Sean's Rant

Projection for 11-21-2008: Bear Market Rally. Equity is dead: Capital Structure.

Sean — Fri, 21 Nov 2008 04:08:58 +0000

Bear Market Rally

I’m still bearish in the mid to long term, but tomorrow could show us a bear market rally, which should be sold into on its highs. After taking profits turn around and start shorting again.

Overall we still have a ways to go before any consideration should be taken for the equity market.

Equities are dead. They are the lowest man on the totem pole in the capital structure. Everyone and their mom (the government representing their mom) gets more capital from a liquidation than equities in the case of a liquidation. Debt is the new equity investment. It pays more and you get more in case of liquidation, which is looking much more likely right now. The Yields have gone much higher and it makes much more sense to buy debt now.

Again, I was right.

This makes a point for hedging your portfolio for scenarios like this. Let me make a point for this:

If you had put 80% of your $100,000 in an DJIA index fund and 20% in the ETF UltraShort Financials SKF you would be doing just fine right now and heres why:

The DJIA Indexed fund lost 46% from Oct 11, 2007 to November 20, 2008. So 80% ($80,000 investment) results in x (1-46%)= $44,000

The Ultrashort Financials EFT gained 354% so 20% ($20,000 investment) results in $70,800.

So, if you had hedged just 20% of your portfolio in the Ultrashort ETFs to cover your long position in the DJIA you would have a gain of $14,800. A more conservative investment of 20% in Ultrashort S&P SDS with a return of 266% would put you at a net ((.2*2.66)+.44) ($3,000) loss. Big whoop.

Some food for thought on using only ONE methodology for investing. The whole concept of “diversification” is not taking into account a real sense of diversification. Asset classes should be used for diversification, not just different equities.

Beautiful. So Beautiful. Opera Mini 4.2 mobile internet browser on the instinct (With Functional Keyboard)..

Sean — Wed, 19 Nov 2008 21:52:59 +0000

Of course you’ll need the Instinct MR-4 update, and to download opera mini from Opera’s website, but after that you can now experience:

-Better Browsing from the Opera’s smart browsing. Instead of scrolling side to side it shrinks it to size.

-Google Reader was already sweet on the Instinct’s native broswer but is now made sweeter by the previous feature, because now all feeds (so far) are limited by the screen width.

-Settings (Native browser does not have a settings menu.

-Flip directions (Landscape or Page view)

-Zoom text size and still keep the view within the borders

Oh this is soooo much better! Thank you Sprint for the keyboard update, and thank you Opera for the sweet browser!

S&P Hits New Intra-Day Low, Dow Gets Close.

Sean — Wed, 19 Nov 2008 20:50:08 +0000

Looks like the charting I did about the down-trending being similar to 1929 was correct.

2:30PM 11-19-08 Instinct Update MR-4 goes Live. Get it while its hot. Opera mini works now!

Sean — Wed, 19 Nov 2008 20:36:34 +0000

Instinct update just went live. Read about the details on it here:

What I’m looking for:

-Opera Mini 4.2 support (YES! The keyboard Shows Up!) They added a button!

-Standard Document support

Taken from BAW (Buzz About Wireless):

“Public Release Notes for Instinct Firmware Update MR4
Version: BJ20
Delivery: OTA
Projected Release Date: 11/12 (BOTH client & network initiated) Projected Release Dates are best estimates and aresubject to change with no notice.

Notes: Instinct firmware BJ20 includes the resolution of 165 tickets open since the previous public firmware release, BH29, including:

5442 - links fail on smoking gun website
5872 - VVM Client is not able to make Data connection
5886 - Ebay login fails in standard mode browser
6015 - Voice notification speaks wrong contact name
6016 - Device UI locks when FUMO push is being received
6025 - Initial Mobile Sync can cause device to slow down until initial sync completes
6036 - bestbuy.com soft-resets device
6039 - deleting ringers can soft-reset device

The release also provides the foundation for the first public release of the updated Sprint Mobile Email Work Calendar. The new work calendar, available OTA 11/21, syncs with one or more Exchange (OWA) based calendars, and allows for meeting creation, editing and alerting on the go.

Also included in MR4:
* Java refit to better enable 4-way/OK and text input to LCDUI widget-based applications. Yes, this is the Java Keyboard you’ve been waiting for.
* support for native document viewing for many popular office document types including .doc, .pdf, .ppt, .xls and others

Individual application upgrades for the MR4 period are expected to go live the week of 11/21 (all dates are estimates and aresubject to change with no notice). Exact go-live dates depend on application vendor.”

Instinct Update Watch: Will it go live today?

Sean — Wed, 19 Nov 2008 12:46:41 +0000

Not yet. I just tried and got nothin.

I will check periodically throughout the day, and mostly will be keeping my eye on the BAW instinct forum for someone who has successfully loaded it.

***UPDATE*** It’s live now

Just got an ASUS Eee PC 904HA. Freakin sweet.

Sean — Tue, 18 Nov 2008 19:09:21 +0000

ASUS Eee PC 904HA

Amazon turned out to be the best deal but I did some deliberating and finally came up with this one.

-Price: $342 (when I got it)

-140GB HDD (Says 160 in the ad, but when looking at the HDD from my comp, its partitioned into a 80GB and a 60GB which isn’t 160)

-1.6GHZ Intel Atom N270 processor (I’m usually an AMD fan, but I’ll make an exception here.

-1GHZ RAM

-Super Fast 802.11b/g wireless card

Differences between the 904AH and the 900A

The 900A is

-$280

-Smaller (Same screen size, but the actual size is smaller

-Uses a solid state HD of only 4GB

-Has a 4 cell battery vs the 6 cell of the 904AH

-Has Linux vs Windows XP SP3

Great Article about Subprime, Credit Default Swaps, Bond Rating, Wow

Sean — Tue, 18 Nov 2008 16:39:57 +0000

This article is great. It talks about Steve Eisman and how he was one of those betting against the subprime and was trying to understand what was happening right in the middle of the storm.

2008 vs 1929 charts, an update to 11-14-2008

Sean — Sun, 16 Nov 2008 18:51:07 +0000

Based on pageviews, which is the only thing I have to go off of without comments, the charts were a hit. I’m back with an updated chart since the last one, still comparing the 1929-1932 chart to now.

The 1929-1932 Chart

The now chart (as of 11-14-2008)

As you can see, like I had said before, we’re still maintaining an overall downward trend, and are definitely not in the clear yet. From November 1929 to August 1930, the market traded pretty much flat. So the market might be doing the same, trading sideways before it decides where to go. A neat site I found showing a lot of trends and analysis of now versus the depression.

Soon to come: Samsung Instinct Update 4: Keep an eye out

Sean — Sat, 15 Nov 2008 16:44:11 +0000

11/19/2008 is the proposed date for release of the fourth instinct update.

Some major changes that are supposed to be in it:

-Java Keyboard support for 3rd party apps like Opera Mini! (This will be sweet and I have left Opera Mini installed even though it doesn’t work in hopes that it will when the update comes).

-Support for native document viewing for many popular office document types including .doc, .pdf, .ppt, .xls and others. Currently an Instinct user can just use google docs mobile for this, but it will be nice to have the option to view these on the phone without needing service.

This will be a manual upgrade so hit upgrade on the 19th and 20th and check back if the phone doesn’t update because it will probably have delayed again.

I’ll start the echo chamber on this one. Google Chrome Update coming, whats in it. Asus eee.

Sean — Wed, 12 Nov 2008 21:46:24 +0000

Memo on the echo chamber: Every time A Google Blog posts something, there is a wave of runoff posts that basically just repost the original Google post. Save yourself the trouble and subscribe to the Google Blogs that interest you, see the directory.

Now that I’ve got that out of the way, let me start the echo chamber on this one:

-Google Chrome will soon come out with an update - 0.4.154.18 allowing for a bookmark manager that has an import/export feature, along with other fixes. This will hopefully simulate foxmarks in chrome.

P.S. I’m looking at the Asus eee. That thing is cheap and looks sweet. Chrome won’t work on it yet, without a windows emulator, but I guess I could use Firefox again until Chrome has linux capability.

I really nailed it: Review of posts where I was right on about upcoming market actions dating back to early July 2008

Sean — Wed, 12 Nov 2008 20:05:30 +0000

Listed from newest to oldest:

Showed how the short term uptrend was just part of a greater long term downtrend.

Picked the DJIA for the week within $26.

Called Buffett Wrong (Sorry Buffett).

Held my ground about the recession when there was so much blogspeak otherwise.

Reiterated my statement about Day-Trading being in and agree with Cramer about Not Buying.

Explaining the breadth and depth of the recession.

Rubbing it in their face about the -777 drop.

About short limiting and capital injections not helping.

Calling the beginning with the Lehman crash.

This one was written July 13th about the Risk perceptions of the market and the state of the market conditions then. This was right on.

A note about the current market rally. 1929 - 1932 chart and 2008 chart.

Sean — Tue, 04 Nov 2008 16:34:53 +0000

Take a look at the following chart. The famed October 1929 crash is towards the left of the chart. Look at the bottom of the chart by October before 1930. Then look at what follows it for two more years. In April of 1930 things were lookin pretty good.

Now, take a look at our current situation.

Not exactly time to party yet. Not for at least a year if we’re trying to shake the similarities of the Great Depression. Also, the economic indicators continue to get worse, not better. Yesterday’s reports told us that Chrysler, GM, and Toyota all had horrible sales numbers, like we didn’t already know that was coming. CNBC said that these were the worst declines since WWII. Don’t start shorting the market just yet, because it will probably go up some more before it drops again but be on the lookout. If its anything like 1930 it will be a slow progression down, like it was for the last year before October. That’s excluding the hype about tax changes. This view is based on the current status of the economy.

Wordpress Plugins: Are they slowing down your site? Also a few neat ones I just added

Sean — Sun, 02 Nov 2008 19:05:34 +0000

I removed some plugins that were significantly slowing down my site (I removed about four at once, so I don’t know which ones), and its running like a champ again.

I also added a few:

Plugin Manager (Awesome). This lets you add plugins right from WordPress admin, without having to go to your hosting site and manually drop them into the plugins folder. It lets you download and activate from the same screen.

Share This I have had the share function via rss feeds for a while, but remembered I needed to add this functionality for posts on the site.

Site Maps I have been wanting a plugin like this for some time now. I don’t know exactly how much an updated site map to google really matters for SEO, but it sure can’t hurt.

A few notes about Google Chrome, Google Docs

Sean — Sat, 01 Nov 2008 02:33:07 +0000

If you are currently using Google Chrome there is an unofficial update available here, thanks to downloadsquad.com.

Another note is that Google Docs looks to be getting a make-over. Either that or its erroring. Look at what the screen flickers if you click ‘refresh’ in Google docs:

Google Reader on the Subway

Sean — Wed, 29 Oct 2008 14:15:58 +0000

I suggest that google reader mobile add cache capability, meaning that when you are on a subway it would be nice to have everything that you have on your reader screen (1 or 2 screens at a time) was pre-downloaded (the detail of the feed). I was on the subway in Washington DC and it was “service”, then “no service” which was very jarring for reading. I understand that it would be difficult to cache everything, thats why I suggest 1 or 2 pages at a time. Obviously this is like google gears for mobile.

The mark to market accounting controversy

Sean — Wed, 29 Oct 2008 14:10:39 +0000

About mark to market, talked about on squawk box on 10-29-08:

It is ridiculous that anyone would want to not show securities at their current fair value based on how much they are worth in the open market. If no one wants to buy them then they are not currently worth anything. If the company or bank holding them wants to continue to hold them they can, but it seemed that the issue being discussed was that this effect causes banks and companies holding these securities to become insolvent. Why shouldn’t it?

The reason this decline in value caused these companies to become insolvent is because the amount of leveraging that was allowed. The companies or banks that had these securities and kept a low leveraged rate are doing fine right now. This shows that it is not about the mark to market rule but about the irresponsibility of these companies and institutions to manage assets properly and use prudence. There has been cries for transparency… Not marking these securities at fair value, based on what the market will pay, would make the reporting of these securities very opaque. This would then just delay the effects of the true problems.

Gold & Silver will skyrocket if equities start to trend higher

Sean — Wed, 29 Oct 2008 14:08:15 +0000

Gold & Silver are jumping because of the proposed fed rate cut (lowers the value of the dollar), and if the market comes back the money people have invested in “safe” treasuries will be put back into the market and the dollar will drop like a rock, pushing gold & silver sky high. If you want to keep track of the dollar index it is (DX-Y.NYB), or just search dollar index.

The reason treasuries will drop with increasing equities is because there are so many investors hiding out in treasuries right now that will switch back to equities if there is any sign that the volatility has come out of the market (^VIX). Of course there is still the fact that the economies of all of the other countries are not doing well either, and that is why there was a flight to the dollar.