2007 resolutions

Dicks Sporting Goods (DKS @ $32) up 7% since my last post.

Dicks Sporting Goods stores (DKS @ $32) stock price is up 7% from after I reported on its earnings. The sporting goods retail stock has been slipping with all the other major giant retailers such as Sears Holding (SHLD @ $112) and Macy’s (M @ $30). Since earnings it has risen about $2 after being upgraded the second day after earnings by Citigroup (C @ $31). Practicing the play on options/real trade you would of made a 75% ROI on JAN 30 CALLS for DKS. Bought around $2 and sold around $3.50. Of course you would of traded this if you had your head screwed on straight and were not in demolishing belittling DEC 30 PUTS for Apple Inc. (AAPL @ $171.50) up probably 6 pts from where I bought the PUTS which are going to $0. Yes – yes – yes the likely hood that I could of took a small loss, well big to most people, at -$300 on a $1000 trade (-30%). I’m currently at a value of $250 for my 10 contracts. I think Apple is a hot company, but I was 100% sure this second run one the last until the New Year. I was definitely wrong. I think I need to take a long break from trading any stock. Even a majority of my stock practice plays are failing. I’ve also noticed all my very short-term plays (in and out within 1 1/2 day) for the most part 90% work earning an average of around 5-10% per trade because the stock market is currently going up and down so much that by the 4-7th day in my option practice trade my options intrinsic value is becoming less and less even if the stock is going my way. Something I think is what makes Dick’s Sporting Goods a “hot pick” that is bound to go up is because its brand name is advertised all over ESPN’s basketball and football games. It’s subconsciously telling little boys and girls all over the world to buy from Dick’s. I have a Dicks Sporting Goods in my hometown of Virginia Beach and I have to admit its really simple nice store with a very good selection priced for the average consumer.

Conclusions: Well my DEC PUT is good until December 21st so I have a little less than 30 days for Apple Inc. stock basically to fall to around $150 to become profitable and sell out. I am 100% against depositing money into my account. I just “feel” like I am going to lose it! And any trader’s book says if you feel like you are not 100% confident about your trade you probably should not be trading and likely to lose. I know I have better trading skills then what I have been actually putting out. I need to put more research into trading a stock – before I trade a stock. Currently trades I consider won’t work to practice on ARE WORKING so I know it isn’t 100% my error either. The market is definitely a bit nutty with all this bad credit mortgage news and thriving tech companies.

Below is a 55 minute chart of DKS to show movement:
DKS 55 minute chart
(Click on to enlarge)

going into the holidays – to be thankful right?

In this world of market uncertainty I think everybody is a bit stretched out on emotions. I’ll be in port for the holidays (currently posting underway). I might spend it with colleges or old friends or crap maybe both! I thought having thanksgiving at a chinese resturant like “The Christmas Story” movie would be fun and have duck, which I’ve never had. I’ll probably serve the homeless. It will probably be more excitement for the week. Likely is the season to down a couple of microbrews and shots of something that will likely make my throat buring warm.

I guess I should be thankful for being alive and not jumping off some building for all the daily events I go through. I’m not very happy about losing such a big amount of money during the season I usually earn big money, but I suppose years in “7” are learned. I really wonder and imagine down this long and cumbersome road I take if I will get better. Maybe you should be asking me? Dude, do you want to get better at trading? Because I really do. I don’t even care to be rich. It is more about suceeding at something and really showing myself I can finally be great at something where others will take notice. Then again you don’t really wear a price tag on your head so unless I look like a million dollars then I’m still just going to be that average guy.

I am thankful about joining the United States Coast Guard. Although difficult to work with other coasties at times I genuinely enjoy eyeing the horizon of the ocean, sunsets, and slow rocking back and forth that comes with living on a boat. I may not have a major purpose, but I feel my impact of staying focused on my dreams does somehow effect the way other people think about what they should do with their own lifes and because of that I’ve got purpose.
I may not be some major philanthropist, but I do “teach” others to really seek their own financial dreams and I actively keep persisting mine as a student of my own errors. Plus I get paid very well in my opinion for what I do and with as little education as I’ve got. My new income has helped me push me toward my financial dreams even if I’ve made dumb moves along the way that possibly have pushed me further back! But hey it comes with the ambitiousness riskyness!! =D

Apple Inc. (AAPL @ $126) big pull back expect lots of buying

Apple Inc. (AAPL) just recently took a big pull back at $126. I’d load up on shares if I wasn’t broke! hahahaha. Seriosly! Okay I’m not actually broke, but I definitely feel like I’m spent out to the max. For anyone interested in getting a bargain AAPL at $126 currently is because Apple Inc. is a great company that will keep earning profits even if the financial markets have a melt down because of its trendy very wanted products. AAPL current growth trends are off the charts by out selling the entire PC industry with its sleek charming Mac computer sales. All those iPods are finally paying off because those customers are switching to Macs. The iPhone will just be another diamond ring paying off big once it picks up and it will. Apple’s advertising on Tv works. The iPhone is awesome. Apple Inc. keeps turning heads with every new and old product they created improving everything about it, and Apple fans are great influence of more products being sold with mega word of mouth.

Even though currently on a 1 and 5 day chart AAPL looks glim and very bullish I expect bullish up ticks tomorrow or Monday back to the $135. IF AAPL continues to fall with the market (since the market IS falling) then better for me when I will have some capital saved up to buy it when it does start moving up again. I thought AAPL’s flame was over, but with new affordable Mac’s and the creation of the iPhone we could have another 2-5 years of upward growth for AAPL stock. This year I predict it to go well over $200 a share with increasing market share in the phone market and computer market. That currently would be a +$74 profit per share or around a 7000% profit on any option you buy now good until 2009.

Apple Computer iPhone, AAPL option trade, Condo Investments

Apple Computer’s announcement of its new iPhone and iTv was no surprise as the stock dropped 3 pts right before CEO Steve Jobs came out with the iPhone around noon PST. As soon as it was shown investors bought in confidence AAPL stock and it rose up 8%. The following day buyers that did not buy the first day tried to get in on the action raising the price another 5%. This is when I had the decision to sell my AAPL JAN 07 100 Calls and get out +$2000 instead of being negative -$4300 just 3 days before!

I’m pretty impressed by the sleek look of the new iPhone and I’m even considering changing my Cingular RAZR for it if it works easy. I keep my cell phone on me all the time and have a nano iPod and I actually really want my iPod in my phone. I think the iPhone idea is brilliant and will be a profit machine for growth for 2007 AAPL balance sheet. The only shortfall to the iPhone is its small harddrive for space. Until a new iPhone comes out I might not get it because its small 4/8gig harddrive is just not enough for all my songs, video podcasts, and data to store on it. This could be the new wave of ultra-small computer devices. Yes, Palm has been out for a while but it was more of a mini-desk organizer then a phone or music player. I owned the sweet Palm phone (silver) back in 2000 for $400 so buying a $500 iPhone really isn’t that big of deal. I do not find price a problem here. Just harddrive space at the moment I think will upset new iPhone users like myself.

As for the stock play I did on AAPL this trade definitely wasn’t the worst trade I’ve ever done because my GRMN trade being +300% and not selling before earnings Nov 15, 2006 is definitely the worst trade. This will have to be my 2nd worst trade of 2006 just because the smart thing would of been to buy these option contracts just days before the Mac Expo. I should of sold out at a $500 loss earlier and bought back in at $.20-30 per contract and bought over 100 and made such a bigger % and income from the trade probably half of my USCG salary in less that 3 days! I am journaling this for next time. What I did do which is good trading but isn’t bad either since it helped me get out profitable was I bought in increments when the stock price went down so my ending cost basis for my options was $1.22 per option and I sold my options at $2.05 giving me almost a 100% profit for around 35 trading days or about a month. Again, bad trading. I’m sure their are some investors that are reading this that are thinking this is a fantastic gain in such a short time, but believe me this is really bad trading, although I sold before earnings and didn’t hold my options being greedy. Because of this reason I have already improved 100% personally and more disciplined.

I saw AAPL starting to hit a ceiling today and thought to myself I’d rather have money in the bank right now then be wrong about tomorrow. I sold before the option pricing starting to go down with the close of the day. In after hours Cisco came out with a big “I’m sueing Apple over iPhone name patent”. So my thinking of I could be wrong tomorrow was a smart move. AAPL stock is pretty bullish right now so hitting $110 or even $120 by earnings is possible, but its also possible it could fall hard right after earnings. For this reason, today, I am happy in Hawaii.

My next trade will most likely be FXI Puts with its strong new trend downward all charts are showing a downtrend and lots of profit taking is happening. I don’t care to be right I just want to perform in my trading for 2007. I’d rather be wrong and sell out early and keep my money.

As for my Mexico property investment the new terms are better on a condo I looked at while I was there even closer to the beach I am in the process of putting a purchase contract on for $560,000 Pesos or converted to USD $52,000 and I’d have to put around $5000 into renovations then rent it for 4-6 months a year to break even. This condo is less expensive than the smaller home I would have liked to buy, but now I am thinking this is the better rental income investment over time.

Another idea I had was build a decent size log cabin on some land in Virginia and rent it out as a hunters lodge during hunting season, ski resort people looking for a private place, weekend retreaters, and churches for retreats. Right now I don’t feel I could really do it well without help and none of my family is really interested at the moment so I will make this a project for later possibly.

As for beginning the new year of 2007 I’m pretty happy being sold out of all my options and feel I have a fresh start of trading wiser and more disciplined this year. For one thing I’m going to stop depositing money into my stock account to trade. I’m just going to build up my savings, something I’ve never really done before. I’ll probably use that money to pay off my car loan because that would free up $400 a month I could keep saving and not worry about that loan payment by the time I’m out of the USCG.

I hope this was helpful to any young or old investors out there. Lesson today is not to be greedy and sell when you are happy.

An article I liked on Apple Computer’s hype and glory for the secretcy of it’s products was done great by a blogger from the Utility Belt. Also here is an article on the growing middle class of Mexico starting a mortgage boom that will help build Mexico’s growing economy by BusinessWeek Online. A good article on the iPhone and how it will definitely change the computer-phone industry by theStreet.com did a great job here.

An option traders New Years resolutions…

I usually don’t make new years resolutions and plans because I don’t like making statements I don’t follow through with, but I need to this year. As I stood on the fantail of our cutter in Manzanillo, Mexico watching fireworks around the entire bay (amazing) I wished to become a better trader this year. I want it so bad. I also need to stop touching the money I collect on my rental unit and let it sit in my savings account to build up an emergency fund. I told God to make me a better stock trader, please, and thanked God for the beautiful fireworks and magical happy feeling I felt all around me as the new year began with all the excitement around me. Here are my specific resolution goals for 2007

To be a better options trader in 2007 I will:
1. I have to do 25 practice trades or more a week.
2. I can only trade one option at a time.
3. If my option goes down on the second day I must sell sell sell and live another day.
4. If I am up 50% on an option in less than 2 trading days then sell it.
5. I need to finish at least one economics or stock market book a month, and work at finishing a book every 2 weeks.

To grow Assets I will:
1. Buy a second property to rent out either in my home state of Virginia or at a tourist location in another country to use as a vacation home once I’m out of the military. I can also use this property for more tax write offs to get back a bigger return or less taxes.
2. Leave alone $725 rent collected and deposited into Savings Account to build as an emergency fund. If I don’t touch it for 2007 I will have accumulated $8,700 for 12 months.
3. Any extra money I don’t use from my paycheck will go towards my second properties mortgage, trading account, and second savings account.
4. When inport find a second part-time job to pay off my new car loan to decrease debt.

To become a better person I will:
1. Try to smile more? To breakout of this stressful serious syndrome I’m always in.
2. Create and stick to some routine exercise besides surfing and tennis.
3. Volunteer for at least a few days out of the month for an organization I could help.
4. Setup a donate savings account. Find someone or group I can donate to.