Forbes.com - TiVo Off The Mat

Here is an interesting short read.  If you have been following me on this blog, you will know that I am receiving Forbes Magazine for free.

Here is a quick blurb about how TiVo's Chief Executive Officer bought 10,000 of the company's shares.  This is the first time in eight years that one of the executives have purchased shares in the open market.

Tom Rogers, the Chief Executive, feels that they are undervalued.  The article discusses the following factors:

• Increased spending on research and development to handle both internet media and cable/broadcast content. 
• Increased value by decreasing DVR prices but also increasing monthly fees
• Likely settlements from AT&T and Verizon
• Possible expansion with large media providers (such as Time Warner).

Read here for more details:

• TiVo Off The Mat on Forbes.com

You can support me by subscribing to Forbes with the following simple steps:

• Click on this link to be taken to Upromise
• Click on the See Deals and Shop button
• In the next window, you can either click on Barnes and Nobles or enter the following address in your web browser: http://www.barnesandnoble.com/s/forbes

Invest in Real Estate via a REIT?

Here are a couple of additional reads if you are interested in investing in a Real Estate Investment Trust (REIT).  The benefits of investing in a REIT are diversification and liquidity.  Be sure to review the tax implications of this type of investment.

There are two articles that can be found on Forbes.com that cover the:

• Largest commercial property trusts
• The biggest REITs

For more information on wikipedia on REITs, click here

To subscribe to Forbes magazine, click below:

5 investing bubbles?

In this small piece on Yahoo! Finance which is actually from CNNMoney.com, they discuss five possible investing bubbles and each of their brief rationale.  They are as follows:

• China economy (yes)
• United States Treasury Bonds (no)
• Pure-Play Shale Rock Company Stocks (yes)
• Cotton (minor yes)
• Gold (yes)

Would I short any of these?  Probably no.  

 

Would I take money off the table if I had significant investments in them? Yes.

 

Would I hedge against them if I had significant investments in them? Yes.

 

For more details, click here to go to CNNMoney's website.

Click on the following link to subscribe to Money Magazine for 1 year with auto-renewal.

Time to invest in Japan?

In the June 2010 Money Magazine issue, there is a section outlining how Japan's economy will benefit from the successes in China.

You will need to buy the current issue if you want to read all of the details, but here are three ideas on how to invest in Japan.

• VGTSX which has 17% in Japan (Vanguard)
• LLINX which has 30% in Japan (Longleaf Partners International)
• EWJ  which is an exchange-traded fund (iShares)

Click here to subscribe to Money Magazine for 1 year or 2 years.

Major indexes are yet even more overbought

Last week, I thought the major indexes (such as the ETF symbol DIA) was overbought.  I continue to feel so.  On the flip side, the market has been overbought much of of the last 12 months.  

Support is around 102.5 to 103.

Markets still seem a little overbought

My last market update was that they seemed overbought.  Although the short-term extremism (if that is a word) is not as severe, it continues to be so.  I am still probing and taking positions that would benefit myself if the market would drift to the downside.  The short-term support for the DIA would be somewhere around 99 and 100.  For the USO, it is around 35.

Crude Oil is Oversold in the short-term

I believe that Crude Oil is oversold in the short-term.  If you look at the United States Oil Fund ETF with trading symbol of USO, it is down about 10 percent from its January 6, 2010 high of $40.97 to today's close of $37.25.  I believe it could go up to just around $40 in the short term.

Disclaimer: I either own and/or control long positions in USO.

Market Update

Just a quick update on my thoughts.

• Equity market averages have been consolidating.  The Dow Jones Industrial Average looks like it is in a tight trading range of about 300 points.  Look out when it breaks either way.
• On this post from December 3, 2009, I reported that Gold was just about as overbought as it could be and I was looking for a short-term target of $108 based on the Gold ETF with the trading symbol GLD.  It has hit that target and even a little more.  (Note that on that previous post, it appears that the link I inserted for the GLD chart updates every day so to know what the chart looked like on December 3, 2009, you would need to look at an archived chart. It looks like GLD is now consolidating nicely and it may be able to make a move in the next week or two.
• The Crude Oil ETC (USO) appears to be short-term overbought.  The risk/reward appears to be favorable to enter a position where you would benefit from a downward movement. I am not doing anything at this point. If the market moved another 5 percent higher, it seems like it would be even more likely to fall.

Looks like the DJIA is setting a base for a 400-point move

Just looking ahead...  It looks like the Dow Jones Industrial Average is setting a base to make a potential move.  Sure it may have a little more consolidation in the next day or so, but if everything continues as it has been, we could be around 10,750 in the next 10 trading days.  Call it an early January effect, a Santa Claus rally or what not.  Maybe it will be part of the $10 trillion sitting on the sidelines that I addressed in this earlier post.

At this point I think the risk and reward is leaning toward accumulating positions and increasing holdings.

Disclaimer:  I have a position where I benefit if the Dow Jones Industrial average increases in value.

Exited my Gold Position

In this previous post, I reported that Gold was overbought and that I had a position where I would benefit from a fall in gold prices.

Here is an update on my risk and reward estimate.  I have exited the position since the price has dropped about $6.50 based on GLD and about $65.00 on the spot price.  My initial target was a support of $108 for GLD or about $1,080 for the spot price.  At this time I am not ready to risk about $6.50 in profit to wait for another $3 or $4 to develop.

I expect prices to fluctuate for the next two weeks in the range of $108 and $113.  I would not be a buyer at this time unless it fell below $108.

Gold appears to be the most overbought in 2 years

For at last the short term, Gold as represented by the SPDR Gold Shares ETF trading symbol GLD appears to be overbought.  Even when you look at the 5 year chart it is just about as overbought as possible. 

There is this report that Billionaire investor John Paulson (known as the "other" Paulson) is taking long positions in mining companies and the metal.  This in addition to recent positions in several large banking stocks.  Click here for the video.  This is the investor who actually started placing investments against the housing market in 2006 and made about $20 billion for his hedge fund.  He personally profited about $6 billion to his benefit.

If there is a short-term correction, I would expect support to be around $108 at the time of this post.

Disclaimer:  I hold a small position where I would benefit from a lower price of Gold.

How much farther can Gold prices go?

I heard a report that the bullish sentiment has been high for a number of days now. I found a report by Mark Hulbert that says the previous four Gold tops at bullish sentiments of around 57 to 65 percent with a subsequent drop in prices of up to 24.8 percent. Currently, the sentiment number is 68 percent (note that it is above the recent highs).

Obviously, any market can remain overbought for extended periods of time, but usually not for very long. Remember that when a lot of people are already bullish, the contrarian view is that there isn't much money on the sidelines left to drive up prices and thus, prices will fall. Looking at gold charts, a short-term correction would take it to just above $1,000 per ounce. This would make it about a 10 percent drop.

Click here for the Mark Hulbert article

Disclaimer: I don't directly control any investments in gold.

Homes for less than $10,000 on sale in Detroit

Hmmm. Sounds like there's an opportunity and lots of people are taking advantage of this. It reports one person from California has purchased nearly 200 homes.

Click here for the article on CNNMoney.com.

Remember that Real Estate is not a liquid investment. This means, it takes time before you can access or convert it into something that is usable (think sell or borrow against). Compare against a highly liquid asset such as a bank account where you can deposit money into an account and withdraw the same money five (5) minutes later. After you make this purchase, how long will it take for you to "get out" of this investment?

Risk/Reward: Need to weigh the risk of needing liquidity and management issues (dealing with tenants, property management companies, trips to location of property, insurance, tax, liability or legal issues, etc) vs. the reward of potential monthly cash flows from rents and appreciation of the underlying asset.

EMC - Pay cuts across the board or layoffs?

I can't understand what their employees and executives are going through (not in their shoes), but it seems to make sense that in companies and institutions that people should take pay cuts (across the board) vs. laying off a percentage of employees or executives.

A recent marketwatch article states that EMC executives took a 20 percent pay cut, followed by an additional 5 percent pay cut and are now encouraging employees to take the same 5 percent pay cut. In this way, they can save $100 million and noone loses their jobs.

May that's the risk averse side of me coming out...it's safer for everyone to take a pay cut than to risk having some people lose their jobs and suffer those circumstances.

Disclaimer: At the time of this post, I controlled some EMC stock.

Investing Ideas - 20 most profitable Tech companies per Fortune

Click here for the Fortune on-line article.

In general, tech companies have very little debt so in economic downturns (such as we are in now), they can “weather the storm” as long as they can manage their expenses.

Disclaimer: as of this post, I don’t directly own or control any of the 20 companies listed.