Long Term Investments Are Out of the Question

Of late, I've found my attention span in the stock market is decreasing rapidly. I used to be of the standard "buy and hold" mentality, picking great companies with potentially great stocks. But the seeming inevitability of the buy and hold strategy was that eventually, the stock would go down - sometimes in a big way, thanks to a profit miss or product issue.

The result is that my investment strategy has morphed, first from holding stocks for the better part of a year to instead a few months, down to a month or two at longest, and most recently, it's been unusual for me to even hold a specific stock for even a week. Instead, I've been looking for momentum plays, with specific actions that would temporarily boost a stock or stem a drop. This change in strategy has made it easier to turn money over and better regulate the potential spikes.

By turning into more of a day trader, per se, I don't fall emotionally for stocks, but instead look at them as faceless entities with ticker symbols, whether it's AAPL, GOOG, TIVO, or others. In fact, I even prey on companies that have fallen on hard times to benefit from their eventual rebound. Even a 3 percent jump in a day or two might be enough for me to sell. As a result, I've made more in stock profits in January already than I did in December, and more in December than I did in all of 2006 prior.

I don't know if this is a recent stroke of luck or the result of good planning. But for now, we'll keep trading off CES and MacWorld, and earnings hit or misses. It's working.

Listening to ''Walk Down (KVA Club Mix)'', by Kyau & Albert (Play Count: 2)

Apple Stock Pays for AppleTV, New Airport Extreme

There's nothing more assured from a MacWorld Expo keynote than AAPL stock volatility. We took the bet last week that the rumors around Apple were true - that Steve Jobs could surprise us all and set the stock higher. We also bet that ahead of CES, TiVo, still undervalued, would pull of some tricks to elicit interest in their stock. So we overweighted the portfolio in a big way.

Thank goodness we were right. We're not wealthy by any means, but we cleared about $2k from 5 days of trades in the two, and that was more than enough to treat ourselves to the new $299 AppleTV and new Airport Extreme wireless base station, sporting 802.11n connectivity. The AppleTV will be a welcome addition to our new setup, including new DVD players and plasma screen, as we catch up with Silicon Valley expectations. The new Airport should get our wireless a bit more regular, faster and reach further. And as far as I'm concerned, they were free, and we have more than $1,500 in profits left over, to point somewhere else.

Listening to ''It's My Turn'', by Pete Tong (Play Count: 3)

401k Cap Rule Confuses Paycheck Reality

Quickly glancing at the direct deposit data in my bank would show you that over the last three pay periods, my take-home amount had steadily increased - without my knowledge of any raise, paid expense reports or even a holiday or end of quarter bonus. Having grown accustomed to the same number chiming in every two weeks, this variation, first two weeks ago, and even more odd this most recent Friday, caught my eye. Upon further investigation, it turns out I'm still the same old schmuck, and an obscure footnote on our 401k plan had kicked in.

I recognize the need to save for the future, and to start early is the best policy. Therefore, at the beginning of the year, I engineered my givings to the company 401k plan to be a good percentage, but not so high as to leave us short each month. Every two weeks, my paycheck is split in a dozen pieces, with the biggest chunks going to me, federal and state governments, and to the 401k. But our corporate plan, through Fidelity, is capped at a contribution amount of $15k annually. So, even if you jack up your contribution level to 20, 30 or even 50 percent of your salary, once you reach $15k in donations to the plan, it stops cold, leaving your future paychecks at the mercy of Uncle Sam, instead of being held for your future retrieval, tax-free.

At the rate I had elected to shuttle cash to the 401k, I hit my cap in early November, when only a portion of the usual amount was excised from my take home pay. This Friday's check, seemingly too high, had not taken out a single dime, and we won't see any further donations until the beginning of 2007. It may be an arcane rule, and somewhat confusing, but I plan to simply recognize it as something resembling a holiday bonus, and will forget about the future for a full month or so.

Listening to ''Rendezvous'', by Paul Oakenfold (Play Count: 6)

It's Hard to Pay BIlls With Eyeballs

In the late 1990s, during dot com mania, the Media Metrix rankings ruled the business world. Geocities fought with Yahoo!, AOL, MSN, Excite and others to show they had the most unique visitors, the most click-throughs, and the most eyeballs. Talking heads on CNBC were ecstatic when a company with major eyeball momentum was readying to go public. But, as we know, the only way your eyeballs will see a lot of these dot mania companies now is if you look in the obituaries or in the history books.

So, if you're not yet ready to focus on profit/loss statements, but think your company has some serious wind behind its back, how do you value yourself? Is it done through the number of users, the number of hits on your Web page? The number of units shipped, or megabytes served, and downloads or views?

Robert Scoble says in this new world, a new audience metric is needed, which he terms "engagement", or how actively participatory the audience is. It's not just about the raw number of eyeballs, but how involved they are - does coverage in said media result in click-throughs? Does a post generate comments and further linkage?

In case you think this is a bunch of flim-flammery disguised as new economy logic, the debate over statistics can make or break company valuations. Recently, Digg has been rumored in TechCrunch to be in discussions with News Corporation for a potential acquisition, to the tune of $150 million. But VentureBeat says that conflicting statistics on the site's reach may kill the acquisition altogether. After all, if you can't agree just how many eyeballs are on the site, then how can you decide how much each eyeball is worth, and eventually, what the purchase price should be?

There isn't a quick fix easy answer, but if a business model isn't sustainable to the point of profitability, then regardless of how popular a service is, it may never be worth it to an acquiring company, for whom the newly acquired service will just be a future drag on EPS and P&L. Just look at Time Warner/AOL. AOL had an incredible user base, but there was no synergy there. Time Warner didn't see the popularity of its content skyrocket, but instead, it eroded from within as AOL became a massive boat anchor. Trying to make a business based on click throughs, page views, user count, downloads, video plays and eyeballs doesn't work any better in 2006 than it did in 2001. I thought we had learned this by now.

Listening to ''Never Knew Love'', by Stella Browne (Play Count: 8)

I Bet Wrong On AAPL, Again

This afternoon, Apple announced blowout numbers, including profits of $546 million on 1.6 million Macs sold (1 million portables) and nearly 9 million iPods in the just-concluded quarter. As a result, the stock is up more than five percent after hours, to $79 a share, and I'm not benefitting, as I sold all of my AAPL shares at a measly $72.87 a week ago Wednesday.

I have followed Apple Computer stock closely for the better part of a decade, and started investing with a measly 25-share pickup in 1999. Though not always invested in AAPL, it's always been on my watch list. I thought I had the stock figured out. In 2005, along with my Google (GOOG) stock, I had made a good profit, but the heady times where I could expect a 2-3x improvement are long behind us. As a result, I've bought and sold the stock frequently, hoping to cash in by timing the dips and the peaks.

In the last two weeks, with CEOs losing their jobs over accounting stock options issues, I believed that Apple was still at risk for yet more bad news. I thought that even if they had a strong quarter, the uncertainty and potential restatement of previous quarters would be a drag on the stock. Beyond that, anyone who watches AAPL closely knows that even the slightest hint of weakness can cause a tidal wave of financial negativity. With a product transition to Intel processors, and the occasional analyst note regarding slowing iPod sales, I thought I was the smart one by selling my stock for a profit and getting out below $73. Maybe a decrease after earnings would get me a chance to buy in again in the mid to high 60s?

Clearly, I was wrong. Again. And now, while my money sits in cash at eTrade, those who kept the faith and tried not to game the stock are reaping the rewards. I still love my Macs, but I'd love them even more if I wasn't such an idiot investor.

Online Window Shopping: A New Macbook!

When it comes to technology at the office, I feel like the smallest child at the table who looks around for scraps and grabs whatever the big guys didn't take already. It may not be the best stuff, but it gets the job done.

My cubicle consists of two computers - one six-year-old desktop Mac (Dual G4 450), and a Dell laptop which likely has some kind of hardware defect that has the hard drive make a random clicking noise every few minutes or so. Similarly, each Blackberry I've had, since my first one in 2002, has been taken from someone who left the company, for whatever reason. Even the cell phone number I feature here on the site is one that used to belong to someone else. When I took it away, I simply e-mailed everybody and asked them to update their address books, but even today, after using it for 18 months, I get his calls.

That being said, I think it's time to make an upgrade - to a new laptop that works well on both Mac OS X and Windows. There's no need to be tethered to a slow, clunky, desktop, and no need to have two machines. Keeping our tradition of online window shopping, I headed to Apple.com to design the machine I want - now, and yes, I admit to choosing design over speed. I simply want a black one, and only the consumer level lets me do so.

The full setup, including 2 GB of RAM and a 120 GB hard drive, sets me back just over $2,200, plus tax. It's enough to make me buy it and issue an expense report, if only I knew it would be approved... see below.



Listening to ''Twin Town (Nick Warren Mix)'', by Ian Wilie Vs Timo Maas (Play Count: 3)

Online Window Shopping: A New Car!

It's often said that one of the biggest concerns any e-commerce Web site has is that too many people are filling shopping carts, and then abandoning them before the sale is complete. While some point to slow page loads, or difficulty in page navigation, I'd argue the Web is a fantastic way to go window shopping, both to compare prices, and to fantasize spending money we may not have anyway.

I, for one, have been caught every once and again with my cart fully loaded at the Apple store, working to see if add all the bells and whistles to the newest laptop or desktop, just how expensive I can make the darn thing.

Assuming I had all the cash I would need, I thought I'd present you with my new car - the one I keep thinking I'm going to get someday, if money fell out of the sky, yet somehow didn't lead to inflation or a devaluation of the currency. (Tough economics there!) On BMW's Web site, you can design your own vehicle - coupe, convertible, sedan or SUV, and even get pricing terms. I present to you my new 333-horsepower 2006 BMW M3 Convertible, with all the options.



The above includes:

* Mystic Blue Metallic exterior
* Dark blue top
* Gray Leather with Shadow Trim
* Heated front seats
* On-Board Navigation System
* Adjustable lumbar seats
* AM/FM stereo/CD with MP3 capability, 10 speakers
* Harman Kardon Premium Sound System
* Floor Mats

All this, and more, for a mere $62,000. Now, would I ever really by a BMW online? Probably not. And if I had so much disposable income at hand as to consider really buying a top-of-the-line BMW, would that be the wisest choice to spend all my cash? Probably not - but who cares? It's online window shopping, with no car salesmen!

More fanciful shopping lists sure to come soon...

Listening to ''Live at Aria Montreal'', by Dj Tiesto (Play Count: 1)

Update: Money Transfer Still In Limbo

The Players: Wells Fargo Bank, eTrade, and Bank of America

(Follow on to "Give Me My Money. Now.")

For those keeping score at home, the financial issues between eTrade and Wells Fargo still have not sorted themselves out. In a highly wired world, it seems the only "instant" way to send cash is to use PayPal - and I don't know anybody who has yet managed to tie their stock brokerage into the online payment eBay subsidiary.

To recap:

* On Thursday at noon, I sold half of my Apple stock holdings in eTrade, both to diversify, and to raise needed cash.

* Friday, Saturday and Sunday went by. No sign of my cash in eTrade being available to transfer out of eTrade.

* Monday night, after checking throughout the day, the money became available, and I immediately set up to transfer $5k to Wells Fargo.

* Tuesday and Wednesday... nothing. Now that it's early Thursday morning, the money is no longer in eTrade, and certainly is not at Wells Fargo yet, let alone ready to be spent or written out in a check to my wife. (One potential recipient)

Are you telling me that with some of the most online-savvy brokers, it takes a whole week to sell stock, and transfer the proceeds from one account to another? Color me unimpressed.

Listening to ''Summer Sun (Ibiza Mix)'', by 4 Strings (Play Count: 8)

Give Me My Money. Now.

The Players: Wells Fargo Bank, eTrade, and Bank of America

The Hypothesis: I should be able to get my own money when I want, as fast as I want, to do whatever I want.

The Reality: Although each of these institutions offers Web-based transfers, and in the case of eTrade, stock purchases and sales, I don't really get access to my own earned money immediately, despite the fact it's mine. While they have made it relatively simple to move money from one institution to another, and have even gone so far as to make it without charge (that's good!), I find myself consistently frustrated that I can't get to my own cash, in the event I need it.

I have been a loyal Wells Fargo customer since 1998, and opened an eTrade account during the online stock boom in the 1999-2000 timeframe. My wife, a loyal Bank of America customer herself, was acquired following months-long negotiations involving multiple parties. While we've so far avoided getting a joint checking account, something that may change soon, it is common for me to need to write her checks to cover outstanding items, or to spot her on excess spending. And every once in a while, what she needs exceeds the cash I have on hand, meaning I need to draw from the till at eTrade to make ends meet.

One easy way would be to transfer to her Bank of America account directly from eTrade, but we've learned that can take 4-5 business days, and lots of waiting around to figure out if it's really happened yet. The same is true if I transfer from eTrade to Wells Fargo, but the onus would then be on me to wait - more accepted, obviously. I could write her a check, and post-date it, but that'd be silly.

And there's one more option - move all my banking to eTrade. After all, they do say they offer competitive savings rates. But that's not happening any time soon.

Until then, we still have two major issues:

1. I can't figure out why I first can't send my money from eTrade to Bank of America or Wells Fargo immediately.

2. Why doesn't money I gain from selling stock on eTrade become immediately available, either for reinvestment or for transferring?

This Wednesday, I sold half my Apple holdings, to diversify and to gain cash. But the money hasn't appeared available to transfer to either Bank of America (her) or Wells Fargo (me), several days later. Foolishness. It's not as if eTrade is going to bounce a check if they send me my money. Last I checked, they were doing fairly well. And as a strong customer for both them and Wells Fargo for several years, one would think that the skids would be greased a bit for simple transactions like buying, selling and transferring. They're basic. But instead, I need to deplete my savings to give my wife the money she needs, and then wait a week or so, optimistically, to get my own money out of eTrade and into Wells Fargo to refill the money pit. It's real simple - make a change. Give me my money. Now.

Listening to ''That's Life'', by Paul Van Dyk (Play Count: 6)

Will Terror Woes Mean Big Bucks for Some?

With the recent news that British authorities thwarted a potential terror strike on multiple airliners headed from the UK to the United States, where the alleged perpetrators were set to ignite liquid-based explosives disguised as carry-on drinks or even digital devices, many travelers are lamenting not only the extended lines making a bad situation worse at airports, but others are distraught over potentially being separated from their iPods and laptops for the duration of the flight.

But the end results aren't all bad for all companies. Some are sure to find a way to capitalize on any opportunity. Here's a not-so-tongue in cheek look at who benefits, and who loses, from the recent new security guidelines:

WINNER: WebEx

The Web meeting powerhouse has extinguished dramatic challenges from Microsoft's NetMeeting, PlaceWare, Centra and many others to remain the king of the hill in holding meetings and presentations online, rather than forcing executives to fly in to meet on site. If enough businesspeople tire of the long lines and forced inactivity at airports and on flights, WebEx might see increased business by customers and increased adoption from those who have been holdouts.

LOSER: Apple

I can't think of a better use for an iPod Video than on the airplane. There have been a few trips where I wish I could just break out the iPod and catch an episode of CSI or Law and Order, or even South Park. Additionally, the airplane is where I most frequently use the iPod Shuffle, just after the airlines say it's okay. While just about everybody who wants an iPod already has one, the airlines are a great place to display the white earbuds.

WINNER: Amazon.com

If you can't use your laptop, and you can't listen to your iPod on a flight, what are you going to do, start up a card game with your fellow passengers? No - you'll probably read, or sleep. Amazon is the de facto standard for purchasing books of all kinds on the Web, whether for business or for pleasure. Considering that the pleasure quotient at airports will be diminishing, maybe a good book will help take the edge off.

LOSER: United, American Airlines, etc.

The airlines have not been in good shape financially for a long time, and any incentives to drive customers away from flying certainly don't help. For United and American Airlines, the two largest domestic carriers, bankruptcy has never been that far away. Additionally, increased security requirements and more unhappy customers can further diminish margins and revenue for a business who doesn't need more of the same.

WINNER: JetBlue

While the rest of the airlines have been slow to adapt to new technology, being very reluctant to even offer power ports on seats, and have instead focused on wedging as many passengers in a small area as possible, JetBlue is well known for offering customers DirectTV to every seat, in flight, whether you're first class or coach. If you think you absolutely need to be entertained during your flight, and who doesn't... JetBlue is a great alternative to the cattle pens of United and Southwest.

LOSER: Evian, Arrowhead, etc.

While airlines have done a fairly good job of keeping fliers near soda or water throughout a flight, others prefer to bring their own on the flight. With the latest news, this certainly will go away. While it may be an immaterial knock on the bottled water providers' bottom line, it will certainly break the habits some have and force them to go another way - maybe toward the $5 shots of hard liquor to keep them in a stupor until the plane lands...

Listening to ''Praise the Lord'', by Paul Oakenfold (Play Count: 6)

Stock Market Hours Are Antiquated

With small exceptions, including extended hours trading, the time in which the general public has the opportunity to buy and sell individual stocks is still largely tied to ages-old tradition and scheduling, tied to the East Coast (New York City) and arcane hours kept by men who it seems can't eke out an eight-hour day. For those of us on the West Coast, the time in which the stock market is open is surprisingly fleet - the market opens, for real, at 6:30 a.m. Pacific, and closes shop at 1 p.m. - just under seven hours (not taking time for lunch).

As somebody who works for a living during normal business hours on the Pacific side, but also prefers staying up late to getting up early, overlap between open market hours and time I have to actually study the market and make transactions is ridiculously small. In an era of 24-hour shopping networks on TV, and anytime shopping, news and sports on the Internet, it really doesn't make any sense that trades can't take place whenever the heck I feel - after all, it's my money.

The idea that a bunch of businessmen in suits, shouting noisily, waving papers in the air continue to dictate the time in which I can make significant financial decisions, in this era, is ridiculous. Though there are a few loopholes, it's often the case that the majority of stock moves have taken place before I've even checked the ticker. I look forward to the times, and soon, that this changes.

Listening to ''Nautical Bodies'', by Paul Oakenfold (Play Count: 5)

Getting Rich Quick Still Doesn't Work

Back after dusting off our wounds from the Vonage IPO disaster, we're still on the hunt for potential bargains in the stock market, looking for anything with a chance to jump. For some reason, I'm not all that patient with stocks that I just don't know all that well (or think I do). So, today featured a number of IPOs, including J Crew, and Utah software company Omniture. I made my bet and got into Omniture this morning at $6.39, below the initial price of $6.50.

Sure enough, after I did that, the stock started to trend down - to $6.15, to $6.10, and down... as I should have known, right? It was an instant replay of the Vonage mess.

Yet, by end of day, somehow, the stock turned itself around, finishing at $6.53, up a mere 2% for me, and less than one half of one percent for the company. Yet, for some reason, silly news wire reporters remained confused. Reuters said "Omniture shares rally in market debut", while TheStreet.com said most of the IPOs were "duds". And for anybody scoring at home, J Crew was up 28%. Guess I picked the wrong horse.

Listening to ''Moonboy'', by Christopher Lawrence (Play Count: 4)

Not a Sirius Long Term Investment

The stock market continues to bug me this year. Without any startlingly obvious opportunities in which to invest in clearly undervalued companies, I've been sitting on the sidelines of late, watching my Apple and Salesforce.com stocks churn well below my entry points, and keeping the rest in cash. But that's dull, and it's time to start taking more risks and seeing if I can flip some momentum plays for short-term cash.

This week's candidate was Sirius Radio. I don't own a satellite radio and don't think I ever will, barring any chance I moved far away from the A's flagship stations and wanted to always have access. But Sirius is one of the top two leaders in the space, and its stock is well off 52-week highs. So on Tuesday, I took my cash and jumped into the stock at $4.00 even. Flat on Tuesday, it jumped about 3 to 4 percent on Wednesday, and after a few pennies rise this morning, it was trading at the 4.23 level or so, up 5 plus percent in two days.

Not caring about whether I held it for any length of time, and not convinced it would continue to appreciate, I took my smallish gains and dumped it this afternoon for a quick few hundred bucks profit. It's money I didn't earn, but I have it now, and I'll stay on the prowl for the next thing, whatever that may be. And for the record, after selling at 4.22, the stock closed at 4.19 today. We'll see if my quick trade made any sense.

Listening to ''Tom's Diner (7" A)'', by DNA & Suzanne Vega (Play Count: 4)

S&P Analyst to Stock Market Rescue?

I'm trying to be patient by holding on to stocks from Apple Computer and Salesforce.com, both of whom are great companies with strong products I use every day. But 2006 and the last few months especially have not been very good for either, and it's hitting us in the piggy bank, as I whined about after Monday's stock market close.

But it looks like help may be on the way. According to BusinessWeek, a financial analyst from Standards and Poors sees significant upside in both stocks, upgrading Apple from a Hold to a Strong Buy, and Salesforce.com from Hold to a Buy. Of course, one of the main reasons he gives for the renewed enthusiasm is that both stocks have been unfairly hammered. But I think I knew that already.

In early (very early) trading, Salesforce.com is up more than seven percent, while Apple is down fractionally. (Yahoo! AAPL, CRM)

Listening to ''Loveparade 2000 Live'', by Carl Cox (Play Count: 4)

The Stock Market Is Bleeding Us Dry

2005 was a good year for us in the stock market. Luckily for us, our investments in Google and Apple were some of the biggest hits of the year, and we got lucky with our timing on Baidu.com's IPO, among other short-term wins in Rackable, TiVo, etc. But 2006 has been a complete disaster, getting worse with every passing day, it seems. Even as the tech-rich NASDAQ continues to fall by full percentage points in every session, our own overweighted portfolio is getting killed.

Our two major holdings, Apple and Salesforce.com, are down 20 and 33% respectively from our average buy-in price, and Monday's activity saw our entire portfolio, including our 401k, take a dive, down another 2.5 percent. It's one thing to put money away for a rainy day, and quite another to see that money wash away in a flash flood of red ink. It's tempting enough to cut our losses and hide it in cash for the time being, but as any individual investor knows, that's exactly when the market would take a bounce upward - reverse indicators and all that...

Apple and Salesforce.com aren't the only stocks seeing their valuations recapitalized at a much lower level of course, but they are certainly the most painful for me. Tech giants like Microsoft similarly have continued a slide that looks to be unabated. And all we can do is wait and watch for things to turn around, whether it be a breakthrough on the oil and energy front, an easing of interest rates, or simply a spike in confidence, but our bets are made, and we're going to hold on.

Listening to ''Amsterdam'', by Oakenfold (Play Count: 1)

Free, Free, Free

We've lately been trying to save money. Beyond avoiding outlandish purchases, we're taking a lot of shortcuts to avoid spending money where we don't have to, so when we have the opportunity to get something for free, and have a good time as well, bring it on.

Last weekend, when the A's had three sellout games against the Giants, the team put on a promotion where Round Table Pizza gave away personal pizzas to every member of the crowd. Simply by exchanging the tickets, we could get free pizza for the next week. Having attended all three games, that meant on Monday, Thursday and today, we were at our local Round Table, spending all of $1 or $2 on lunch (covering drinks and tax) and doing our best freeloader impersonation.

This was made even better tonight, when a vendor from the office treated us to field-level tickets at the Giants game tonight in San Francisco. Not only were the tickets free, but so was the food, and drink, and continuing in my cheap phase, I convinced a colleague to drive there and back so he would cover gas. In fact, we parked outside of the stadium... again for free. Good deal! All told, we got three lunches, dinner, drinks, a game and parking for the princely sum of about six bucks this week - not saying that the food will do me any good, and that my waistline may be increasing at the same rate as my wallet, but it's a start.

Listening to ''Inertia'', by Fragile Feat. Alex Lemon (Play Count: 3)

Get Rich Quick!

Or at least, that's always the idea... why would you want to have to work every single day of your life and either not get rich, or have it take so long that you don't get to enjoy the benefits? Everybody wishes it were that easy, even if we don't admit it. That's one idea behind trying to time first-day IPO stocks, and why many try to get in on the ground floor of startups, with the hope that 2 to 4 years of 80 hour workweeks and the elimination of a social life will translate into riches beyond belief.

If you're of that type, and you're not exactly satisfied with how your first day results are on Vonage (as the stock dipped 15% or so in the first day, much to my chagrin), then Business 2.0 has the how-to list on creating a bulletproof successful startup. Of course, it always looks easy when you have lego-like cartoon images that demonstrate product development, launch and the inevitable requirement of talking to VCs. Heck, if they are so bright, how come they are just reporters at a industry trade rag that got absorbed by Fast Company a few years back? What? They thought we forgot? And remember when they were as big as phone books? How did that work out?

Listening to ''Adrenalin'', by Purple Haze (Play Count: 7)

To Vonage or Not? 1999 Redux

You know you're in a period resembling a bubble when companies that have a long history of consistent losses, without end in sight, who pride themselves on cost per acquired customer, are thinking of going public and raising ungodly amounts of money. You also can tell that the bubble period is upon you if you're actively considering putting money into the IPO on the first day "just in case".

Such is the case with the latest IPO du jour, Vonage, who raised more than $500 million after pricing its initial shares at $17 apiece. The VoIP specialist is looking to go public tomorrow, and hopes that its stock echoes the meteoric rise of Google and Baidu, rather than the sinking lead balloon of so many others.

Critics far and wide have criticized Vonage's model, saying the company doesn't offer unique differentiation over services such as Skype, yet somewhere out there are enough investors to give Vonage what it needs even more than customer growth - $500 million smackers. The only question is - will I too try to cash in on what might be a first day pop, for a stock I have no interest in holding long term? Will I have regrets if I do? Will I have regrets if I don't?

I famously had the opportunity to buy 100 shares of Google at 90 and walked away from the chance. I also flipped Baidu on its first day for some quick money, but was on an airplane when the stock first hit the ticker tape, and missed out on tens of thousands more. But I've also put money into stocks like Salesforce.com and Rackable on their first week only to see the trend go down or flat. One never knows, and if we did, the SEC would want to know about it. Keep you posted....

Listening to ''LSG'', by Sasha (Play Count: 4)

Flashback: Computer Layoff Payoff Alerts IRS

Today, at lunch, a colleague and I were recalling past jobs, and how struggling companies had elected to tell their employees the jig was up, and that their time had come to an end, sooner than expected. In the Silicon Valley, it's much easier to be laid off than fired, and in the late 1990s and early parts of this decade, it was incredibly easy, regardless of your job skills.

In January of 2001, having returned from a two-week mandatory holiday break, I was asked into a conference room and told that, due to financial shortages, the senior executives had foregone pay the last month or so, and that they were extending me the same courtesy, at least until they could close necessary funding to keep the company afloat, at which point I would be paid and lose nothing. I was assured that the funding was imminent and investors were very interested. Silly me.

A week or so later, again I was summoned into the conference room, and was told that the funds never were to come, and that was the end. It wasn't just me, but all of marketing, business development and sales had been let go as well - as the company would be sustained solely with engineers until the product could be sold to the highest bidder.

Doing the math in my head, I offered to barter with the cash-strapped firm, taking my Power Macintosh G3 (Blue and White) tower and monitor with me at the end of the day, instead of a paycheck covering the year to date. It was a good deal for us both - they wouldn't have to pay, and I got a new machine setup for the house. So, at the day's conclusion, I packed up everything and lugged it to the parking lot, thinking that was the end of that, and I never returned to the office where I had worked for two years.

I very rapidly found a job, less than three weeks later, and began anew with a new adventure. But the following March, the previous firm struck back, sending me a W-2 tax form to cover the value of the computer and monitor, the very day after I had submitted my taxes with the new W-2 from the new employer, thinking myself ahead of the game.

This snafu forced me to get tax adjustment forms, resubmit and pay the remaining tax owed, something I wasn't feeling so charitable about, having been let go by the company just a year prior. Worst of all, the IRS didn't correctly file everything, though they certainly cashed my checks right away, so in the next year, I started to get letters saying I had been found negligent and still owed the additional tax - now with fines due to lateness in payment. I wasn't even allowed to submit 2002's records until the 2001 data had been resolved. Several phone calls and letters later, the agency recognized I had been right all along, but the entire ordeal makes me think that next time I get laid off, I'll take the cash, including accrued vacation time and severance, thank you very much.

Listening to ''Slowblow (Darren Price Mix)'', by Depeche Mode (Play Count: 8)

Contrarian Market Advice

If I've learned anything, it's that I really don't have a clue when it comes to guessing how companies will make announcements that impact stocks I hold. Just a month or so ago, I mentioned that I'd played TiVo (TIVO) for a quick 5 percent bump, and jumped out of the stock around $6.00, expecting it wouldn't continue to appreciate. Yet, seemingly after that not-so-bold move, the stock has continued to grow - through $7.50 yesterday on news of their efforts to defend patents against EchoStar.

Now, this morning, we get the news that the company has extended its agreement with DirectTV for an additional three years, after an August 2005 release saying the opposite - that the two companies had parted ways. This too is good news for TiVo, and again, the company stock has jumped, surpassing $8.00 in early trading. That means that I left a full 33% on the table when I sold around $6.00. I hate that. It's called "sellers' remorse", and though I've always been told to lock in profits if you can and not to complain, I hate knowing I played the hand wrong.

In similar news, I've been a Salesforce.com (CRM) stock holder for some time - it's a great service our company uses, and I think Web hosted applications are the way the market is headed. Yet, yesterday, on what would seem to be good news, they acquired a company that will further their reach into wireless devices. While good, the news hit the stock for about 5%, as the adage on the street is the acquiring company is always punished.

While just two examples, it's certainly frustrating to be on the wrong side of a half-educated guess. It'd be wonderful to have a crystal ball that showed what companies planned next. But I guess that's called insider trading, and I probably should steer clear of that.

Listening to ''Messages'', by Solange (Play Count: 4)

401k Matchup Closer Than Expected

On March 7th, we started tracking how well our own individual investments were producing, in comparison to those selected by a "professional" running our 401k, through Fidelity. What we've seen is that while my peaks have been higher than those of the fund, the valleys are of course, lower, and with the 401k slowly trending flat to slightly up, a true measure of my progress vs. the 401k is instead just how many up days I have versus down days. If I'm up, I'm up higher than the 401k, and if I'm down, I'm down more than the 401k. It's that simple. It's rare that I would go one direction and the market another. So... a few weeks into our little unqualified, unsanctioned, nobody wins anything contest, the current standings are eight to seven, with my pulling ahead today at the end of market close. We'll keep watching.

Listening to ''Blue Fear'', by Sasha (Play Count: 7)

Are Blog Rumors Impacting Stocks?

In the late 1990's, rumors on stock boards from Yahoo!, Silicon Investor, The Motley Fool and Raging Bull would often have impact on the financial markets, whether through bumping up penny stocks in a quick pump and dump scheme, or suggesting rumors of mergers, take overs, new product shipments or product delays. While some of these people were caught, others made a lot of money in gaming the system.

Now, with community-generated media growing by leaps and bounds through personal blogs, and aggregation sites like Slashdot and Digg wielding a great deal of power in the blogosphere, some are trying to game the system through promotion of their own company's products, or through purchasing stock cheap, hyping a rumor, and selling when the stock goes up - migrating away from discussion boards, and to more legitimate, yet still unsourced sites.

One of these recent activities is described by Silicon Valley Sleuth, who charts a series of posts by a no-name blogger to Digg.com about the possibility of Google (GOOG) acquiring Sun Microsystems (SUNW). The blogger made multiple attempts to have his rumor picked up by Digg, and Sun stock, coincidentally or not, is up fractionally since he started. Should this be illegal, or has this person simply found a loophole, and enough suckers to help him make a profit?

Given the wide opportunities offered through freedom of speech, this individual and others like him, certainly have that right - but the responsibility is on site owners for Slashdot and Digg to reign in their algorithms or editors, to offer their readers the highest accuracy. Only though accuracy and consistency will readers continue to trust the sites, for Web users are fickle and can move along.

Nasdaq Market Rally Continues

While not as strong as Monday's rise, technology stocks continued upwards today, and given my complete lack of diversification - as I stick to the companies and stocks I know, reducing my need to look around and research, this put me in a good spot today. Apple (AAPL) and Salesforce.com (CRM) were both up more than 2 percent, while Rackable (RACK) continued its gains, increasing more than one percent on the day. In fact, Rackable's increase of 1.15% was the lowest of the three, while that increase was actually the highest jump (if you can call it that) of any of the mutual funds featured by the 401k.

Given the above, this means that for the fourth session out of six, I outplayed the 401k mavens. It still seems that through reducing risk, we reduce reward, and the market is all about reward. Get what you can as fast as you can and get out before it's too late.

Great Day on the Stock Market

You might as well ignore me every time I say I'm out of one stock or another, because the bug keeps biting, and I can't stay out of a small handful. So long as I can keep my focus small and ride the ebbs and spikes of a number I know, I can maintain the growth and avoid losses. Or at least that's my excuse.

Monday's market activity made a fan out of me. Apple (AAPL) was upgraded, and rose nearly 4%. Salesforce.com (CRM) similarly grew nearly 3%, and Rackable (RACK) continued its strong run, jumping more than 7% Monday alone. Of course, that kind of action helped me continue to outpace the 401k, which saw gains of .2 to 1.1 percent in each of the top four funds. That makes the up-to-date score in the Louis vs. 401k challenge 3 to 2 in my favor so far. We'll keep you posted on how that continues to progress.

Me vs. the 401k - Who Wins?

For years, I delayed signing up for the company's 401k plan, for a few reasons - first, the company didn't offer matching funds, limiting the potential benefits, and second, I always felt that I could react more quickly to market changes and be more likely to select potential winners, while mutual funds selected by a third party would be far too diversified to do any good. Years of being an amateur stock picker (always in tech and without diversification) showed me I could routinely outrun the market, and though there were always risks, I tended to come out on top.

However, I gave in at the end of 2004, and have watched the 401k slowly increase. And I do mean slowly... as even if I put as much as I can into the "high growth" funds, we're lucky to see anything more than 1% increase on a good month. Meanwhile, the money left in eTrade is a lot more flexible, but, as is cautioned, has the ability to be withdrawn and spent at any time, while the 401k is hidden away where I can't reach it.

So, the stock market in 2006 has definitely been up and down, as it seems for every winner I've picked, another tried and true favorite has been letting me down. That brings us to today. The three largest stocks I own on eTrade were each up today - at rates of 1.3%, 2.5% and 4%. I didn't mind. Slow and steady wins the race after all. But at market close, when I expected the 401k to chip in with similar gains, instead, all four funds were down... between .9% and 1.4% apiece. Seems they aren't picking the right horses.

So - today, I win. Louis 1, 401k 0. I'll watch this space and keep you posted.

2005 Tax Refunds Already Here

Just ten days ago, I wrote on here to say that my wife and I had wrapped up our 2005 taxes, courtesy of using TurboTax online. This morning, I had the pleasant surprise of logging into my Wells Fargo account online and seeing I had quite a bit more cash than when I'd gone to bed the night before. That's always good. The reason for it was that both our tax refunds from the state and federal levels were deposited automatically, getting me the money that was rightly ours in the first place back a lot more quickly. Now, with it not even being March, we can close the door on our 2005 finances.

Of course... that depends on whether our good friends at the IRS opt to open up the discussion at any point in the future. After all, it's their right to do so, but I say, bring it on. We're ready.

Every year, especially as the date moves closer to April 15th, you hear the inevitable belly-aching and gnashing of teeth over the stress of taxes, getting the forms right, making sure your deductions are in order. But I've never quite understood why. It's a right of passage. It's a challenge. There's some nostalgia involved - especially as I go through every single stock trade from the previous year. (I owned that? What was I thinking?) And there's definitely some self-satisfaction to finishing the task well ahead of time and with a minimum of fuss. I almost would beg for the sticker that says "I paid my taxes", the same way you get one that says "I voted", if you're one of the 38% of us who do that every couple of years or so.

At least today, I feel like we're financially secure. But almost all of the refund already has to be spent on bills that were outstanding, and simply catches us up. But today, I have cash - let's see if I can hold onto that feeling.

Keep The Change: Is America that Stupid?

I first heard one of Bank of America's promotions for their new "Keep the Change" campaign while on a business trip last Spring in Arizona. The idea sounded preposterous - the bank would help you save money by taking the difference between your debits and the nearest whole dollar and depositing it into your savings account - theoretically helping you create a nest egg for the future. Somehow, they expect that we have no financial planning abilities, and that the nickels and dimes they transfer from one account to another will make us all rich some day, something we couldn't have achieved on our own, through stocks and bonds, real estate, or common sense.

Now, the commercials are getting more air time. This evening, during Winter Olympics coverage on NBC, an ad featured a young boy doing the math in his head while his mother paid for groceries. He gleefully spouted off 87 cents if she had been charged $4.13. Oh, what a bright young man, and how lucky we are for Bank of America to come to his family's aid and prepare for his inevitably illustrious college career! Ridiculous. If his parents have to rely on Bank of America to guard their piggy bank, it's not likely that little Johnny is going to make it to a community college, let alone a reputable four-year university.

The "Keep the Change" campaign effectively gives Bank of America the right to overcharge you not just on a small number of your purchases, but EVERY purchase. It guarantees that you will always pay more than the cost of goods. It gives Bank of America the right to take even more money from their clients and invest it as they choose to make even more money for the bank. And what is the likelihood that this campaign will even be around when it's Johnny's turn to brave the SATs? Marketing programs come and go, and with silly exceptions like Free Checking, most don't have much staying power. And what if Bank of America merges or gets swallowed up in some future unforeseen acquisition. Will the program continue?

Bank of America has always annoyed me. They're the IBM or GM of banking. Huge, but not offering anything positively differentiated from the competition. I've used Wells Fargo for the better part of a decade, and I can't remember the last time I stepped into their branches. My online banking does everything, and it doesn't ask me if I want to "keep the change" or get fries with that.

2005 Taxes In the Bag

I'm hoping that the only reason I'd ever seek out the help of a tax professional is that through some stroke of fortune, I'd become so wealthy that it'd take an army of accountants to keep my finances straight. Ever since I made enough money to have to file taxes, I've taken the easy way - using Tele-file while in college, and filing online the last 5 years or so, using TurboTax, initially via Yahoo! and now through the TurboTax site. Using TurboTax online is a snap, as each step guides you along, supposing you have your paperwork handy on the side, and it fills in your data and math as you go. A running total in the top left of the screen lets you know if you owe Uncle Sam a check, or if he owes you one.

Best of all, it imports all your previous year data if you've used the site before. That makes it simple - as you don't have to re-enter your contact and background information, and can mentally gauge how you did in contrast to the previous year, for income, deductions and taxes.

Yesterday, we wrapped up the 2005 filing, and all we have to do is store our records in the event of a future audit, or watch the bank account to be sure their direct deposit goes through. Very simple, and there's no reason I want Uncle Sam to hold onto my money for any longer than absolutely possible, so getting done in February is great.

Exxon: Record Earnings of $10 Billion

Rising gas prices affect all of us, drivers or non-drivers alike, and in the last few years, we've seen the average price per gallon rise from below $1.50 a gallon in 2002 to nearly double that in 2005, and about $2.50 plus a gallon today. Just this morning, I filled up for $2.57 at Chevron - a fairly average price for the Bay Area.

We've been led to believe that the meteoric price increases are due to several factors - cleaner gas initiatives, Middle East regional strife, scarcity of oil wells in North America, refineries under repair, the War on Iraq, and Hurricane Katrina. But simple economics tells us that there are really two ways that price increases can be sustained in a large economy - the first being that the cost of goods is increasing at the supplier level, which forces them to raise costs in turn to sustain gross margins, or second, that a scarcity of suppliers, through monopoly, collude to uniformly raise costs.

This morning, Exxon reported a quarterly profit of $10.7 billion. On the year, the company's profit (not revenue, mind you) was more than $36 billion dollars, bigger than the economies of 125 of the 184 countries ranked by the World Bank, and a world record for any company in history - period. Does this tell you that the company is simply keeping profit margins in line with rising costs, as mentioned above, or is something rotten in Denmark?

If you believe the company's spin, they'll say that the record revenues will "fuel" investment in the future, and that this is good for all, but do you buy it, and if not, what do you think should be done? Is this just capitalism, and we should be happy that the market has worked?

Related Links:
Exxon profits shoot up 42pc to world record of $36bn
Exxon Profits Up, Valdez Anger Lingers
Exxon profits lead to PR blitz

Location, Location, Location

It's no secret that the San Francisco Bay Area is one of the most expensive locations to live in the country, if not the world. I am agape at the "bargains" available in the rest of the country - where it's not uncommon to see billboards advertising homes in the "Low $80s to $100s" and beyond. Given it costs you more than $350,000 to get a 1 BR/1BA condo here, the difference is enough to make one consider other options. After all, with high speed Internet being a great equalizer on telecommuting and communication, and relatively cheap airfare available, then what difference does it really make whether one lives in Alameda or Albequerque, Mountain View or Montana?

Every month or so, we get notices telling us what prices homes and condos in our area have sold for, what the owners were asking, and what they received. On a back of the napkin calculation, one could easily guesstimate we could get more than $450k for our 2 BR/2 BA condo - provided we replace the carpets and hide all notice that a dog has been one of the primary residents.

Putting that in perspective, here's what a comparable amount of money will get you in other areas of the country:

Denver, Colorado: 4 BD, 3 BA, 2,700 sq ft $350,000

Billings, Montana: 5 BD, 3.5 BA, 3,000 sq ft $320,000

Kansas City, Missouri 5 BD, 5 BA, 1.4 acres $350,000

Atlanta, Georgia 4 BD, 3 BA, 2 story $350,000

Nashville, Tennessee 5 BD, 3.5 BA, 3,200 sq ft $350,000

Provo, Utah 5 BD, 6 BA, 4,800 sq ft $350,000


So, in theory, you're telling me I can trade up to a 5 bedroom, 6 bathroom, 4,800 square foot home with central air conditioning and a lake view, and LOWER my mortgage payments, and all I have to do is move to the Beehive State? Where do I sign up?

Stock Market Bloodbath

Sometimes, you think you're on a roll, and then after a few bad days, not only have you lost all of the money you made, but you're in the red - even on blue chip stocks you thought made sense. Heck, today's stock market tumble was so bad, even my 401k lost more than a thousand dollars all on its own. Google was down $36 a share in one day. Yikes!

It's enough to make me want to record this loss on last year's results to help with taxes this year. I don't know how well Uncle Sam is going to treat us come April 15th, but we could sure use the money.

Out of AAPL too

E-Trade is telling me I have a lot more cash now than how I started the day. Following up on my note this morning on exiting Salesforce.com (CRM), I saw the mid-day spike in Apple (AAPL) take the shares up to record heights, above the $80 level. While I'm unlikely to be out of AAPL for long, as it's a habit that's hard to break, it made sense to take profits above $81, and we did. So we're out. We'll see over time if that was a smart move or not, but I can't argue with making money.

Taking Profits

On Saturday, a relative and I got into a discussion around the stock market. I told him that I'd had some good success in 2005 (as many did) by following the fundamentals - buying low and selling high. I only invest in those companies who I believe aren't fully valued, or have unique services. In 2005, I got lucky with Apple, Google, Baidu, Rackable, Transmeta and other tech stocks. That happens to be a market I know. But I also know when to get out.

Saturday, he kept telling me that profits only mattered after you sold a stock, not in a one-day bump. Of course they do! But I already knew that. Just this morning, after holding Salesforce.com (CRM) for only a week, I sold it for a 10-15% profit. Now I have cash in the account again and can decide where to go next. That's how the market works. Just don't tell me my cash doesn't do any good if it's not invested.

Follow The Money

They say it's never too early to invest in your future, and that with every year you put off saving money, or deferring income into your 401k, you lose precious opportunities down the road. With that in mind, I've been putting what I can afford into the 401k offered by work, and trying to be smart through diversification, I split up the allotments to a few funds which Fidelity, our provider, claimed to be the most consistent.

But mutual funds are made up of a collection of individual stocks. The highest growth funds are dominated by technology and healthcare stocks (Google, Apple and the like) - which I'm fine with. But this weekend, I looked at the breakdown of the "Fidelity Equity-Income II Fund", which is a middle of the road performer... doesn't go up a lot, doesn't go down a lot, and increases bit by bit over the year.

Guess what were some of the stocks in the fund's Top Ten holdings?

* Exxon Mobil
* Walmart
* Halliburton
* Microsoft
* News Corp (Owner of Fox News, enough said)

The top ten stocks make up 23% of the portfolio, and these are five of the top ten, but yikes! What is this? The crooks and liars fund? I'm out! So I went into the online records and moved all the money in that fund to a different one. I'll have no part in making those companies feel financially secure.

I guess it's one small step toward feeling socially responsible. But don't expect my change to "rock the markets" per se. I don't own a controlling share of any of these companies.