Stockwatch for Fri, Mar 30

Currently, 94% of my portfolio vascillates in 9 swingtrade long positions. Barring any overnight gaps in the opposite direction, they pretty much stay in until either 1) Something triggers a stop or 2) I locate something better and take some profits to fund the new position.

Most of the group knows I follow familiar symbols that hit the 52 week high list. Whether its momentum based, screen based, or IBD based, it's boils down to finding any pattern that has proven reliable at least in terms of my own personal trades. It also helps that many of the companies are either old picks from traders who are no longer with us, (we saw your LSS get bought out today), to cherry picking variations of sector trends.

FLIR popped up on the scanners tonight. If the March 18 higher low was for real, then on a technical basis, a potential target is around the old high of 36.40. A stop would probably be placed around 34.68 which would be a bit below Wednesday's high. Essentially, I'm risking $.60/share in an attempt to make $1.20/share or a 2:1 risk/reward ratio.

EEP has been chatted about with Barrons over the past 15 months. This is both momentum and dividend based. I figure if any of my swing longs decide to not keep up with its energy sector brethren, this might be a candidate to establish a probe position. Given the size of my portfolio, a probe is anywhere from 5k to 10k depending on the price of the stock and how much confidence I feel in the trade.

One thing I have to watch out for is being aware of earnings dates for current and potential positions. The last thing you want to do is to be caught on the wrong end of a trade when you could have hedged your position.

Uni-Ball Signo Black 207 Gel Pen

Fivecentnickel.com talks about a pen that supposedly makes it much harder for would be theives to commit "check washing" on your account. Available at any office supply store or even amazon.com, supposedly this pen, the Uni-Ball Signo Black 207 Gel Pen, is the one you should use when writing physical checks. As for its authenticity, its up to you to go through the motions of whether its worth the extra cost for a little more piece of mind.

Tiger 21's asset allocation

Marketwatch.com featured an article on a group of 125 high net worth investors whose common membership is under the name "Tiger 21 Group". On average, members have a minimum net worth of at least $10 million U.S. Dollars and with obvious confidentiality clauses, most of their names are not known. This is a group where the $25k annual fee is merely pocket change given the potential insight within its so-called peers although most of the subgroups presumably are limited to 10-12 members depending on geographic location. While most of the membership presumably reside in the New York area, there are subchapters in San Francisco, Los Angeles, San Diego, Palm Springs, and Miami.

The total net worth of the entire membership is around $7 billion U.S. Dollars so this likely excludes the top 100 names on the Forbes Richest 400. On average, their net worth is divided as follows:

30% Stocks
27% Real Estate
15.6% Fixed-Income Investments
9.6% Hedge Funds
9% Cash
8.8% Private Equity

While I likely disagree with the composition of the ideal asset allocation, one detail I did agree on was that each member was not willing to spend more than 3% of their total net worth in a given year. So assuming a person was worth $10 million, they wouldn't spend more than 300k in a single year. Another interesting statistic was with regards to the 9% cash position. Presumably, members believed this amount represented enough cash to ride any prolonged three-year downturn in one of their core holdings without having to sell. Another way of saying it is, they can go to sleep at night, knowing their cash is in "their pillow or wallsafe".

Shopping for credit cards

Many cardholders have known since last October that Citicards was reducing its rebates program for subscribers of its Dividend Preferred Mastercard from 5% to 2% for purchases at gasoline stations and supermarkets. This week I officially received their notice and have been perusing a couple of sites determining if I could find a better rebate program.

Creditcardtuneup.com has an interesting fill-in spreadsheet that pretty much determines in a numerical fashion which cards would generate the best overall reward based on twelve consecutive month's of average charge purchases. Simply type-in what you spend on each category in an average month and click the refresh button. Interesting enough, the spreadsheet recommended the one offered by Fidelity.

While credit-land.com list some good comparisons of rebate cards, I've found that there is no substitute for perusing the company's website and tediously going through page after page of a card's terms and conditions. Credit card companies can change policies at will, so having the most current information available makes your decision much more relevant.

Overcoming daytrader stereotypes

Earlier this week, The Wall Street Journal talked about the types of people who showed the most success as daytraders since 2000. While it's probably one person's independent assessment, here is what the article concluded:

The best daytraders were those who are: airline pilots, graphic artists, and heart-lung machine operators. "These occupations are trained to make quick decisions based on visually presented information or instrument readings without spending time questioning the indicators."

The worst daytraders were those who went through conventional college backgrounds such as: engineers, doctors, lawyers, dentists, economists (this means you Bernake) , computer programmers, accountants (this means almost anyone with the letters C.P.A. after their name), and entrepreneurs (I'll disagree with this last one, I know many who excel as daytraders). The two common characteristics of the worst were: 1) Not admitting they are ever wrong such as staying with a bad trade in the hope it turns around. 2) Freezing up when it's time to enter or exit a trade. The worst want more confirmation of information and by the time it arrives, the profit opportunity is lost.

Approach it as a business was the investment tip of the week from the trading group. Whether it applies to poker or to the stock market, it's sound advice.

Bouncing ideas with the aunt

My aunt wanted to bounce her ideas on a few companies. It's more interesting to listen how she explains her reasoning because her memory is beyond intuitive. She relies on experience and her ability to accurately remember historical events . Without delay, this was on her mind.

1) Still long MYY.

2) ETFC. She thinks it drops to 18.

3) SCHW. She's been long since last summer and I said to sell because of GS's reaction to its own earning's report this morning. We were trying to pick a bottom, she went with 15, I went with 14.30 which is near the July 2006 bottom.

4) Short HD. She shorted just above 39. She will cover some at 35.

Now for the few who wonder what I'm watching:

5) Long SKF. Most of the traders know my dislike of BAC and MER. Since this was one of the best performing ETF's in yesterday's market, I am looking to add to this position on any pullback.

6) Long TWM. Before today, I was underwater on this position before today's gap move. I'm more likely to close this position sooner than later, and more comfortable following the daily news that influences my other ETF position.

Some have asked why I haven't long put options on individual stocks such as BAC and MER? The main reason is because being right is different from being profitable. There's always a chance that an individual stock will not move far enough to overcome both the strike price and the premium you paid for the out of the money or in the money option before the options expire. If you are going to risk your money on any position, the potential reward must justify you're willingness to take the trade. Remember, there is nothing wrong with collecting 5.25% in interest for a cash position while waiting for a good trade. Every bad trade you eliminate improves your overall portfolio return.

Beware the Ides of March (yeah right)

Personally, I despise anything Shakespeare. Now I have nothing against the writer, but I am disappointed in most of my high school teachers for making us remember this "junk" when I have yet to use anything Shakespeare to make a living.

Ok now that the venting is over, earnings watch for this week and remember, it's options expiration's week.

Tues - GS
Wed - CLHB, LEH
Thur - ARD, BSC, LGND
Fri - ANN

ETF watch:
XLB - DOW, WY, IP, AA, DD (Basic Materials)
XLP - PG, MO, KO, WAG, WMT (Consumer Staples)

Since the market meltdown of 2000, I use the three broker's earnings reports as a proxy for the next quarter's general trend. It's more of a feel than science since I frequently trade the three brokers in order to capture part of their ranges.

As for the ETF's, if this is the beginning of a prolonged decline, there aren't too many places to hide, since historically 90% of all sectors will show a negative return in a bear market. While I don't know if were headed in that direction, my instincts tell me that these two will be the last ones to drop.

This weekend, one of the ladies went shopping at DDS. Note to self, it's usually a good sign at least for this week.

Ironically, we both talked about FD, since she likes the shoe department at Macy's and I like to browse their men's store every two weeks. It was packed at our mall store. While most Americans despise paying retail for anything especially apparel, here is one good reason why we do pay retail: because some of their clothes last several years even after 50 spins in the washer/dryer. Yes there are things you can scrimp on, but since I still work in an office environment, it's either bend to the office dress code, or pack your stuff. Naturally, the running joke with me is that everytime I go shopping, my friends know I will spend four hours and buy absolutely nothing for myself 90% of the time. As for the other 10%, its usually something for the sister. By the way, also stopped at WSM, same story, 30 min, bought nothing. Ironically, with all the window and mystery shopping I do, I would make a good columnist for Consumer Reports. But of course, if that were ever to happen, a nuclear missile will fly over my home, yeah right.

100 High Schools to Improve Your Children's chances of getting into an Ivy League University

There is no such thing as random chance. Worth Magazine profiled in their September 2002 issue that the skills acquired from these 100 high schools greatly improved an applicant's chances of acceptance at a top univerisity. While the list is somewhat outdated, the theme has not changed. 94 of the schools were private, only 6 were public. (M) stands for male students only, (F) stands for female students only.

1) Roxbury Latin School, West Roxbury, MA, (M), http://www.roxburylatin.org/
2) Brearley School, New York City, NY, (F), www.brearley.org
3) Collegiate Schoo,l New York City, NY, (M), www.collegiateschool.org
4) Groton School, Groton, MA, www.groton.org
5) Dalton School, New York City, NY, www.dalton.org
6) Spence School, New York City, NY, (F), www.spenceschool.org
7) Horace Mann School, Bronx, NY, www.horacemann.org
8) Winsor School, Boston, MA, (F), www.winsor.edu
9) Milton Academy, Milton, MA, www.milton.edu
10) Phillips Academy, Andover, MA, www.andover.edu
11) Phillips Exeter Academy, Exeter, NH, www.exeter.edu
12) Trinity School, New York City, NY, www.trinityschoolnyc.org
13) St. Albans School, Washington, DC, www.sta.cathedral.org
14) Chapin School, New York City, NY, (F), www.chapin.edu
15) St. Paul School, Concord, NH, www.sps.edu
16) Saint Ann School, Brooklyn, NY, www.saintanns.k12.ny.us/
17) National Cathedral School, Washington, DC, (F), www.ncs.cathedral.org
18) Polytechnic School, Pasadena, CA, www.polytechnic.org
19) Hotchkiss School, Lakeville, CT, www.hotchkiss.org
20) Brunswick School, Greenwich, CT, (M), www.brunswickschool.org
21) Deerfield Academy, Deerfield, MA, www.deerfield.edu
22) Potomac School, McLean, VA, www.potomacschool.org
23) Belmont Hill School, Belmont, MA, (M) www.belmont-hill.org
24) Baldwin School, Bryn Mawr, PA, (F), www.baldwinschool.org
25) Maimonides School, Brookline, MA, www.maimonides.org
26) Hunter College High School, New York City, NY, http://www.hchs.hunter.cuny.edu/ (Public)
27) Gilman School, Baltimore, MD, (M), www.gilman.edu
28) Sidwell Friends School, Washington, DC, www.sidwell.edu
29) Hopkins School, New Haven, CT, www.hopkins.edu
30) Pingry School, Martinsville, NJ, www.pingry.k12.nj.us
31) St. John School, Houston, TX, www.sjs.org
32) Buckingham Browne & Nichols School, Cambridge, MA, www.bbn-school.org
33) Lakeside School, Seattle, WA, www.lakesideschool.org
34) Harvard-Westlake School, North Hollywood, CA, http://www.harvardwestlake.com/ (Beware, I've heard some negative rumors in 2007 that the quality is not up to what it was in 2002).
35) San Francisco University High School, San Francisco, CA, www.sfuhs.org
36) Episcopal Academy, Merion, PA, www.ea.pvt.k12.pa.us
37) Greenhill School, Addison, TX, www.greenhill.org
38) Haverford School, Haverford, PA, www.haverford.org
39) Lawrenceville School, Lawrenceville, NJ, www.lawrenceville.org
40) Regis High School, New York City, NY, (M), www.regis-nyc.org
41) Ransom Everglades School, Miami, FL, www.ransomeverglades.org
42) Holton-Arms School, Bethesda, MD, (F), www.holton-arms.edu
43) Georgetown Day School, Washington, DC, www.gds.org
44) Greenwich Academy, Greenwich, CT, (F), www.greenwichacademy.org
45) St. Andrew School, Middletown, DE, www.standrews-de.org
46) Fieldston School (Ethical Culture Fieldston School), Bronx, NY, www.ecfs.org
47) Germantown Friends School, Philadelphia, PA, www.gfsnet.org
48) Delbarton School, Morristown, NJ, (M), www.delbarton.org
49) Landon School, Bethesda, MD, (M), www.landon.net
50) Professional Children School, New York City, NY, www.pcs-nyc.org
51) Choate Rosemary Hall, Wallingford, CT, www.choate.edu
52) Tower Hill School, Wilmington, DE, www.towerhill.org
53) Crystal Springs Uplands School, Hillsborough, CA, www.csus.com
54) Hackley School, Tarrytown, NY, www.hackleyschool.org
55) Bryn Mawr School, Baltimore, MD, (F), www.brynmawrschool.org
56) Hathaway Brown School, Shaker Heights, OH, (F) www.hb.edu
57) College Preparatory School, Oakland, CA, www.college-prep.org
58) Taft School, Watertown, CT, www.taftschool.org
59) Princeton High School, Princeton, NJ, http://www.prs.k12.nj.us/ (Public)
60) Greens Farms Academy, Greens Farms, CT, www.gfacademy.org
61) Maret School, Washington, DC, www.maret.org
62) Head-Royce School, Oakland, CA, www.headroyce.org
63) John Burroughs School, St. Louis, MO, www.jburroughs.org
64) Menlo School, Atherton, CA, www.menloschool.org
65) Agnes Irwin School, Rosemont, PA, (F), www.agnesirwin.org
66) Stuart Country Day School of the Sacred Heart, Princeton, NJ, www.stuart.k12.nj.us
67) Westminster Schools, Atlanta, GA, www.westminster.net
68) Pembroke Hill School, Kansas City, MO, www.pembrokehill.org
69) Marlborough School, Los Angeles, CA, (F), http://www.marlboroughschool.org/ (Might have a negative rating recently in 2007)
70) Bishop School, La Jolla, CA, www.bishops.com
71) Thomas Jefferson H.S. for Science and Tech., Alexandria, VA, www.tjhsst.edu (Public)
72) Seven Hills School, Cincinnati, OH, www.7hills.org
73) Noble and Greenough School, Dedham, MA, www.nobles.edu
74) Community School of Naples, Naples, FL, www.csn.naples.fl.us
75) Castilleja School, Palo Alto, CA, (F), www.castilleja.org
76) Nightingale-Bamford School, New York City, NY, (F), www.nightingale.org
77) Convent of the Sacred Heart, New York City, NY, (F), www.cshnyc.org
78) Packer Collegiate Institute, Brooklyn, NY, www.packer.edu
79) Chadwick School, Palos Verdes Peninsula, CA, www.chadwick-k12.com
80) William Penn Charter School, Philadelphia, PA, www.penncharter.com
81) Scarsdale High School, Scarsdale, NY, http://www.scarsdaleschools.k12.ny.us/ (Public)
82) Princeton Day School, Princeton, NJ, www.pds.org
83) Ramaz School, New York City, NY, www.ramaz.org
84) Kent Place School, Summit, NJ, www.kentplace.org
85) Peddie School, Hightstown, NJ, www.peddie.org
86) Indian Springs School, Indian Springs, AL, www.indiansprings.org
87) Bronxville High School, Bronxville, NY, http://www.bronxville.k12.ny.us/ (Public)
88) Canterbury School, Fort Myers, FL, www.canterbury.pvt.k12.fl.us
89) Riverdale Country School, Bronx, NY, www.riverdale.edu
90) Millburn High School, Millburn, NJ, http://www.millburn.org/ (Public)
91) University of Chicago Laboratory Schools, Chicago, IL, www.ucls.uchicago.edu
92) Allendale Columbia School, Rochester, NY, http://www.allendalecolumbia.org/
93) Altamont School, Birmingham, AL, www.altamontschool.org
94) St. Andrew Episcopal School, Ridgeland, MS, www.gosaints.org
95) Shady Side Academy, Pittsburgh, PA, www.shadysideacademy.org
96) Hawken School, Gates Mills, OH, www.hawken.edu
97) University School, Hunting Valley, OH, (M), www.us.edu
98) Bancroft School, Worcester, MA, www.bancroftschool.org
99) Pine Crest School, Fort Lauderdale, FL, www.pinecrest.edu
100) St. Mark School of Texas, Dallas, TX, www.smtexas.org

7 ways to reduce your risk of identity theft

Cadence Financial Advisors in Dallas, TX sent the following to their customers on some of their suggestions for reducing their risk of identity theft.

1) Only have the first initial and last name printed on your personal checks.

2) Use a work phone number, if a phone number has to printed or written on your checks.

3) Never write your social security number on checks.

4) Instead of signing the back of your credit cards, write "Photo ID required".

5) When writing checks to your monthly creditors, only put the last four digits of your account number if needed.

6) Find a day to photocopy both the front and back copies of your important id's that you routinely carry with you, such as your driver's license, credit cards, passports, etc. Store this information in a secure location in your home. And if you're going to a public location to photocopy, remember to retrieve everything from the copy machine.

7) Keep these numbers of the three major credit bureaus with your photocopied info:
Equifax (800) 525-6285
Experian (888) 397-3742
Transunion (800) 680-7289

These are the main numbers used to obtain your one free credit report annually from each credit bureau or to file a credit watch in the event your personal information is compromised. Most people request one report from one agency every four months. (For example, Equifax in Jan, Experian in May, Transunion in Sep to coincide with the shopping seasons of Christmas, Summer Vacation, and Back to School)

30k a year for tuition at a private high school

This morning's online edition of The Wall Street Journal featured an article on one of the sacrifices parents are making with regards to their children's education.

A majority of today's parents are unwilling to gamble on the public educational system to teach their children the skills necessary for admittance at a top university. Some parents have resorted to moving across the country to private schools charging upwards of 30k per year after learning of the acceptance ratio of Ivy League candidates at these schools.

While I cannot comment on the validity of the National Association of Independent Schools in Washington, D.C., I suspect this trend has been around for at least a decade.

The four private schools specifically mentioned (in no particular order) were:

Germantown Friends, Philadelphia, PA
Hathaway Brown, Shaker Heights, OH
Cal Polytechnic, Pasadena, CA (this school I am aware of, parents who are leaning their children towards CalTech have enrolled their children here because of its math and science programs)
Winsor, Boston, MA

The coming of generation of graduates will be a who's who of haves and have-nots. While some won't need a college education to succeed in the 21st century, are you willing to bet your children's future on it?

Aunt speak and Rugged Individualism

Earlier this evening, my aunt phoned on her opinion of the markets. Since I've had a couple of requests on posting her thoughts, here's a summary of what she said.

She's still long MYY.

She's thinking about two new shorts:
LFC
MPEL (target to 13)

With this Tuesday's Mega Millions jackpot exceeding $340 million, there is an unusual sense of entitlement sweeping through the office. In this example, most of the staff at my day job have been pitching in $10/person/drawing and pooling their tickets together in the hopes of beating the 175 million to 1 odds. While I hope they win the jackpot, the detail that shakes my head is when some members of the staff have begun to blame others not in the pool for the group not winning the jackpot.

I am reminded of a speech from Herbert Hoover during his 1928 presidential campaign. In short, it emphasizes the importance of the individual. We all have a right to lead our own lives and as long as we do not infringe on the laws of the land, we do not have to answer to anyone. If people want to invest $10 in a lottery pool, that is their right; but consequently, if i want to invest my $10 in a money market fund, that is my right.

Jonathan Koenig from capitalistpig.com and sometimes featured on Fox "Bulls and Bears" investing segments on Saturday morning had these thoughts to share (as my fellow traders noticed the Nikkei average down another 3% this morning):

"In the stock market, you are entitled to nothing. The stock market does not reward failure, laziness, inactivity, stagnation, or irresponsibility. "

There are many different ways to succeed in America. When others start giving you unsolicited advice, 90% of the time you are doing the right thing.