Sold half of my position in Alcoa at $11.42 for a 24% return. I am holding on to the other half to see if the upswing continue.

I’m glad that I sold my short position in SRS on Monday. SRS has declined to $52.47 per share.

Rohm & Haas Sell

Sold 50 shares of Rohm & Haas at $58.80 per share. My gain came out to be $5.35 per share. I only had 100 shares but still not a bad gain for less than 24 hours.

5 Signs you are drowning in debt

5 Signs that you are drowning in debt

1. You use your credit card so that you can pay your monthly bills. You use your credit card to pay for necessities like your phone bill, gas & electric or groceries.

2. You depend on cash advances in order to make it through the month. Cash advances charge upfront fees, interest rates in the 20 percent range and have no grace period.

3. You have no idea what your account balances are. You don’t care to know how much you owe on your debts.

4. You have stopped opening your mail. You throw it in a drawer or in the trash. You would rather do anything than open your mail.

5. You don’t answer the phone. You know it is a bill collector calling about your debt so you don’t even bother to pick it up.


Photo by mlinksva

Rohm & Haas

I bought 100 shares of Rohm & Haas Company(ROH) at $53.45 as an arbitrage play. Dow Chemical agreed to purchase Rohm & Haas for $78 per share earlier this year. The Kuwaiti government pulled out of a 17.4 billion dollar deal with Dow Chemical which could hurt financing for the Dow Chemical-Rohm & Haas deal. ROH stock is down over 17% today amid risk that the deal may not be completed.  I think the deal will still get done just not at the $78 price offered. Dow Chemical already has the bank financing in place along with a 3 billion dollar investment from Warren Buffett’s Berkshire Hathaway. Dow needs this deal and would be subject to liability lawsuits if they back out. I think the deal gets done but at a lower price.

SRS Sell

Sold off 100 shares of Proshares UltraShort Real Estate ETF(SRS) at $62.  This was after the $4.56 distribution declared last week which would make my exit price over $66. There could be more upside to SRS but I never invest long term in any short position. I sell short positions once I have made a profit.

Buy It Like Buffett

Below are excerpts from a Motley Fool article by

It took him long enough.

At the end of 2004, Warren Buffett’s Berkshire Hathaway had around $44 billion in cash. Ditto for 2005. And 2006. And, yes, 2007 as well.

At one point, more than 20% of Berkshire’s assets were earning money-market returns. While armchair investors complained that the company had amassed too much capital to continue its market-thrashing ways, Buffett simply sat on Berkshire’s enormous pile of cash. And waited. And waited. And waited some more.

He refused to buy until the time was right.

The time is right
Buffett has called the current mess an “economic Pearl Harbor.” He has also said, “In my adult lifetime, I don’t think I’ve ever seen people as fearful economically as they are now.”

These aren’t just words. Mr. Greedy-When-Others-Are-Fearful has been stuffing money where his mouth is.

That $44 billion Berkshire had at the beginning of this year? By the end of June, Buffett had spent it down to $31 billion, in deals including Berkshire’s purchase of Marmon Holdings, the Mars purchase of Wrigley, and the Dow Chemical takeover of Rohm & Haas. He even bought up auction-rate securities at bargain prices.

And in the second half of the year, he accelerated. It’s nice to have cash when the credit markets are frozen.

This fall, he has committed:

  • $4.7 billion to purchase Constellation Energy for $26.50 per share. (It had been trading above $100 at the beginning of the year.)
  • $5 billion to purchase perpetual preferred stock in Goldman Sachs. He not only gets the hefty 10% dividend, but also receives warrants allowing him to buy $5 billion of common stock at $115 per share.
  • $3 billion to General Electric under terms similar to the Goldman Sachs deal — except the preferred stock is callable for a 10% premium after three years. The warrants allow him to buy stock at $22.25 per share.


That’s more than $20 billion spent over just one month if he chooses to exercise those warrants. Buffett’s back, baby!

Learning from Buffett
Instead of buying what Buffett is buying, we should look to what his strategy has to teach us. So what can we learn from Buffett’s shopping spree? Two things:

  • Invest for a lifetime.
  • Compile a watch list of attractive companies.


Buffett’s pushing 80, but he hasn’t been panicking and trying to make a quick buck, no matter what the market has done. Rather, he’s been investing for the long term. In the past few years, that’s meant waiting for opportunities to present themselves. Now that they are, he’s striking with a vengeance.

And because of his patience, he hasn’t had to compromise — and he’s getting great companies at great prices. When Constellation Energy’s price dropped so precipitously in mid-September (from above $60 to the $20s), he was ready to pounce. Goldman and GE may have approached him, but you can be darn sure that he’d already done the bulk of his research beforehand.

Follow Buffett’s lead
To be great investors, we need to be similarly prepared. In volatile times like these, Mr. Market presents us with loads of great values — but just because a stock price has fallen, that doesn’t mean a given company is a good value.

The complete article can be found here.

Best After Christmas Deals

These large retailers are offering some of the best after Christmas deals.

Home Depot

Nationwide and Online
Dec. 26 to Dec. 31

The building store is offering several promotional rebates, including $300 off two or more select General Electric appliances, and up to 30 percent off select Dirt Devil products.

For more information, visit


Nationwide and Online
Dec. 26 to mid-January

The largest department-store chain in the country will offer shoppers clearance prices on fall items such as diamond earrings, bedding and appliances. Discounts will reach 75 percent off.


Nationwide and Online
Dec. 26, until supplies last

Despite the fact that it’s doing better than others — December sales are expected to increase by 3 percent in North America — this big-box still needs to rid itself of much 2008 inventory. Shoppers will see reductions of up to 80 percent off certain jewelry, appliances and toys, as well as Christmas decorations.

For more information, visit


Nationwide and Online
Dec. 26, until supplies last

Women’s clothing designer Thakoon Panichgul’s GO International collection for Target hits stores Dec. 28, which means you’ll find previous GO designer Jonathan Saunder’s collection reduced by up to 90 percent. Other discounts include markdowns on appliances, Nintendo DS games ($25 each) and 50 percent off certain toys.

For more information, visit


Nationwide and Online
Dec. 26 to Jan. 3

Along with home appliances, shoppers will see discounts on fine jewelry — up to 70 percent off — and certain models of treadmills, which will be discounted by up to 40 percent off. On New Year’s Day, further discounts will occur.

For more information, visit

Circuit City

Nationwide and Online
Dec. 26, until supplies last

This bankrupt electronics store bought too much inventory for fall 2008 and now needs to liquidate that overabundance. However, for after-holiday shoppers, the company’s downfall means can’t-be-beat discounts starting Dec. 26 at still-open stores as well as online, including yet-to-be announced markdowns on already-discounted laptops, flat-screen TVs and digital cameras.

For more information, visit

Saks Fifth Avenue

Nationwide and Online
Dec. 26 to mid-January

This struggling high-end department store–November 2008 same-store sales were down 5% from November 2007–will offer shoppers jaw-dropping discounts on designer shoes and clothes, with up to 90% off Marc Jacobs pumps and 60% off up-and-coming designer Brian Reyes’ cocktail dresses.

For more information, visit


This was taken from an article at Forbes. The complete article can be found here.

Photo by The Consumerist


I purchased $5 April call options on Wendy’s stock. This is the third largest burger franchise beneath McDonald’s and Burger King. I already own stock in McDonald’s which has performed well this year. I think Wendy’s may also see an increase in sales as consumers downgrade to cheaper restaurants.


Photos by belgianchocolate

Stock Watchlist

I am keeping an eye on the following stocks:

Harvest Natural Resources(HNR) closed at $3.88 per share. This is a classic Graham play. This natural resources company is currently trading below its net current asset value and the cash on its balance sheet.

Manitowoc(MTW) is down over 80% this year and is trading at $8.29 per share.  The company has a strong enough financial position to survive this economic downturn.

Electronic Arts(ERTS) has sank to $15.01 per share. Electronic Arts is currently undergoing a massive restructuring as the company seeks to increase market share in the competitive video game industry. Might be a good takeover target with over 2 billion in cash and no debt.

Cheesecake Factory(CAKE) trades at $9.36 per share. The casual dining sector has been crushed and Cheesecake Factory is no exception.

Whole Foods Market(WFMI) closed at $8.99 per share. This is a very risky play because of the grocer’s huge debt load and problems with the Wild Oats merger. If the stock drops anymore it may be worth a shot.