Archive for May, 2006

Last night, Cramer had this to say about Expedia, “That one is a total train wreck that will never be revived.”  Having watched Cramer’s “performance” over the past year, I now feel more confident than ever that this will bounce back relatively sooner than later.  Only time will tell but I’m recording this for posterity – We’ll look back a year from now and see how things pan out.

Ouch!  According to Bloomberg, inflation grew 0.6% in April which was preceded by a 0.4% increase in March.  If we “average” these two amounts and annualize it, then inflation is growing at roughly 6% – Yikes!  I suspected the Fed would raise rates again in June by another quarter point but I now they may have to be more aggressive and bump it up to a half a point to stave off the inflation beast.

Looks like Expedia (EXPE) finally stabilized around $14.60. I still have 19 calls contract out which I sold for $0.95 and are now trading for $0.05 and expire this Friday. While I’m tempted to buy them back and close out my short position, I see no need to do that just now. I’ll hold on till the end of the week to see how things turn out. It is interesting to note that the January 07 Expedia options are trading at $0.55. This indicates to me that the speculators out there give it a 55% chance of getting back to $20 by January 07. We’ll check back on Friday after options expiry to see how the Jan 07 options shake out.

Well Expedia (EXPE) dropped a whopping 27% today. Life in the fast lane sometimes leaves roadkill…. I still own the stock and haven’t purchased back the 19 call contracts yet. I’m riding this one out and I’ll hold onto the stock come rain or shine. I suspect that the unusually trading activity on this stock along with the buyback program means something brewing in the background – perhaps a buyout/merger by/with one of the other travel sites? Only time will tell.

This morning I picked up 1900 shares of Expedia (EXPE) at $19.75 and as I write this post it has dropped to $19.35 but I’m not concerned. I researched this little gem last night and I am fairly bullish on this stock. My original intent in purchasing this morning was to sell the May 06 20 calls (was trading at $1) for a quick $1900 in profit (5% return in a week!) but the stock drop meant my options didn’t get bought so I’ll hold on to see what happens after the earnings call this afternoon.

Update: What a wild ride! I ended up selling 19 contracts for May 06 20 calls at $0.95 close to the end of the trading day. That yielded me a profit of 4.8% ($1805 sans commissions). Now for the bad news, the stock dropped 18% in after-hours trading because Expedia missed forecast by 6 cents. The positive here is that I can buy back these options cheap and sell them again. I am still bullish on Expedia however so we’ll see what happens tomorrow!

Nothing unexpected today in the fed’s rate hike although it is interesting to note that gold closed up +$3.40 to $709.10 and oil closed up +$0.25 to $72.38. The USD is also at a low against the Euro at 1.2736 so none of these things bode positively for US equities. I’m researching some potential money trades tonight and I’ll closely watch the markets for any signs of pessimism.

I won’t make any money trades until after the May 10th FOMC meeting or if a great opportunity rises suddenly so in the meantime, I’d like to point out some educational resources that have helped me over the year. The most important aspect of these resources (with the exception of one) is that they are all FREE. Here are the top five.

1. http://www.investopedia.com/university/ – a great resource for beginners which includes a stock simulator that allows you to buy/sell stocks and options. The site defines many terms in a simple straightforward manner.

2. http://www.stockcharts.com/education/ChartAnalysis/whatAreCharts.html – Ever wanted to know what all those symbols, characters and lines mean on those stock charts? This is the place that explains it all.

3. http://www.kellerpublishing.com/VSW_index.htm – Although not FREE, this book is entertaining and highly educational. I derived the bases of one of my MMO strategies here but expanded it to primarily work with Exchange Traded Funds instead of individual stocks. I highly recommend this book.

4. http://www.dinkytown.net/ – This website has just about every calculator related to finance that is critical for you to be successful in your financial life. It’s a great place to learn how your investments can grow (or not) based on various assumptions.

5. http://www.optionscentral.com/basics/default.jsp – If you ever wanted to learn about options trading this is the place to go. An alternative resource is also http://www.cboedirect.com/LearnCenter/Tutorials.aspx from the CBOE.

Remember, the key investment you need to make here is time to education yourself. I’ll post more educational resources later on.

-Rich Slick

Hello World!

This is an inaugural post- the day is May 2, 2006. I created this website in an effort to entertain and educate the sea of investors out there who thirst for a different perspective on investing and those who seek better insight into the financial world beyond the “Finance 101” blogs out there.

My goal: Grow my portfolio by 20% year over year.

My strategy: Use unique investment opportunities to grow my portfolio.

My Disclaimer: I intend to use varying strategies to achieve my goal. Some are high risk and may lead to the loss of capital should the investment sour. In no way shape or form should you construe my posts as advice on what you should do with your own money. Please perform your own due diligence and if necessary consult a financial professional to assist you with your investing strategy, aims and goals.