Procrastination

Gotta stop procrastinating, and get started on that bio research paper.

Memorial Day

This year on Memorial Day, spend a moment remembering the military men and women who have made the ultimate sacrifice for our country and freedom.

Finals

Just finished my bio lab final on sat. It was dissecting a baby pig. It was pretty nasty, cutting up a dead pig and pulling out the organs. But got an A in that class!! Already finish my history and libs 150 final. Just 1 more research paper in bio 101. Anyways looking forward to take macro-econ in the next quarter, hopefully I can use that class to better my investments.

http://www.covestor.com/mbr/wong55

current track record ^^^

The price of oil

Ready for the Oil Bubble?

Source: http://www.star-telegram.com/104/story/651928.html

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One law is causing prices to go through the roof
By Ed Wallace
Special to the Star-Telegram

"There’s a few hedge fund managers out there who are masters at knowing how to exploit the peak [oil] theories and hot buttons of supply and demand and by making bold predictions of shocking price advancements to come, they only add more fuel to the bullish fire in a sort of self fulfilling prophecy." — National Gas Week, Sept. 5, 2005 as reprinted in the US Senate Permanent Subcommittee on Investigations’ report, "The Role of Market Speculation in Rising Oil and Gas Prices," June 27, 2006

Fiddling While We Burn

There it is in plain sight for everyone to see, exactly what I’ve been reporting for the past few years: Many individuals who are investing in oil and natural gas futures are going out in the media and trying to convince the American public that either we are out of oil or there is a serious supply shortage of crude against worldwide demand. The question is: Does it surprise you to discover that the US Senate investigated the rigging of the oil market by speculators in the summer of 2006 – and concluded that there was no supply and demand problem with oil? Did you know that their conclusion was that speculators were responsible for a 70 percent overcharge in the price of oil in the months leading up to the summer of 2006?

This from page 1 of the Executive Summary of that Senate investigation, there is this one troubling line: "Today, U.S. oil inventories are at an eight-year high, and OECD (Organization for Economic Co-operation and Development) oil inventories are at a 20-year high."

That’s odd because, in 2006, just like today, the media reporting covered the serious international shortage of oil and justified oil’s high price. Even more troubling is that the House of Representatives held a hearing this past December, ominously titled "Energy Speculation and Price Manipulation." How did it pass under the radar that both the Senate and the House studied the issue of price manipulation in our energy markets and both concluded that it was unregulated, massive trading in one futures market that was really driving up the price of oil and natural gas? And given that conclusion, why has Congress done nothing about it?

Investors Make the News, Literally

A week ago Goldman Sachs issued a new investor note, suggesting that somewhere between six months to two years, the price of oil could go into a "super spike" and prices jump as high as $200 per barrel. It became the major story of the night. Ignored in the reporting frenzy was that many legitimate and well-respected oil analysts dismissed Goldman Sachs’ prediction as groundless.

Get ready for the next shock to your system. In the past month we have added 11.9 million barrels of oil into our stock reserves, giving us 32.3 million more barrels of oil than we had on hand January 1. On May 5, we found out that for the second time in as many years, Iran was storing its excess crude oil on tankers in the Persian Gulf, because it had run out of storage space in the desert and was awaiting buyers for its heavy crude. That same day Saudi Arabia cut the discount price for its Arabian Heavy crude to $7.45, hoping to entice more buyers for immediate delivery. We didn’t hear that news, either.

While researching my third article for BusinessWeek online about the world’s oil situation in 2008, I asked for the most current report from Oil Movements. Because the oil industry is not transparent, Oil Movements tracks every tanker at sea, from both OPEC and non-OPEC oil countries, along with their cargoes’ final destinations. Anne O’Shea responded immediately to my request with their report dated May 8, 2008. Just so you will know, oil shipments are up from a year ago in almost every class, including Middle East oil in transit and Non-OPEC in Transit. The only class of oil shipment that has declined is covered on page 3 of that report. That chart is labeled, "4-Week Changes in Westbound Oil at Sea."

That’s right, shipments of oil headed west have shown serious declines during the month of April, down 800,000 barrels per day in the week before the publication of the report. Now, let me give you the first line from under the Westbound Oil shipments chart: "In the west, a big share of any [oil] stock building done this year has happened offshore, out of sight."

Could this be true? Oil Movements, the unimpeachable source for finding the real world situation on oil transits, is saying that oil is being hidden offshore, not declared in inventories? Yes, that is exactly what they are saying.

That same week our refineries cut their production runs back to 85 percent, down from 89 percent a year ago, to trim more gasoline out of our stock reserves, to increase their profits per gallon.

National Short-Term Memory Loss

It’s amazing how quickly we forget our recent history. Congressional hearings in 2001, blasting certain Wall Street executives for using the media to sell the public on stocks in order to bid up the price – so their firm could divest of its shares without taking a beating. Meanwhile, other trusted advisors pushed stocks that were fundamentally worthless, because their affiliated banks had large loan agreements with those companies.

The year before Enron had been caught manipulating the California energy market, even forcing rolling blackouts across the northern part of their state apparently just for effect – to support their claim that there just wasn’t enough electricity to go around. Again, we now know that claim was untrue. It was Enron shutting down certain power generation plants, while placing bets on their unregulated energy futures market. The net cost to California consumers was almost $8 billion.

It didn’t end there. Amaranth Advisors, a hedge fund, literally was cornering the market on natural gas futures, to make it appear that there was a shortage of natural gas, when the Commodities Futures Trading Commission told Amaranth to liquidate its position on the NYMEX because its bidding had already moved natural gas prices far beyond the reasonable limits of supply and demand. Now, remember this name: ICE, short for Intercontinental Exchange – the "dark futures lookalike market."

Once the CFTC told it to back off its natural gas futures contracts, Amaranth simply shifted gears, got out of the NYMEX, placed its massive bets outside of government regulation in ICE and managed to drive natural gas futures to $8.50 per MBtu.

As the Senate investigation into the manipulation of the energy markets showed, "Amaranth – the day before they failed, natural gas was about $8.50; the day after it failed, it went to $4.46 MBtu." That’s right, one major hedge fund managed to double the price of natural gas simply by loading up on futures contracts; when the government told them their bets were unwarranted, they simply moved their monies to a futures exchange that was unregulated. Only when Amaranth failed did natural gas prices fall back to what was considered normal for supply and demand.

Sadly, like oil today, when this was happening we were being told that natural gas supplies were tight worldwide. That statement simply wasn’t true.

Dark Future

Likewise, British Petroleum was busted for manipulating the propane market in the winter of 2004 and fined $373 million. Of course, in Texas, under deregulation of our public utilities, our electric rates can be set using the futures market for natural gas, so the manipulation of the natural gas market spelled trouble for us. Consider this, by 2006, according to www.powertochoose.org, electricity rates for us had climbed to 15 cents a kilowatt-hour due to the high cost of natural gas. But, that was the exact same time period that Amaranth was proven to be manipulating the market and sending natural gas futures through the roof. Two months later the hedge fund collapsed and natural gas prices fell. Therefore, most Texans paid higher electric bills for Amaranth’s manipulation of the natural gas market.

Professor Michael Greenberger of the University of Maryland, a former board member of the Commodities Futures Trading Commission, testified in front of the House Committee on Energy and Commerce on December 14 of last year. Under discussion that day was the manipulation of the energy markets and prices, but Professor Greenberger added these comments: "Three, four months from now, you’re going to have a hearing on the subprime meltdown, and you’re going to find that the very same legislation [deregulating energy] deregulated something called collateralized debt obligations, CDOs." That legislation, friends, directly ties the mortgage meltdown to the high price of energy today.

It was called H.R. 5660, the Commodities Futures Modernization Act of 2000. At first this bill went nowhere in the House, not even up for debate. Then, a few months later, late one night a 242-page bill written by Wall Street lawyers, with the exact same name as the former House bill, was quietly added to an 11,000-page appropriations bill, and the Enron loophole was created. The power behind that bill was one Texas Senator, one Texas Congressman and their wives.

Next week: How the unregulated futures market pushes the price of oil, natural gas and gasoline far beyond those commodities’ market value, thanks to the creation of the Intercontinental Exchange. Worse, Congress knows this, but does nothing.

© 2008 Ed Wallace

Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Society. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, contributes articles to BusinessWeek Online and hosts the talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF. E-mail: wheels570@sbcglobal.net

value investing?

watchlist/stock picks 5-22-08

So I've been reading a lot about value investing recently. I haven't tried it yet. It makes sense but I find it hard to hold on to a stock for too long. I really want to hold Visa long term. I can see the value in it as people start switching over from cash to credit, all over the world. Right now seems a very good time to buy at discount. The economy was hit by sub prime mortgage crisis, a credit crisis, and now inflation and high oil prices. These event brought stocks to its lows. These stocks caught my eye. Bank Of America (Boa), JP Morgan (JP), Microsoft (Msft), Pfizer (PFE) are all near there 52 week lows. They seem like curent market events (high oil) have unjustly taken down these stocks to. (think oil would go back down soon, extra production from Saudis in June?) These companies are in a good position to profit when the economy recovers.

I like Bank of America right now. Boa made money last quater even though the billions in write offs. Management is also keeping the dividend, and trying to get a better deal on Countrywide.

JP Morgan is one of the major banks that hasn't been hit to hard by all the crisis. They are aquiring Bear Stearns. (their assets, clients, etc) They are also in a very good position to profit.

I don't like that Microsoft is trying to buy Yahoo. (at those high prices). But Msft has a lot of cash and is making money off of Vista, xbox360 and other windows software. Plus it's expanding into servers, and home entertainment. But gonna to wait until Msft gets better management. (Ballmer is retarded, coming back to yahoo after walking away.)

Pfizer looks good to profit long term. The Generation of baby boomers are retiring soon, they'll need at lot of medecine. The stock right now is undervauled.

Don't know why I'm viewing the markets going down as a good thing. Then going to buy cheap stocks. Must be going crazy.

Indiana Jones

An idea for a short play coming up is buying in Viacom. (VIA)


This coming week is memorial weekend, and the release of the new Indiana Jones movie. The stock could swing ether way depending on the numbers of the box office. A 5-10% change of next week after the weekend box office numbers come out. There's a lot of hype surrounding the movie directed by Spielberg and written by George Lucas. People have seen the other 3 and expect it to be just as good.

I'm not gonna buy it yet, need to more research. I don't think it's going to do as well Iron Man (MVL), which made over 100 mil first weekend.(5% jump after the #s). Have to read some of the reviews from the critics who saw it already.

Well anyways enjoy the movie and the memorial weekend.

Typhoon warning

Currently Typhoon warning 3. Someone said it's gonna pass thru Okinawa.

Dragon Boat Pics

Third guy from the back ^^^^

Dragon Boats
The team from Thailand, I think^^^
Motivated Japanese team
green boat-thai ^^
black boat-usmc
yellow-army

We beat them both.

Understand the real value of money

http://www.coloribus.com/files/paedia/print/part_20/200603/file/Dollar_1.jpg

Thought this was pretty cool. ^ click link for bigger pic

The piece highlights the power that money holds, as well as where it goes. It's focuses on the negative, highlighting the war on terrorism, dependency on oil, etc. It shows where money is spent and how social and cultural events influence it

My position on Visa

My position in Visa

Been getting a lot of questions lately about visa. From friends, other investors and people on Covestor. People consider this stock overvalue (based on the p/e). Momentum from its Ipo hype seems to have died down, and no longer carrying this stock. To be honest, I don't know what to do with my holdings of Visa. Is it just a temporary correction after a few days of astonishing growth? It didn't reach its 90 option in May. People may be taking profits at the 80 range level.Maybe it is overvalue, and the Olympics are already priced in. Does it price even justify Visa's potential growth ?

One problem that I have when I'm investing, is that I have a hard time selling. I think it's gonna keep going up (lol), and don't realize sometimes that is way overvalued, and people are just speculating at it. But some of times I sold, the stock would just shoot up even more. Sometimes that stings more than losing some money. To fix this problem, someone suggested that I hold a little longer and have my stop automatically pull me out(let sink, wait for rebound), so I wont miss that jump.

I got in at Ipo price and some more a 59. I'm sitting on a big profit already. I'm considering about selling it. But I'm also considering holding this stock long term. (Never held a stock long term before, don't think I even held one longer than 6 months). But this company will do good long term. Planing to place a stop and if current downtrend continues, it'll hit, and I'll walk away with with whatever profits (then probally go into Visa options), hopefully it wont hit the stop, and I'll be there for the rebound.

It'll would be really cool if I get sent to Iraq, then I can sell this w/o any taxes. Stupid rear...

Battle for Visa (Phase II)

Been looking thru the threads and forums of visa. This really cracked me up. A battle plan for Visa. Getting ready to move out my troops, with another assault on 90. lol

Anyways got duty on Tuesday and duty recovery on Wednesday! Hopefully that means I get to miss the grenade range on Wednesday. Really don't like throwing grenades, always nervous that some stupid Marine gonna blow themselves up. I mean, if they mess up on the practice grenade(only a bang and some smoke), WHY would anyone give them a REAL ONE!?!?!

Bank of America

So I was looking through my watch list, at the numbers on Fridays close. Bank of America stood out at 36.65. It's the lowest I ever seen it. Looking at the charts for the last 6 months, it also shows a strong resistance at the 36 level. I want to jump in around 36. But instead of just buying the stock, I'm gonna try options.
I don't have much experience with options. I'm gonna try a call, strike price 37.50 and 40 with a Jan 09 expiration. I'm gonna try to explain my position here. On Fridays close, oil was up to 125, s&p failed to break 1400, overall bad news for the market. Thats why I think the stock price dropped so much. Also on Tuesday some analyst said Bank of America's acquisition of countrywide is a bad deal. But I believe the price has been factored in already.
There is a margin of safety with a strong resistance of 36. With a Jan expiration date, there is also a lot time for the option to "get in the money" (reach 40) before Jan.

So I'm gonna go buy my first option.

Learning Derivatives

Really wished I learned more from high school, took a more advanced math classes. Rite now I'm trying to get into options trading. Having a hard time to understanding how these derivatives (options) derive their values. I'm reading some books and I see equations like this:

What da heck does dat mean? Anyways did a lot of research and read some books on it. Here's my understanding of that whole options thing so far. click here. Leave some feedback on it.