No post till later

Traveling back up to Seattle to see the girlfriend this weekend. Was going to try and write something up tonight, but it is really really late. I got home from a late night of playing RockBand desipte the fact I have to get up early to catch the commuter train since I'm leaving straight from work and not taking my car. Instead I'll leave a bunch of links I'm reading.

Oil Surpasses $103 for First Time - Do I hear $110?

Bush, Fed Chief See No Recession Ahead - Thanks Ben. Really.

 Dollar weakens even Further.  - Weak dollar causes higher oil, causes inflation, amplified by the fact foreign goods are more expensive.  Not pretty

Dell Misses -  Whatever happened to Dell?  They used to make such great affordable computers.  My latest experiences have not been all that favorable.

I'll try to post while in Seattle this weekend.  Everyone take care.

Why Ben, Why?

Will you please stop with the rate cutting? You already made the mistake of cutting rates, and you are going to do it again?  You can't save the economy now.  You can't make housing prices go back up.  There is only so much the fed can actually do.  Cutting rates is not the panacea you are making it out to be.

For years, the Fed provided cheap money.  That cheap money caused the problems you are now seeing.  And the solution is to throw more cheap money at it.  It's like paying off your credit card with more credit cards.  It just won't work.  Let the economy feel some pain and lets move on.

The High Price of Oil

Oil shot past $101 today in after-hours trading.

I love news like this actually. The picture is actually starting to look pretty bleak. Housing is bad, and in my opinion will get worse, no matter what the crooks, I mean real estate industry has to say. The US looks headed for a recession. The superstars of tomorrow are having problems. High energy prices mean that inflation is likely.

Inflation + Recession = Stagflation

which is the worse thing that could happen to our economy.  So despite all this doom and gloom, why would this type of thing make me smile? Because things are starting to get to a point where I might be interested in buying. Granted, I probably can't double my money this year, but long term, there are starting to be some interesting plays. Best time to buy stocks is when nobody else wants to, and right now, a lot of people are fleeing stocks.

Google Looking Interesting - Still Not a Buy

Google Closed yesterday at $486.44.  This represents a 4% drop from the previous close.  This despite the fact that the rest of the market saw a strong day with an up 1% day on the Nasdaq and a 1.5% up day on the Dow.

I've actually been looking for an in to Google stock since it originally broke and stayed above the $500 barrier in Jun of 2007.  It broke it a few times before that but could not sustain itself.  in August of 2007, it took a brief dip below $500 but recovered soon thereafter.

Now it has gone under $500, and I believe that will be a strong resistance point from now on.  If it can rally in the next few days and find a way above it, then perhaps it will stay there, but in all likelihood it will stay below.  It is never good when a stock like this, which has been a leader for so long, goes in a tailspin down.  Part of it up until now could be blamed on the overall market.  But when the market turns, and a stock like this doesn't turn with it, you have to be concerned.

I don't think it has much to go down from here, but I still don't think its a buy.  Long term, I believe Google is probably a good buy,especially at a 30P/E.  Short term, $450 is possible, and perhaps lower.

Best Investment Books for Beginners

I've often been asked what are the best investment books for someone to read if they are just starting out. I've read a lot of books on the topic and I'm happy to share my opinion on what the best books are for someone just starting out.

One Up On Wall Street- If there is one book the average investor should read about buying individual stocks, this is probably it. It is very well written and offers very pragmatic advice on how tho think about individual stocks.  It is written by Peter Lynch who became famous running Fidelity's Magellan fund and it is written to show how an ordinary person has some rather large advantages over the boys in Wall Street.

Robert Hagstrom's The Warren Buffett Way -Readers of my blog know how much I admire Buffet. I believe his technique (despite what I may espouse on this website) is the way to go. Buy well run companies that are easy to understand and that are attractively priced. Buffet himself has never written a book, but Hagstrom clearly outlines what Buffet has done to make himself one of the wealthiest men on the planet.

Pat Dorsey's The Five Rules for Successful Stock Investing - This is a really great book to teach you the basics of how to evaluate a company and what the important metrics are.  I also like the fact that it has in its appendix how to evaluate companies in different sectors.  Evaluating a bank is much different than evaluating a tech company, and this book shows you the basics so you can get started.

Joel Greenblatt's The Little Book That Beats the Market-  The best book is the book that you read and you finish.  That's why I put this book on the list.  It's very short and a very quick read.  The advice is actually half way decent, but more importantly it is simple to follow.  He even has a website that does all the work for you.  The thing I like about it most is that it should make it really simple for you to invest, and the most important thing when it comes to investing is to just start.

There are a lot more books I suggest you read, but this should give you an excellent starting point.  Like I said, start with the basics and then go from there.

After Fight - No Hard Feelings

Just as an update to my last post. To show the bag that he didn't have any hard feelings, my cat decided to take a nap and snuggle up next to it. Proving that we can all get along.m

Save Money On Pet Toys

I used to buy my cat lots of toys. I figured I was doing OK financially and that I might as well "spoil" my cat a little by buying him toys whenever I had the chance. Part of it was guilt because I knew I didn't play with my cat nearly as much as I should.

However, I soon learned that buying cat toys was a waste of money. My cat found ways to entertain himself with whatever was lying around. I think I first came to this realization when I tried to celebrate Christmas with my cat by buying him some gifts. He ended up playing more with the wrapping paper and ribbon than he did with anything I bought him.

To prove my point, I took this video of my cat. Here he is with a plastic bag I happened to leave on the floor.





He rarely if ever enjoys playing with the toys I buy him from the store. He's learned to entertain himself with bags, string, cords, leaves I drag in from outside, etc. The last toy I bought him, a self moving electronic gizmo with some sort of feather attached to the end of it, entertained him for about 5 minutes, and then was forgotten. Cost $20. This bag cost me nothing, and brought him the same amount of amusement.

Where is All The Financial Advice?

I know what you are thinking, "Terrence, where is all my financial advice."  I'll be honest with you about what is going on.

My new job is taking a lot more time than I had originally thought.  I'm working harder than when I was at Microsoft, and I was working pretty hard there.   When I get home, I don't do much.  I generally spend most of my time doing things around the house, talking to my girlfriend, or traveling back to Seattle to see her.  In addition, I don't have cable TV so I'm not watching a lot of new or CNBC.

So I've been stuck in this rut.  Trying to figure out how to get out of it.   This project is important to me, but my work-life balance right now is heavily skewed toward work.  The little left over is devoted to working on my long-distance relationship, something obviously pretty important.

I'm going to try and get back on track this weekend.  Just have some patience with me, and I'll find a way to catch back up.

Losing the Battle

Seems like adding reCaptcha didn't really do much for me in regards to fighting comment spam.  Seems that most of the comment spam I get comes in the form of Trackbacks which reCaptcha can do nothing about.  Even after I put up reCaptcha I was still averaging over 100 spam comments a day.  Couple that with the fact that kirah complained that her comment got eaten and she didn't even notice it, and my original fear proved correct.  I burdened my legitimate users without adding any real protection.

I will have to go another way to fight the spam.  I suppose I can just let Askimet do its job.  It catches most if not all of the trackback spam.  Just annoying that I have to sometimes sit through it and look to see if any legitimate comments got through.

HD DVD, competitor to Blu-Ray, dead at 2

HD DVD, known for ushering in the next generation of high capacity optical disc as well as the exclusive titles of Transformers and Shrek, died on Tuesday in Tokyo Japan.  It was just short of its second birthday.

The cause of death was a lack of support from the major studios and retailers.  HD DVD's health had been failing for several months.  Several movie studios announced that it would stop supporting HD DVD and defected to its hated rival Blu-Ray.  In a desperate attempt to save its life, doctors slashed prices.  But it was too little too late.  The hemorrhaging was too severe.

Born on March 31, 2006 to Toshiba and NEC, HD DVD had the first player out for the next generation format.  For the next two years, HD DVD and Blu Ray waged an intense battle for supremacy.  There were times that HD DVD looked to be pulling ahead, but the numbers just weren't adding up.  Consumer indifference slowed the progress of both formats.  Consumers did not find a compelling reason to upgrade to either as most believed their standard DVDs were good enough.   Consumers did not care, nor did they have the right equipment, to really appreciate the higer quality picture or the interactive menus.  Coupled with high prices for disk and equipment, and both formats struggled.

However, retailers and studios seemed weary of a long protracted fight so they started picking sides. Perhaps aided by the PS3 and more movie studio support, Blu Ray players were outselling HD DVD players despite their higher cost.  Still, with adoption so much slower than the original DVD format, it was hard to pick a winner quickly.  But one by one, support mounted for Blu Ray.  Things looked really bad as Netflix and Best Buy announced they would be supporting Blu Ray.  The final straw came when Wal-Mart, the retail Goliath, threw its weight behind Blu-Ray dealing the death blow to HD DVD.

HD DVD is survived by Microsoft, Universal and Paramount (The latter two quickly announced they would be adopted by the Blu Ray family).

War Against Comment Spam

In my last post, I openly wondered why I get so much comment spam.  It was amazing to me that a small site like mine could be the target of so much spam.  Thankfully, pyrochild left a comment and directed me to a wordpress plugin called reCaptcha.  I'm going to test drive it out for a few days and see how it is.  Hopefully my spam will go way down without annoying anyone who wants to leave a comment.  So please, by all means, tell me what you think.  If you have any issues with it, leave a comment.  Well, hopefully it doesn't block you from leaving a comment :)

At first I was a little annoyed that the program ask you to solve two different words.  But then, after reading the site, I discover that one word is known, and is used to verify that you are indeed human.  The other one is used to help with digitizing old books.  So not only are you leaving a comment on my blog, but you are helping the world become more literate.  All the more reason to leave lots of comments.

Why Do I Get So Much Comment Spam?

I've had this website up for a few months now, and I've gotten over 6,000 instances of comment spam.  Not sure why I'm getting so much.  My site isn't all that popular, at least not traffic wise, yet my askimet spam filter gets pummeled with several hundred spam comments a day.  If my poor little site gets this much, I really wonder what some big websites get.  Now, I could do more to try and combat the spam.  I could certainly make it harder for my readers to post a comment.  But I think that really destroys the purpose of a blog.  I don't like solutions that make it hard for legitimate users to use a service just to prevent the bastards who try and make the rest of our life hard.  So for now, I'll just keep watching my askimet spam number go through the roof, and hope that your comments don't get lost in the crowd.

Great Minds Think Alike

Berkshire Hathaway disclosed a very large stake in Kraft yesterday. They are the largest shareholder and own a little under 9% of the cheese maker. I like this pick up because I too own Kraft. In fact it is one of the few stocks I do own. I have kept most of attention in the consumer staple area as I have believed for a long time that we were heading into a recession, and consumer staples will do well in this environment. In addition, I thought that a lot of value would be unlocked as soon as it split up from Altria.

I told someone else this and I will say it here too. Berkshire here is a good buy if you can hold on for several years. Stocks are getting cheap and Buffet is going to be like a kid in the Candy store. He is going to pick up some names that seem crazy in this environment, but his craziness has made him the second richest man in the world.

Obligatory Valentines Day Post

If somehow you haven't realized it, today is Valentines Day.  I don't have very strong feelings about the holiday one way or another.  I definitely don't like the holiday and don't celebrate it despite the fact that I have a girlfriend.  I don't hate the holiday either, probably due to the fact that I'm in a happy relationship.  But even when I wasn't, I never begrudged happy couples their day.

I guess the one thing I never could get behind is doing what everyone else does.  This has helped me throughout my life, especially financially.  You shouldn't go where the crowds are, it is simple supply and demand.  There is a huge demand for things like flowers and gifts on Valentines day and the markup on these items are ridiculous.  Wait a day and things get a lot more reasonable.  I guess I just never understood why this one specific day was the one day you had to be romantic.  What about the other 364?

This also dictates who I am as a stock picker.  I tend to not follow the crowds. I  just can't stand  going with the crowds.  I like to buy stocks that have dipped and are a good value.  This can be a painful thing to do because stocks in the short run are very momentum driven meaning that if they have been down, they are likely to go down further.  People will tend to watch fasting rising stocks go up, and continue to go up and then jump in right when they are about to top out.

Guess I'm Glad Too

I'm watching the Morning Show right now and they just put up a graphic of the weather throughout the country. They showed the northwest, including Seattle, to be in the 30's and 40's today with rain. I'm looking outside my window at the bright sun and blue sky. It is 70 degrees and it is only going to get warmer as the day goes on. Guess my cat isn't the only person happy to be back in California:)

Why The Market Will Piss You Off

The market just loves to move up and down for no particular good reason. This has been especially true the last few weeks where the market has seen fit to gyrate up and down, mostly down, somewhat erratically. So today I go to Yahoo Finance to read the above as the top story.

Now really, this is a non story. But for some reason the so called "experts" are pointing to this as why the market has rallied. Is there really anyone out there who didn't think Buffet would get in on this market? The entire sub-prime sector is in turmoil. People don't know what is going on with these mortgages and there is wide spread panic. When people panic, Buffet makes a fortune. I for one have been one of the loudest voices for quite some time that the housing market has been over-inflated and that it would come bite us in the ass very soon. That being said, we have probably reached a point where most of the dust has settled and people are going to start looking around for bargains.

But these are the types of things that can infuriate novice investors. The markets can and will move seemingly randomly in the short term. I can't tell you the number of stocks I've bought with solid reasoning only to lose my shirt because my stock was out of favor at the moment. The market determined what my stock was worth and it just didn't agree with me. It wasn't based on data, it was based on psychology.

Don't be shocked if the market just dips on no news tomorrow, it went up today on very little.

Samsung Blackjack 2 - A review

I got a Samsung Blackjack 2 a few weeks ago, and I have to say I like it so far.  Now I have to say one thing up front, I've never really had a "smart phone".  I've always used my phone to make phone calls.  A novel idea I know.  But I decided to get a phone that would allow me to check my work e-mail where I was, so I got this phone.

I had heard bad things about the Blackjack 1.  But to be honest, I just didn't care what I got.  I figured it was all the same so long as I could check my mail.  Despite being a technology geek, and working at a telecom company, I've just never really been into phones.  So I just ordered whatever was convenient and this is what I got.

I have to say, I like it a lot.  The screen is bright, it's slim, and it does what I need it to do which is make calls, check mail, and occasionally look something up on the internet.  It is 3G capable, which means internet browsing is fast, and I like the display and keypad just fine.  Of course like anything it does have its drawbacks.  First off, navigating through this thing was not intuitive.  Now that I got it down, I can get through, but for a first time user, Windows Mobile 6 is not the most user friendly thing around.  I know for a fact that Microsoft is starting to divert a lot of resources over in that division, so hopefully this will improve over time.

Also, the battery life is not so great.  The 3G really sucks the life out of the battery, so if you plan on doing more than just the occasional  search, be ready to find a plug fast.  That's the other thing I don't like about it.  It has a proprietary plug  for out output and input.  So despite the fact that it can play music, you are going to have to buy Samsung's own headphones.

Overall a thumbs up.  But then again, I have nothing to compare it to.

Someone is Happy to Be Back in California

Yesterday we had a very nice, albeit typical, California day. It was in the mid to high 70's for most of the day and even got to the point I turned on the AC just to cool the apartment down a bit. There was one person who was even more happy than me to be back in California. That would be my cat pictured above. One of the big drawbacks in living in a place like Seattle was that we just did not get much sun. To make matters worse, my apartment in Seattle did not really get any direct sunlight.

When you have a kitty that loves to sun bathe, that can be a problem. Now that we are back in Southern California and I have a southern facing apartment, kitty just loves to spend his day sprawled out and laying in the sun. Lucky for him he doesn't realize how much more expensive it is to live here. Despite a higher salary than what I was earning in Washington, I'm really not saving more money. In fact, I'm probably saving less. We will see how it all equalizes as soon as my move in cost are gone and my girlfriend eventually makes it down, but for now, definitely not saving as much money as I was before.

Microsoft and Yahoo - An Ex Employee's view

So my quick thoughts on the proposed Microsoft and Yahoo deal after a comment by bluejay311 in my last post.  . What the hell is Microsoft thinking? Quite frankly this is Microsoft's capitulation that it just can't compete with Google by building it's own solution, so it will go out and acquire one. The hope, I'm sure, is that by combining the second and third largest search providers into one, you can hopefully take out the behemoth Google. I just don't buy it.

Perhaps, and I think its a big perhaps, this strategy might work, but I don't think so. Search will be won by he who can deliver what the end user wants. In most cases this will be relevance, speed, and perhaps content. I'm not sure how by combining forces, Microsoft and Yahoo really address either of the first two. A second and third rate solution combined, don't beat the front runner. I liken it to basketball. In a trade involving a superstar and two really good, but second tier players, the team receiving the superstar always wins the deal hands down. It simply is a matter that there are certain things superstars can do that you can't get anywhere else. In this case, Yahoo and Microsoft just can't compete in the things that matter.

Where the deal does make sense is on the advertising side of things. It might work because Microsoft actually has pretty good technology in Ad Center, it's ad platform, and Yahoo has a much deeper advertiser base. Combining these two things gives the combined company a chance to woo advertisers to its platforms. But the problem here is that this is only a secondary consideration for advertisers. Advertisers want to be where the eyeballs are. A combined Microsoft and Yahoo might have enough eyeballs to make it worth while, but I'm not so sure. There are a couple more reasons I don't like it.

• Yahoo seems to be fighting it - Yahoo is doing its best to find an alternative, even going to the point of exploring a possible partnership with Google.  How likely is it that the new company will integrate nicely with their new acquirers after they fought so hard to find alternatives.  How much of the top talent will just get up and leave?


• Microsoft is overpaying - $44.6 Billion. Really? This will take most of Microsoft's cash horde as well as a stock offering. This deal values Yahoo at over 60% more than the close the previous day. This on the heels of a $6 billion aQuantive purchase, a 200% premium at the time.  Why is Microsoft continuing to pay such steep premiums.  Is this a sign of desperation?


• Mergers are just hard - I've been through a few.  They are never easy.  I can't imagine how hard it would be for two companies of this size with their own very unique cultures.  Not to mention two companies that have been direct competitors for so long.

Microsoft may just have no choice but to make this move.  I believe they realize that Google is just too big to take down by themselves, and so are looking for any means necessary to do it.  If you don't believe what I have to say about it, just look at what the market did to Microsoft stock after the announcement, down double digits.

Don't Panic!

The market has been quite turbulent. I myself have decided to walk away from it and not pay too much attention. Even in my regular portfolio, I'm not that heavily invested in stocks, so I can afford to not worry too much. That being said, with the wild swings of the market as of late, I have seen one day drops in my portfolio in the $1000 range which makes me nervous.

However, when things look bleak, it is time to start looking to buy things. You can essentially think of the market as going on sale, and don't we all like a good sale? Like my man Warren Buffet says, “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market”. Given this bit of advice, this little 10% drop or so at the beginning of the year is nothing. I'm in fact somewhat excited by it because I really want to buy into some good stocks.

That being said, wait a few more percentage points down. The perfect case study in this is Google. Google is down to about $500 from a high of $740. This stock is in no mans land at this point. I would not be a buyer of it, but I also might not be a seller of it. Google has good long term prospects, but right now the stock is getting beat up along with the rest of tech. Is this panic selling? Absolutely! But if you can't stand to watch the stock drop another $100, you shouldn't be in it. It can easily go down another $100 because it is so tied to online advertising, and in a recession, which everyone is predicting, advertising is one of the things businesses cut back on first.

If however, you can buy the stock and ignore it, than this would be an excellent time to consider buying into it. It is all about the type of person you are. Long term investors want to seriously start looking at the market, and trying to pick some stocks up that you have wanted for a while. All others who let their emotions ride the roller coaster along with their stocks are best to avoid the market until things start leveling out.

Sushi Land

I went back to Seattle this past weekend, and one of the places I stopped was good, old, cheap Sushi Land. Actually, I went twice. Considering I only had four meals there, taking half of them at Sushi Land should tell you how much I miss the place. My two meals there came to a total of about $20 each. For that price, I was able to eat until both me and my girlfriend were quite full. Since I normally focus on nigiri rather than rolls or noodles, I'm able to eat quite cheaply. Most of the nigiri is $1.50. The one general exception is pictured to the left, the sockeye salmon.

Sitting here in bright, warm, Southern California and thinking about the sushi almost makes me want to move back. OK, maybe not.

To Tip or Not to Tip

I'm one of those people who in theory, don't really believe in tipping yet I do it anyway, even when I get horrible service.   The side of me who doesn't really believe in tipping believes so because I believe I pay for a service up front.  The price of the service is built in into my bill.  When I go to a restaurant, I pay a premium to eat there.  If they wish to charge me more to cover the salaries of their workers, so be it.  But I do not feel obligated to do the job of the owner of the restaurant, which is to pay his workers.  While some may argue that the wait staff is paid less  because tips are factored into their pay, I simply respond that again, I'm not responsible for other people, however callous that may sound.  Pay is between an employer and an employee, and if the employee is not being paid enough, it should be brought up with the employer, not the customer.

With all that being said, I always tip, even when I'm generally unhappy with the service.  Not sure why I do it, but something just compels me.   Perhaps it is a sense of guilt, although I like to think I live my life pretty guilt free.  For whatever the reason, I almost always tip and it is almost always quite generous.  However, I had cause tonight to not tip.

My movers came to deliver my stuff to my new apartment.  I tipped the crew at the origin and planned to tip the crew (who was different) at my destination.  However, the guy who showed up was clearly unorganized, and wasn't sure what was my stuff and what was another persons.  He also shows up woefully understaffed, he brought only one other guy with him.   Since he showed up at 7:00 p.m., I decided to help lest he be here till Midnight.  What upset me even more was that it was very clear that many of my belongings were mishandled and not treated with care.  There were boxes with water damage (most of the contents were safe however), there were boxes labeled "This End Up" that were upside down, they dropped the bed (that was thankfully covered in plastic) onto the wet grass.  The list goes on and on.  So I decided to not tip them.  I felt bad for about 30 seconds, and then I got over it quickly.  I'm up typing this at 1:30 a.m. because they left at around 10:30.

So what do you think.  Do you always tip?  Are there times you don't?  Why  not?

Work - Learn Not Earn

I was having lunch with a former colleague from Microsoft. She was telling me how she was reading the book Rich Man Poor Dad and thought of me as she read it. In that book, Richard Kiyosaki describes how each job he took he took more for the experiences he would have and the lessons he could learn rather than the money he could earn from the job.

It is true. Each job I have taken I have taken with purpose. I have done this because I know that life is much more a marathon than a sprint. It is like my lesson on compound interest. Small sacrifices now can have a big impact down the road.

Now, that being said, I've been pretty lucky.  It's not like any job I took forced me to live in a box and survive on Top Ramen.  But as I was considering whether or not to take a certain job, I definitely focused much more on the characteristics of the company and the job than on what my paycheck would look like.  This continues to pay off with each subsequent job I take as I'm very easily able to articulate why I took the job and what I gained from it.  This actually means I can generally get a job that paid me significantly more than what I made previously because I have had great experience and have a career with purpose.

So I am not advocating ever taking a significant pay cut just to get a job that gives you slightly better experience and learning opportunities.  Doing so has other bad side effects later on down the road.  But never ever make salary your primary concern.  Working to learn not earn will keep your career trajectory aimed very high.