Reminder to Enter June Stock Challenge
If you haven’t picked a stock yet, remember to submit your entry by the end of Sunday June 8th, 2008 for the June Stock Challenge.
Stock Challenge June 2008
The May 2008 Stock Challenge ended with only one participant, myself. I pick Nvidia (NVDA) and it netted a gain of 20.19% for the month. But since I was the only participant, I win by default anyway. I took the $20 cash and bought myself a lot of ice cream.
I will give the Stock Challenge one last chance. And for this month, I am offering a brand new VISA Gift Card at $25 value (I paid an extra $3.95 activation fee for the card), plus lots of prizes for the other winners.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of June 2nd to the close price of June 30, 2008. In case of duplicates, the contestant with the earlier post counts, so enter early.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of June 2nd, 2008.
The company stock must have a minimum stock price of $5.00 at the start of June 2nd, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by the end of Sunday June 8th, 2008. The winners will be announced here on Growing Money after June 30th, 2008.
Prizes
1st Prize - $25 VISA Gift Card
2nd Prize - Choice of book from my collection
3rd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me
via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick YGE.
Previous Contests
Stock Challenge April 2008
Stock Challenge May 2008
Stock Challenge Results for April 2008
The results for the Stock Challenge April 2008 are post below. There were four stocks that were picked: AMD, C, SGP, and RIMM. SGP had the highest percentage gains in April however, the contestant did not fulfill the requirements and link back to the blog.
Therefore, the official winner is The Dividend Guy. His pick Citigroup (C) opened at $22.61 on April 1, 2008 and closed at $25.27 on April 30, 2008, netting a percentage gain of 11.76% in a month. The Dividend Guy will receive the first prize. Vaughan will receive the second prize. Since Siddharth was one of the earlier participants, I will also send him a prize.
I have sold my shares of AMD in April. I lost confidence in the stock, at least for the short term, and have been looking at other stocks.
Transactions
3/18 Bought AMD 500 6.42 $3218.00
4/28 Sold AMD 500 6.05 $3016.98
Total Gains of -$201.02
Updated 5/3/2008
1st Prize of $20 cash was sent via PayPal to The Dividend Guy.
2nd Prize was unclaimed. No contact information was given for Vaughan.
Other Prize was unclaimed. No contact information was given for Siddharth.
Stock Challenge May 2008
Last month, I started the first Stock Challenge in April. We had several participants in April, and hopefully we will have more participants this month. I will post the results and the winners for the April Stock Challenge by the end of next week.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of May 1st to the close price of May 30, 2008. In the case of duplicates, the first person to post will be declared the winner, so enter early.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of May 1st, 2008.
The company stock must have a minimum stock price of $5.00 at the start of May1st, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by Sunday May 11, 2008. The winners will be announced here after May 31th, 2008.
Prizes
1st Prize - $20 Cash (Payment made by PayPal)
2nd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick NVDA.
Stock Challenge April 2008
I am starting a stock challenge for the month of April. This will be a pilot program and if the pilot goes well, there will be more contests in the future. There will be prizes for the winners. I will participate in this contest to start it off.
The Challenge
Pick a stock that you think will have the most percentage gains from the open price of April 1st to the close price of April 30, 2008. In the case of duplicates, the first person to post will be declared the winner, so it’s best not to pick a stock that was already posted.
Requirements
Pick a stock and reply to the comments of this post for the record with a link to your blog.
The company stock must have a minimum market cap of $50MM at the start of April 1st, 2008.
The company stock must have a minimum stock price of $5.00 at the start of April 1st, 2008.
The contestant can only pick one stock.
The contestant must have a blog and post the pick on his/her blog and link back to this post.
Rules
Entries must be submitted by Sunday April 13, 2008. The winners will be announced here after April 30th, 2008.
Prizes
1st Prize - $25 iTunes Gift Card
2nd Prize - Choice of book from my collection
*Prizes will be shipped to the winners free of charged. If you are the declared winner, please provide your address to me via email (growingmoney (at) gmail.com).
My pick for this contest
I will pick AMD. AMD opened at $5.93 on April 1st.
Oil Prices Hit Record $100 a Barrel
Oil Prices touched $100 a barrel today on the first trading day of the new year. The market tanked today from the weak manufacturing reports. There are many talks about an upcoming recession. The market certainly does not look good right now, and the dollar is still very weak.
I realized most of my losses in my portfolio before the end of last year to offset my gains. My biggest loss for the year was WM. I will have to assess the damage the credit crises has done to my portfolio. And I will put 2007 behind me so I can prepare for a new year. I will do more research and see which stocks and funds I should invest in for 2008. With high oil prices, the upcoming US presidential election, housing, credit issues, this year should be very interesting.
Good luck everyone. Be careful if you are trading in the markets.
Current Thoughts on the IPO Market
I recently signed up for the NMM IPO and was allocated shares. But the stock has gone downhill since it went public on November 13, 2007. NMM was opened at $18 and closed at $19.17 today, a drop of 4.15%.
I have noticed that some IPOs are being put on hold indefinitely. The EnteroMedics and Stewart & Stevenson, Inc. are two that I have seen recently, but I’m sure there are more. This is not a good sign of the IPO market.
Bank Dividends
I am currently holding a large position in Washington Mutual and took a huge hit when WM stock price dropped like a rock. I am planning to hold it long term so I was not paying attention to the stock prices. One of the main thing that concerns me now is dividend payout. Will WaMu continue to pay 56 cents quarterly dividend? Here is an article there talks about these concerns, Dividend-Cut Anxiety Rises as Banks Wobble.
Hong Kong Hang Seng Index
I was in Hong Kong recently and one of the main things I notice was the stock market. The Hang Seng index had surpassed the 30,000 mark while I was in Hong Kong. Stock talks were all over the place, from grocery stores to shopping malls. And almost everyone was trading stocks - young adults, moms, and even grandma’s. Some people even quit their job to trade stocks. Every morning most of Hong Kong is focus on the Hang Seng index and their stock portfolios. And it seems so unreal, everyday the market is going up.
At the time of my departure from Hong Kong, the Alibaba company was about to go public. It was said to be one of the hottest stocks and everyone had their eyes on that stock.
It seems like deja vu to me. I remember seeing this type of market in 1999 in the US stock market. Anyone can buy any stock and make money in a short period of time. There was no reason to look at fundamentals of companies. Why? Because in the amount of time you would spend doing your research on a company, you would have already made a 20% gain. It was about buying the company with the best value, it was about buying something that was hot and would trade on news. People tell me the stock market is the best way to make money. Every time someone talks to me about stocks, I would just listen, nod my head and smile. When asked for my opinion, I would give the most unexpected answer, “Risky market. Tread carefully.”
Cash Is King
The stock market has seen some wild swings recently, the sub prime market is almost devastated, and the real estate market is falling. With so much uncertainty, the best place to park your money is in cash. Cash is safe and liquid.
The stock market index has moved up and down in a huge range over the past few months. The Dow has closed with a spread of more than 100 points 32 times since June 1, 2007. Let’s take a look at the high volatility of the Dow from June 1 to September 11, 2007.
Date Change
9/11/2007 180.54
9/7/2007 -249.97
9/5/2007 -143.39
8/31/2007 119.01
8/29/2007 247.44
8/28/2007 -280.28
8/24/2007 142.99
8/22/2007 145.27
8/17/2007 233.3
8/15/2007 -167.45
8/14/2007 -207.61
8/9/2007 -387.18
8/8/2007 153.56
8/6/2007 286.87
8/3/2007 -281.42
8/2/2007 100.96
8/1/2007 150.38
7/31/2007 -146.32
7/27/2007 -208.1
7/26/2007 -312.22
7/24/2007 -226.47
7/20/2007 -149.33
7/12/2007 283.86
7/10/2007 -148.27
7/2/2007 126.81
6/22/2007 -185.58
6/20/2007 -146
6/13/2007 187.34
6/12/2007 -129.95
6/8/2007 157.66
6/7/2007 -198.94
6/6/2007 -129.79
The Dow Index has rallied as much as 286.87 points on August 6, 2007. A few days later, on August 9, 2007, the market dropped by as much as 387.18 points. That is a spread of 647.05 points in three days. Imagine you are holding a company that trends with the Dow but on a wider scale. You will be seeing some wild movements and it may be difficult to stomach such volatility, especially if much of your money is in there.
I think it’s a good time to have more cash on hand and wait on the sidelines until this “mess” clears up. It will be also be a good opportunity to pick up some stocks for a cheaper price.
I have sold most of my stock positions in August and my money is mostly in cash. I will take this time and opportunity to do some research on companies. I look for solid companies that have a solid track record and great long term growth prospects but the shares are currently oversold. The deeply depressed stock price allows me to buy shares of the company for a discount and gives me a comfort of security. I feel the risk level is very low and at the same time there is great opportunity for reward. This strategy has always worked out well for me. Whenever I buy stocks with little downside to it, I do not have to fear of a big drop and if I’m patient enough, I usually end up reaping huge gains.
One great example is my purchase with the big pharma company, Pfizer. I bought shares of PFE at $21.25 on 12/5/2006. It was a time when shares of PFE were being dropped left and right, but the company was doing well. Around that time PFE also increased dividends. I held my shares of PFE for a little over a year and sold them earlier this year, at $24.85 on 3/6/2007. My gains came in at a nice 17% plus about a 4% dividend, so the total is roughly a 21% gain. Also, because I held my shares for at least one year, I would pay only 15% on long term capital gains tax on the investment.
Another market I like to invest in is the real estate market. The real estate market has risen for the past several years and has finally gone into a down trend. With the sub prime market crushed and home prices depreciating, a good place to park your money would be in cash.
I’m waiting patiently for a good opportunity to enter the real estate market. If I can buy at the right place and at the right time, I can end up with a property that will appreciate greatly over time.
I like being in cash positions because it allows me to be financially flexible. I can move my money in any market at any time. If I think the stock market is the place to go, I can immediately buy shares of stocks. If I think the real estate market has a good entry point, I can immediately shift my money to the real estate for a deposit or down payment. The liquidity is an important factor; it can make or break a deal.
Let’s look at a scenario where liquidity can help or hurt you. Imagine you see a very nice house for a bargain. The owner is trying to sell the house quick and asks you for a deposit. Your money is tied up and you tell the owner you need some time to free up your money. The owner cannot wait and sells the house to another person who can immediately put down the deposit. You have just lost a great investment opportunity.
Liquidity is important. Untied money allows you to pick up bargains quickly and move freely from one market to another to take advantage of opportunities. Cash is king.