Blogvesting

RCI : A wobbly monopoly

valuegeek — Tue, 18 Nov 2008 18:44:08 +0000

After reading about Rogers Communications from TMWTFS, I decided to evaluate if RCI is a possible defensive portfolio holding in these turbulent times. Rogers Communications (RCI) is an integrated telecommunications company based in Canada, and has 3 operating segments, wireless, cable and media. Their wireless segment makes up 50% of revenue, and 70% of operating [...]

Parking cash in TIPS

valuegeek — Fri, 07 Nov 2008 13:55:37 +0000

TIPS, short for Treasury Inflation-Protected Securities, are bonds which provide a degree of inflation-protection and are backed by the full faith and credit of the United States government. The principal of a TIPS increases with inflation (as tracked by the CPI-U published monthly by the Bureau of Labor Statistics) and decreases with deflation, and interest [...]

Calendar effects and October crashes

valuegeek — Tue, 04 Nov 2008 12:38:46 +0000

The finance literature is littered with examples of many calendar effects in the stock market; the following is a partial list : The weekend effect : The mean return from buying stocks on Friday and selling them on Monday is larger than buying stocks on Monday and selling on Friday. This is especially unusual since the [...]

SEB liquidation

valuegeek — Tue, 04 Nov 2008 11:19:05 +0000

I have liquidated SEB from my portfolio at $1365 a share, which is a 6% gain from my entry price. In the end, I felt that this company has too many cash flow streams which is beyond my circle of competence to analyze, and the fact that management is so uncommunicative is starting to worry [...]

ZINC partial liquidation

valuegeek — Mon, 03 Nov 2008 04:11:33 +0000

Since my last review of ZINC, zinc commodity price has sunk rapidly from $0.70 per lb to $0.50 today. Even with half of 2008 and 2009’s production capacity hedged at $0.90 per lb, Horsehead probably requires a zinc price of $0.70-$0.80 per lb to break even. With zinc prices at $0.50 and many major zinc [...]

Writing WMT put options

valuegeek — Sun, 02 Nov 2008 12:10:10 +0000

I have recently sold put options for WMT at a strike price of $45 expiring in November 2008 (WMTWI) and January 2009 (WMTMI) at $0.80 and $2.25 per contract respectively. This is in keeping with my new strategy of writing options on stocks that I would like to acquire at strike prices that I [...]

Are we headed for a depression?

valuegeek — Fri, 31 Oct 2008 13:30:47 +0000

Nowadays, every stock seems to be trading not based on their fundamentals, but based on the fear that the economy will sink into a depression. If indeed this fear proves to be true, then buying stocks now would be a mistake. In the Great Depression of the 1930s, US GDP shrunk by 27%, pushing the [...]

Kapstone Paper : Microcap with a dominant market position

valuegeek — Mon, 27 Oct 2008 14:47:42 +0000

Kapstone Paper (KPPC) is a microcap paper company specializing in the production of kraft paper, the strong brown paper used for packaging and paper laminating applications. Kraft paper is made into grocery bags, consumer packaging for flour/sugar/pet food etc., industrial packaging for fertilizers/cement/dry chemicals etc, wrapping papers (the kind found around a burger at a [...]

Writing options

valuegeek — Mon, 13 Oct 2008 18:07:57 +0000

Now that my entire portfolio is underwater, I am resigned to holding most or all of my positions for the next 1-2 years. However, due to the dramatic upswing in volatility recently, many options are now priced at incredibly expensive levels, especially the puts. While I wait for the market to recover, I have decided [...]

Turbulent times

valuegeek — Sun, 12 Oct 2008 03:27:59 +0000

In the past month, I have increased my exposure to the stock market, primarily in the technology sector, only to see my positions decimated. Stock prices now seem completely divorced from fundamentals. Even companies with substantial cash reserves and well-positioned to ride out the economic storm are now trading at below cash value. To quote [...]