Archive for August, 2011

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Where Is The Uptick Rule?

August 20th, 2011

I watch the market recover today, enough so that the smaller retail investors (middle class investors) might have believed the market had turned and bought some stock.  Then WHAM, either the whales decided to take profit, or the automated machines (stock terminators? hasta la vista baby) kicked in and the DOW ended up down more than 173 points.

I watched this turn of events and all that I kept wondering is “Where is the Uptick Rule, and why hasn’t it been re-instated yet“?  Ironically, as I thought this question, other older guest investors on CNBC asked the same question about 30 minutes after I wondered it myself that day.  I’ve been complaining about the loss of the uptick rule for quite a while!  I first mentioned it in an article on May 2010 as a small blurb about the Uptick Rule.

So what is the Uptick Rule?  Basically that a given stock has to be bid up a tick before shorting can happen!  Now it won’t stop a stock from going down in value and that wasn’t why it was invented!  It’s main purpose is to slow the decline of the downturn of a stock and to prevent corruption from happening because shorter can not pill on to the stock that’s falling like a rock dropped in a pond.

Oh, I heard the excuse how doing away with the uptick rule would help some Wallstreet folks keep their jobs back in 2008, I think that was a month or so before the market started to crash.  But I have to wonder, what about the small investors like me and the rest of the middle class?  Why doesn’t the government re-instate this rule?  With the machines and the whales playing in the market along with the small-scale investors, we are getting slapped around like rag dolls.  As an analogy, it’s like a 4th grade football team playing against the NFL football players…  Obviously, the 4th graders are always going to get hurt!  Why doesn’t the government wake up and realize this?  At least the Uptick Rule gave the middle class investors a fairer chance against the machines and whales…

If anything, it would give the market a boost of confidence, that the government is not going to take market manipulation!  Whether the effect from the reinstatement of the Uptick Rule is real or not, at least it would show the people who the government isn’t trying to destroy everybody’s wealth.  How can they just sit on their hands and let the boomers go bust?  It’s like kicking an old person if you see one out on the street!

Today left a bad taste in my mouth, as I really wondered if the stock market is corrupt and being manipulated.  What incredible sad it would be if that were true.

So I have to wonder, after so many years of not going far enough, Where is the Uptick Rule?

Thanks for letting me rant,

MR

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Posted in Investments

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My Car Broke Down, Should I Get a New One?

August 19th, 2011

Should I replace my car with a newer one?

 

Silver Malibu

Silver Malibu

First, let me describe the car that I would like to replace.

  • It’s a silver 2003 Chevy Malibu with around 97,000 miles on it.
  • It’s not pretty, but that’s okay since I bought it as a work car.
  • Friends at work make fun of me calling it a grandma’s car, but it was cheap (even though I bought it new) so I deal with it.
  • One very big positive in my book is that it’s been paid off since March 2009.
  • It has had its share of problems since the beginning, and it’s difficult to work on.

So since it’s paid off and that’s a big deal to me, you might be wondering why I want to get rid of it?

Here’s why:

  • It’s always had small problems since I bought it.  Such as the fan and air conditioner stopped working after it was out of warranty.
  • It’s a very not noticeable car.  I’ve driven past my wife and friends in it and they don’t even see me.  It’s like I’m invisible…
  • It doesn’t get that great of gas mileage (21 on the Highway, 19 in town).
  • And the main reason is that it’s starting to fall apart!

Yep, as much as I like no car payment, the falling apart reason is why I’m considering buying a new car (by new, I mean newer than the one I currently have).

My latest break down:

I just had lunch and I was driving back to work on a busy, very popular highway when all of a sudden my car gets sluggish.  I think that I have a low tire, so I try to speed up to get over a lane to get to the brim of the road.  The car doesn’t speed up though and it’s like my gas pedal isn’t working (actually it wasn’t).

So I drift over to the side of the road, turn down the radio, get out and check to see if all is well.  After a quick check, I get back in the car and try to start it, but it’s down for the count.  I wait a few minutes and try again, but it still doesn’t start.  I know it’s not the battery since I just bought that the day before.

I start looking for my phone to tell my wife and call the triple A phone number, but my cell phone is nowhere to be found!  Shoot, I left it at work on the charger!  So I wait for a few minutes looking at the car, then start to walk the 5 miles back to work.  I got about 10 steps when someone with a truck pulls over and asks if I need some help!  Hooray!  My savior lets me use his phone and then he drove me to work (he was going that way anyway, actually).  I was cool that a good Samaritan came to my rescue, or at least he saved me some time.

Back at work, I called five shops which none could look at my car for a week!   Finally I find one in a different city, so I take that number down and bum a ride back to my car from one of my work buddies.

I call Triple A and waited.  As I sit in my car with the windows down on the side not facing traffic, I wonder if I’m going to get killed by a semi-truck or really any size car as they go flying past me at 70 to 80 mph.  It doesn’t take much to realize how dangerous this spot is!

Triple A sends a tow truck, and he takes me to the closest mechanic.  The mechanic calls the next day and says that it was the fuel pump!  The mechanic replaced it and two days later I picked it up!  The bill was over 600 dollars!

After picking my car up from the mechanic I drive home and there is a squeaking sound in the right front tire when I turn.  I jack up the car, and notice that there is a leak somewhere near the engine.  I have a hard time getting it into gear sometimes.  And someone clipped my front bumper one or two years ago, and the crack is starting to get pretty long.  When I replaced the battery the day before the car broke down, I notice that the metal platform that it was sitting on crumbs when I touch it, kind of like a graham cracker…  I think my car’s rims are bent, and I need all my brakes done soon.  and of course there is a tune-up…

I can go on and on about the problems that my car has…

If I do decide to take the leap, I’m thinking of going with a Toyota or Honda this time (sad huh).

What would you do in my scenario?  Should I stay (with my current car) or should I go (with a newer car)?

MR

 

 

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Posted in Problems

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DIY Fixing a Garage Door That Sticks

August 18th, 2011

The past two months, we been fighting our garage door that sticks.

By “garage door sticks“, I mean that it would start down when we push the garage door button, but then get stuck about 1 foot down and come back up.  To get around this, we would have to push the garage door button at the point where it first gets stuck, then push it again so that it would continue down from that point.

This technique, while obviously not preferred, worked for the past few months.  After we came back from vacation though, it would sometimes require 2 or 3 stops and continues to get the door to close.  Well, that was ridiculous, so I decided to have it fixed.

First I asked the guys in the office that I work with, and they said to bite the bullet and hire someone to fix it.  They said it would run between $200 to $300.  As a frugal guy, I decided to try to fix it myself (staying away from the spring that opens the door, since touching it isn’t the safest thing to do).

So what I did was to climbed up a ladder and watch the garage door as my son opened and closed it a few times.  During this observation stage, I noticed a few thing that could be the cause of my problem, like the fact that the chain was very loose and that practically everything could be cleaned and oiled.

I googled the problem with the keyword phrase “garage door sticks” and basically read articles that suggested oiling the track and rollers.  Next a few articles suggested replacing the gears.

Next I googled my particular model, which was a craftman 1/2 hp model:

Garage Door motor

Garage Door motor

 

The few articles that I recommended stated stuff that I already knew and already read (oil the track and hinges).

Another article recommended to oil the bottom roller that rides in the track very well.  I check and it did look a bit rusty and not as easily moving as it should have been.

Garage Door Roller

Garage Door Roller

 

The last thing I didn’t find online via google, but the fact that the chain was so loose bothered me.  I was sure that it shouldn’t be that loose!  So I started looking from some type of tension screw or mechanism to make the chain a bit tighter.

Garage Door Screw Tension

Garage Door Screw Tension

 

So after climbing the ladder a few times, thinking about it for a while, and reading google a few times, here is what I did:

  1. Wiped clean the track that the garage door uses to slide on, then oiled it.
  2. Oiled the rollers, especially the bottom ones with WD40.
  3. Search for a tension adjustment screw, and figure out how it works.
  4. Tightened the chain via the tension screw.  I left a little bit of slack though, but it’s was much tighter than before.
  5. Pat myself on the back for a job well done.

And there you have it!  After doing all of the above, I tried the garage door and it worked like a champ!  If you follow what I describe in the steps above, it should take you about 10 minutes to perform versus the hour that it took for me.

Now I wish I had fixed it about a month ago…  Oh well, better late than never.

MR

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Posted in Frugality

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Sell a Stock When The Story Changes

August 17th, 2011

If you happen to read some of my past articles, you know that I’m a “buy and hold” and “dollar cost averaging” kind of guy!

When I buy a stock, I usually buy it for the long turn (except in my Roth IRA, where I do some small active trading in down markets  and use it as a dividend shield).  Occasionally something happens to one of my stocks that requires that I sell the stock since the story has changed.  Such was the case yesterday.

I sold a stock that has increased in value by around 10 fold!  It was a great stock and had a wonderful business model where it’s at (in China).  In fact the company is so good that it practically has a monopoly in it’s area of expertise.  It’s main competitor (Google) exited the environment leaving all the spoils to this company.  Yes, the company is Baidu (ticket BIDU).  I’ve held this company for a few years and it has been the equivalent of a rockstar among stocks.

So why am I selling it now?  China!

China is an incredible country and there is a lot of great growth happening over there with respect to their economy.  Baidu has been a shining star, even in a fast growing country like China.

So again, why am I selling?

The state media is starting to sling mud at Baidu by stating that Baidu is allowing bogus drug companies to sell fake drugs on it’s site and claiming that the auction bidding process for Ads is rigged. In the US, this would not be room for alarm and wouldn’t bother me much since the company would most likely just get fined.  But in China, they can do whatever they want, whenever they want.  They have no restrictions.  If they want to shut down Baidu tomorrow, they would just walk in to Baidu and shut it down.  If they wanted to take over the company and claim it’s now a state company, they can do that too.  China actually has no limits as to what they could do.

So the real question is, has Baidu’s story changed?

  • Well, the last identification of problems by the state may change Baidu’s business model.  if this happens, then there is a chance that it might not be as profitable.  This would destroy the stocks growth rate and stock valuation.
  • Potential loss of the drug Ads could have an impact on Baidu’s profits too.
  • Changing the business model (if this is done again), may prove less profitable than the prior model.
  • If China nationalized the company, many would be out of lots of money.

The reasons above dances in my mind, but mostly it’s investor sentiment that worries me.  Others may be thinking about the small subset of problems points that I mentioned above and start to sell even more that what has happened already.

Depending on what goes down and how brave I feel, I might try to buy some more shares if the price falls far enough.

So yes, because of uncertainty, I’m out of one of my favorite stocks.

What would you have done?  Do you think I’m panicking too quickly?

Time will tell,

MR

 

 

 

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Posted in Investments

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My Largest Business Purchase For My BlogTo Date

August 16th, 2011

Today, I’m going to go through the thought process that a financial blogger such as myself would go through to make a business purchase.

Understand that I’ve been considering this business purchase for a long time, at least since last year.  So you are probably wondering what has been holding me back?  The financial considerations involving such an expensive purchase…

When I initially started looking for the type of laptop that I wanted, they were running at a cost of around $700.  Since my blog is small and for the first five months I only made about five dollars, I couldn’t justify spending that much money for what was basically a borderline business, but more of a hobby.

So what has changed?

First, the Apple iPad and other tablets have come on the scene and made me rethink whether I wanted a laptop or a tablet.  After playing with my son’s Apple iPod Touch and my dad’s IPad 2, I’ve come to the conclusion that they are both awesome products but for me, the larger screen of the laptop just fulfills my blogging needs better.  I especially like the larger screen when I’m working on graphics for my blog.  Needless to say, the apple products were very tempting and it wasn’t an easy decision.

Second, the price of the laptops that I was looking at dropped by more than half the original cost!  The particular type of laptop that I wanted now costs $300!  That makes a four gigabyte laptop with a 320 Gig drive cost as much as my son’s iPod Touch…  As awesome as the iPod Touch is, the pure horsepower and larger screen make the laptop an obvious choice.  Still, I think an iPod Touch or iPad would have been very useful and functional…  perhaps next year.

Third, my blog is finally making a little bit of money.  Not enough money to quit my day job, but enough to afford better tools for working on the blog.  I plan on pouring some of the money from my blog back into the blog itself.  This purchase will enable me to blog from many more places than I previously could.  Now I’m able to be more mobile with the longer battery life of my new laptop.  Previously, I was occasionally using the laptop from work but this feels more right, and the longer battery life and greater processing power will enable me to do far greater things with it than the older laptop I was using.

All told, it still took me longer than 1 year to make this purchase.  In fact, had I not see this bargain on one of the bargain sites (techbargains.com), I wouldn’t have made the purchase.

Even after the salesperson brought out the laptop and handed it to me, I had to walk around for about 30 minutes before going up to the cashier for the purchase.

Thanks for letting me share my largest business purchase with you!

MR

 

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Posted in Entrepreneurship

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