Markets Strength

The markets strength continues to amaze me. With talk of $ 4 gas, the market continues to make healthy gains. The biotech sector has come back strongly with Genentech making a new all time high. The biotechs are rallying after correcting to their 50 day moving average. This was a healthy correction for the biotechs and now they're ready to continue their upward trend. I have positions in the following biotechs: Amgen, Biogen Idec, Genentech and Genzyme.

I'm going to need to raise some cash soon. Here are some options in addition to my money market account:

• Borrow from my margin account (borrowing against 20% of equity). When particular stocks hit predetermined tagets, I would sell to reduce the margin loan. (Possible)
• Cash out some on some stock options. I may lose out on stock appreciation. The options don't expire for another 7-10 years. (Bad)
• Start to do next day sale on the essp. (Good)
• Borrow against my 401k? (Bad)

A Stormy Market?

I thought the market was going to get slammed today with predictions that hurricane Katrina was about to wipe Louisiana off the map and the effect of the storm on oil prices. Katrina was bad, but not as bad as everyone feared and oil fell from the opening high of $70 a barrel. I don't know, but it almost feels like a top in the price of oil. So much bad news is priced into the oil market. We'll see... I'm horrible at making these short term predictions.

Overall it was a very good day for the market. All of my holdings were green except for Biogen Idec. The WSJ reported that there maybe additional adverse events with the use of Tysabri. There's going to be side effects in just about every drug we take. The number of people, who encounter serious side effects are small, but that's what makes the headline news. No drug is 100% safe.

On a different note, I'm still deciding whether or not to go for the condo. Time's ticking...

Contemplating Condo Purchase?

I decided to check out a pre construction condo project. It's very close to Boston, actually right in Cambridge. I really had no intention of making any purchase, but I was really impressed with the project. Here's the web site: click here. I put down an initial deposit of $2,500 to hold the unit and I have ten days to opt out. It's a nice little 800 sq Ft duplex. There are the pros and cons. I would have to do some big time portfolio adjustment. I will put at least 20% as a down payment, but that means liquidating a chunk of my portfolio. I hate these kind of decisions... Ugh...

The IPO Game

I never really played the IPO game. My first IPO investment was in DJ Orthopedic (DJO) back in November 2001. I thought it was going to be easy money since it was supposed to be a "hot" deal. I was allocated a few shares at $17.00 and I was planning to flip it the same day. Well, guess what happened. The shares opened flat at the IPO price $17 and started to decline. I knew instantly that it was trouble. The underwriters were not supporting the stock. I sold the same day for a small loss (I believe it was ~$200). Anyways about a year ago there was a class action lawsuit and I sent in a claim. Today I finally got a check for $59. So my total loss from this ordeal was $140. It was a learning experience. The little guys rarely get a chance to get their hands on a "hot" ipo. If you get a full IPO allotment, there maybe trouble brewing. There's no such thing as easy money in this game.

More Apple...

I admit, I'm an awful short term trader. I've started building a position in Apple. Today I picked up some more shares at $46.72, right near the high for the day! Ugh...

And what's up with OSI Pharmaceuticals (OSIP) acquisition of Eye Tech (EYET)?! Talk about destroying shareholder value for the OSI investors. OSI shareholders don't even have a say in this merger. Apparently this merger does not require the approval of OSI shareholders. I see no positives in this transaction. Yuck!

Bought Some Apple

Apple's strength last Friday was really impressive. Like I said, the chart and the fundamental look great. So I went ahead and nibbled on some Apple at $47.99. Buy high and hopefully sell higher. So we'll see...

Apple Looking Good

I couldn't wait any longer, I broke down today and purchased an Apple 12" iBook. Today was "tax free" day in Massachusetts so everyone waits for this day (yesterday and today) to make some big ticket purchases. It's not a huge savings since the sales tax is only 5%, but there are good deals if you look hard enough. By the time I got to the Apple store the iBooks were sold out, so I'm going to have to wait a week for home delivery. No big deal... I was able to take advantage of some back to school deals. I was able to get a 4 gig mini iPod and a HP DeskJet 5740 printer for free (after the rebates). I'll take it!

I'm going to keep a close eye on Apple (AAPL) on Monday, the chart looks great. Maybe the analyst are right for once, people are converting to the Apple. I just did!

How Much For Retirement?

Here's an interesting article from the Market Watch site. It's alarming that 40% of all workers have not started saving for retirement. They bring up a good point of determining how much you will need for retirement. hmm.. I've never really come up with a good number for myself. Time to start crunching some numbers! Click here.

My ESPP Dilemma

I've been working for the company for ~ 8 years and have participated in the employee stock purchase plan since day one. It's been a great deal, the ability to purchase company stock at a discount and the appreciation of the stock. I have not sold any stock in the company. Now it makes up approximately 40% of my total portfolio. I've been able to generate an annual return of ~ 34% by just holding onto the stock. I'm tempted just to lighten up to diversify a bit. It would probably go into an index fund or real estate (if there's a good deal). It's very tempting to just hang on, but we all know what happened to the Enron...

Biogen Come Back?

Yesterday Biogen Idec and Elan reported that there no new cases of PML. Investors reacted favorably to the news by bidding up shares in Biogen Idec (BIIB) and Elan (ELN). Are they over reacting? Here’s one analyst’s take on the news:

An analyst from Robert Baird & Co. stated the following in BioWorld: “…even in the best-case scenario – near term Tysabri re-launch – we still see a limited commercial opportunity for Tysabri, given its safety profile.” He has a neutral rating on Biogen Idec.

I believe the market reacted appropriately to the news. The market pretty much wrote off any potential come back of Tysabri. Now there’s a good chance that Tysabri will come back on to the market. It won’t be a blockbuster by any means. I certainly hope that Tysabri is proven to be safe and will improve the quality of life for MS patients. Biogen is going higher, but how high?

Note: I have a position in Biogen Idec.

Amusing Frugal Stories

I just saw in this in our local Sunday paper. Some people go to great extremes to save $$$. Check it out... Click here.

Roth IRA - How Time Flies

I was just reviewing my Roth IRA account. I started my Roth IRA in 2000 at the peak of the market. Since 2000, I've contributed the maximum to my account each year. I actively manage my Roth by mostly investing in individual stocks. The portfolio currently is made up of the following: Amgen, Biogen Idec, Genentech and the Fidelity Contra Fund. I've been able to generate an annual return of ~ 15.7%. I'll take it considering I had to endure the 2000 - 2003 bear market. What saved my butt was Genentech. I bought it right before the big Avastin news and now it's up ~ 400%. All you need is one stock to really take off (plus a little luck!) and it can produce wonders to your portfolio.

Real Estate - Now or Wait?

I'm looking at real estate once again and up comes this Money magazine article talking about the riskiest real estate locations. This index ranks Boston as one of the most at risk for a decline over the next two years. That's where I'm looking... Definitely no deals. Here's the article: Click here.

Fisher Scientific (FSH) - Beats, but ...

Looks like I made a good trade for once! I sold Fisher Scientific (FSH) last week and made a nice little profit. Today after the bell, the company released Q2 earnings, which beat the estimates, but they narrowed the range for their full year earnings guidance (in another words they guided down for the year). The stock is down in after hours. The conference call is tomorrow morning so we'll see how the market reacts to their excuse for trimming the guidance. The company also made two small acquisitions today. Like I said before, growth by acquisition is a risky strategy especially when the company is highly leveraged.

Zippo Savings

Here's a Money magazine article about our national savings rate. It's hard to believe, but the national savings rate is down to zero. Yet consumers are spending like crazy and where do they get this money? From the appreciation of real estate prices. Great... more debt! Click here.

People just need to be more financially literate. I was fortunate enough to enroll in a personal finance course in college. I remember my first job out of college and I was making $20,000 / year. I still managed to contribute the max to my retirement account. The key is to start early!

Mutual Funds: The Good and The Bad

I've never been a big fan of actively managed mutual funds. You tend to pay for poor performance. Over the past years, I've invested in several mutual funds in my 401k. The best performing fund for me has been the Fidelity Contra fund. A great manager / fund with solid returns year after year.

I've also invested in a few dogs such as the PBHG growth fund. That was ugggllly! Enough said!