Ivy League Interviews - What to Do

I am an interviewer for Princeton University.  They use their alumni network to reach out to students and get to understand the person behind the application.  I've stated before in my post on how to get into an Ivy League, that an interview won't make or break you.  It really is just one of those things that the admission council uses to confirm all the other things on your application.  That being said, it certainly wouldn't hurt you to do well in your interview and there are a few things you can do to have a bad one.  So here are some tips for your interview

1.  Know why you want to go to the school - Yes, everyone wants to go to the best school, but why specifically the school you are interviewing with?  If you just want to be around smart people, you can go to any of the Ivy Leagues.  Know something about the school that is specific to it and would be great for you.  Do some reasearch, use the internet.  It isn't hard to come prepared.


2. Have goals - You don't have to know what you want to do for the rest of your life, but you should have some idea about what you want to do and how attending the college of your choice can help you get there.


3. Know why you stand out - Everyone has great grades and test scores.  Be able to articulate why you are different from the crowd.


4. Talk with passion - people love to here othes talk with passion about the things they love.  If you love playing the oboe, show it!


5. Demonstrate a strong desire to go to the school - Alumni who interview for their school feel very passionately about their school and have a lot of pride.  They do it strictly on a volunteer basis and it is often inconvenient for them.  They want to see people who will love their school as much as they do, so show some enthusiasm.


6. Have a conversation - don't let it be one sided.  Ask lots of questions.  People love to hear themselves talk.  Asking questions shows interest (which helps with the ones above).  When asked a question about something, respond, and think about how you can ask a question right back.  This creates good conversation and a natural flow.

Other than that, relax.  Like I said, the interview really isn't that important.

What is Ben Doing?

I learned from Ben Bernanke. He was the head of the Economics department while I was at Princeton University. I in many ways should come to the same logical economic conclusion that he does. But for the life of me, I can't understand what the heck he is doing these days.

Today, in case you missed it, the Fed cut the fed funds rate another 50 basis points. This along with the emergency 75 basis point cut they just did, means the rate has plummeted 125 basis points over the last week. Most of this is being done to avert a recession. Of course that implies we are not already in one.

The fed is being reactionary here. Plain and simple. They are seeing the turmoil in the stock market, and they are trying to do something about it. Why, is beyond me. This problem was created by too much easy money. The Fed dropped the fed funds rate to 1.0% several years ago. This caused a flood of cheap money to enter the market. This in turn made it very easy to get loans. This then lead to housing prices going through the roof because money was so easy to come by. Of course, the music stopped playing, and the chairs were pulled out.

To now fix this problem, the Fed proposes to do the same thing all over again? How is that going to help the situation? It isn't. All it does is delay the inevitable. Debt must be repaid. You can continue to get more and more of it, but some day the bill comes due. It reminds me of people who use credit cards to pay off the other credit cards, compounding the problem, just trying to avoid the day they will eventually declare bankruptcy.

And I'm Back

It seems like I've been without Internet forever, when in reality it has only been a few days.  Even when I was on the cusp of getting it, wouldn't you know it almost didn't happen.  I was explaining to my friend Sandy one time how nothing ever comes easy for me.  I'm not sure why that is the case, but it's true.  So when the cable guy came to install everything, he couldn't find the closet where he needed to make the connection.  After much searching, and finally asking a neighbor, we found it.  But wouldn't you know it, it was locked.  As the cable guy came late (which was annoying in itself) there was nobody in the office to actually let him in to turn the cable on.  Lucky for me, there happened to be one maintenance guy still around after hours because he was putting together some new gym equipment.  He was kind enough to let us in.

So I thought we were finally close, he would find the right cable, plug it in, and we would be on our way.  Of course, like I said, nothing comes easy.  He goes back and forth trying to get a signal, but just can't find one.  After many attempts, we discover a cable that is not plugged in on the patio.  So we go through the whole exercise again.  Still nothing.  So we take the cover off the wall, and discover a mess of other cables.  So we try a few of those.  Finally a signal!  Two hours later, and I'm back online.  Have a lot to say, but at this point I'm tired, and going to call it a night.  I'll resume my regular posting schedule shortly.

A World Without Internet

As my last post has indicated, I have moved.  Unfortunately, I don't have my internet access setup.  Since I don't blog from work, this means that my posting and responses are going to be a little bit spotty over the next few days.   It's amazing to me how disconnected I feel when I don't have access to the internet.  I checked my e-mail and there wasn't that much for me to really pay attention to, but I still felt very disconnected from the rest of the world until I was actually able to check it.  And there are the little things.  My AV definitions of my computer are out of date, so it keeps bugging me to update them.  My media center PC can't update it's guide so I can't easily figure out what the heck I'm watching on TV.  It's times like this that you realize how for so many of us, it is so important to be connected.  The internet is supposed to be turned on this Wednesday, so I only have to last a few days.  It's going to feel like an eternity to me. 

Found an Apartment

So I finally found an apartment after a really long search. I didn't hit all my criteria for finding a place, but I'm really happy with what I got. I looked at literally hundreds of listings and physically went to look at about 20 units. Reviewing my list here is what happened

1. They must take cats - They do. I have to put a deposit down, but that was to be expected.


2. Must have a dishwasher - It does. It's even brand new and stainless steel.


3. Must have a washer/dryer IN UNIT - It does not. This was the big compromise. Just weren't that many apartments that actually had washer and dryer in unit. Those that did, I was compromising a lot more for other things. This was more important to my girlfriend than it was me, but she saw the place and thought the laundry facilities on site were adequate.


4. I have to be able to get two parking spots - It has it, it is underground (i.e. covered) and they are side by side. Lots of places in the area have tandem parking, so this was excellent


5. Roomy - One of the bigger places I saw and I have a large amount of terrace space.


6. Clean and relatively new- Of all the places I saw, this was the nicest inside. It had granite counter tops, stainless steel appliances, and relatively clean everywhere else. I am VERY happy with this part of the criteria. The only drawback is that I will have to buy my own fridge, but that really isn't that big of a deal.


7. Budget - Given all the above, you would think this was one of the more expensive places as I've only compromised on the washer/dryer. But here is the kicker. Of all the places I actually visited, this was the cheapest place. More on that in a minute.


8. In Pasadena - I'm in an excellent location, pretty close to things, and in the good part of town.

So given all the above, I have no idea how I got the place for only $1700. This is seriously below budget and much less than I would have expected to spend. I looked at a lot of places, and most of the one bedrooms were going for more than that. There were no two bedrooms going for that low of a price for sure. Add on the fact that there is a pool and a fitness center and I'm pretty happy with the place. So I keep thinking to myself, what am I missing? What detail would account for this place getting such a good deal. Is it one of those cases of it being too good to be true?

Microsoft Beats ...

And I would sell.  Now full disclosure time.  I own Microsoft stock, stock I received while employed there.  Microsoft came out and beat their estimates.  More importantly, they gave good guidance as opposed to Apple who came out with good earnings and less than optimistic outlooks.

While I'm going to hold on to Microsoft (I rarely make moves in my long term portfolio) my recommendation is to sell.  You see, I have VERY little faith in this company long term.  They are losing talent left and right.   Most of the top developers I worked with have already left the company or are planning to leave.  Most of them are heading over to Google.

Companies like Microsoft are very dependent on their talent and the talent just isn't going to Microsoft anymore.  Those that are still behind are quickly seeing that there are better opportunities elsewhere.  I still have to make my post about why I left Microsoft.  I'll follow up with that one shortly.

600 Point Swing

This is why you wait to invest right now.  The market is just sloppy right now and you have to be a pretty brave soul to tread into this quagmire.  My advice to you is this, if you have some stocks you have been looking to get rid of, do it now.  Sell on this bounce, because the market is going down from here.  Take something off the table.

Some stocks are starting to look pretty interesting here.  I still like Altria here.  It is down with the market and there is no good reason for it.  You can buy this stock on the dips.  I haven't been a big fan of Google stock and was strongly advising people to sell at the $720 level (it topped out at $747).  However, it is back in the $500's and went as low as $519.  If it comes down to around $510 I'll have to take a very hard look at it.  I also would love to buy into Berkshire.  This is exactly the environment that Buffet will kick some ass in.  Great long term play if you have the cash right now.

Almost There ...

Almost time to re-enter the market. The market opened sharply down and recovered after the Fed announced a 3/4 point rate cut.  One quick comment on that.  Not sure what type of house that my former professor is running.  I would prefer to see the fed leading the way rather than reacting to every little thing (OK a 500 point drop isn't little) that happens.

I still think that the market is flat to down over the next few weeks if not month.  But it is impossible to pick the bottom of a market.  If you can take the long term pain, you should start thinking about putting your money back into the market.  Financial stocks are going to be the first to recover, but they might still be pretty scary here.  I still like my MO and I really want to by Home Depot, but I'm holding off for now.  Bottoms take a long time to form.  In 2000, it took months before we actually reached bottom even though there were several sharp drops.

There is still weakness however.  Apple is touching the 130's in after hour trading.  They had a good quarter, but their outlook was grim.  That is going to be the theme for a lot of companies.  Good earnings, grim outlooks.  Thank god I passed on it at 195.  Tech is going to be a hard place to be.

HD-DVD - Too Little, Too Late

So today, Toshiba announced that it was cutting the price of its players even further. The players will start for $149.99 and work its way up to $300. Throw in the fact that you can get 10 free movies with a purchase, and you are looking at a fairly good deal.

That being said, the HD-DVD camp is a little late to the game. With the defection of Warner Brothers from the HD-DVD fold, there isn't much that the HD-DVD camp can do to actually save their format. You see, content is king. People won't buy a player because it is cool new technology and it is cheap. They want to be able to play their favorite movies. I always believed that the first player to $100 was going to win, but that was before all the content got taken away from one of the formats.

In the end, I still think this race is a big yawn. I write about it only because I'm oddly curious about the battle going on from a geek's perspective.

By the way, what type of lame ass reporting do they have over at Crave? In one of their articles, they suggested that Microsoft might want to look into buying a movie studio. For what possible reason would Microsoft do this? Seriously, it may be the lamest idea I have ever heard and quite frankly it is a little bit of irresponsible journalism. First, Microsoft is not in the movie making business. It is in a lot of businesses, but none of them are even close to actually producing a movie. Second, HD-DVD is a very very small part of what Microsoft does. There is no way that Microsoft, no matter how much cash it has, would make such a ludicrous transaction. As a shareholder, I would instantly sell my remaining shares if it ever happened.

I guess any old person can post whatever they want, no credentials required. Then again, I guess I do the same thing :)

Blame Others for Your Problems

I was driving in my car when I heard an ad for debt consolidation. These ads are everywhere, so it must be pretty good business. Anyway, something I heard on the radio really struck a nerve with me. To paraphrase the commercial it basically stated, "Have too much Credit Card Debt? Don't you realize that the credit card companies are after you by charging you high interest rates? It's not your fault. Blame the big bad credit card companies who are out to get you!"

Now I won't dispute the fact that credit card companies are trying to make a lot of money off of you. After all, they are a business. However, this commercial really just bothered me. Seriously folks, when you have credit card debt, you really have nobody to blame for yourself. There are times where there is a legitimate emergency, and you have to use credit to get out of it. But these are few and far between. Even in these cases, I would argue it is still YOUR fault if you have EVER purchased something you didn't need on a credit card and left a balance because you should have been saving the money to put into an emergency fund in the first place.

So instead of blaming other people for your problem, why don't you stop buying things you can't afford? Don't let the credit card companies charge you interest in the first place. Be in control of your own finances, and you will be in control of your own destiny. I know it can be easier to just point the finger of blame at someone else. But when you point that finger back at yourself, you will find that more often than not, accepting responsibility for your own mistakes will be far more productive.

Quiting Without Another Job - An Epidemic

Today, I found out that one of my coworkers is doing what I did, quitting without another job lined up. He is about my age, maybe a little bit younger, but he just didn't feel that the opportunity was right at our company and has decided to go and try it on his own. He doesn't have a real plan but knew that he had to move on. I know a few more people who have done this or are planning to do it. Most of them are younger without a lot of obligations. Most of them however have really good paying jobs. Free Money Finance just recently had a post on whether or not you should quit your job without another one lined up. He came down on the side of you should definitely not.

I however, having done it, really do see both sides of this argument. It really just depends. Most people are probably unhappy with their job in one form or another, especially younger people. I think my generation more so than any other before take job satisfaction to be very important. Our parents understood that a job was just that, a job. You didn't like your job, you did it to put food on the table. But somewhere along the way that changed. A job became who you were, it defined you. We constantly heard our parents tell us, "Do what you love" and we took it to heart. That has caused my generation to job hop until we find something that really makes us happy. The problem is that it is always still a job, and many people don't ever come to realize that. They jump from job to job always hoping to find something better. I know very few people my age that haven't had at least two different jobs. I myself am on my fourth while only being out of college for a little under eight years.

I disagree with the conventional wisdom for a few reasons.

1. You can be doing a lot of other things besides a 9-5 job to earn money - This didn't use to be the case, but you can spend your time coming up with alternative ways to earn income. In the end, this might actually be smarter if you can make it passive, and then return to the work force. You will have double income!


2. It really depends on your financial situation - If you are like me with no obligations or debt, and could survive years unemployed, than you have little to worry about. Believe me, the fear is bigger than the reality most of the time. This is where living frugally really pays off.


3. Depends how much you make and how in demand your skills are - I make a lot of money. There aren't a lot of jobs that pay what I make now. It isn't easy for me to just find a job that will pay me what I want to make. However, I have the advantage of having skills highly in demand, so most of the time I have very little trouble finding a new job when I really want one.


4. Money isn't everything - Coming from a guy who highly values money, this may be shocking, but it's true. I would rather have a job I liked and get paid less for it than a job I hated and got paid more for. So I would be willing to take a job that paid me less if I ever got so desperate. That being said, a lot of people are miserable no matter how much they get paid, so this makes the argument that perhaps you should just stick it out. Might as well get more money than less money for the same level of misery!

So what do you think? How bad of an idea is it to quit a job without another one? Do you think it really is an epidemic among the younger generation?

The Macbook Air

This week at Mac World, Steve Jobs announced the company's latest product, the Macbook Air. I have to admit, it is pretty cool. I'm actually in the market for a new laptop and I'm leaning toward getting a mac (despite my dark Microsoft days). In case you haven't heard yet, here is a video showing the Macbook Air.







Now the problem is that it starts around $1800 and goes up from there all the way up to $3000. It's a little bit more than I want to spend.On a related note, boy am I glad I didn't buy Apple when I was looking at it.The stock looked poised for weakness there and boy was I right. Rick urged me to buy at $195, but I resisted. The stock closed just under $160 today, down 6%, I would have taken a huge haircut on that trade (although I would have gotten out way before now) Maybe I should ask Rick for advice, and then do the exact opposite. I might make my double then!

Actually, my advice would be to short Apple at this point. The market is looking ugly, and the former leaders like Apple are going to get whacked. Short the market as a whole (sds) or short some of the stocks that have been great like Apple or Monsanto.

Index Funds are for Dummies

A few weeks ago, Aaron had asked me why I buy individual stocks rather than invest in index funds. He makes a good point. Index funds beat 80% of the market. When you factor in their very low cost, it would seem silly to invest your money any other way.

And I generally agree with the principle that for most people, the right thing to do is to invest your money in index funds. However, I'm not most people. I love thinking about what trade to make. I love doing the research before I buy a stock.

Some liken stock picking to gambling. I really don't think anything could be further from the truth. True, short term stock picking can be very hard. There are random fluctuations that happen for no other reason than the sentiment "feels" something is going to happen. That can be quite scary.

However, a stocks long term price is 100% correlated with its earnings, and with enough homework, you can figure out which stocks have the best earnings potential. You won't be right 100% of the time, nobody ever is, but you can certainly pick more winners than losers.

I take the Warren Buffet advice on investing. Put all your eggs in a basket, and watch the basket closely. My portfolio at this time is relatively small, and I watch it closely. That being said, I'm getting hammered along with the rest of the market. So who knows, maybe I'm totally wrong about picking individual stocks, but I'm having fun doing it.

Update: It occurs to me that my point wasn't totally clear here.  I actually think that index funds are good things.  Most of us are dummies when it comes to the market.  Most people don't need to be experts.  If you aren't, then you should invest in index fund.

Secret to Building Wealth #2

Don't try to keep up with the Jonses. After seeing a post on MoneyNing about working on Chirstmas, it got me to thinking about how people always try to compare themselves to other people. While MoneyNing's post was about working on Christmas Eve, I think the advice is true in ALL aspects of life.

I used to really care what other people thought. Thank god I got over that before I actually started earning my own living. Ever since I was on my own, I cared much more that I was doing well and not so much that people thought I was doing well. Don't get me wrong. Sometimes I look around at my peers and want the things that they have. Would I like the nice car or the newest gadget? Of course. But I would also like to stop working at a young age, and I won't be able to do that if I accumulate stuff rather than wealth.

It's just a cycle you can't win. So stop trying to buy whatever it is that you think you have to buy just to look like you can. Believe me, the Jones' probably can't afford it either, and you are trying to win a fool's race.  All that will happen is that you will push yourself into debt.  And you won't even accomplish what you want, because the Jonses really don't care what you have, they have their own problems.

Be rich, don't look rich.

Dealing With Ambiguity at Work

Part of being a Program Manager is dealing with ambiguity. But like all people, I sometimes have problems with this myself. Especially with my current job. I am the trailblazer at my work when it comes to Program Management. It never really had a program management office which means I need to start it from nothing.

In the past few weeks, I have found myself in a situation where I didn't know what to do next. For someone like me who is action oriented, this can be very frustrating. There seems to be so much to do, I don't really know where to start.

In times like this, the best thing you can do is just try to break it down into really small and manageable steps. That is, just do something, evaluate, and then do something again. Otherwise, you will find yourself in decision paralysis. It's the same in all aspects of life, especially financial. Can't save money? Start small and build on it? Don't know how to invest money? Open up a brokerage account and invest a small sum of money in an index fund. Don't know how to make money fast? Start a website and just figure it out :)

Saving Money on Sushi

I love eating sushi. I didn't always. I didn't take my first bite of sushi until I was 24. But somewhere along the way I grew to love it. The problem with Sushi is that it is very expensive. Almost anywhere you go, sushi is going to run you about $5-$8 for two sushi pieces. This makes it prohibitive to eat very much of it very often.

I went to eat sushi for lunch today. I spent $23 for three orders of sushi (Tuna, Yellowtail, and Salmon) and a roll. This is probably pretty standard. However there is a place in Seattle called Sushi Land. I miss it. I traditionally go to the one in Redmond, and it is great. The service isn't always the best, and they tend to be pretty inefficient when it comes to cleaning tables and seating people, but you can't beat the overall experience.

For the exact same meal I just got at this other restaurant, I would have spent $6.50. That's about 70% cheaper! Each of the sushi pieces would have cost me $1.50. The roll would have also cost me $1.50 (I would have had to get two roll orders at Sushi Land to equal the one I got at today's restaurant). And here is the kicker. The sushi at Sushi Land would have actually been better. It isn't the best sushi I have ever had, but it is definitely better than average. And for the price you can't beat it. I can get a meal there cheaper than I can at most fast food restaurants.

Add the fact that because it is a conveyor belt system, and you can just pick your sushi off the belt without having to ask for it, and you have a great situation. You can come in and eat in a matter of about 5 minutes or less. So it's better, cheaper, and faster than you can get at almost any other dining experience. I've introduced a few of my friends to this place and before I left, we use to go all the time. Rick is one of those individuals. If you really want to pay him back for developing Paint.NET, just buy him a couple of plates of the spicy tuna roll. Then again, he probably would be happier if you just donated the money.

If I could use the money for this experiment to buy a franchise, and I was at all interested in running a restaurant, I would. Then again, I might eat away all my profits :)

Cuban Cigars Suck

Despite the fact I stated I never smoke, I was coincidently talked into smoking a Cuban cigar last night. I figured you don't often get the chance to smoke one in the United States, so I might as well take advantage of the situation while I could. So I sat down with some friends and a few Cubans and a nice eighteen year old scotch.

Now while I don't actually think the cigar sucked, I really don't get what was so great about it. Maybe it is because I'm a non-smoker, but I really just don't get the appeal of this. I honestly tried to enjoy it, but I just couldn't. I don't think it was particularly flavorful or anything like that. It just felt like I was inhaling some smoke. Now granted, I have nothing to compare it to. Maybe it is so wise to start out with the very best. But this will be the last cigar I probably ever smoke.

What do you think? Have you smoked a Cuban Cigar before? What did you think?

Have No Conscience When Buying Stocks

I was going to respond to the comment that Stephen left in my post about smoking being good for you but decided that a full post would be better served. Full disclosure. I don't smoke. I hate smoking. I hate being around smokers. I generally won't go to a place if they allow smoking. That being said, I have no problem buying shares of the largest tobacco producer around.

One of the things you can't do when you are trying to pick stocks, especially in the short term, is worry too much about the social impact of what you are doing. When people tell me that they have a problem buying a certain stock this is what I tell them. Buy the stock, and when you make a lot of money, support a charity that tries to address the issue. So if you don't like smoking, fund lung cancer research. If you don't like alcohol stocks, fund a charity like MADD.  Stocks are just pieces of paper.  Buying the stock doesn't actually help the issuing company.  A stock trade is between you and some other third party, the original company does not directly benefit from your purchase (they do indirectly but that would be a whole other post)

That being said, there are literally thousands of stocks you can buy. So if you really feel that strongly about it, just try to find a similar stock with a similar thesis. If you don't want to buy a stock like Altria, look at other consumer staples like Coke or Kellogg (I don't recommend these like I do Altria by the way).

Morning Trade - GameStop

GameStop (GME) is set to announce guidance tomorrow. The stock has been killed the last few days on relatively no news. It has been down with the rest of the market as people are fleeing almost anything retail and connected to the consumer. However, I strongly believe that GameStop had a fantastic holiday and their guidance will look good. This should provide great stock price movement tomorrow. Be warned, if Gamestop comes out with bad news, this stock is going to come down. I just think you have more upside than downside at this point. If I can get in before the announcement, which is doubtful considering when I get up in the morning, I'll look at getting in. It closed at $55.11 today, and I think you might have $7 or $8 of upside, maybe $4 of downside right here.

Smoking is Good for You ...

If you want to make money in the stock market right now.

I bought 65 shares of Altria at 76.07 when I recommended it in my post about shorting the market. I know that it is unlikely that this stock will double in the next year, but I also do not want my money sitting idle. Right now, nothing is working but defensive names in the market. I'm not sure when this market will turnaround. The fact that we are more than 10% off the highs of the market is a good sign that we might have corrected and now may move up, but I am still weary of the market right now. I think Altria along with other defensive names like JNJ are the way to go. They won't get you the fast money, but they will keep you safe for now.

By the way,my stock picks from that post are doing quite nicely. In two days, the QID is up 6% SDS is up 3.5%, MO is up 3.5% and JNJ is up about 1.5%. This compared to the market being down almost 4% isn't a bad showing.

The Etrade Bounce Trade

Etrade was down another 20% today.  This stock is ugly.  I got out of it not too long ago, cutting my already significant losses.  But, if I could watch this stock like a hawk tomorrow, I would consider trying to buy up a few shares and then day trade it.  I still think it will sink down to around $2, but at some point very soon, the shorts are going to cover and you should be able to eek out a 5% gain or so.  Again, you would have to have a very tight stop-loss on this stock, because it still has a ways down.  That said, I won't do this.  I don't have the time nor inclination to day trade.  But it will be interesting tomorrow to check out the chart and see if it does indeed bounce.

For all other people thinking about getting in now and trying to pick a bottom, FORGET IT.  Do not go long this stock.  I promise you, it will go down more from here.  I honestly think this sell off is overdone, and that Etrade is worth more than this, just for the fact it still has quite a few customers (myself included).  If you have money that can sit dead for about two years, and don't mind waiting it out, than maybe just maybe you can get in.  For everyone else, the risk of bankruptcy probably doesn't outweigh the potential gains.  Don't fight the stock at this point.

How Much Should I Spend On an Apartment?

So right now, the big question mark in my life is where am I going to live. I've spent most of my free time the last few weeks looking at apartment listings or going to go see places. One of the things I'm struggling with is figuring out exactly what I want. For me, I have a few requirements for the place I want to live and it is making it hard for me to find a place. These are

1. They must take cats - I've joked with friends that I would give my cat up to find a place, but in reality there is no way I would do this. This eliminates a lot of places that just won't take pets.


2. Must have a dishwasher - I don't do dishes. My girlfriend doesn't either.


3. Must have a washer/dryer IN UNIT - I won't rent a place that I have to share a laundry facility. I'm lazy with my laundry, and don't want to be checking on it all the time


4. I have to be able to get two parking spots - and I would rather they both be included in the price of the apartment.


5. Roomy - Got to have enough room for the TV I'm going to buy.


6. Clean and relatively new- I'm probably past the point where I can really compromise on this. When I walk into a place, I want to feel like it is bright and clean and that the appliances are in good condition.


7. Budget - This is the most flexible component for me but perhaps the hardest for me to adjust. I'm just not use to spending money on rent. I keep debating like MoneyNing did not too long ago, how much should I improve my standard of living?


8. In Pasadena - This is the closest place to my new job where I'm willing to live. I've lived there before

The first four are not negotiable. The fifth one is somewhat subjective as is the sixth one. My budget is pretty flexible. Before moving down, I thought I would be right in the $1800 mark but having looked at quite a few places, I think the number is closer to $2000. A question for me is if I want to go up to $2300. If I go up that high, I can probably easily get what I want. I can afford it, it is just a matter of if I want to. The last one I may adjust. I greatly prefer to live in Pasadena, but right now I'm not finding what I want in the area I want.

So what do you think I should do? Do you think I should just spend the extra money and get exactly what I want, or should I scale back my expectations a little bit and compromise somewhere else?

Morning Trade - Starbucks

Today, it was announced that Howard Schulz would retake the helm as CEO of Starbucks.

The stock is on a free fall for the last year.  Just take a look at the chart



See how the chart moves in almost a straight line down to the right?  This is a VERY UGLY chart.  Yes, it is Janet Reno ugly.  But I think the trend is over.  There is no technical reason that it should be, at least not yet, but I think that Schulz taking over now puts a bottom in the stock.  I hate calling bottoms, but in this case I would.  The stock should open up significantly, it is above $20 in afterhours trading.  I wouldn't get in at the bell, the stock will pull back in the morning, but I would watch the stock carefully over the next day or two.  If it can put a few good days together, than this sets up nicely for a good trade.

Short the Market

The market took a beating on Friday, with the Nasdaq losing over 3% today. Just look at the S&P 500 over the last six months and you will notice something really disturbing.



Take a look at where the market ended up on Friday. It ended up at around the same level as the previous market dip in late November which is the same as a dip we saw in August. In November, after the market bounced, people believed it would be a double bottom. When you see stocks that hit a double bottom and then continue up, you normally take this as a reversal and that the stock is on the way up. However, there is no such thing as a triple bottom. This should make you worry a lot about the direction of the market.

If the market breaks through this resistance area, it has a lot to fall. If that is the case, then it would be best to buy either the QID or SDS both of which will double for every point that the Nasdaq or S&P go down.

If not that, you need to go defensive into names like Altria or Johnson and Johnson.

And the Winner Is...

Figured I would follow up on my original post about trying to pick a winner between HD DVD and BluRay now that the industry is starting to pick sides. Warner Brothers announced that they would only distribute their movies on BluRay. Warner Brothers is the largest distributors of movies there is and this puts the momentum squarely behind the BluRay camp. This means that Sony, Disney, MGM, Fox, and LionsGate all release on only BluRay. These are the heavy hitters when it comes to movies, and

Many believe that when there finally is one format chosen, that this will move consumers away from the sidelines. However, I don't think this "confusion" on the consumers part is really what is causing the delayed adoption of the next generation DVD format. However, I think this is bogus. I think adoption has been delayed because people are indifferent. While no doubt movies look better, most Americans aren't going to waste buying a player that cost 5x more than a similar DVD player and disc that carry a 25% premium.

Most people I know think DVDs look just fine on their TVs, even their HDTVs.

So that means the winner is officially ... downloaded movies. Seriously, I wonder if anybody really cares about the next generation DVD format. I certainly don't despite Rick's urging for me to get a BluRay player and HDTV. While DVDs were a leap ahead from VHS in terms of quality and form factor, I don't see the same thing here. For god sake, the disc look exactly the same! The next leap is a form factor of nothing. I don't have to carry it around or get it, it comes to me.

So there you have it. I don't really care that BluRay seems to have brought the hammer to the HD DVD camp, because in the end, both formats are going to be irrelevant.

Knowing What you Want

Despite the fact that most humans have unlimited wants, most people can't articulate exactly what it is they want. I've been searching for an apartment the last few weeks. I've looked at a lot of apartments to try and figure out exactly what I want. Just the other day I thought I finally found a place that was good enough that I wanted to submit an application. I wasn't sure though, so I wanted to think about it and discuss it with my girlfriend.

Well right before I could submit an application, someone else did and got the apartment before me. It got me thinking about how I should have just made a decision about the apartment when I saw it. Before I spent all the time looking around, I should have really narrowed down what I would and would not accept. It's so often happens with people. People just don't know exactly what they want, and when faced with making a decision, they have decision paralysis. You would think that given my job as a decision maker, I wouldn't have a problem making decisions, but I guess I'm only human.

I think this plays out in so many ways that are even more important than finding an apartment. People have this problem when deciding what they want to do with their career. I've talked to so many people who know they don't want to be doing what they are doing now but can't tell me what they really want to do. Worse, I've seen people switch to a job just to leave their current job, without really considering what was wrong with their current job and if it would exist at their new job.

Do you ever face decision paralysis because you don't know what you want? If so in what situation?

Commuting and the Quality of Life

Slowly but surely I'm learning how taxing it is to have a really bad commute to work.  It used to be that I had a nice quick 10 minute drive to work with absolutely no traffic.  I would jump on the freeway, take it three exits, and then I was at work.

Now, that isn't anywhere near the case.  I have at least a 1.25 hour commute.  On bad days it can be two hours. I actually tend to handle traffic better than almost everybody I know, but a 2-4 hour commute is taxing on you no matter what.

It isn't even the drive that really bothers me.  It's the fact that I routinely lose about 3 hours of my day, every day, to a commute.  This used to be the three hours I would devote to this blog.  Since I have a very strict no blogging from work policy, this means I have to squeeze time in in the evening to be able to blog.  I really wanted to complete my Polycom analysis but I just don't have it in me when I get home at 11:00 and have to get to bed so I can be up by 7:00 to make the commute.  Blogging this weekend was out of the question since I spent most of it moving.  Luckily, I think I found a place much closer to work, and I hope to go and sign the papers tomorrow.

Quick thought on the market.  The whole market is down.  Like I said earlier, stay out for now.  I think if you are going to buy, buy in a few days.  Right now just does not look like a good time to go long in stocks.  Nothing is really working except for the few stocks that are coming out with good news.   I think a window might open soon, and you can get some good stocks at the bottom, but if you have to do something right now, short stocks.

Polycom

Only a quick post for now. Will elaborate later tonight. Just got back from Seattle and completed my move. Moving is hard. I don't even have that much stuff, I had the movers pack my stuff, and I still feel pretty wiped out from the whole experience.

One stock I think I may do for 2008 is Polycom, the makers of conferencing technology. I really think this is a great growth sector, and the stock looks kind of cheap now. Don't know if it is the right dime to buy right now, it's been on a downward trend as of late, but I like the growth story. Will do some research later tonight and write it up.

Wall Street is SLOW

I KNEW we had a housing bubble. On another blog, I called the top of the market in October of 2005. I was dead on in California. I was tempted to short the stocks of a few homebuilders and mortgage insurers but never did. I figured that Wall Street had to know that these businesses were in trouble and had already priced it into the stocks.

I KNEW that the Wii would take off. In fact, I told my friend Scott to buy Nintendo stock. I didn't myself because I was too lazy to call my broker and place an order since Nintendo only trades on the Japanese exchanges. I knew how hard it was to get a Wii. People were snatching them up faster than they could be shelved, and I knew Nintendo had something special. I figured Wall Street knew too so, and I was lazy, so I did nothing. Stock doubled in a year.

I KNEW that Guitar Hero 3 was the must have item of the year. I was actually going to buy it a few weeks ago, and then Vivendi announced that it would purchase them. The stock jumped over 20% that day and hasn't looked back.

There is the theory that the market always perfectly prices in all news to a stock. That's a bunch of bull. Wall Street will often over react or under react to news. It's up to you to figure out the real story and play things correctly. If you know deep down inside that the so-called-experts have it wrong, chances are, you are correct. There is a fantastic book by Peter Lynch called One Up On Wall Street where he talks about advantages that individual investors have on the street. One of the many advantages you have is that you see things at the ground level. Much easier for you to spot the trend starting than the analyst on Wall Street.

Happy New Year everybody!  I hope we have a great year going forward!