Alzhermer drug?

The market will rebound at the opening. I do not expect it to be strong. I may sell 200 HSE if it reaches 27.3.

Pay attention to MDVN. Its Alzheimer's drug is in phase 3 trial and could become the most important drug in 10 years. I will buy 100 @36. Be aware that it is a high risk investment.

summary Feb 8, 2010

The market had a late day sell off. It is still too early to be aggressive buyers. I will buy selectively if market continues to go down. IBM earning is very stable and did not went down last year. I will be interested in it around $120. I do not see European debt problem blown to a crises but it will have some impact on government spending (a warning to many countries).

How to balance inflation and growth is huge task for Chinese government. Given the wage and raw material increase, I do not see how they can contain inflation without bursting the real estate bubble. Containing inflation probably will not be a priority this year.

As Greenspan pointed out, stock prices (wealth effect) will have an impact on real economy. If stock market continues to go down, it will have an negative impact on GDP 3 months from now.

When I start this blog and my portfolio, I stated that my objective is to outperform the market while have much less volatility. As of today, the market is down 2% since I started. My portfolio is up. But more importantly, I only had one negative day in more than 3 months and the volatility is less than 25% of the market.

Closing value
Portfolio 1 (U$): 110715
Portfolio 2(C$): 80421


Closing value

Insurance, cash and etc

One question is always being asked is how much liability insurance we need. It is always good to have some but too much is not necessary a good thing. Same thing maybe true for companies. Too much cash reserve is not necessary a good thing. Toyota has billions of cash reserves and it attracts so many lawyers right now in U.S. to sue damage. I am afraid all the cash will be spent on the court. An unfortunate truth is how much you will be sued depends how much insurance or cash you have. The more you have will not make things better for you.

Husky Oil (HSE) is trying to spinoff its Asian operation by the mid of 2010. My guess is they would sell the Asian operation to a Chinese company. It should give some supports for the stock.

The market is still range bounding. I will be interested in IBM (@120) and INTC @18.8

Summary Feb.5, 2010

The market had a late reversal and ended flat. I closed IMG @14.5. Greece and other European countries' debt problems can probably be controlled. The unwinding of carry trade may cause some failure in financial institutions. I do not see much upside in the market. Take profit when opportunity comes.

Closing value
Portfolio 1 (U$)110907
Portfolio 2 (C$): 80501

public opinion and government action

The public opinion has turned against government intervention. It has limited the options governments have to deal with next crisis.

Bought 200 IGM @13.9. Will sell it @14.5.

Job number

The job number came out a bit weak than expected, although the unemployment is lower than expected. The market will rebound at the opening but I will not buy into it. The trend is going down another 2-5%. I will put 200 IMG (C$) @13.90 (I sold it 3 days ago @15.6), 100 IBM @120 and 200 INTC @18.8.

Summary Feb.4, 2010

The Dow Jones is down over 260 points and barely hang on to 10000. S&P is down 34 points. The market clearly worried about PIGS. I will cautiously add some positions tomorrow if market continues its down trend. I will buy 200 INTC around 18.9, 200 IMG @14 (I did not get filled today @14.1) and 100 IBM @100.

Closing Value
Portfolio 1 (U$): 110779
Portfolio 2 (C$): 80285