmly at $7,687.24 / $7,500.00 or up about $187.24 or nearly 2.5% in about two weeks. Not bad. Need more plays like Bear Stearns. In. Out. Quick turnaround. Closer to day trading. But that also brings a lot more risk with it. We'll see what happens.

And I'll make an AAPL/GOOG play before their earnings calls later next month. Which way I'll bet is anyone's guess. Hearing some scary things about Google's Q1 results, but AAPL might be hot. On a day with exceeded expectations, you can always expect a 5%+ gain. Likewise a loss on failed expectations, for certain.

Preparing my exits...

Symbol	Last price	Change	Shares	Cost basis	Mkt value	Gain	Gain %	Day's gain
AAPL	140.98	1.45	1	123.35	140.98	17.63	14.29	1.45
GOOG	450.78	-9.78	1	428.94	450.78	21.84	5.09	-9.78
BRK.B	4300	-41	1	4367.5	4300	-67.5	-1.55	-41
V	63.1	3.37	35	2273.95	2208.5	-65.45	-2.88	117.95
				$7,193.74	$7,100.26	($93.48)	-1.30%	$68.62

Someday, I'll figure out how to accurately represent my performance in the market. The above Google Finance output, for instance, doesn't much care about my BSC deal which netted me $280, instead highlighting that I've lost on V and BRK.B.

Visa had a decent day today and didn't hit my STOP for it. I've established 3% trailing stops for both GOOG and AAPL, which will put me at an extremely meager profit for each of them; it's stupid to be playing with that cost with such low volume. The commissions make it completely inefficient. Lesson learned.

I'm also considering pulling out of BRK.B. It's not underperforming or anything; I expect in a year or less it'll be breaking $5,000 or more. It's just boring and I think tying up that much capital is a bit of a pain when I have such little to work with. It's a decent hedge though, and keeps me from blowing everything at once. But if I play smart and keep my eggs in separate enough baskets at all times, I'll be fine. I may exit once it pushes past my commission-break even. Meh.

Starting up...

Today marks my first official foray into the murky depths of investing. I'm keeping this blog as a sort of stop gap, to enforce critical thinking about my decisions and to give me a good record of what the hell I was thinking at any given moment. I'm anticipating there'll be a healthy dose of rationalization when I experience some losses, but that's all part of the fun.

A little about myself: I'm 22 years old and run a web development company. I've never invested in anything except a middle-of-the-road online savings account which, thanks to the fed, is currently only yielding 3.55% APY. I think I can do better.

I've started off by transferring $5,000 out of my savings account and into my Scottrade account and making a few buys:

Symbol	Action	Qty	Acct Type	Price	Total
AAPL	BOUGHT	1	CASH	$123.35	$130.35
GOOG	BOUGHT	1	CASH	$428.94	$435.94
BRK/B	BOUGHT	1	CASH	$4,367.50	$4,374.50

So, one share each of Berkshire Hathaway, Apple and Google.

Berkshire Hathaway, for the uninformed, is Warren Buffet's company. It's a mega-conglomerate that owns a great deal of holdings across a bunch of different industries. Warren has built up this portfolio in a strikingly intelligent manner and managed the business with a flare whose genius I'm sure I don't quite yet comprehend.

After reading his shareholder Owner's Manual (PDF), I found myself really, really liking his approach and perspective. It seems so straightforward, but a lot of what he espouses (slow, long-term, stable growth) is sometimes lost in the fray and trampled by greed nowadays. He makes it absolutely clear that he intends to build the true value of the company by working diligently to improve operations, properly manage float (a great deal of which is provided by GEICO) and by letting the managers at each organization do their job, relatively hands-off.

BRK/B indicates that I bought a Berkshire Hathaway Class B share. A Class B tightly correlates to about 1/30th of a Class A share, though it only holds 1/200th the vote Class A shares maintain. Class A BRK is trading roughly at $131,940. Per share. Needless to say, I'm not exactly able to afford one of those right now. (The stock is at such a high value because it has never split, a tactic further representative of Warren's ideal that you should be in BRK shares for the long haul. It's his nest egg and he wants it to be yours, too.)

By the end of the day, here's where I ended up:

Symbol	Qty	Price	Mkt Value
AAPL	1	127.3501	127.3501
BRK/B	1	4,400.00	4,400.00
GOOG	1	439.8399	439.8399

Total Market Value:$4,967.19

So roughly up $47.40. Less the $21.00 in trading fees, I'm looking at $26.40 profit, or, you know, roughly 0.5%.

My outlook on each of these positions:

Berkshire
I'm going to hold onto BRK/B for the long-term. I've heard some really encouraging things the point to a proper valuation closer to $5,500-$6,000. Some people believe it'll hit that by summer, most people agree it'll get close to that within 18 months. Naturally, people believing isn't enough to make it so, but Berkshire is often considered relatively inflation- and recession-resistant. Mr. Buffet explains as much in the aforementioned Owner's Manual: A recessed market allows Berkshire to pick up on some great deals and buy out some very undervalued companies when the time is just right.

Berkshire should represent some significant growth and present as a relatively low-risk position for me over the next year or so.

Apple
Apple's taken it in the shorts since the beginning of the year, sliding 70 points and about 35% from its 52-week high of $202.96. Ouch. Why? A bar set a bit too high, and a penchant for missing expectations. Apple has delivered with the iPhone—an incredibly popular device that should represent a consistent money maker for them. Their latest line of Macbook Pros are gaining market share and since the switch to Intel-based chips, they've seen incredible adoption rates.

So where have they gone wrong? They've had some issues keeping the residuals up with the iPhone. Users are abandoning AT&T and in doing so, cutting Apple's residual check from the telco. Apple's CFO Peter Oppenheimer played the spin game with this issue a few days ago, stating that they viewed it as a positive thing: an indicator of future demand. That's all good and well, but perhaps Apple should be looking for a trap door out of their contract with AT&T that would let them also receive residual kickbacks through T-Mobile. TMO would love to sell the iPhone, I'm sure, and unlocking the device isn't exactly a basic task, though some software is available that makes it much easier.

Add to that a lackluster MacWorld in January, where the best thing going for Apple was a thin-and-not-too-functional version of the Macbook and you see why investors aren't the most excited right now. But watch: we'll see the iPhone continue to be a great seller. Apple will release higher capacities and continue to evolve their iPod line. And they'll continue selling Macbooks and Macbook Pros like hotcakes.

About 45 minutes ago, some news came off the wire that the government of Japan was investigating a potential defect in the iPod nano that may cause it to, you know, erupt into flames. That could ding the share price tomorrow, but I'm guessing it won't have too big an impact. Apple's due to bring back some value, and I'll probably sell if it gets close to $165 or drops below $100.

Google
The GOOG has taken about the same thrashing since the start of the year as Apple. We're talking a very similar story: down 271 points, about 38% from a near-52-week-high of $710 on Dec. 26 to a 52-week-low of $413.62 yesterday. It rebounded today a bit to close at $439.84.

Google's taken such a beating because they simply couldn't keep reporting exceptional growth quarter after quarter. There are diminishing returns and Google's starting to feel the burn of a slip in click-through-rates on their primary product, AdWords. Today's news that the EU has cleared Google's planned acquisition of online advertising behemoth DoubleClick can only help things. This will broaden Google's reach a great deal and make it considerably harder for rival Microsoft to gain the traction they'd like to with their AdCenter product.

Today's approval completes the acquisition for Google. I'm guessing we'll see some afterglow from that announcement tomorrow and some continued growth from the brand to a perhaps more balanced $550 or so over the next three months. We'll see what happens at the Q1 2008 earnings release on April 17th. If they've cleaned house a bit more this quarter, we'll see some positive activity. If they've failed to wow again, we could be in for another market-adjusting slide.

I plan on adding another $5,000 to the pot in the next month or so. I think I'll play that set a bit more closely and try some much shorter term holdings. I'm learning a great deal about things like Dollar Cost Averaging and other fun things like that.

We'll see how this goes.