stock market

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Yeah, ok, I'm finally done with the subject. It just feels so good to have seen this from miles away. The indulgence in criticism, vulturey I call it, really should be man's eighth sin. I've always felt the critical (and commerical) success of a console has always been linked to its controller. From the Atari 2600's emancipating joystick, to the NES' revolutionary gamepad, to Sega Genesis' sleek but uncomfortable three-button pad, to the classic SNES, to the alienating N64, to the re-classic PS pad, to the Buick-sized XBox controller that was slimmed to a successful "Japanese"-style precursor to its latest bit of perfection, and so forth.

So it comes as no surprise, then, as the sell through rate of PS3s declines on the black market and at retailers, Sony brazenly claims their SIXAXIS controller, an engineering marvel they claimed at E3 to have no gimmicks, had won an Emmy. They gloried in the announcement. They squirmed like a teenager rolling in a vat of oiled Maxims, and prematurely immaculated their product. A day later, they recanted, saying they had jumped the gun. The Emmy was given not to their SIXAXIS, rumbleless from the Immersion spat, but to the PS One controller, in conjunction with Nintendo. Ouch! Holy wax-affixed feathers, Batman!

On the bright side, video game publisher stocks took flight today. Pity I got knocked out of my Activision stop, but it was a high stop and I'm happy with the trade. I've been watching Sony stock too (SNE) but it seems like there is too much weakness, despite breaking out of its channel. But news about poor sell-thru, which isn't really news to anyone who's gone to Best Buy recently, cast a big glaring sun, daring them to rise higher on their borrowed wings.

It's time for my first year-end review of how my portfolios are doing. I hope this introspective proves interesting for readers, because, as I've garnered from other financial blogs, it will certainly be useful for me to consolidate my experiences into one critical place.

So I'll chomp my surrogate cigar, a slab of delicious Robertson Farm's beef jerky straight from Oklahoma, and get a rollin'! Know-nothing investor a-go-go! …

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In a downward spiral of serial debacles, Sony announced today that after the estimate of 4 million PS3 units by end of year was slashed down to 2 million, with launch seeing a paltry 100,000 units for Japan and 400,000 for the U.S., guess what? Japan, the heart of PS3 loyalty, is actually going to be getting 80,000 at launch. In completed unrelated news, end of year units for the Wii is expected to "handily" beat 6 million, with 1-2 million estimated ready to go at launch. Preliminary reports rumor 24-120 Wii's per Best Buy.

Let's step back from the numbers here. What the heck is Sony doing? Do they really want their plentiful holiday season preceded by plentiful consumer base exposure to their competitors? And their weapon against the monumental XBox Live is a petulant adaptation of XFire (for which support falls into the duties of individual developers), completely ignoring the necessity of the online community in the console world, a need PC gamers have taken for granted? Even the Wii Channels system is taking the Animal Crossing model to make gamers networked and personal. The story is quickly going from a Miracle on 34th St. to Great Expectations to Macbeth.

Admittedly, their launch list looks like the strongest of the three so far, but it's almost as if they were actively sowing the seeds of confusion and disappointment into their product. From PR snafus to logistics drama, we're seeing a lot of weakness as they strut and fret their hour on the stage. Though people who find the whole console war debate irrelevant would say the market is robust enough for them all, and the industry stands to gain no matter who is the victor, if they're wrong, there is no doubt that Sony has its hands furthest down the cookie jar.

Despite growing apprehension in the currently overbought market, I recently bought a good chunk of Nintendo stock, something I should have done a long time ago. Even with a soft landing, the economy isn't too supporting of the PS3 price point, nor an alinear jump in game sales (yes I know it's cyclic). I think very soon, the industry will realize that huge budgets net huge revenues, but huge profit margin is what ultimately counts. As it stands, only the Big N seems to be on that terra firma. Looking at how game stocks did this past year, shareholders agree that "next-gen" is just bluster, signifying nothing. Show me the money.

…death and tax evasion.

I seriously thought gamers were a bunch of Democrats these days. Guess not.

I made a post earlier today that I felt worth expanding on. It dissappoints me how naively the gaming community opposes the taxation of virtual property, which thanks to the proliferation of game economies in venues like Second Life and World of Warcraft has brought legislative interests in like cultural vultures to a cash-stuffed corpse, which has begun turning the wheels in the dark recesses of the IRS’ mind. It is like a shudder in the Book of Revelations when Reuters decides to establish a virtual news bureau to investigate virtual news.

But it’s happening. And you’d be a fool to stand against it. Specifically, what’s being debated is that virtual transactions of either virtual goods or virtual currency is capitalized into real money. How much? There are a few individuals who make six digit salaries as black market dealers, (adult) service providers, and real-virtual-estate agents. Can one really expect the IRS to take a backseat to that?

Of course not. Income is income. Income is taxable, income SHOULD be taxable. It doesn’t matter if you’re engaged in the intangible businesses of gaming, or the intangible businesses of day-trading, education, entertainment, customer service, consultation, art, etc., if you’re making money, you should be taxed. The more interesting question is how asset value is determined. But I look forward to the day when I can write the cost of buying Warcraft off my taxes, or include the depreciation of my Second Life home on my Schedule A.

The most ignorant thing people said was that the EULA for the game prohibits sale of virtual assets, and therefore government is breaking the law trying to collect on in-game actions. It doesn’t matter if income is legal, illegal, magical, mystical, or genetically produced out of the ass of an X-man, it is TAXABLE.

I can’t wait until the controversy is stirred up further when Kojima’s stock market game comes out. It is possible the government will confuse realized and non-realized profits in the virtual economy. The current state of game regulation debate is looking bad, as we’re being caught between the “bring the government down on their corporate asses” Democrats, and the “morals aka sex should be regulated in all media” Republicans, turning the whole charade into a political lose-lose for video games. It’s high noon outside the virtual saloon, and the tumbleweeds are a’tumblin away from the gunfight.

Isn’t it strange how little hypocrisy has evolved over the course of human civilization? Invariably, it sticks to a couple simple propositions:

– Believe in an issue.
– Protest an antagonist issue except if it applies to you.

So the Democrats grabbed on to a report pulling selective quotes about how the Iraqi war has only engendered more conflict. The Bush Administration tried to intercept the critics by saying it was going to release specific portions of the document claiming overall threat has decreased. Democrats then scorn the administration for “selective declassification” and dismiss the whole charade as propaganda.

Apparently pulling selective quotes to begin with wasn’t “selective declassification.” Is anyone else getting sick of this game? I can’t believe how many people out there believe more in the game than in reality. It saddens me that 60% of Americans believe recent drops in oil prices is somehow right-wing oil manipulation. Maybe it serves Big Oil right for having such shitty PR, but most Americans do not know that Big Oil is a drop in the barrel compared to other oil barons in Saudi Arabia or Venezuela. Exxon ranks a distant number 15 in size, and only half of that even is oil.

The Fed thinks we’ve peaked on inflation. My portfolio has risen precariously on that news. I’ve made enough in the past few days to buy myself a PS3, but that would be succumbing to Harrisonragi’s “selective declassification” of next-gen details. All I can be bullish on is the Xbox 360’s version of Guitar Hero 2 with DOWNLOADABLE CONTENT! I want that wireless X-Plorer dammit! No doubt the chum in the picture is struggling with his Democratic desire to tell all his friends about it, and his Republican desire to rock out against the man.

Shame it’s the other way around today in real politics, where Democrats do nothing but tell all against the man, and the Republicans do nothing but rock out with their friends.

The harbinger to November rain seems intent on supplanting the throne of the bluesiest period of the year. I'm talkinga about our dearest, most choleric month of August.

Within its tendrils melancholic, the stock-market caesar takes its annual brute stab in the back in time for the ides of the eight month. But having done a lot of spiteful math this week, I can proudly say that I've managed to beat the S&P 500, albeit by a meager +1.6% percent. Wherefore proud? Considering the "surprise" downturn the market had, and my own inexperience with having just started investing last October, that's not bad. My gain has hovered at 5.22% with minor spikes to 16%. However I've situated myself for much better gains later this year, now that I've weathered the worst. I've learned a lot about something I always considered to be pure gambling. Of course, the less you know, the more gambling it is.

While the stock market was taking a beating in auto, food, and near about every other sector, another rainy cloud snuck in. E3 was canceled. There isn't much to say about this that isn't already covered in this excellent article. I'm bummed, but I think it's for the better.

But all is not lost! A new animated series based on Mike Mignola's art, voiced by the likes of Paul Giamatti and David Hyde Pierce, has been born, and it's awesome. Remember the feeling you had the first time you saw Dexter's Labratory or the Braak Show? Aqua Teen Hunger Force? The Tick?!? Here it is, times ten tenfold. Watch and weep, for joy and for August.

I've just recently signed up for Morninstar's premium membership, and man does it rock. Their new portfolio manager is so easy to get up and running, and unlike Yahoo Finance, 5-10 year corporate finances data is accessible with a simple click. As someone who values long-term stability and earnings and debt trajectories, their charts are really convenient. They've also done a great job keeping their in-depth analyst reports up to speed. Out of the first five I went through, only one was dated over a month back.

Importing portfolios from Yahoo is the only thing painful, but I can deal. I was very happy to see that my fair value estimates for the stocks I was interested in roughly matched theirs. From now on, it seems way more efficient to take their values over trying to number-crunch mine everytime earnings reports come out. They also have a review on stewardship, which is piece of the puzzle largely missing from Yahoo and Google.

Finally, there is an excellent portfolio X-Ray that I've used before (it's incorporated into T. Rowe Price's site as well), but I think for folks only using Yahoo Finance, it's a much better way to step back and take a complete view of one's diversification across geography, industry, market cap, and risk. Anyways, highly recommended.

Housing market kinda pulled up the current bear based on some shady conclusions that largely ignored how weak future construction prospects looked. I'm feeling like people are grasping at all sorts of straws at the moment. New home sales aren't half the story, resale volume has been plunging and been mostly underreported, and construction momentum seems to be built of fulfilling backlogs rather than new contracts. The rally also had some short covering behind it.

I am not changing my stance- interest rates will rise, but inflation will ignore it as oil prices soar, and eventually the dollar will crack under stagflating duress. There are few places to be domestically that won't be disasterous. Inflation hedges? Hard to time. Deflation hedges? Even harder. Emerging markets? Hit or miss, and subject to liquidity leaking out of the asses of the rich and irresponsible. My current aim is to go for U.S. companies with costs in dollars, sales in foreign currencies, and good stability, low low price. Dividend helps.

Gundam wants to know… are you protected?

We braced ourselves and stepped into X-Men 3 with low expectations carefully normalized to the wave of negative reviews that deluged the gap Brian Singer left, and that Brett Ratner tried to fill. And honestly, it wasn't a bad flick, great action, funny moments, and lots of so-so special FX. I'd say decent FX if it wasn't for the abuse of particle systems and the "shattery" feel of the bridges and other exploding objects, which really got annoying since there is always something being explodeded. The X-men fan in the recesses of my soul, however, was indignant. Juggernaut, a mutant? Phoenix a double personality? Magneto so campy he should have sported a titanium handlebar mustache to twirl to tensile breaking point?

What the hell were they thinking? Sure, the movie was fun. I got my money's worth. But plucking the audience's money's worth is hardly a way to perpetuate the species, a species like the perennially entertaining James Bond money-tree. No, a species like X-men won't grow much without Miracle-Gro and respect. I mean c'mon… Psylocke is a Morlock?

Speaking of money-trees, the tumbling market these days makes for a great albeit risky buying opportunity, yet I am looking at some severely underpriced large-cap. The inflation fears keep rising, and while I had predicted long-term rate hikes from the FED long ago, I've grown to realize that inflation is only part of the reason for them. In fact, the FED doesn't fight inflation so much as create/hide it. M3 anyone? No, the FED is really fighting to keep the dollar high, yet is faced with keeping domestic equities attractive at the same time.

Inflation is the rising of prices, not the fall of money value, although that is the net effect. But such forces affect more than the U.S. economy, it affects entertainment as well. As the price to see Wolverine slash some nobodies up increases, the value of my time and cash spent at the cinemas, my "FandangoBucks" per se plummets, and will quickly lead other movie-goers like me to enter that deflationary spiral that entails sitting on the couch with five Netflix offerings upon the altar of the coffee table. Now that's diversifying your portfolio.

Stock markets have taken quite a plunge in the last few days, its biggest drop in three years. The combination of a backlash against commodity speculation, profit taking, and the inability of the Fed to stop rate hikes has really put the hurt on investors without the nerve to stay. My advice at the moment is to stick with companies with profits in strengthening currencies, and costs in the weakening dollar. Rate hikes will pause in the short run, rise in the long, especially with the yuan breaking the 8 RMB/$ barrier and the yen fluctuating at the 110 border.

Despite the hubbub of E3, seems like the market has not been kind to game companies. Wedbush Morgan insinuates we're already at a plateau in the game industry, with apparent gains from console sales actually only coming from people buying two consoles. In other words, market penetration is not up to snuff. Atari, fer instance, is clinging desperately to its AD&D license. The only thing they've got left is Call A Friend.

What was up to snuff, and by snuff I mean the film variety, not the 'baccy, was the horrifying crash and burn the Phantom Console with the departure of Kevin Bacchus and the catch-in-the-act of ex-CEO Timothy Roberts, who allegedly faxed unbacked promises for Infinium stock to drum up the price. The SEC replied with "BOOYAH!" Did I not tell people to stay away from this fictitious fiction of a company? Anyone get it on tape? 'Cuz that's snuff.

Let's hear what Guitar Hero babe has to show say.

There's only one thing in the news today more important than Tetris DS with its NiWiFi multiplayer block-completiongasm.

Now, I am not one to trust the stock market. AFAIK, to anyone but type A and type B, it's merely a professional looking gamble. In fact, the Chinese word for operating on the stock market is "wan" which translates literally to "play." How's that for an admission. Type A are people who spend every waking second knowing the going's on of the industry, the business, and the health of the nation, and can edge their investments past the border of profitability. Type B is the the type who makes his broker rich by trading on every other down and up. When they get lucky, they call it skill and intuition. When they take a loss, they call it bad luck.

So you can understand then, given my abhorrence for the investment "pretense" we find amongst wall sharks, that it was a major decision for me to put even a dime last year into Motorola (nyse: MOT). Big M is doing so-so, slightly under-priced, decent company backbone, growing market share after finally making decent phones for a comeback. On the other hand, they have a history of losing their brilliant minds, and their key employees don't seem eager to invest in the company itself.

Enough money talk. Let's not fool ourselves into thinking we know where MOT is going. Why did I buy? Well, since the invention of the lightbulb, the PC, and the cell-phone, nothing has really infiltrated into our everyday dependency. Every year, gadgets try desperately to escape the power strip nursery we created them for. Two things on the horizon will change that.

E-Ink. E-Paper if you will. It seems rather unglamorous at the moment, but it will revolutionize the white collar pantheon. It will become a new force in the Unified Theory of Advertising Relativity. One day, you will eat out of cereal boxes that play cartoons on them. You'll have multi-page post-it notes, self-updating billboards, posters you can order tickets from, T-shirts that change logos, postcards that show home videos, and an umbrella that flickers when it knows there is rain this week. Forms, brochures, pamphlets will all have tutorials built into them, and the 1040EZ will calculate as you write. My business card will host my demo reel.

And you thought e-Books were a big deal. Holographic displays are not the future.

You might be thinking of going to E-Ink.com right about now, but rest assured, they are privately held. But their list of partners reads like the who's who of the future of entertainment.

While these subtle improvements to your life waft in, a scent stronger than silicon will wake you up one day. A battery. A real battery, one that lasts all day under constant use. Or one as thin as a business card. One you can even cut in half if it doesn't fit in your wallet. Will that not be the one salvation to the bindings of this technomania? Only Motorola knows. There isn't a single gadget that wouldn't date-rape a TRUE long-life battery though.

Scotty told me too look out for diabetes and hearing loss on the medical front. He's dead right, and the epidemic is looming. Am I a little selfish to wish for the day a 24-hour iPod leaves half the boomer's babies deaf? For my investments' sakes, I'll leave that unanswered.