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20th anniversary of Black Monday

Friday, October 19, 2007, 12:24 AM
Stocks by John

In the spirit of being cheerful, I thought I'd mention that 20 years ago today the stock market had its largest single-day drop, 22.6%.

Market theorists have still never fully accounted for why the drop occurred. Obviously, some automated trading systems were in play. In the end, though, intrinsic valuation, even as push through machines, still counts.

In other words: sometimes the market is nuts.

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Sold BP

Thursday, September 27, 2007, 12:59 AM
Stocks by John

I sold my BP stock, probably a bit belatedly. BP is issuing warnings about earnings, and has generally been an energy sector laggard anyhow. I made some dividend and some money, so I walk away happy.

My initial concern is that oil has peaked for the year. It is hard to say where oil will settle, but I would be unsurprised if over the never six months we don't plumb some of the depths we saw last winter. I would be surprised at all to see oil dip below $60 a barrel sometime this fall or winter.

Second, I don't like it when CEOs warn on earnings. Bad. Especially since BP has been trailing the whole sector.

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What's really wrong with marketing these days

Monday, September 3, 2007, 2:29 PM
Business by John

In a simple and concise manner, this one aimed at the music industry but easily articulated for anyone doing marketing:

there were a handful of channels in the music business that the gatekeepers controlled. They were radio, Tower Records, MTV, certain mainstream press like Rolling Stone. That's how people found out about new things. Every record company in the industry was built to work that model. There was a time when if you had something that wasn't so good, through muscle and lack of other choices, you could push that not very good product through those channels. And that's how the music business functioned for 50 years. Well, the world has changed. And the industry has not.

I would add that a lot of colleges are still churning out students who buy the gatekeeper theory.

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Buying Nordic American Tanker

Friday, August 17, 2007, 11:26 AM
Stocks by John

Yesterday I was sitting in a sort of ideal position. Having unloaded my NTRZ stock, I had cash on a market apocalypse day. These are the days when real money is made.

If you've followed the website, you know I have had the Cramebase up and running, tracking the stock recommendations made by Jim Cramer. However, I have not yet bought anything based on Cramer's recommendations.

A few weeks back Cramer made a recommendation that slightly confused some of the audience. He recommended Nordic American Tanker, a transport company. Cramer has generally been down on the sector. However, at $41 he recommended NAT as a money play. NAT issues a gigantic dividend (easily over 10% at any recent price) and it issues it regularly (40 straight quarters as of yesterday). Cramer said that NAT is a best-in-class, carries less debt and is seeking expansion at a reasonable rate. While the industry is cyclical, oil is at a peak and doesn't seem to be slacking off anytime soon. So, demand for tankers remains.

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Nutracea postmortem

Thursday, August 16, 2007, 2:43 AM
Stocks by John

My experiment with my first year of investing hit a big pothole yesterday. That pothole was Nutracea's second quarter conference call. I've tried to get a spread of stocks. Big cap, regular dividend companies, like BP. Small cap, high growth companies. And a PK and an OTC BB stock. Nutracea turned into an absolute nightmare today.

I'd like to believe the long term prospects are good for NTRZ. But, by their own admission, the prospects are horrid. They've all but written off the American market. They refuse to answer how much of the higher margin Phase 2 product they sold. They stated that their best markets were overseas where standards weren't as strident as in the US.

Nutracea is stuck with its Phase 1 product, which is just animal feed. They aren't even selling any Phase 2. God only knows why. They claim they had to keep commitments to sell equine feed first, but that sounds like bullshit. If they had good orders for Phase 2, they would have burned their Phase 1 customers a to a friggin crisp.

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NTRZ conference call was something awful

Wednesday, August 15, 2007, 1:31 PM
Stocks by John

Something is very wrong with NTRZ. I unloaded everything at $1.83 and it has continued dropping. I listened to most of the call before the light really switched on and I realized that this whole business was far from kosher.

NTRZ is hiding debt. Worse, it is hiding debt in a company (Vital Living, VTLV) that has close ties to its CEO, Brad Edson.

NTRZ is telling shareholders to wait until Q4. It claims it will be cash flow positive in Q1. This is all bad news. Also, there are a lot of receivables with apparently very little cash received. $5 in a license. No cash sitting there. Worse, $2 in receivable to VTLV, with no cash sitting there. Do the math! $13 million of the quarter, and $7 million of it is absolutely made the fuck up!!!

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Cheap oil means better returns for oil companies

Wednesday, August 8, 2007, 12:19 PM
Stocks by John

Something odd has happened in the oil sector. They have hit a point where cheaper oil is boosting their stocks. Why?

First off, despite a rocket ride into the upper $70 range for crude, gasoline has tried to stay below $3 a gallon. Something odd there, huh?

The oddity is that the oil companies are scared that oil over $3 a gallon will dent demand. In other words, as oil goes up, and gasoline refuses to go over $3, the oil companies have to be eating the difference in price.

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Good day for growth stocks

Monday, July 30, 2007, 10:57 PM
Stocks by John

I am always loath to say I agree with Jim Cramer. of course, this has nothing to do with the man's opinion. It is an inherent prejudice against his delivery.

But, Jim is right, growth stocks are a great place to hide during market downturns.

For my part, I'm looking specifically at NTRZ and BRLC. I recently loaded up more Nutracea stock after the downturn, and tada! NTRZ is up 7.77% today. People who bought at the $2.50 low have made a killing. Anyone who bought below $3.00 isn't doing too shabby either.

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Does AMD's next-gen core's name mean anything?

Friday, July 27, 2007, 12:26 AM
Stocks by John

Consider this name: Bulldozer. That is AMD's internal name for its next generation processor core. I wonder if AMD is coming to the realization that the Barcelona and quad core fight is just a skirmish compared to the hell the company will be raising by the time we're buying second generation eight core processor.

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eBay + AMZN = the BIG tech bubble of 2008

Wednesday, July 25, 2007, 10:36 PM
Stocks by John

Earlier this week, I commented that the combined results of AMD and GOOG and how the market responded to them signaled this earnings season was the small tech bubble of 2007. Well, now that I've had a chance to digest EBAY and AMZN earnings, I can't help but say this: Here comes the big tech bubble of 2008.

What am I talking about? AMZN reported OK earnings that are considered simply amazing mostly because the earnings from tech stocks suck about as much as going to Sea World instead of a real amusement park. The stock jumped more than $10 and stayed there.

I was about to unload EBAY, based on the popular "EBAY never goes any friggin where" theory when I noticed that some members of the chattering class were adopting an intriguing form of stupidity. They say: "EBAY has better earnings than Amazon.com and yet trades at half the price."

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