Monday, July 23, 2007

Profit Taking at Alcoa...

Alcoa, Inc shareholders probably would have liked to have known that two key Executives sold large quantities of their personal shares in the aluminum giant in the middle of last week.
Today it was revealed that Alain Belda, Chairman and CEO sold 1,873,917 shares for between $45.19 and $46.48 apiece last Wednesday July 18. He had exercised options for those shares earlier that morning for between $36.51 and $41.51.
Can we say quick profit of around $10,800,000 after capital gains taxes..?
Of course he could claim he was only following the sterling example of Alcoa CFO Charles McLane, Jr. who sold 37,132 shares for between $46.69 and $46.77 the previous day (Tuesday July 17). He had exercised options on those shares that morning for between $22.56 and $29.31 each. We didn’t find out about that until last Friday (the same day Belda filed his report with the SEC).
I wouldn’t presume to suggest that either of these fine businessmen were aware that BHP wasn’t really going to buy Alcoa which along with the news that Alcoa was no longer bidding for ALCAN had driven the cost of the shares up.
I don’t own any shares of Alcoa and haven’t for several years. If I did I might be a little troubled by all this since today on an “up” day in the market Alcoa was selling at one point for $41.34 which is less than the option price Belda paid for some of the shares he sold.

Monday, July 16, 2007

Urban Legend: Day Trading at the Public Library...

I had an interesting talk with a fellow on Saturday. He was an engineer by trade and we mostly talked about riding our bikes however the discussion began when he asked me about the current state of Bally Total Fitness, the health club we both belong to.
I began following BTF* closely about a year ago by setting a google news alert on it so I’m pretty up-to-date on most of the corporate machinations which have been going on about the preplanned bankruptcy and its opposition. I mentioned that the stock was worth about 54 cents a share and he thought that it might be a good investment, an idea which I discouraged pointing out that in a bankruptcy the stock gets canceled and the equity holders lose everything.
He then asked me if I’d heard about “these guys that were day trading using the computers at the public library”. He then pointed out that he’d heard that they each were making about $200 a day. I expressed my skepticism at this suggesting that all you need is one really bad day when the market is getting beat up to lose everything.Here are some of my other thoughts on the subject:
I’ve heard news journal reports that the vast majority of those who try to both formally and informally “day trade” lose their shirts.
I don’t day trade but I do engage in “trade timing” when I am selling and buying. ( I don’t have any real secrets here but I have discovered that I am able to buy stock cheaper than the visible current ticker prices, enough usually to cover the fees of both buying and selling). One thing I am doing at that moment is I have multiple browsers open. Have you ever used even the “modern broadband access computers” in a public library? To someone like me they are really about what you can’t do. You’re limited to one browser at a time and it is cumbersome and unfriendly. You have a default search engine (usually MSN because of its affiliation with “explorer”) which resists any attempt to "googlize" or "yahooize" it. Other than to do a check of my portfolio I’ve found the public library’s computers to be worthless for activities which require internet agility.
The other thing is the limit on time. At my public library you may only use the computers for 120 minutes a day.If you were making $ 200.00 a day why would you even be using the computers at the public library?
In short I believe that if anyone is successfully day trading at the Public Library they are doing it there for a very short time.

* not the stock symbol which is “BFTH”

Claudia "Lady Bird" Johnson: 1912 - 2007

I think that I shall never see a billboard lovely as a tree.
Perhaps, unless the billboards fall,
I'll never see a tree at all.

Ogden Nash

..................................Lady Bird Johnson..........................

Thanks... We haven't all forgotten...

Wednesday, July 11, 2007

Off with their heads...

The ugly side of China has reemerged this week with news of the execution of Zheng Xiaoyu, the former Drug and Food Minister of the People’s Republic.
Zheng had been convicted of taking $800,000 + worth of bribes during his tenure in office from 1998 to 2005. It represents the government’s attempt to minimize the problem as of late of various unhealthy substances finding their way into products the Chinese sell worldwide. By eliminating the person at the top of that area of the culture the problem is instantly solved, so their thinking goes. Normally someone in China having committed public bribery on that scale would be denounced, forced to make restitution and given a two year prison sentence.China has been trying for the last decade to fashion it’s own brand of capitalism, something somewhere between the “Singapore economic model” and a Marxist command economy. The opportunity to show itself to the world through the 2008 Olympics is a matter of immense pride to its leaders. Now a rush is on to bring off that event with a minimal amount of dysfunction, as the report of the execution was accompanied by the proclamation that the food to be served at the Olympics would be contamination free.There are plenty of other problems to be solved in the next 12 months, traffic, air pollution in the host city and the logistics of properly providing hospitality to its Olympic guests. Let’s hope that no more people will be killed in the name of putting China’s best foot forward.

Wednesday, July 04, 2007

Happy Fourth!

Speakeasy Speed Test