Archive for the 'Investing / Finance' Category

Warren Buffett on Charlie Rose

Car Paid Off

Thirty-six months ago, I bought out the lease on my VW Golf for around $10k. I played one lender off another and eventually got a 4.13% interest rate. I could have paid cash for it, but at those rates it made far more sense to finance.

Lo and behold, the car is finally mine. My last payment was July 19th.

I don’t care much for the car anymore, but I’m going to like it a lot more without the $280/mo. I’m going to shunt the free cash flow into a money market account so I won’t even notice a difference.

Confessions of a Street Addict

I just finished this one 10 minutes ago and had to blog about it. However you feel about Jim Cramer, he’s got a great story here and it was impossible to put down. It’s unfair to compare this to his second work, Real Money, because they are so different. (Confessions is a narrative about his hedge fund, and his early days at TheStreet.com, whereas Real Money is written in a how-to style.) Unfair as it may be, I vastly preferred Confessions.

Jim Cramer - Confessions of a Street Addict - Cover Image

Jim Cramer and Life Time Fitness Inc

On his podcast today, Jimbo mentioned that WalMart is pulling guns from some stores and filling the void with exercise equipment. Then he suggests that a good play on this is to buy Life Time Fitness Inc (symbol LTM).

I’m sure Cramer is a smart guy, and I like Life Time, but it only takes about 10 seconds of web-based “research” to know that they do not sell gym equipment. They are a nationwide chain of fitness centers.

Increased home gym equipment sales might actually hurt these guys. Indeed Life Time themselves identify home fitness equipment as a “risk factor” in their most recent 10K.

(Disclaimer: I own LTM in my charitable trust, GetMarkRichPLUS.com)

Google Finance Launch

Google Finance launches today. Check it out. Finally, some competition for the old (stagnant) standby, Yahoo Finance.

Max Pain

Sometimes I make money in the stock market, and sometimes I “pay tuition”. Today’s lesson is: if you own an equity, pay attention on the 3rd Friday of the month (when options expire).

Here’s the chart for CWTR, a stock I owned until about 10:15 this morning:
CWTR Chart

Just after 10AM the stock dropped 10% on big volume, triggering my stop-loss order. To add insult to injury, it pretty much recovered right away. I was “shaken out.”

Dissapointed, I went hunting for the bad news that must have caused this. There was nothing to be found. It seemed like there was no reason for this behavior.

And then I learned about the Theory of Maximum Pain.

Tomorrow is the 3rd Friday of the month. There were a lot of in-the-money $30 calls set to expire tomorrow. Whoever had written these calls was incredibly lucky that they got this opportunity to buy them back at-the-money.

This post from the Yahoo Message Boards pretty much says it all.