stocks and options

Todays trades

noreply@blogger.com (Just a concerned person) — Thu, 04 Jan 2007 20:34:00 +0000

Hey folks,

In the Pacific Northwest it has been weeks without power for awhile. I wanted to update some trades and will have some more tonight.

Close short GOOG 510 call @ $2.20
Close short GOOG 460 put @ 3.20

I will update tonight.

GL

We are going into the slow X-mas months

noreply@blogger.com (Just a concerned person) — Sun, 10 Dec 2006 18:47:00 +0000

Going into the slow part of December we are going to mostly sit the market. I am going to sell some more GOOG January 460 puts while wrapping my December position. I am also going to play a January 510/ March 540 diagonal spread. I am going to see if I can get the premium of the 510's to pay for part of the 540's. Please note this diagonal spread is a very risky play and one would not normally sell the puts and play the spread because the exposure to loss is amplified.

Sell 500 shares TIE @ $33.50=$16,750.00
Sell 300 shares ATI @ $98.20=$29,460.00
Sell 300 shares BA @$90.13=$27039.00
Buy to close 4 contracts of GOOG Dec 460 puts (GOPXL)@ $70.00=($280.00)
Sell to open 4 contracts of GOOG Jan 460 puts @ $710.00=$2840.00
Buy to open 5 contracts GOOG March 540 call @ $1370.00=($6850.00)
Sell to open 5 contracts of GOOG Jan 510 call @ $830.00=$4150.00

Transactions: $73109.00
Commision: $88.00
Total transactions: $73021.00

Long 300 shares FCX @ $61.81=$18,543.00
Short 4 contracts of GOOG Jan $460.00 puts (GOPXL) @ $830.00=($2840.00)
Short 5 contracts GOOG 510 call @ 830.00=($4150.00)
Long 5 contracts GOOG March 540 call @ $1370.00=$6850.00

Total portfolio: $18,403.00
Total cash:$88,534.80
Total gain to date: $6937.80 (6.94%)

GL investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:
This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

The market is somewhat back on track

noreply@blogger.com (Just a concerned person) — Thu, 30 Nov 2006 02:00:00 +0000

It looks like the market is getting back on track a little. The oil stocks had a very nice couple day run and I am taking profit. Time to go full bore in specialty metals. Following are the trades for the fantasy portfolio.

Buy 500 shares TIE @ $30.42=($15,210.00)
Buy 300 shares ATI @ $88.46=($26,538.00)
Buy 300 shares BA @$88.89=($26,667.00)
Sell 4 contracts of GOOG Dec 460 puts (GOPXL)@ $320.00=$1,280.00
Sell 500 shares long COP @ $66.45=$33,225.00
Sell 300 shares long OIH @ $145.89=$43,767.00

Total transactions: $9,857.00
Commissions: $64.00
Total transactions: $9793.00

Portfolio
Long 300 shares FCX @ $61.64=$18,492.00
Long 500 shares TIE @30.42=15,210.00
Long 300 shares ATI @ 88.46=$26,538.00
Long 300 shares BA @$88.89=$26,667.00
Short 4 contracts of GOOG Dec $460.00 puts (GOPXL) @ $320.00=($1280.00)

Total portfolio: $85,627.00
Total cash:$15,513.80
Total gain to date: $1011.80 (1.14%)

Justifications: The defensive plays in oil worked real well but I think the big runs are over. I took the profit.

BA: It is time to get back in to Boeing with the market correction mostly behind us.

TIE: Time to load up on more metals. Titanium appears to be doing well so I think this will be a nice play.

ATI: This is another specialty metal play.

GOPXL: I am slightly bullish on GOOG but think it might still be in snide for awhile. I wouldn't mind buying GOOG if it hit $460 but most likely I'll just let these contracts expire by December option expiration.

GL investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

The word for today is capitulation

noreply@blogger.com (Just a concerned person) — Tue, 28 Nov 2006 03:18:00 +0000

The market was heading ever higher with seemingly unstoppable speed. Then all of the sudden crash!! The dollar was hitting 22 month lows against the Euro. The market was also seriously overbought. The correction came and there was no where to run and no where to hide. My guess is that this market will be stuck in the mud for at least a few days if not weeks. The Nasdaq closed down $54.34 and the Dow closed down $158.46. The high flyer's were hit the hardest. Following are some stocks:

CSCO: $25.80 down $1.04
BIDU: $106.85 down $7.14
RIMM: $135.30 down $6.26
AMZN: $40.85 down $1.56
AAPL: $89.54 down $2.09
BA: $87.37 down $2.40
JCG: $40.21 down $3.07
NYX: $101.11 down $7.15
CME: $532.77 down $20.47
BOT: $157.12 down $6.83

It was not a good day to be in the market unless a person was short. I don't believe that tomorrow will be a bad day but I also don't believe it will be stellar. Time to do a little risk management with the portfolios.

GL investors

Disclosure: I am not currently long or short any of the positions in this post.

Note to all readers:This post and all other posts in this blog are for entertainment purposes only. All of the stocks described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Time to go mostly cash.

noreply@blogger.com (Just a concerned person) — Tue, 28 Nov 2006 01:43:00 +0000

Today is a bad day for the market and I think I will sit out of all the marquee plays for now. As I had said yesterday, that I would either sell at a $.50 rise or wherever the stock is an hour out of the gate (with the exception of FCX). The trades to buy COP and GG didn't reach their target. Let's account for all the trades last week:

Sold at Earnings
Buy 1000 shares of BRCD @ $8.18 sell at $8.49=$310.00
Buy 200 shares of GME @ $50.70 sell at $53.00=$460.00
Buy 400 shares of DELL @ $24.76 sell at $24.82=$24.00

Bought last week and sold today:
Buy 1000 shares of LCRD @ $12.41 sell today at $12.40=($10.00)
Buy 200 shares EFUT @ $45.00 sell today @ $46.50=$300.00
Buy 500 shares MRVL @ $21.25 sell today @ $20.80=($275.00)
Buy 200 shares SNDK @ $48.95 sell today @ $46.75=($440.00)

Short position covered last week:
Cover 500 shares RIMM @ $138.00 (shorted @$127.50) =($5250.00)
Cover GOOG @ 495.83 (shorted @ $491.93)=($390.00)
Buy to close 1 contract GOPXI @ $520.00 (Sold@ $870.00)=$350.00

Positions previously accounted:
Sell 100 shares BA @ $88.20=$8,820.00
Sell 1000 shares GT @ $17.40=$17,400.00

Positions bought today at close:
500 shares of COP @ $64.19=($32,095.00)
300 shares of OIH @$138.20=($41,460.00)

Net transactions ($58,256.00)
Commission: ($242.00)
Total transactions($58,498.00)

Portfolio:
300 shares long FCX @ $61.45=$18,435.00
500 shares long COP @ $64.19=$32,095.00
300 shares long OIH @ $138.20=$41,460.00

Total portfolio: $91,990.00
Total cash:$5,720.80

Total gain to date: -$2289.20 % (-2.23%)

Today's market action is a normal correction. This is why I am liquidating stocks of a non defensive nature. I will stay long the metals and the oil stocks COP and OIH through this correction. Between the short position in RIMM and today's action, the small loss is not too bad.

GL investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Thanksgiving trades

noreply@blogger.com (Just a concerned person) — Mon, 27 Nov 2006 05:01:00 +0000

With Monday looming with the dollar dropping I am going to liquidate all positions for now except FCX.

Following are the trades sell at $.50 up from the morning. Any stocks that are down an hour out of the gate will be sold at the price at that time.

I am going to put in a buy order for 1000 shares of GG at $28.00
I am going to put in a buy order for 500 shares COP at $64.00

I will make some option trades at the end of the day.

I hope everyone had a nice turkey day.

GL investors

Disclosure: I am not currently long or short any of the positions in this post.

Note to all readers:

This post and all other posts in this blog are for entertainment purposes only. All of the stocks described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

FCX and PD plan marriage by almagamation (copper and Gold)

noreply@blogger.com (Just a concerned person) — Sun, 26 Nov 2006 16:03:00 +0000

Last Sunday FCX Freeport McMoRan made an offer to buy PD Phelps Dodge for $88.00 a share plus .67 shares of FCX stock. Is this a good deal? Will this create too much dilution?

I think this is pretty darn good deal for FCX. Let's look at the numbers:

PD
Shares outstanding: 203.99
Cash less debt: $3.17 billion
2006 forward EPS: $16.40
2007 forward EPS: $15.95
Total net income for 2007 at consensus: $15.95 x 203.99 million=$3.25 billion

FCX
Shares outstanding: 196.93 million
Cash less debt: -$76 million
2006 forward EPS consensus: $6.99
2007 forward EPS consensus: $5.65
Total net income for 2007 at consensus: $5.65 x 196.93 million $1.11 billion
New shares created: .67 x 196.93 million=131.94 million
Total new shares of the combined company: 196.93 million + 131.94 million=328.87 million
Total debt: ($88.00 x 203.99million)+ $76million -$3.17 billion=$14.86 billion
Total 2007 net income of new company: $1.11 billion+$3.17 billion=$4.28 billion
Current stock price: $61.86
Forward 2007 EPS of combined company: $4.28 billion/328.87 million shares=$13.01
Forward PE of the new company: $61.86/$13.01=4.75

This deal if it happens as advertised would create tremendous share holder value. The forward PE should be somewhere between 8 to 10. This would mean that the shares should be at $104.19 to $130.23. If copper and gold remain at their current levels, the EPS for 2007 could be quite a bit more. This combined stock could be a $180 to $200 stock with high copper prices.

The risks that remain are the deal isn't approved by share holders. We saw what happened when PD tried to aquire Inco and Falconbridge. The other problem would be if metal prices tumble next year. I think that both of these scenarios represent a real possibility.

I have to admire the way that this deal was structured even though there is debt. This debt could be paid off in a short period of time and it doesn't create too much dilution. If this deal goes through, it would be an amalgamation made in heaven.

GL investors

Disclosure: I am not currently long or short FCX or PD.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

GOOG revenue expectations for Q4

noreply@blogger.com (Just a concerned person) — Sat, 25 Nov 2006 20:41:00 +0000

In a previous post, I explored Google’s earnings and found that the analysts consensus is a high target. With Google entering the strongest quarter of the year, is their top line or revenue an easy target. In this post, I will explore this.

The consensus for Google’s revenue number is currently running at $2180 million TAC adjusted. Last quarter GOOG produced $1860 billion. That is 17.2% quarter over quarter revenue increase. This would mean that they would earn $3153M gross revenue (revenue not adjusted for TAC).

Last year GOOG had a 21.6% quarter over quarter increase so 17.2% should be a walk in the park…………….. right? After all this is Google’s best quarter.

Actually $2180 million is a very high target. As a careful investor, I would not think that it is a given.

Why is this number not just another number for Google to blow away? From my previous post, following is Google’s revenue starting from when it went public:

GOOG gross revenue with quarter over quarter growth
(04) 3) $806M 4) $1032M (28%)
(05) 1) $1257M (21.8%) 2) $1384M (10.1%) 3) $1578M (14.2%) 4) $1919M (21.6%)
(06) 1) $2254M (17.5%) 2) $2456M (9%) 3) $2690M (9.5%)

Growth metrics
Q3(06)/Q3(05)=1.70
Q2(06)/Q2(05)=1.77
Q1(06)/Q1(05)=1.79
Q4(05)/Q4(04)=1.86
Q3(05)/Q3(04)=1.96

As you can see, the numbers on a percentage basis are decreasing. This is very clear. As Google grows, the numbers on a percentage basis become much harder to achieve. To demonstrate this I will show the dollar amount that would need to produce the growth:

Q4(05) growth over Q3(05); $341 million.
At $3153 million gross, Q4(06) over Q3(06) would be $463 million. That is $122 million more growth than produced in Q4 last year. This is where the large number statement for Google becomes prevalent.

Now I’m not going to predict that Google misses this target. Many things could happen that would make this number higher like addition sources of revenue. Even with products like Youtube ™ and Google Checkout ™, most of Google’s income will be derived from search. Most of Google’s new sources of revenue haven’t been efficiently monetized yet.

With 10 straight quarters of growth in search revenue, what happens if growth slows?

The gross revenue number of $3153 million could be considerbly less.

Now, I am not predicting a miss in revenue for Q4 but am pointing out the risk which is real. There are many people like Jim Cramer who are not even mentioning the risk that is associated with investing in growth stocks like GOOG. Anybody who has perused the message boards and online discussion groups regarding Google will see people predicting insane near term numbers like $1000 and $1500. A new breed of idiots has been born. There may be some people who lose a considerable amount of money due to these recomendation’s by perma-pumpers.

Folks……..Google is a risky investment. Due to the risk, an investor may receive a nice return. These returns are not a guarantee, though, and could be subject to large losses.

The last post in this series will look at costs and taxes. It will become evident that GOOG will most likely have to meat the revenue number to meat EPS consensus for Q4(06). Even if the revenue number is hit, there is a possibility for an EPS miss. Everyone should be risk adverse and it would be a mistake to take on a new investment either long or short through Google’s earnings.

GL investors

Disclosure: I am not currently long or short GOOG.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Trades for Nov 21

noreply@blogger.com (Just a concerned person) — Wed, 22 Nov 2006 05:53:00 +0000

Since I set some targets for trades today following are today's trades. Unfortunately I had indicated that I would sell all companies that were announcing earnings so following are today's trades:

Buy 1000 shares of BRCD @ $8.18 sell at $8.49
Buy 200 shares of GME @ $50.70 sell at $53.00
Buy 400 shares of DELL @ $24.76 sell at $24.82

Momentum trades:
Buy 1000 shares of LCRD @ $12.41
Buy 300 share FCX @ $55.00
buy 200 shares EFUT @ $45.00
Buy 500 shares MRVL @ $21.25
Buy 200 shares SNDK @ $48.95

Cover RIMM @ $138.00
Cover GOOG @ 495.83
Buy to close GOPXI @ $5.20

Good luck investors and have a happy Thanksgiving

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:

This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Some momentum and earnings plays for tomorrow

noreply@blogger.com (Just a concerned person) — Tue, 21 Nov 2006 05:47:00 +0000

I decided with positions that I am closing out tomorrow I will add some pre-earnings plays and some momentum plays tomorrow.

These companies announce earnings after the bell tomorrow at the opening price and I will buy at open and sell at the end of the day to pick up some pre-earnings rise.

Buy 1000 shares of BRCD at opening price
Buy 200 shares of GME at opening price
Buy 400 shares of DELL at opening price

I will also take a few momentum plays:

Buy 1000 shares of LCRD at tomorrows open
Buy 200 shares of EFUT at tomorrows open
Buy 500 shares of MRVL at tomorrows open
Buy 200 shares of SNDK at tomorrows open

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:
This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Some momentum plays for tomorrow

noreply@blogger.com (Just a concerned person) — Tue, 21 Nov 2006 05:47:00 +0000

I decided with positions that I am closing out tomorrow I will add some pre-earnings plays and some momentum plays tomorrow.

These companies announce earnings after the bell tomorrow at the opening price and I will buy at open and sell at the end of the day to pick up some pre-earnings rise.

Buy 1000 shares of BRCD at opening price
Buy 200 shares of GME at opening price
Buy 400 sahres of DELL at opening price

I will also take a few momentum plays:

Buy 1000 shares of LCRD at tomorrows open
Buy 200 shares of EFUT at tomorrows open
Buy 500 shares of MRVL at tomorrows open
Buy 200 shares of SNDK at tomorrows open

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:
This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

RIMM has been a run away freight train

noreply@blogger.com (Just a concerned person) — Tue, 21 Nov 2006 03:55:00 +0000

RIMM has been going up and up. It is hard to stop. The knee jerk reaction is to keep short but it is time to cut the bleeding with a $5000.00 loss and cover the short tomorrow . I will also cover GOOG tomorrow. Following are trades for tomorrow.

Cover RIMM at $134.00 with a stop at $138.00
Cover GOOG at tomorrows open.
Put a buy order in for 300 shares FCX at $55.00

BA 100 shares long @ $89.12=$8912.00.00
GT 1000 shares long @ $17.79=$18450.00
RIMM 500 shares short @ $137.41=$68705.00
GOOG 100 shares short @ $495.05=$49505.00
GOPXI 1 contract short GOOG 480 call @ $590.00

Total Long positions: $27362.00
Total short positions: $118800.00

Total received from shorts: $112,943.00
Net positions=$21505.00
Long cash position: $80,718.80
Gain to date $2223.80 (2.22%)

Rationalizations for trades:

RIMM: Sometimes it is pure stubbornness or maybe it is stupidity that keeps a person in trades. Don't short on valuation. I will cover tomorrow because it looks like RIMM is still going up.

GOOG: In my opinion, I don't think that GOOG does too much this week. It is time to get out and on to new trades.

FCX: M/A activity taking over PD. I think this will be good for FCX but the market has to digest these moves.

GL investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:

This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Comparing YHOO to GOOG

noreply@blogger.com (Just a concerned person) — Mon, 20 Nov 2006 03:49:00 +0000

I have noticed that many people want to make a comparison of YHOO and GOOG. This is to produce a value comparison. I think that this is a mistake especially for GOOG which is a growth stock not a value stock. A growth stock is a stock that is based on it's future ability to produce earnings......We risk today's dollars for a future company value.

But what the heck. Let's do the calculation since I have seen many people use false assumptions in their calculations.

GOOG is currently at $498.79
YHOO is currently at $26.91

Let's start calculating forward PE's......But wait a minute GOOG reports on a non-GAAP basis and YHOO reports on a GAAP basis. The basic difference is that Yahoo accounts for option and one time expenses in their earnings and Google doesn't. Ok then, we will turn Google's earnings into GAAP. To add to this equation, GOOG created 3.2 million in dilution by the Youtube purchase and YHOO is buying back $1 billion worth of it's stock. Everything is fair right?

Information pertinent to GOOG:

Estimated options expensing for 2007: $475 million dollars (From Goog's employee plan)
Number of dilutive shares: 310.574 million
Number of shares created by Youtube dilution: 3.2 million
2007 consensus estimated EPS: $13.70
Total shares after Youtube buyout: 313.774
So let's back out the option expenses: $13.70-($475/313.774)=$12.19
Dilutive forward EPS: (310.574/313.774)$12.19=$12.07
Forward PE: $498.79/$12.07=41.32

Information pertinent to YHOO
2007 consensus EPS: $.60
Number of dilutive shares: 1.36 billion
Number of shares leaving the float due to buy back: $1 billion/$26.91=37 million shares
Number of shares after buyback: 1360 million - 37 million=1323 million
Adjusted EPS: (1360/1323)$.60=$.62
Forward PE: $26.91/$.62=43.4

Well Goog=41.32 and Yhoo=43.4 are closer than Goog=36.41 and Yhoo=44.85. It is kind of crazy how these numbers come out huh?

Now I tend to think that YHOO hovers around the $24-$27 range and GOOG will probably head for the mid $500's just prior to earnings. What would these valuations look at that time. You know what, there will be the same comparisons made at that time.

Yes, I know that I made some assumptions. There are many more calculations that go into these numbers, but that is not my point. These valuation comparisons are useless especially for GOOG. These calculations that other people made on the valuation take two unlike numbers (GAAP and non-GAAP) and try to compare them. Both companies are going to grow and the price of the stocks will be based on how much people currently believe in the future numbers.

The main point is that none of these numbers have been achieved yet. Hey guys they are future numbers.

Now one last way to look at this is that because YHOO's numbers were lite this year they will have an easier time achieving the future numbers......Hmmmmm

In all actuality, I believe that GOOG will have a stock that appreciates more than YHOO and will most likely produce better growth. The moral here is not to try to intermix growth and value metrics because they are not the same.

GL investors

Disclosure: I am not currently long or short GOOG or YHOO. I do have some speculative option plays on GOOG.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

FCX buys PD

noreply@blogger.com (Just a concerned person) — Mon, 20 Nov 2006 02:34:00 +0000

PD ( Phelps Dodge ) failed in it's bid to buy N ( Inco ) and FAL ( Falconbridge ). FCX ( Freeport McMoRan ) is going to buy out PD. The buy out price is $126.46 and will pay PD shareholders $88.00 in cash and .67 shares of the combined company.

In a future post, I will look at how this deal will look. It will produce around $18 billion in debt on Freeport's books. If copper and gold prices remain high, this could be a great deal and the debt could be paid off real fast. The combined company will have a very low PE and could be a super company to buy.

If metal prices dive, this will be a bad company to get into. I will give a complete analysis next week.

GL investors

GOOG earnings for Q4 Goog or not so Goog

noreply@blogger.com (Just a concerned person) — Sun, 19 Nov 2006 19:21:00 +0000

Earnings are coming around the corner. Most people think that GOOG will beat their Q4 earnings target by a fair amount. Fourth quarter is seasonally the strongest quarter for GOOG.

This should be a piece of cake because Google has a way of always beating estimates by a fair margin.

Google actually missed Q4(05) by $.22. Let’s look at the targets and actual earnings for this year:

Q1 Posted $2.29

Q2 Target $2.22
Q2 Posted $2.49

Q3 Target $2.42
Q3 Posted: $2.62

Q4 Target: $2.89

What is wrong with this picture? Am I the only one who sees this? Every quarter this year the target has been lower than the previous quarter earnings except Q4 which is much higher. If a person went back last year the pattern is the same. Does this mean that GOOG is going to miss 4th quarter earnings? No, I am not going to say that GOOG will miss Q4. Actually the toughest target was for Q1 which GOOG beat by a fair margin. It would seem to go without saying that Q1 and Q4 are the best quarters. In the next posts in this series, I will explore "Revenue" and "Taxes and costs to revenue".

A quick teaser
At current consensus analysts are calling for a revenue of $2.18 billion TAC adjusted. Is this number reasonable? If this number is hit, GOOG could come close or even slightly ahead of EPS estimates? This will be dependent on taxes and costs.

Now, I am not trying to make a bearish statement but one has to understand that the Q4 target will be a tough target to surpass or make. I am not even trying to predict a miss. I will say the bar is at the highest point this year. If I were a risk adverse investor, I would not be long
through this earnings. This will be a thought provoking series because I have not seen this mentioned before.

GL investors

Disclosure: I am not currently long or short GOOG. I do have some speculative option plays on GOOG.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks Described are very highly speculative. Investing in the stocks mentioned could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

10-Q Numbers and a few metrics from GOOG

noreply@blogger.com (Just a concerned person) — Thu, 16 Nov 2006 05:08:00 +0000

Following are some number from GOOG's earnings announcements since public. Over a couple of posts we will explore a little into GOOG's future. I think GOOG is on a bull run and should be in the mid $500's just prior to their 4th quarter earnings report.

I think the 4th quarter earnings will be one of the most risky earnings to invest through. I won't give predictions but will explore why it might be risky. If you invest or trade in GOOG, these numbers should save a person from of digging through 10-Q's.

GOOG gross revenue with quarter over quarter growth
(04) 3) $806M 4) $1032M (28%)
(05) 1) $1257M (21.8%) 2) $1384M (10.1%) 3) $1578M (14.2%) 4) $1919M (21.6%)
(06) 1) $2254M (17.5%) 2) $2456M (9%) 3) $2690M (9.5%)

Q3(06)/Q3(05)=1.70
Q2(06)/Q2(05)=1.77
Q1(06)/Q1(05)=1.79
Q4(05)/Q4(04)=1.86
Q3(05)/Q3(04)=1.96

TAC
(04) 3) $303M 4) $378M
(05) 1) $462M 2) $494M 3) $530M 4) $629M
(06) 1) $723M 2) $785M 3) $825M

Total cost of revenue
(04) 3) $795M 4) $729M
(05) 1) $814M 2) $909M 3) $1049M 4) $1349M
(06) 1) $1511M 2) $1641M 3) $1758M

Stock compensation

(04) 3) $68M 4) $60M
(05) 1) $49M 2) $47M 3) $46M 4) $58M
(06) 1) $115M 2) $109M 3) $100M

Total cost less stock comp and TAC
(04) 3) $223M 4) $291M 30%
(05) 1) $303M (4.1%) 2) $368M (21.5%) 3) $473M (28.5%) 4) $572M (20.9%)
(06) 1) $673M (17.7%) 2) $747M (11%) 3) $833M (11.5%)

Interest income:

(04) 3) $3.87M 4) $7.37M
(05) 1) $13.7M 2) $19.7M 3) $20.8M 4) $70.2M
(06) 1) $67.9M 2) $160.8M 3) $108.18M

Capex:
(04) 3) $78M 4) $59M
(05) 1) $142M 2) $157M 3) $293M 4) $246M
(06) 1) $345M 2) $699M 3) $492M

Tax and rate
(04) 3) -$37M 4) $106M 34.19%
(05) 1) $87.3M (19%) 2) $152.6M (30.88%) 3) $168.8M (30.69%) 4) $267.6M (41.8%)
(06) 1) $218.3M (26.9%) 2) $255.1M (26.1%) 3) $306.2M (29.4%)

Number of dilutive shares:

(04) 3) 275M 4) 286M
(05) 1) 287M 2) 287M 3) 290M 4) 304M
(06) 1) 304M 2) 310M 3) 311M

Non GAAP EPS

(04) 3) $.45 4) $.48
(05) 1) $1.23 2) $1.36 3) $1.51 4) $1.54
(06) 1) $2.29 2) $2.49 3) $2.62

GAAP EPS GOOG

(04) 3) $.19 4) $.71
(05) 1) $1.29 2) $1.19 3) $1.32 4) $1.22
(06) 1) $1.95 2) $2.33 3) $2.36

Good luck investors

Some major M/A activity gave fuel to the market

noreply@blogger.com (Just a concerned person) — Thu, 16 Nov 2006 04:15:00 +0000

AMR announced a $8 billion dollar bid for beleaguered Delta. The FOMC state that there will be a soft landing. Following are today's trades for the fantasy portfolio:

Short 100 shares GOOG @ $491.93=$49,193.00
Sell 1 contract of Dec $480.00 covered put $870.00=$870.00
Sell 300 shares CAT @ $61.45=$18,435.00
Buy to close 3 contracts of CAT Nov. 60 calls @ $155.00=($465.00)
Target cover on GOOG short at $483.00
Target cover on RIMM short at $124.00

Trades from Monday (re-posted):

Sell 200 shares of ADM @ $35.06=$7,012.00
Short 500 shares of RIMM @ $127.50=$63,750.00

Net short positions: $112,943.00
Net from long positions: $25,852.00.00
Commisions $64.00
Total from long positions: $25,788.00

Portfolio:
BA 100 shares long @ $87.08=$8707.00.00
GT 1000 shares long @ $18.45=$18450.00
RIMM 500 shares short @ $128.42=$64210.00
GOOG 100 shares short @ $491.93=$49193.00
GOPXI 1 contract short GOOG 480 call @ $870.00

Total Long positions: $27157.00

Total short positions: $113,403.00
Total received from shorts: $112,943.00

Net positions=$26,697.00
Long cash position: $80,718.80
Gain to date $7415.80 (7.42%)

Rationalizations for trades:

ADM: It was looking like a loosing position so I sold.

CAT: With the calls sold this position was fully profitable so I wrapped it up. Since the calls were in the money they would go up almost lockstep with the rise in CAT. Why hold this position for it to drop.

RIMM: I think that RIMM is looking a little top heavy so I'm going to see if I can get a little drop out of it.

GOOG: I am going to bet on the might manipulators before OE to pull GOOG down some. In two years watching GOOG it is unusual to see this weeks type of gains on the week of OE. I sold a covered put to give a little hedge just in case.

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned. I have some speculative option positions in GOOG and RIMM.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Trades for Nov. 13

noreply@blogger.com (Just a concerned person) — Tue, 14 Nov 2006 05:20:00 +0000

I am in a hurry so here are some quick trades. I will account for the trades tomorrow.

Sell 200 shares of ADM @ $35.06
Short position was met for RIMM @$127.50
Set cover target for RIMM short positions @ $122.00

Good luck investors

Today was a bad day for the metals and miners

noreply@blogger.com (Just a concerned person) — Sat, 11 Nov 2006 17:34:00 +0000

It was a bad day for the metals and miners and is time to get out of PD. Following are Fridays trades for the fantasy portfolio:

Sell 200 shares on PD @ $96.71=$19,342.00
Sell target for BIDU was met for 400 shares @ $97.50=$39000.00
Buy to close 4 contracts of BDQCT (BIDU Dec. 100 calls) @ $4.10=($1640.00)
Put in a short target for 500 shares of RIMM @ $127.50
Sell 3 contracts of Nov. 60 call contracts of CAT (CATKL) @ $55.00=$165.00
Total transactions: $56867.00
Commission: $47.00
Total transaction: $56820.00

Portfolio:
BA 100 shares long @ $85.62=$8562.00.00
CAT 300 shares long @ $59.60=$17880.00
Short 3 contracts CATKL CAT Nov. 60 calls @ $55.00=($165.00)
ADM 200 shares long @ $35.46=$7092.00
GT 1000 shares long @ $18.02=$18020.00

Total positions=$51389.00
Cash $54930.80
Gain to date $6319.80 (6.32%)

Rationalizations for trades:

PD: Copper prices as well as other metals took a hit on Friday. Instead of trying to chase this around, I am going to get out and wait for a better opportunity to either short or go long.

CAT: I am writing some Nov call contracts in hopes that they will expire by Friday OE.

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned. I have some speculative option positions in GOOG and RIMM.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Good day of trading

noreply@blogger.com (Just a concerned person) — Fri, 10 Nov 2006 02:24:00 +0000

Following are the trades for today.

RIMM short target met at $127.50 cover at days end of $124.75 500 shares $1375.00
Buy target met for 300 shares CAT @ $59.00 =($17,700.00)
Buy 1000 shares GT @ $17.54=($17540.00)
Sell 500 share COP at $63.31=31655.00
Sell target for PD $102.50
Sell target for BIDU $97.50
Todays transactions: ($2210.00)
Commission: ($40.00)
Total transactions: ($2250.00)

Portfolio:

BA 100 shares long @ $85.45=$8545.00
CAT 300 shares long @ $59.20=$17760.00
PD 200 shares l0ng @ $101.19=$20238.00
ADM 200 shares long @ $35.76=$7152.00
BIDU 400 shares long @ $96.07=$38428.00
GT 1000 shares long @ $17.54=$17540.00
BDQCT (BIDU Dec 100 calls) 4 contracts short @ $420.00=($1680)
Total positions=$107,803.00

Margin $1886.20

Gain to date $5916.80 (5.92%)

Rationalizations for trades:

GT: Goodyear got a nice rise off of good earnings. I am going to see if I can catch some momentum.

BIDU: Setting a sell target of $97.50. It looks like it is sputtering a bit so I will hopefully get out tomorrow if target is met.

COP: COP has performed nicely so it is time to take profit.

GOOG: Still have buy target for $460.00

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned. I have some speculative option positions in GOOG and RIMM.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

Todays trades

noreply@blogger.com (Just a concerned person) — Thu, 09 Nov 2006 03:55:00 +0000

Following are today's trades:

Buy 200 shares ADM $35.73=($7136.00)
Sell 100 shares RIMM $124.87=12487.00
Buy 400 shares BIDU $96.10=($38440.00)
Sell 4 contracts BDQCT BIDU Dec 100 call @ $420.00 per contract=$1680.00
Buy target for 300 shares CAT @ $59.00
Short target for 500 shares RIMM@ $127.50
Buy target 100 shares of GOOG @ $460.00

Today's transactions ($31409)
Commission $44.00
Total transactions: ($31453)

Portfolio:

BA 100 shares long @ $85.45=$8545.00
COP 500 shares long @ $62.37=$31185.00
PD 200 shares l0ng @ $98.60=$19720.00
ADM 200 shares long @ $35.73=$7136.00
BIDU 400 shares long @ $96.10=$38440.00
BDQCT (BIDU Dec 100 calls) 4 contracts short @ $420.00=($1680)
Total positions=$103346.00
Cash: $363.80
Gain to date $3709.80(3.71%)

Rationalizations for trades:

ADM momentum looking good after election. I am going to see if I can ride this for a little while.

RIMM: This was a one day momentum play. It was bought yesterday and I sold it today. If it goes higher, I think there will be some correction so if it reaches $127.50 I will go short.

BIDU: Looks like this has a full head of steam. I am pairing this with a Call for a hedge.

CAT: Looks like it is stabilizing so if I can catch it at $59.00 tomorrow, I will buy.

GOOG: It looks like it could go a little lower. This is a compelling investment if it reaches $460.00.

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned. I have some speculative option positions in GOOG and RIMM.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

The stock market had a nice day ahead of elections

noreply@blogger.com (Just a concerned person) — Wed, 08 Nov 2006 01:32:00 +0000

The Dow was up 51.22 to close at 12156.77 and the Nasdaq was up 9.93 to close at 2375.88. Following are the trades for today in the fantasy portfolio:

Sell 40 GOOG $472.57=18902.80
Sell 500 CROX $44.25=22125.00
Sell 300 ERTS $58.53=$17559.00
Buy to close 3 contracts EZQLL @ $140.00=($420.00)
Buy 100 shares BA $84.85=($8485.00)
Buy 100 shares RIMM $122.77=($12277.00)
Commision: $63.00
Total procedes: $37341.8

BA 100 shares long @ $84.85=$8450.00
RIMM 100 shares long @ $122.77=$12277.00
COP 500 shares long @ $60.99=$30495.00
PD 200 shares l0ng @ $101.23=$20246.00
Total positions=$71468.00
Cash: $31816.80
Gain to date $3284.80(3.28%)

Rationalization of trades:

GOOG: I still think GOOG will do very well in the near future but it isn't performing very well as of late so I am selling the entire position. I might have to wait until Options expiration to purchase more.

CROX: CROX rose very nicely both today and yesterday. I believe that it will perform well but with such nice gains it is time to takes some profit.

ERTS: This is a speculative play. This does not look like it will go anywhere so I sold it today.

RIMM: RIMM was a short target but it looks as though there is some momentum. I will see if I can catch a little tomorrow.

BA: Fedex canceled an order with EADS. Boeing had a nice rise today and I am going to see if I can catch a little momentum tomorrow.

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned. I have some speculative option positions in GOOG and RIMM.

Note to all readers: This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

The stock market had a fabulous day today

noreply@blogger.com (Just a concerned person) — Tue, 07 Nov 2006 01:40:00 +0000

It was an all around great day for stocks. Many people will disagree with me but I believe when there is profit take it. All prices are days end. Following are the transactions for today.

Sell 60 shares of GOOG @ 476.95= $28617.00
Sell 500 shares of DIVX @ $24.80=$12400.00
Sell 500 shares of XLE @ $57.01=$28505.00
Sell 500 shares of YHOO @ $26.59=$13295.00
Buy to close 5 contracts of YHQAY (YHOO Jan (07) $27.50) @$140.00=($700.00)
Sell 200 shares of IACI @ 32.29=$6458.00
Buy 300 shares of CROX @ $41.27=($12381.00)
Buy 300 shares of ERTS @ $59.25=($17775.00)
Buy 200 shares of COP @ $61.05=($12210.00)
Sell 3 contracts of EZQLL (ERTS Dec 60 call) @ $190/contract=$570.00
Buy 200 shares of PD @ $101.73=($20346.00)

Commission $116.00
Total transactions for today $26423.00

Portfolio

GOOG 40 shares long @ $476.95=$19078.00
CROX 500 shares long @ $41.27=$20635.00
COP 500 shares long @ $61.05=$30525.00
ERTS 300 shares long @ $59.25=$17775.00
EZQLL Short 3 contracts @ $190=($570.00)
PD 200 shares l0ng @ $101.73=$20346.00
Total positions=$107,789.00

Margin: $5525.00
Gain to date $2264.00 (2.26%)

Rationalization of trades:

XLE: Right before the election (California Proposition 87), I don't want to have exposure to CVX which is in XLE. This is why I sold the entire position.

DIVX: This stock had a 8.53% gain. I have to take all this as profit. This was a very speculative play and I am very happy with the gain.

GOOG: I think GOOG will do very well in the near future but to have such a large exposure in my account wasn't good so I took a little gain today and pared down the shares.

CROX: CROX rose very nicely and I think it might catch a little short covering at this level so I wanted to increase my position.

COP: I think oil will rally after the election. I do believe it will do well tomorrow as oil has been doing well for the past week. Conoco Phillips shouldn't have exposure to California offshore drilling so I don't think it will be effected by proposition 87.

YHOO: YHOO was marginally up today. It did not quite have the same momentum as I had anticipated. I don't think that it will do too well tomorrow.

IACI: I sold IACI for the same reason as YHOO.

ERTS: This is a speculative play. Electronic arts had a much better than expected quarter on Friday. It was only marginally up today. I believe that it will rise on upgrades. I hedged this position with a covered call and hope for a quick small gain.

PD: Phelps Dodge broke through the $100.00 mark and held in that position today. The play today is a momentum play and will be closed at the end of the day tomorrow.

RIMM: I had a target for shorting RIMM at $121.00. Fortunately it did not hit this target $120.74 was the high. The momentum that RIMM has was high and I will not short until further notice.

I hope everyone had a great day in the stock market.

Good luck

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:

This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

New Format

noreply@blogger.com (Just a concerned person) — Sun, 05 Nov 2006 17:35:00 +0000

I have been very busy and haven't posted in a couple of weeks. I have given commentary and did some research previously.

I am going to change the format a little.........

In looking at what other people like to read and to make it more valuable to the reader I am going to follow a portfolio. I am still going to give commentary from time to time. I hope you enjoy.

The portfolio that I am following will be a fantasy portfolio and will not reflect any of the holdings that I have. The portfolio is going to start with $100,000 and will be traded. Some margin will be used. Other than an occasional covered call no other option trades will be made. I could do something grandiose and make a goal of turning this into one million dollars.......While that is fun to try, I think that would be unrealistic. The goal is to produce double digit yearly returns. I will give rational when trades are made. All option trading education and trades will be moved to another blog which I will have going next week. I will post the link at that time.

Beginning portfolio:

GOOG 100 shares long @ $471.80....................................$47,180.00 cost
DIVX 500 shares long @ $22.85........................................$11,425.00 cost
CROX 200 shares long @ $39.00......................................$7,800.00 cost
XLE 500 shares long @ $56.60.........................................$28,300.00 cost
COP 300 shares long @ $60.97.........................................$18,291.00 cost
YHOO 500 shares long @ $26.28.....................................$13,140.00 cost
YHQAY sell 5 contracts YHOO Jan (07) 27.50 calls......($625.00) proceeds
IACI 200 shares long @ $31.76..........................................$6,352.00 cost

Subtotal......................................................$131, 863.00
Commission................................................$85.00
Total............................................................$131,948.00
Margin.........................................................$31,948.00
Target................Short 1000 shares RIMM @$121.00

All prices are closing day prices Friday. All trades will be made with the closing price the day the trade is made unless a target is given. As in the RIMM target, I will short 1000 shares of RIMM in this portfolio if it reaches a target price of $121.00.

I hope everybody enjoys this new format and I look forward to see how this portfolio grows.

Good luck investors

Disclosure: I am not currently long or short any of the shares aforementioned.

Note to all readers:

This post and all other posts in this blog are for entertainment purposes only. All of the stocks listed are very highly speculative, and the portfolio is not diversified and could produce severe losses if you were to invest in these stocks. None of these stocks represent a recommendation in any way. As an individual investor, you have to assume your own risk. Prior performance is no guarantee of future returns.

GOOG earnings just the numbers

noreply@blogger.com (Just a concerned person) — Sat, 21 Oct 2006 19:19:00 +0000

Following are the numbers from GOOG E/R. More later when the 10-Q is filed.

Effective tax rate: 29%
Stock option cost: $100M
Dilutive shares: 311M

Non TAC adjusted revenue:
Q2 $2.456M
Q3 $2.690M
Q/Q 9.5%

TAC Non GAAP
Q2 $785M
Q3 $825M
Q/Q 5.1%

Total expenses Non GAAP
Q2 $1.531B
Q3 $1.659B
Q/Q 6.4%

Total expenses GAAP
Q2 $1.640B
Q3 $1.758B
Q/Q 7.2%

Income from operations Non GAAP
Q2 $924.5M
Q3 $1031.2M
Q/Q 12.5%

Non GAAP EPS
Q2 $2.49
Q3$2.62
Q/Q 5.2%

Income from operations GAAP
Q2 $815.4M
Q3 $931.3M
Q/Q 14.2%

GAAP EPS
Q2 $2.33
Q3 $2.36
Q/Q 1.3%

Capex
Q2 $699M
Q3 $492.2M

Free cash flow
Q2 $141.6M
Q3 $512.1M

Good luck investors