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ralph sekulski
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Sometimes I am tempted to speculate on a specific stock in a virtue of making some quick and easy money but then again I hold my self back and resist the temptations. Following basic fundamentals, researching before making the trade, and following the history of the company is my way of... More
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  • Invest Like Warren Buffett You Have Earned It

    (click to enlarge)How can someone become a rich investor without understanding the stock market or understanding which company to invest in? For starters, you may consider allocating your capital to Berkshire Hathaway, ran by the world's greatest investors Mr. Warren Buffett. If you would have put $1,000 to Warren's fund in April of 1966 your investment would be worth $6.5 million today. With such spectacular returns year over year, since the inception of the fund, Warren Buffett is looked upon as the greatest financial adviser, leader in the markets, and a trust worthy individual that persuades other funds and investors to follow his money.

    Warren Buffett recently appeared on CBS Sunday Morning show, exemplifying his understanding of the market, how ordinary people should invest, and obviously sparked some statements of the rich and poor divergence.

    "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega rich continue to get our extraordinary tax breaks."

    Although, I am not an individual who likes to speak of the class warfare, Warren begs to differ, bringing the subject at every opportunity. Maybe he does have a point in this matter but lets review further.

    According to Forbes, here in the US, we currently (2012) hold 425 billionaires with a total net worth of $1.7 trillion. With such a hefty capital laying around, an increase of few percentage points to their tax bracket will bring much needed relief to out national debt without hurting their future investment prospects or their current wealth being. Okay, so we may bring couple of billion out of this money basket.

    What about those millionaires? Well, according to Spectrem, there are 8.6 million household in the US with a total net worth of $1 million or more, 1,078,000 million household with a net worth of $5 million, and 107,000 household with a net worth of $25 million. With the recent financial mayhem in the markets we have created a vision that all millionaires and billionaires are evil and greedy. All that, with the help of our media that escalate this class warfare. However, maybe for that reason Buffet does have a point and such we should bring the playing field within common ground.

    In future, with the tax code changed, maybe the next secretary would not have to pay more in taxes than Buffett himself.

    Besides this subject of the have's and have not's, Buffett has always been optimistic in America and Wall Street.

    "We will have hiccups along the way. We had a big hiccup in 2008 when the housing bubble burst. Dow Jones in the 20th century went from 66 to 11,497 went through Great Depression, World War's, all kinds of things, and this country keeps chucking forward."

    (click to enlarge)Such a statement is not Buffett's opinion but a fact of our market (wall street), for such we should portrait the market from Buffett's point of view instead of medias which brings negative headlines, pessimistic approach, which keeps us away from a fundamental understanding of investment for the future. I praise Buffett for his optimism and maybe an individual investor can do as well. Instead of concentrating on the bad situation on hand, one can learn the fundamentals of investing their capital, and actually put their money to work. Investing your hard earn income should not become a headache, when it does, stop whatever you are doing and seek professional help. Their are professional advisers that can guide you, for a small fee, and they are available to even the smallest investors.

    "Average person will not know which stocks to buy, they wont know enough, when to buy them, but they don't have to, because they can buy all of America through an index fund. And then they have to make sure they don't jump in at the exact wrong time, and they wont know what exactly the wrong time is. They have to put their money in a period of time, and they'll have periods of good times and periods of bad times but over all they will do fine over time."

    Amen to that. It is not a point to buying the lows and selling the highs, as professional investors have problems doing so. However, it is our responsibility to learn the basics of allocating your capital within a set of time, within the funds that most fit our risk approach.

    Every brokerage firm (online: TDAmeritrade, Scottrade, Fidelity, etc.) offers their clients free seminars that teach the understanding of stocks, options, futures, technical analysis, risk management, and the very basic knowledge, which lets individuals invest better than their boring mutual funds.

    Little education goes a long way, and Buffett always tries to make it clear, that individual investor has the capability to run their own money effectively, along their risk tolerance. All is needed is some patience and perseverance.

    Jan 22 7:45 PM | Link | Comment!
  • Intel Corp Weak Earnings AND NOW WHAT?

    Intel Corporation is a semiconductor chip maker, which develops advanced integrated digital technology products, mainly integrated circuits, for industries such as computing and communication devices. The stock yields an impressive 4 percent, price/earning of 9.7 (industry average of 20.8), and price/book value of 2.2. Otherwise known as the "Intel Inside" chip maker that powers our laptops and is considered as one of the top brands for the broader computer public.

    Since the dawn of the first tablet introduced by Apple, consumers have been scaling down on laptops, switching their preference to tablets which are more productive for standard daily use and employ the power of amazing applications. In essence most chip makers have been getting the boot gradually, with margins shrinking, lack of growth and steady increase in operating expenses which for Intel rose 7.1 percent to $4.66 billion.

    To this affair, it does not catch me as surprise, that Warren Buffet is one of the first major investors who booted Intel Corp (NASDAQ:INTC) out of his Berkshire Hathaway portfolio all together. Warren was unloading Intel shares throughout summer of 2012 for an average price of $28 which was one of his most profitable investment of the year.

    Back to the main even that took place after the bell this afternoon; 4th quarter profit fell 25 percent, with profit of $2.47 billion, or 48 cents a share, down from $3.66 billion, or 64 cents a share same quarter of last year.

    Gross margin, which is closely looked by investors because it signifies future growth potential, narrowed to 58 percent down from 64.5 percent. Not a convincing number for future forecast.

    Since sales an personal computers are down year over year the company is trying to market themselves more aggressively into the mobile market. However, as sweet as that sounds, mobile market is dominated by Samsung Electronics, Qualcomm Inc. (NASDAQ:QCOM), and Nvidia Corp (NASDAQ:NVDA). With that said, there is plenty of ongoing competition with, Micron Tech (NASDAQ:MU), and Sandisk (NASDAQ:SNDK) besides others, that are pushing aggressively into the mobile space. Too much competition may be positive sign for consumers but not so much for chip makers who will struggle with margin growth.

    With so many disadvantages in this name one would think that the smartest move is to take a hike and move the cash into something else. However, looking at the technical levels, especially after the 5.6 percent sell off after hours to $21.43 just before the stock closed up 2.58 percent before the bell, the stock itself is dragging along its 200 EMA. If an investor is found of impressive yield, a possible restructuring of the company, consistent cut in expenses for the past few quarters, and a demonstration of investment in research and development, maybe you should reconsider. I would not dive into this name all at once but a gradual positioning over a period of time would be suitable and smart.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: INTC, SNDK, QCOM
    Jan 17 9:24 PM | Link | Comment!
  • Goldman Sachs And JP Morgan Chase High Flyers In Earnings
    With Goldman Sachs (NYSE:GS) and JP Morgan Chase (NYSE:JPM) Earnings are Hot


    Posted on January 15, 2013 by ralphie

    (click to enlarge)Wednesday will kick off with a bang! With major financial companies announcing their earnings just before the morning bell it will spur lots of rumors and a rocky market throughout the day. There is a reason that the market has been mostly neutral for the past few days with traders waiting on the sidelines, salivating waiting anxiously.

    With Goldman Sachs (GS), JP Morgan Chase (JPM), M&T Bank (NYSE:MTB), US Bancorp (NYSE:USB), and Bank of NY Mellon (NYSE:BK) reporting just before sunrise it will not just reveal the profitability and direction of those individual companies but the direction of the whole market for the next quarter to come.

    After the market was hit with a massive sell off just before the fiscal cliff fiasco, we have retraced roughly 5% on the SPDR S&P ETF (NYSEARCA:SPY). So where do we go from here? Clearly, the banks will give the market a conviction to this bullish trend, however, the banks have to crush the earnings and deliver good, if not, better forecast for the rest of the year. Current expectations have a low bar so just beating forecasts will not be a major bang that traders are looking for. In case the banks do deliver I expect a short sell off (a slight dip) were than we do continue the bullish trend forward. Keep in mind that since December Financial Selector Sector SPDR (NYSEARCA:XLF) is up 14%, Goldman Sachs (GS) is up 14%, and JP Morgan Chase (JPM) is up 13%. We have been running this bull quickly, therefore a mere pullback is not just good for traders but healthy for the market.

    I assume that traders will also look forward to the EBay Inc. (NASDAQ:EBAY) earning that will announce just after the bell. Ebay is no longer looked upon as an auction site but as a retailer which shows our spending behavior and brings conviction to the retail sector. With their transformation of the website and the great ease of use on mobile devices I am sure that structure brought in more customers and Ebay will likely beat their expectation of $0.61.

    Here is a list of the hype for today:

    • Goldman Sachs (GS) before open eps $3.44
    • JP Morgan (JPM) before open eps $1.20
    • M&T Bank (MTB) before open eps $2.17
    • US Bancorp (USB) before open eps $.74
    • Bank of NY Mellon (BK) before open eps $.53

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GS, JPM, EBAY, MTB, USB, BK, SPY
    Jan 15 11:30 PM | Link | Comment!
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