Stock Market...down
Topic: Stocks

Last week has been quite rough, eh?

If you held PALM then you must have made a killing. PALM went up more than 10% due to some rumors of buyout. If you held that stock, good for you. My portfolio had a tiny amount of PALM but it was okay. I sold mine not because of nice run up but for the reason that it is over priced now with P/E more than 20. That is 'buy low sell high'. Here the reference is P/E and not price. Price is way too subjective and is based on how Mr. Market feels on any given day.

Down market also provides nice opportunities to start buying. But, do not expect the market to come back very strongly. Not because of any fundamental reasons but people I guess have seen rising market for quite some time. When they see the same trend, they have to do something differently. It's all behavioral finance. That's it.

Some people choose to hold on to appreciated and over priced stock to avoid short term capital gains taxes. That is not a very good idea because you do not know when your stock is going tank. When investing actively, do not go by short or long term gain. If the price (as determined by P/E) is above 18 or 20, SELL. That's assuming you bought the stock when it traded below P/E of 15. Buying anything more than P/E of 15 is not very wise. Greater fool theory that you can sell it some other person if you bought an over priced stock can be sheer wishful thinking.

So, what are some good buys now. Toyota motors which has gone up by more than 30% in last 6 months or so is still an attractive buy as it's around P/E of 15. Pricey stock but worth your hard earned money. Also gives decent dividends.
Tata Motors (TTM) is also a good stock around P/E 15. Moreover, Indian stocks have been swinging quite a bit. So, this may present an opportunity to make some quick money. Most of the other Indian stock traded in the US are very over priced, especially IT companies. Even considering explosive growth in Indian economy, anything more than 20 P/E is still a way too high.

DELL may become still cheaper. Then it may become a good buy. This is because the management team seems to have been kicked in the pants with founder Michael Dell coming back into active management. So, keep an eye on DELL. Also, if DELL goes down, it is going to take down few other stocks such as WDC and other, so they all become attractive buys. One thing to be careful is not buy too much into the same sector but if companies are good, go for it.

AMAT is another great buy. AMAT, largest semiconductor equipment manufacturer, is trading at a very attractive price. AMAT also acquired Brooks Software a few months back. This is going to be great thing for AMAT as Brooks Software was the most comprehensive software provider for the sector and AMAT is going to become one-stop-shop for semi conductor automation. OK, I have some bias as Brooks Software is one of the companies I worked for in the past. I would like to see anyone who acquired all of our hard work prospers and makes all those nice people part of AMAT rich as well :)

Overall, down market is the time to fish for great buy.

Cheers!

Powered by Qumana

Stock picking
Topic: Stocks

Powered by Qumana

SIFY --- good stock for speculators?
Topic: Stocks
SIFY- Indian internet service provider seems to be a good stock for short term speculation. It has had quite an erratic swings of late. It is not as expensive as REDF (Rediff). That makes it more attractive to risk. Just make sure to set right stop level.

What is the right stop loss level? Varies from person to person. My rule of thumb is for stocks bought for long term appreciation (i.e. investments), it is ok to tolerate up to 10% decline. For short term speculations, it is better to dump losers and move on at 3-5% loss depending upon money invested.

(Disclosure: Do not hold any positions in SIFY)

MSFT --- good time to accumulate?
Topic: Stocks
MSFT - Microsoft stock has seen 10+% decline over last few weeks. 11% decline after their last earning report. Stock has remained flat for last few years. However, considering Microsoft's strong position and cash pile (close to 50 bn), stock may be a bargain. P/E is only 16. With 26% payout ratio, some real returns will come back everytime dividends are paid.

(Disclosure: I own MSFT)

BRKS, ACTU
Topic: Stocks
Got rid of my BRKS (Brooks Automation) shares recently. Had accumulated some from ESPP over the years I worked there. Those shares went no where and it was time to do something to them and bite the bullet. Although I do not work for Brooks anymore, I think stock may be a good bargain at the current price as it can possibly hit close 20 if the semi cycles sees even a modest upside. But, if you have, as I had, stocks anything more than $20 a piece, it may be a good idea to dump it and take some tax credit.

ACTU - no much info. This buy was a sheer speculation after this showed up on MSN Money's best small cap but had to cut the losses after it lost 7-8% soon after the buy. Always remember to cut the losses. "Dump the losers and ride the winners."

Current holdings - INFY, WIT (WIPRO) and LOJN.

PLCM - what a nice run up
Topic: Stocks
Sometimes it is interesting to fit a theory to an experiment after the outcome is what you wanted.

If you have read books by legendary investor Peter Lynch, who managed Fidelity's Magellan fund and delivered spectacular returns during 90s,you would remember that Lynch advocated common sense stock picking g that is to buy stocks of companies that made goods and products that you liked, purchased and enjoyed. He would take his kids to shopping and like company like GAP and buy their stocks, like donuts and by Crispy Cream etc.

Similar thing, of course by sheer accident, happened with me and my selection of Polycom (PLCM) stock. Polycom has become synonymous with speak phones and video conferencing infrastructure. I was researching and doing the ground work to buy video conferencing equipment to help my work to manage offshore teams. So, I ended up going to Polycom's demo center in Andover, MA. I liked the whole experience. Very nice demo center, highly professional staff and good treatment.

Next day or so, I was looking for a decent speculating opportunity after selling nicely appreciated TSMC shares. So, somehow picked Polycom and bought some shares. Voila! after 3 weeks after their last earnings announcement, stock went up 20%. Locked in decent profits and sold it off. Now need to have another 'this is the stock' experience.

Anyway, this is fitting the theory back to experience. Market has been on rise and as the saying goes 'rising tide lifts all boats'...so is stock market and stocks....

Cheers!

7-Eleven - Goes Private
Topic: Stocks
This is news. Hmmmm.....7-Eleven which had delivered solid returns over last 2 years or has been taken private as their web site announces.....no wonder ticker SE does not show up on NYSE.

===
On November 9, 2005, Seven-Eleven Japan Co., Ltd., a company organized under the laws of Japan, announced that through its wholly owned subsidiary, IYG Holding Company, a Delaware corporation, it had completed its tender offer to purchase all of the issued and outstanding common stock of 7-Eleven, Inc. that it did not already own. As a result, 7-Eleven, Inc.'s common stock will no longer be publicly traded, on the New York Stock Exchange or otherwise. Thank you for your interest in 7-Eleven.

LOJN, TTM sizzle
Topic: Stocks
LOJN - LoJack Corporation which make stolen auto detection equipment among other things and TTM - Tata Motors....these two stock have done really well during last week, 2-week rally on US stock market.

TTM has been in my lil portfolio for a while. Has been quite volatile. But, LOJN...I added only a week ago...the day after it had come down by 3% so. In less than a week, it has gone up by more than 15%. This rise was also helped by LOJN's good results from last quarter. Sold enough of LOJN to take profits.

TTM has rallied nicely. Sold some to take 15% profit.

I do not profess to be a great stock picker. As they say "rising tide lifts all boats".....some of my holdings all rallied nicely. True trader makes money even in bear market. Unless one invests inordinate amount of time and energy, it is not easy to spot market inefficiencies. Moreover scales tilted against individual investors. Even if you become a fulltime trader, can you organize the kind of resources big money managers have such large research staff, simulators etc.? Moreover, point to keep in mind is that large number of professional money managers fail to match even S&P returns. So, advice to bank most of your hard earned assets in index funds. that way you can hope to earn 8% YOY over long term!

Also my fav website of individual investor www.thekirkreport.com

Cheers!

FedEx
Topic: Stocks
FedEx rose close 18% in less than 6 months. Had bought some just the next day when it fell 5% or more. Was just trying to follow age old strategy of buying bluchip stock on a significant drop. My target was 15% increase. Did not want to wait any longer especially after it had move more than 15%.

No, No I am not a big time investor. My stock picking is all ivory tower academics (MBA Finance). I am like those profs who taught me. They all have most of their money in index funds. So, do I. Firm believer of efficient market theory.

On that note, you may want to read "Random Walk Down the Wall Street" ever green classic by Princeton prof. Malkiel

Cheers!

Growth factor:)
Topic: Stocks
Found this while researching P&G. This alone may 'lift' P&G's stock price to new heights :)

Take it easy. No MCP intent.....

Cheers!

Reuters
Bras designed for girls growing up fast
Sunday July 3, 5:12 pm ET
By Rasha Elass

NEW YORK (Reuters) - As parents lament that children grow up too quickly, lingerie companies are spotting an opportunity to market bras especially for younger girls.

Companies like Sara Lee Corp.(NYSE:SLE - News), whose brands include Bali, Hanes Her Way and Playtex, and privately held Maidenform Inc. have made a major investment in this area in the past few years.

Indeed, some large department stores have started to train their employees that one of their responsibilities will involve bra fittings for "first timers."

"They're either so shy and embarrassed that they'd rather be anywhere but in (the intimate apparel) department, or they're so proud and enthused about being a grown-up that they choose something totally inappropriate," said Beverley Hinkson, national bra fitting specialist at JC Penney (NYSE:JCP - News).

Hinkson, who has been fitting customers with bras and training sales associates to do the same for the past eight years, said first-time customers are coming in at increasingly younger ages.

"It's usually their mother's idea to come in for a fitting," she added.

Indeed, some girls as young as 6 are starting to develop breasts, said Iris Prager, who has a Ph.D. in health education and oversees the Web site sponsored by Procter & Gamble Co. (NYSE:PG - News) that's called www.beinggirl.com, which aims to educate girls about puberty and familiarize them with P&G's line of feminine products.

AHEAD OF THE CURVE

While the average age for menstruation has been stable at 12, other signs of puberty, including breast development, are appearing much earlier, Prager explained, referring to a large U.S. study of 17,000 girls.

The study, published in Pediatrics in 1997, found that the average age at which girls first develop breasts has declined to a little over 9 for Caucasian girls, and a little over 8 for African-American girls.

"Different factors, both genetic and environmental, control puberty," said Dr. Steven Dowshen, a specialist in pediatric endocrinology at the Alfred I. duPont Hospital for Children in Wilmington, Delaware, and chief medical editor of KidsHealth.org, an online site for parents and their kids.

No one really knows why girls approach puberty at a younger age today than what used to be the norm.

But theorists have come up with such disparate reasons as the increasing incidence of obesity in children, an abundance of hormone-laced food in the average American's diet and even the influence of mature sexual themes in movies and on television.

Whatever the reason, the medical community agrees that, at the very least, American girls today look more developed at a younger age than they did a decade or so ago.

And they're shopping for bras.

Sara Lee Branded Apparel, one of the largest manufacturers of bras, started three years ago to respond to this new market.

"When we introduced 'Barely There' three years ago, we immediately found it appealed to this whole category of customers," said Joanne Kaye, director of merchandising at Sara Lee. "This customer is very modest ... and not ready to wear the underwire."

To appeal to a young girl's fashion sense, Sara Lee makes the bras in blue with yellow or pink and green with cranberry, Kaye said.

SPORTS BRAS RULE

There is another dynamic driving the demand for bras by girls today that wasn't as prevalent a generation ago: sports.

"In my daughter's school, they won't let you play without a sports bra," Kaye said. "If you have an 8- or 9-year-old girl starting to develop breast tissue, these bras also have a nice modesty effect."

Then there are half sizes.

Kaye said this patented system is popular with developing girls whose breasts may not conform to traditional sizing.

Maidenform -- an iconic brand whose bra ads in the 1950s and '60s with slogans like "I dreamed I was a toreador in my Maidenform bra ... " became part of American culture -- introduced a version of its "One Fabulous Fit" bra for younger girls in 2001.

But not all companies did so well with this demographic.

Abercrombie & Fitch (NYSE:ANF - News) misjudged the market and introduced sexy lingerie targeted at youngsters last year.

These included thongs decorated with phrases like "Wink Wink" and "Eye Candy" that caused an uproar among parents and child advocacy groups. The company withdrew its line.

But with a large selection of modest, functional and affordable bras for young girls, even single fathers are comfortable dropping their pre-teen daughters off at the mall and letting them pick their own.

"We're prepared for the single dads," JC Penney's Hinkson said. "They bring their daughter and say, 'Please fit her with eight or nine bras and I'll be back in an hour to pay for it."'