GEOY : Rebuilt position

March 21, 2009

On 3/16 (Monday), I rebuilt a small position in GEOY at $18, in accordance with my previous estimate of GEOY’s intrinsic value at $18-$30. I sold the entire position the very next day at $19, thinking that manipulation by options traders will sink the stock price as we approached options expiration Friday. The very next […]

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Strategy : Short-term channel trading within a value-oriented framework

March 20, 2009

In recent months, I have adopted a strategy of channel trading. I pick an undervalued stock according to fundamental considerations to ensure capital preservation (strong balance sheet, valuable business franchise etc.), identify short term support and resistance levels, and then buy when the price is closer to the support level than to the resistance level. […]

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GEOY : Liquidation and update

March 7, 2009

I have recently liquidated my entire position in GEOY for a 15% gain, shortly after the completion of the NGA certification process. While the certification provides $150 million in annual revenue to GEOY, ensuring that it will be able to cover expenses and removing the risk of bankruptcy, the risk of satellite failure as well […]

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ARKR : Value in off-balance-sheet leases

February 28, 2009

Ark Restaurants (ARKR) runs 20 restaurants and bars, and 30 other food operations, including fast food restaurants, food courts, and wholesale and retail bakeries. The company owns operating leases at some of the most prominent and well-trafficked locations in the US, including Bryant Park Grill and Café and The Grill Room (next to the World […]

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GEOY : Manipulation by options traders

February 19, 2009

I’ve been following GEOY for quite a few months now, and every month on or near options expiration, the stock takes a beating and closes near an option strike price. Numerous academic studies have shown that on options expiration Friday, stock prices tend to close around option strike prices. This does not happen with stocks […]

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The failure of labor specialization

February 15, 2009

Division of labor has played an large role in the economic achievements of mankind. The ability to specialize and accumulate knowledge in a narrow domain has allowed incredible efficiency gains that have lifted living standards for all of us. When I want to get a pair of shoes or a new shirt, I do not […]

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AMTD : Update on ARS

February 14, 2009

Since I published my last post about AMTD, I have received an earful from many Ameritrade’s clients who have been burnt by auction rate securites (ARS). Let me be clear from the start : I am embarrassed that I have committed a factual error in my last post. Ameritrade did indeed actively solicit ARS investments […]

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AMTD : Great stock at a reasonable price

February 1, 2009

TD Ameritrade (AMTD) is a leading discount brokerage in the US, and competes for a slice of the $25 trillion US retail investing market. Brokerages make their money from two major sources, transaction-based revenue and asset-based revenue. Transaction-based revenue refers to commissions from trades, and asset-based revenue refers to interest from clients’ margin and cash […]

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Who should pay to resolve the banking crisis?

January 22, 2009

The blogosphere is awash with opinions about whether banks should be nationalized, and whether an aggregator bank to hold bad debt is a good idea. Much of the heated debate about the mechanics of a rescue is about the technical details of the rescue, devoting little time to the fundamental normative question : who should […]

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Two year anniversary

January 18, 2009

Its been slightly more than two years since I started this blog at the suggestion of my wife. I have stuck to my principle of providing original content and stock research rather than up the frequency of my posts and providing second-hand links or garbage. I am a subscriber to the slow blogging philosophy, and […]

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