Penguin's Golden Egg

Performance Check

2012-02-11T14:49:00.001-05:00

Five Stages of Trader Evolution

2012-02-09T23:35:00.001-05:00

Gambler. This is the oldest trader's ancestor. He was fairly naive, highly emotional and addicted gambler. The gambler perceived the market as his casino-like entertaining arena. He bet large and he bet often. His goal was to get rich quick. Most, if not all, of his capital was quickly distributed to more evolved traders.
Hunter. He came to understanding that markets are not random, but quite predictable. His quest was to find a single technical indicator which will make him rich. The hunter spent countless hours back testing expensive software algorithms and other people's methods. Unfortunately, most of his capital was promptly distributed to more evolved traders. A great deal of traders stayed stuck in this stage of development for a relatively long time.
Analyst. He gave up the quest for "holly grail". He came to understanding that the market is much more complex and dynamic place, so he applied his analytical skills to conquer it. The analyst developed better understanding of market interdependency and correlations. He was able to develop fairly sophisticated methods for identifying low risk/high reward trading opportunities. Unfortunately, he was not the master of his emotions. He would sell his winners too early and hang onto losers for too long. His capital was distributed over time, at relatively slow rate, to highly developed traders.
Manager. At this stage, our ancestors got grip of proper money management technique, which enabled them to control their emotions in the market place. The manager was extremely systematic in his decision making process. He fully understood importance of active account management, position sizing and capital preservation. Unfortunately, he was often under-capitalized, which affected his bottom line via high commissions and other cost of doing business. Also, he could not commit to trading full time. Although, he was not net loser, his results trailed those of professional traders.
Professional trader. The final stage of trader evolution. Properly capitalized, fully developed and highly motivated, the professional trader takes a full advantage of his predecessors. He is aware of his weaknesses, so he dedicates time and energy to work on them. He is humble, unemotional and self-sustaining. His only goal is to trade well.

Which stage are you at?

A Rising Tide Lifts Up All Boats

2012-02-08T18:42:00.001-05:00

S&P500 +0.2%
S&P500 +7.3% YTD
ROTH IRA portfolio +10.2% YTD
401k portfolio +7.4% YTD
February picks +4.6% (members)
2012 picks +18.9% (members)
Net worth gain $25K YTD

Statistics

2012-02-08T09:24:00.001-05:00

"Statistics are like prisoners under torture: with the proper tweaking you can get them to confess to anything." ~ John Rothchild

Economic Calendar This Week

2012-02-07T09:35:00.002-05:00

Tuesday
3:00 PM Consumer Credit Dec

Wednesday
7:00 AM MBA Mortgage Index 02/04
10:30 AM Crude Inventories 02/04

Thursday
8:30 AM Initial Claims 02/04
8:30 AM Continuing Claims 01/28
10:00 AM Wholesale Inventories Dec

Friday
8:30 AM Trade Balance Dec
9:55 AM Mich Sentiment Feb
2:00 PM Treasury Budget Jan

2012 Picks - Update

2012-02-05T00:04:00.002-05:00

2012 picks, published in December at Members Only site, continued their strong run last week. This portfolio gained +3.89% last week vs. S&P500's +1.42%. It has outperformed the main market index in all but one week since inception. Big winners this week included: CYOU +14.66%, CMI +11.99%, MGM +8.29%, and CROX +6.08%. After falling for three consecutive weeks, RES finally stabilized this week. However, the stock is still the worst performing equity in the portfolio. It is interesting to note that BRLI, CMI and MGM gained in every single week (7 weeks) since the portfolio inception. If you think stock lists like this one can be useful to you, consider joining Members Only site, where I share all my picks, live trades, and all retirement portfolio positions.

Performance Check

2012-02-04T15:13:00.001-05:00

Net Worth Growth in January +4.4%

2012-02-04T15:11:00.000-05:00

When it comes to net worth growth, January (+4.4%) was our best month since last April (+5.2%). The assets column decreased from 34% (September 2011) to 32% (January 2012). It is getting very close to the 30% floor, which I set for us. As we approach 30%, I will either pay down a portion of our mortgage, or purchase another property to boost this asset class.

I share our retirement portfolio and trading account positions at the Members Only site.

Roaring Bull Market

2012-02-03T22:59:00.000-05:00

S&P500 +1.46%
Strong jobs report confirms market's strength
The bull market is roaring towards four-year highs
Put $8.8K to work in the retirement portfolio (members)
Closed KMT trade (members)
S&P500 +6.9% year-to-date
401k +7.3% year-to-date
ROTH IRA +10.0% year-to-date
Annual membership $50

Strong Jobs Report

2012-02-03T09:18:00.000-05:00

Unemployment rate dropped down to 8.3%
Fifth consecutive month of decline
Unemployment rate at three-year low
603K new jobs added in the last three months
Fewer people out of work since early 2009
Unemployed and underemployed down from 15.2% to 15.1%
Pay increased

Waiting For The Jobs Report

2012-02-02T23:15:00.001-05:00

S&P500 +0.1%
S&P500 +5.4% year-to-date
Mid-day attempt of sell-off failed (again)
Real market strength or complacency?
Big jobs report coming up tomorrow 8:30AM
Closed HMSY trade today +4.2%
ROTH IRA portfolio +9.3% year-to-date

S&P500: Eyeing 1370

2012-02-01T19:03:00.000-05:00

S&P500 +0.9%
Very strong tape with good economic data flow
S&P500: three-year high in sight
One new position today (members)
Net worth: $450K in sight

Good Times

2012-01-31T18:05:00.000-05:00

S&P500 -0.05%
Market's best January since 1997
S&P500 +4.4% year-to-date
Added $$ to one position today (members)
Posted February trade picks (members)
Net worth largest monthly growth (+4.5%) since April'11

Holding The Line

2012-01-30T19:05:00.000-05:00

S&P500 -0.25%
S&P500 still holding strong above the 1300-mark
Despite today's losses, the bulls seem to be still firmly in control
One stop loss order activated today (members)
No changes to the retirement portfolio
ROTH IRA portfolio +7.5% year-to-date
Net worth growth +3.4% year-to-date

Economic Calendar This Week

2012-01-30T09:39:00.000-05:00

Monday
8:30 AM Personal Income Dec
8:30 AM Personal Spending Dec
8:30 AM PCE Prices - Core Dec

Tuesday
8:30 AM Employment Cost Index Q4
9:00 AM Case-Shiller 20-city Index Nov
9:45 AM Chicago PMI Jan
10:00 AM Consumer Confidence Jan

Wednesday
7:00 AM MBA Mortgage Index 01/28
8:15 AM ADP Employment Change Jan
10:00 AM ISM Index Jan
10:00 AM Construction Spending Dec
10:30 AM Crude Inventories 01/28
2:00 PM Auto Sales Jan
2:00 PM Truck Sales Jan

Thursday
7:30 AM Challenger Job Cuts Jan
8:30 AM Initial Claims 01/28
8:30 AM Continuing Claims 01/21
8:30 AM Productivity-Prel Q4
8:30 AM Unit Labor Costs Q4

Friday
8:30 AM Nonfarm Payrolls Jan
8:30 AM Nonfarm Private Payrolls Jan
8:30 AM Unemployment Rate Jan
8:30 AM Hourly Earnings Jan
8:30 AM Average Workweek Jan
10:00 AM Factory Orders Dec
10:00 AM ISM Services Jan

2012 Picks - Update

2012-01-28T09:38:00.001-05:00

RES (-10.77%) is currently the worst performing among 12 stocks. Excluding three losers (RES, PTEN, VASC), other nine picks are all in double digit gains. Search algorithm and all parameters for 2012 picks were published at the Members Only site on December 17, 2011. I use this list as a source for trade ideas. I already traded a handful of them since portfolio inception (12/17/11). All 12 trade set-ups, with entry and exit points, are regularly published at the Members Only site.

Performance Check

2012-01-28T09:16:00.001-05:00

Video Library

2012-01-27T18:46:00.001-05:00

Warren Buffett - Interview with Charlie Rose (56 min)

John Bogle - Interview with Lawrence R. Velvel (60 min)
Daniel Solin - Authors@Google (63 min)
William Bernstein - Authors@Google (58 min)
Mark Hebner - Interview with Dan Solin (23 min)
Warren Buffett - Talk at University of Florida (87 min)
Jim Rogers - Interview with Charlie Rose (56 min)
Warren Buffett & Bill Gates - Interview with C. Rose (57 min)
Ha-Joon Chang - Bad Samaritans (71 min)
Kevin Phillips - Bad Money (85 min)
Burton Malkiel - Investment Opportunities in China (61 min)
Ian Ayres - Super Crunchers (61 min)
Paul Krugman - Prize Lecture (44 min)
Nassim Taleb - Interview with C. Rose (21 min)
David Leinweber - If You Had Everything Computationally Where Would You Put it, Financially? (65 min)

Christopher Whalen - How Money & Debt Build The American Dream

2011 Goal Reached 27 Days Late

2012-01-27T12:39:00.000-05:00

Our net worth goal for 2011 was $440K. We fell short of it by almost $15K. Well, twenty-seven days into 2012, we reached our 2011 target. So, as far as 2012 goal goes, the clock starts ticking today. Our target is $559K, which translates into a 27% growth rate - from today's $440K. Let's see if we can catch up with it in the next 11 months and 4 days...

Small Profit Taking Day

2012-01-26T11:44:00.004-05:00

Today, I collected some profit on a couple of positions I had. First, I sold 333 shares of PIO at $16.93. This position was originally acquired on 11/25/11 at $15.01. Total profit: $639. Second, I sold 92 shares of IYR at $60.78, which netted a profit of $563. All my transactions are posted within minutes of their execution at the members only site. If you have any comments or questions, please feel free to contact me at: penguinsgoldenegg@yahoo.com.

Members, please log-in for more details on recent transactions...

Low Interest Rates Feeding The Bull

2012-01-25T18:13:00.000-05:00

S&P500 +0.9%
S&P500 +5.4% year-to-date
Feds winked, the market surged
Closed one partial trade today
No changes to 401k portfolio
ROTH IRA +6.9% year-to-date
2012 picks +16.8% since 12/17/11

Consolidation & Bull Domination

2012-01-23T23:11:00.002-05:00

S&P500 +0.05% today
S&P500 +4.6% year-to-date
Bulls continue to dominate
Healthy consolidation day
ROTH IRA portfolio +5.6% YTD
401k portfolio +5.1% YTD

Economic Calendar This Week

2012-01-22T14:14:00.000-05:00

Wednesday
7:00 AM MBA Mortgage Index 01/21
10:00 AM Pending Home Sales Dec
10:00 AM FHFA Housing Price Index Nov
10:30 AM Crude Inventories 01/21
12:30 PM FOMC Rate Decision Jan

Thursday
8:30 AM Initial Claims 01/21
8:30 AM Continuing Claims 01/21
8:30 AM Durable Orders Dec
8:30 AM Durable Orders -ex Auto Dec
10:00 AM New Home Sales Dec
10:00 AM Leading Indicators Dec

Friday
8:30 AM Chain Deflator-Adv. Q4
8:30 AM GDP-Adv. Q4
8:30 AM Chain Deflator-Adv. Q4
9:55 AM Michigan Sentiment - Final Jan

Lucky 7's

2012-01-22T13:54:00.000-05:00

Another strong week for 2012 picks. The portfolio of 12 stocks gained 3.43% last week, which brought up the total return to +14.23% (since its inception). All the picks and the search algorithm were published at the members only site in December. I regularly publish my search algorithms and that's where most of my trades originate from. The best performers last week included three "Lucky 7's": CYOU +7.82%, MYGN +7.45% and CMI +7.18%.

SLV Trade - Update

2012-01-22T00:30:00.002-05:00

Four months ago, I laid out detailed trade plan for SLV at the members only site. Twenty-four trades later, the total return on invested capital reached 11.9% (42.8% annualized). Average gain per trade was $51.72, with average holding period of only a couple of days. The trading system I am using here is fairly simple. It relies solely on ETF's volatility. All details are posted at the members only site. If you are not a member yet, this is just one of the investment & trading perks you are missing out on. I post all my trades at the site within minutes of execution. By the way, all 24 trades in SLV trade made money - every single one of them. Have a great weekend! :-)

Performance Check

2012-01-21T11:55:00.000-05:00

Catching Up With The Market

2012-01-21T00:54:00.002-05:00

S&P500 +0.1% today
S&P500 +2.0% this week
S&P500 +4.6% year-to-date
S&P500 up every day this week
SLV trade racked up $1,241 (members)
Retirement portfolio on-par with market
401k portfolio +4.6%
ROTH IRA portfolio +4.7%

Information Overload

2012-01-20T10:53:00.000-05:00

Instead of trying to load your mind with all available financial news (information), try to focus only on information which is needed for your investing strategy. Rather than absorbing random news, pause for a second and ask yourself which kind of information is critical for the successful execution of your strategy. If you carefully dissect your means and goals, you could discover flaws in your basic approach to information. Information is useful only if it feeds into your strategy.

Theory vs. Practice

2012-01-20T09:23:00.000-05:00

"In theory there is no difference between theory and practice. In practice there is." ~ Yogi Berra

Going The Distance

2012-01-19T17:39:00.000-05:00

S&P500 +0.5%
Another day, another win for the bulls
Jobless claims sharply down
Two-century chart of interest rates
Unearned income taxation
Tax advantage of 401k's
Whole life insurance or term?
Closed one trade today (members)
Two new investments ~ $16K (members)

Higher & Higher

2012-01-18T18:37:00.001-05:00

S&P500 +1.1%
S&P500 above the 1300-barrier
More buying brings even more buyers
Home-builders (ITB) up 62% since Oct lows
Standing up against Web censorship
Trading account updates (members)
No changes made to 401k portfolio

Trading Account Update

2012-01-18T12:57:00.000-05:00

Closed HMSY trade (members update)
Partial sell on SLV (members update)
Initiated one new trade (members update)
Continuing to hold CROX (members update)
Trading account +1.6% month-to-date
Trading account +23.7% two year return

Pushing Higher On All News

2012-01-17T18:56:00.001-05:00

S&P500 +0.4%
Another win for the bulls
Firing on (almost) all cylinders
Greece solution in sight?
China still in a good shape
Gold vs. debt ceiling
Net worth: $432K

Economic Calendar This Week

2012-01-15T15:17:00.001-05:00

Tuesday
8:30 AM Empire Manufacturing Jan

Wednesday
7:00 AM MBA Mortgage Index 01/14
7:00 AM MBA Mortgage Purchase Index 01/14
8:30 AM PPI Dec
8:30 AM Core PPI Dec
9:00 AM Net Long-Term TIC Flows Nov
9:15 AM Industrial Production Dec
9:15 AM Capacity Utilization Dec
10:00 AM NAHB Housing Market Index Jan

Thursday
8:30 AM Initial Claims 01/14
8:30 AM Continuing Claims 01/07
8:30 AM Core CPI Dec
8:30 AM CPI Dec
8:30 AM Core CPI Dec
8:30 AM CPI Dec
8:30 AM Housing Starts Dec
8:30 AM Building Permits Dec
10:00 AM Philadelphia Fed Jan
11:00 AM Crude Inventories 01/14

Friday
10:00 AM Existing Home Sales Dec

Performance Check

2012-01-14T11:09:00.001-05:00

2012 Picks Pushing Higher

2012-01-14T00:47:00.000-05:00

Another strong week for 2012 picks. The best performing stock in the portfolio this week was CROX +19.91%. Although five, out of twelve, stocks ended the week in red, the portfolio still advanced 2%. In the last four weeks, since its inception, the portfolio has gained 10.45% vs. S&P500's 5.69%. I expected it would outperform the main market index, but I did not expect such a wide margin in a relatively short period of time. All my search engine picks are published at the members only site. Almost all of my trades originate from similar lists, which I generate using my own search algorithms. (Note: Last week's result was adjusted slightly downwards due to quoting error)

Friday's Reading List

2012-01-13T09:12:00.002-05:00

This is pushing futures lower this morning
Four solutions to US debt chaos
Five stocks for Real Estate rebound
Five dividend ETF's for 2012
Nine ETF's for an eventual EU rebound
2012 worse than 2011?
With two open positions in my trading account, this could be very interesting morning...

Stocks Up On Bad News = Bull Market

2012-01-12T23:21:00.001-05:00

S&P500 +0.2% (+3.0% YTD)
Panic buying ahead? :-)
Bulls still firmly in control despite bad news
EU debt concerns subside
Recovery goes back to square one?
Two new positions/trades today (members)
One old position/trade closed (members)
Another shuffle ($14K) between asset classes (members)

Last 9 Days At The Members Only Site

2012-01-11T22:56:00.003-05:00

January 11 (3 posts): Market analysis, retirement portfolio update, and trade watch list update
January 10 (1 post): LIVE closed three trades: MIND (+6.5%), SLV (+4.3%), AKRX (+0%)
January 9 (1 post): LIVE three investments totaling $34K
January 8 (1 post): Investment idea
January 7: (day off)
January 6 (1 post): LIVE three new trades: MIND, SLV, AKRX
January 5 (3 posts): Investment position overview, two open limit orders, and market analysis
January 4 (4 posts): Asset class breakdown, retirement portfolio position overview, investment position review, and 2012 welcome note
January 3 (2 posts): Investment position review, and open limit buy orders

Membership info

Picasso On Success

2012-01-11T22:21:00.000-05:00

"Success is dangerous. One begins to copy oneself, and to copy oneself is more dangerous than to copy others. It leads to sterility." ~ Pablo Picasso

Market For No Bearish Traders

2012-01-11T22:12:00.004-05:00

S&P500 +0.03%
Stayed at home with a cold :-(
The bulls held their ground
Economy is back from the brink of recession?
EU economy recovering?
EU's new warnings of debt downgrades
Estimate capital gains tax calculator
Turning foreclosures into rentals
Natural gas continues to slide
No new trades today
After Monday's big move, 401k already on par with the S&P500!

Five-Month High

2012-01-10T22:24:00.000-05:00

S&P500 +0.9%
The market came to life in 2012
S&P500 at five-month high
Can China avoid hard landing?
New stocks & the dollar correlation
Closed three trades today (members)

Big Move

2012-01-09T14:37:00.001-05:00

Today, we put to work 40% of available cash from our retirement portfolio ($36.1K out of $85.4K). I identified three relatively strong spots to invest the cash. This is one of the biggest moves we've made in a long time...

Members, please log-in for all details.

Economic Calendar This Week

2012-01-08T23:55:00.000-05:00

Monday
3:00 PM Consumer Credit Nov

Tuesday
10:00 AM Wholesale Inventories Nov

Wednesday
7:00 AM MBA Mortgage Purchase Index
10:30 AM Crude Inventories 01/07
2:00 PM Fed's Beige Book Jan

Thursday
8:30 AM Initial Claims 01/07
8:30 AM Continuing Claims 12/31
8:30 AM Retail Sales Dec
8:30 AM Retail Sales ex-auto Dec
10:00 AM Business Inventories Nov
2:00 PM Treasury Budget Dec

Friday
8:30 AM Trade Balance Nov
8:30 AM Export Prices ex-ag. Dec
8:30 AM Import Prices ex-oil Dec
9:55 AM Mich Sentiment Jan

Performance Check

2012-01-07T11:03:00.000-05:00

2012 Picks - Update

2012-01-06T16:55:00.000-05:00

After last week's snooze, 2012 picks did well this week. The portfolio of twelve picks closed the week on a high note, with only one stock closing in red. Since its inception, this portfolio clocked +7.73% vs. S&P500's +4.77%. Although it is still very early to make any conclusions about 2012 portfolio performance, it is nice to see it heading in the right direction. Total returns exclude dividends. In addition to yearly picks, I publish my top monthly picks at the members only site. Most, if not all, of my trades originate from these search lists.

New Trades

2012-01-06T12:12:00.000-05:00

I entered two new trades this morning, and added some capital to the third one. There is a fourth order sitting in the system, but judging by the current market action, I doubt it will get fulfilled. Based on what I am seeing in the market today, I believe odds have titled once again to one side of the market. Risk/reward ratio seems favorable, so I decided to put some trading capital at work.

Members, please log-in for details on all of my positions and trades...

Jobs Report - December

2012-01-06T11:37:00.000-05:00

Unemployment rate down to 8.5% (three-year low)
200K jobs added in December (2nd highest since May)
212K jobs created in private sector
12K jobs cut by government
Private sector adding jobs for 21 consecutive months
0.94M jobs added in 2010
1.60M jobs added in 2011 (70% increase YoY)

Overall, not a bad report. This report is in line with relatively strong numbers we saw at the beginning of 2011: Feb, Mar and April. Is economy coming back to the right track? Is the bull market of 2009 still well and alive? I am still skeptical, but the data might be telling us that sluggish recovery is still alive...

Friday's AM Links

2012-01-06T00:11:00.002-05:00

The year of the dividend
China faces social unrest
Stock market performance by phase
Europe again worries about debt
Jobs data analysis ahead of Friday's report
Is Amazon the Netflix of 2012?
How to do your own taxes

Mid-Day Reading List

2012-01-05T16:16:00.003-05:00

Financials turned stocks higher
EURO at 15-month low vs. dollar
Three reasons to avoid China
S&P500 long-term EPS & P/E
China's "demographic tsunami"
Best performing stocks in 2012

No Growth Ahead

2012-01-05T11:47:00.001-05:00

"The fact that equities are being sold down, despite the lowest interest rates in recent history, simply means that the market doesn't see growth ahead for very many businesses." ~ John Malone

Pulling Back Ahead of Jobs Report

2012-01-05T10:55:00.000-05:00

After two days of gains, S&P500 pulled back this morning (currently hovering around -0.7%). European markets are down too: FTSE -0.8%, CAC -1.3%, DAX -0.5%. Breaking below this morning's lows (1265 for the S&P500) would probably bring more sellers to the table. Keep an eye on it...

December jobs report is due tomorrow, before the opening bell. The unemployment rate is expected to move from 8.6% to 8.7%. Any deviation from market expectation could send stocks flying either way. I don't think we shall see anything spectacular and out of whack tomorrow. Last week's initial claims were in line with market expectations and a little bit down from the prior week.

Economic Calendar This Week

2012-01-05T10:33:00.000-05:00

Thursday
7:30 AM Challenger Job Cuts Dec
8:15 AM ADP Employment Change Dec
8:30 AM Initial Claims 12/31
8:30 AM Continuing Claims 12/24
10:00 AM ISM Services Dec
11:00 AM Crude Inventories 12/31

Friday
8:30 AM Nonfarm Payrolls Dec
8:30 AM Nonfarm Private Payrolls Dec
8:30 AM Unemployment Rate Dec
8:30 AM Hourly Earnings Dec
8:30 AM Average Workweek Dec

2012

2012-01-05T07:00:00.000-05:00

Our goal for 2012 is to grow net worth by 31.5%. Moving forward, I bundled stocks and cash, from previous reporting format, into one: "stocks". At the members only site, this row is broken down to the equity/cash positions level. No changes were made to how assets and trading account are reported. As you can see from the table below, I drove our targets to round numbers. Per my original calculation, both numbers (assets and stocks) indeed came close to those nice round numbers.

This would put us $559K, which is a significant milestone for our 2015 goal = $1M. Two other milestones include: 2013 ($699K) and 2014 ($852K).

2011 Review

2012-01-05T00:00:00.000-05:00

One year ago, I published our 2011 net worth projections (see original post). Our goal was to grow our nest egg by $79K, or 22%. That would bring us to $440K.

Unfortunately, we felt short of that target. Our growth was 17.9%, which is not that bad. Since I moved some money from cash to trading account, it is best if these two are analyzed together. Our goal was bring them up to $70K in 2011. We were $4K short. Assets made up that difference by growing $5.7K more than planned. So, our short-fall comes from lagging equity performance ($218.3K vs. $235K). On the flip side, we closed 2011 with highest monthly reading (December: $425K)

Although we failed to reach our goal, I still believe we did OK in 2011. It is important to state that last summer we traveled a lot, since I was on my two-month sabbatical. If it wasn't for trip related expenses, we would have reached our target. However, we do not regret it, since that was a great adventure that took us to seven countries, two continents, and a long drive across entire state of California. Priceless memories.

2012 Welcome Note

2012-01-04T14:36:00.003-05:00

When it comes to financials, last year was not stellar by any measure. Our net worth grew by 17.9%, which was below our target: 22.2%. During the last two quarters of 2011, I switched our holdings to more defensive mode. This meant moving some capital from equities to cash. As we all know, sitting in cash does not earn you much these days, so that had a negative impact on our growth. In a retrospect, I think we did the right thing by going more defensive. World economy was, and still is, on the brink of a new recession. I think EU is counting its last days in its present form. Either a full blown break-up or some kind of re-structuring is imminent. Either scenario would most likely send world financial sector into abyss of a brand new recession. Current manufacturing activity in EU is implying that the recession has already started. EU debt de-leveraging will be, in my opinion, the biggest challenge for the markets in 2012. It is not excluded we see a complete collapse of some EU banks. US housing is only a quarter of a size of EU bond market, which is on the currently on the line. That alone should be a warning to all market participants that EU crisis could be much worse than 2008 meltdown of US housing industry and financial sector. I think EU crisis will implode this year. Consequences are to be seen.

Despite all gloom and doom talk, I am really looking forward to the year which is ahead of us. The plan is to grow our net worth by 31.5% in 2012. By all means, that is a very ambitious plan. However, I do believe we can achieve it. Major market meltdown in Q1 or Q2 could open up some bottom fishing opportunities. Since we have a significant amount of "fresh powder" (cash), that meltdown would be welcome and even desirable. We are, also, planning on investing some of our cash into rental properties. Housing in Arizona has reached some unbelievable levels when it comes to renting rate vs. property value ratio. At minimum, houses are renting for 1% per month of its current market value. That 1% is achieved if you overpay for a property and rent for less than competition. In other words, 1% return per month is achieved if you do not know what you are doing. That is a very lucrative proposition, but not sustainable.

When it comes to this site, I am happy to say that the site has been visited by 22,800 unique visitors in 2011. Since I do not invest any money in advertisement, I think that is a great deal of readers. Roughly, about one third are returning visitors, while two thirds are first-timers. The site is designed as a free preview for the Members Only site, so I do not really invest that much time in updating it. However, it seems that even limited content still attracts a decent number of readers. I would like to thank you all for visiting and reading Penguin's Golden Egg. Without you and members, this project probably would not be what it is today. I am dedicated to adding more content to the free site in 2012. However, my primary focus will remain to be Members Only site, where all portfolio relevant information is currently shared.

Thank You again for the support you provide to this site. Your inputs, comments and questions are definitely helping me make improvements. If you have any, please do not hesitate to contact me at: penguinsgoldenegg@yahoo.com.

Let's make is a great year!!

Zero Growth in December, Q4 Up 4.4%

2012-01-02T16:10:00.001-05:00

Performance Check

2012-01-02T15:58:00.002-05:00

Net Worth 2011

2012-01-02T15:52:00.001-05:00

2011 - Flat Year

2011-12-30T21:25:00.000-05:00

Flat year for equities
S&P500 on Jan 1: 1257.64
S&P500 on Dec 30: 1257.60
2007 vs. 2011: spooky parallels
Trading account +7.4%
One new trade today (members)

2011, Two Days To Go

2011-12-29T01:27:00.000-05:00

S&P500 -1.3% today
S&P500 -0.6% year-to-date
Gold's biggest meltdown since 2009
Added $$ to one trade (members)
Only two trading days left in 2011
Net worth 4% below 2011 target

Mid-Day Reading List

2011-12-27T15:43:00.003-05:00

Debt ceiling drama - here we go again!
Consumer confidence up
Home prices down more than expected
Market is returning to normalcy?
2012: stocks +10% or a doomsday?
Geopolitics drives oil prices higher
Dow reverse head and shoulder?
Angels (excellent read!)
Three trading days left in 2011

2012 Goals

2011-12-25T05:18:00.003-05:00

Net worth - Reach $559K in total net worth. Assuming we close 2011 at $425K (where we are 5 days before the year end), this translates into a 32% growth rate for 2012. It is indeed a highly ambitious, yet achievable, goal. Next year should be the year when we reach a half point on our journey to $1M, which stared at $0 in 2004. Our goal is to reach $1M by the end of 2015.
Rental property - Add a rental property to our asset portfolio. We are looking at ~ $100K rental house in a broader Phoenix area, which right now rents for about 1% per month of the house value (after tax, HOA and insurance). Excellent return! Most likely, this will be an all-cash partnership deal, and I expect to close in the first half of 2012.
Retirement account 10% ahead of S&P500 - Beat the main market index by a margin of 10%. Over the last six years, I managed to beat it by an average of 8.1% per year. However, I beat it by more than 10% in only two out of six years (2007 & 2008). To make it even more difficult, I am combining 401k and a slower growing ROTH IRA portfolio into one (Retirement Portfolio).
Trading account +20% - Combined return for the last two years in my trading account was 21.5%. Basically, the stretch goal for the next year is to have that return in one year. It will not be easy, but I am up for the challenge. Having open trading policy at the members only site does not make things any easier due to, what's often referred as a, "The Fishbowl Effect" (a feeling of or reality wherein every move you make is analyzed, noted, scrutinized, and filed away to judged against the behavior of observers).
Run 700 km - By running on average 2km per day should be sufficient to reach this goal. Usually, I don't run every day, so average run is more like 5km/session. Over the last four months I had no issue in keeping up with this average, so my goal is to keep at it and successively maintain it over the next twelve months.
Perfect blood test - Being vegetarian and staying active are definitely helping get my triglyceride in check. My goal for 2012 is to get the perfect blood test readings.
Take time off to relax and energize - Schedule two vacation trips for our family in 2012. Taking time off is very important, but sometimes we get so busy with day-to-day hectic life that we forget the importance of escaping daily grind. By placing this item on my top seven goals for 2012, I want to make sure we plan, at least, two week-long family trips next year.

Performance Check

2011-12-24T10:51:00.002-05:00

NYSE Holiday Schedule

2011-12-22T21:10:00.001-05:00

Friday (Dec 23, 2011) - Open
Monday (Dec 26, 2011) - CLOSED
Tuesday (Dec 27, 2011) - Open
Wednesday (Dec 28, 2011) - Open
Thursday (Dec29, 2011) - Open
Friday (Dec 30, 2011) - Open
Monday (Jan 2, 2012) - CLOSED

2011, Not Much Left

2011-12-21T18:51:00.003-05:00

S&P500 -1.1% YTD
Retirement account +2.3% YTD
Trading account +7.1% YTD
I think 2011 looked a lot like 2007
Will 2012 be like 2008?
Six trading days left in 2011

Up & Down To Nowhere

2011-12-20T23:17:00.000-05:00

S&P500 danced above break-even line for 7 months this year, and 5 more below it. In the end, it seems that we could close the year at the same price level where we started it...

Strong Tuesday Open

2011-12-20T09:42:00.000-05:00

The market is eager to push higher this morning on housing starts numbers. Home-builders are leading the way higher (ITB +3.6%). Other sectors with notable gains at the open include: energy (XLE +2.9%), basic materials (XLB +2.9%), financials (XLF +2.3%), consumer cyclicals (+2.0%), etc. Precious metals are, also, bouncing back nicely: SLV +2.5% and GLD +1.4%. The key for the bulls will be just to stay above this morning's lows (open).

Monday Notes

2011-12-19T23:55:00.001-05:00

S&P500 -1.2%
One small trade today
AT&T's adoption of T-Mobile dead
Kim Jong II is dead too
BoA back to Great Recession levels
Net worth in December -1.2%

Yogi's Wisdom

2011-12-19T22:41:00.000-05:00

“You can observe a lot just by watching.” ~ Yogi Berra

Performance Check

2011-12-17T10:56:00.001-05:00

Warnings From Europe, No Rally

2011-12-16T18:05:00.000-05:00

S&P500 +0.3%
Back-to-back marginal gains in equities
Europe inching closer to implosion
Precious metals bounced back
One new trade today (members)
Nine trading days left in 2011

Precious (Small) Victory For The Bulls

2011-12-15T23:43:00.000-05:00

S&P500 +0.3%
Three-day losing streak broken
Jobless claims at 3-year low
Precious metals up in 2012?
Ten trading days left in 2011
Net worth $19K short of 2011 goal

Three In a Row

2011-12-14T23:14:00.001-05:00

S&P500 -1.1%
European stocks down
No help coming from the Feds
S&P500/Gold correlation spikes
Top 10 stock lists for 2012
Extremely busy day at work
One new trade (members)
Net worth: $420K

Party Goes On

2011-12-14T00:41:00.000-05:00

S&P500 -0.9% today
Sell-off ahead of Feds announcement
S&P500 -2.5% YTD
Two new trades today (members)
Net worth growth +16.8%

Sell-Off Party

2011-12-12T22:43:00.003-05:00

S&P500 -1.5%
Sell-off with afternoon rebound
One trade today (members)
Two-day Feds meeting ahead
Jim Rogers Bloomberg interview
Mark Faber Bloomberg interview

Economic Calendar This Week

2011-12-11T12:53:00.000-05:00

Monday
2:00 PM Treasury Budget Nov

Tuesday
8:30 AM Retail Sales Nov
8:30 AM Retail Sales ex-auto Nov
10:00 AM Business Inventories Oct
2:15 PM FOMC Rate Decision Dec

Wednesday
7:00 AM MBA Mortgage Index 12/10
8:30 AM Export Prices ex-ag. Nov
8:30 AM Import Prices ex-oil Nov
10:30 AM Crude Inventories 12/10

Thursday
8:30 AM Initial Claims 12/10
8:30 AM Continuing Claims 12/03
8:30 AM PPI Nov
8:30 AM Core PPI Nov
8:30 AM Empire Manufacturing Dec
8:30 AM Current Account Balance Q3
9:00 AM Net Long-Term TIC Flows Oct
9:15 AM Industrial Production Nov
9:15 AM Capacity Utilization Nov
10:00 AM Philadelphia Fed Dec

Friday
8:30 AM CPI Nov
8:30 AM Core CPI Nov

China Real Estate Hard Landing

2011-12-11T11:31:00.000-05:00

How To Save Money In 2012?

2011-12-10T12:57:00.001-05:00

Here are four cost cutting initiatives for 2012. Notice that none of the items listed below negatively impacts our current quality of life. These four initiatives should result in a total minimum savings of $2,300 in 2012.

Healthcare - Switching to Health Saving Account (HSA). Our out-of-pocket medical bills (healthcare insurance + expenses) in 2011 were about $5,000 (after-tax dollars). For us, paying $5,000 in after-tax dollars is equivalent to $6,250 pre-tax dollars. In 2012, we will fund HSA with $5,000 pre-tax dollars. Total savings: $1,250.
Groceries - Switching to vegetarian diet (+ fish). To improve overall quality of our health, we recently switched to vegetarian diet (complemented with fish). Positive change we experienced over the last four months encouraged us to continue with this new lifestyle in 2012. Switching to plant based diet had a great impact on our grocery bills. Replacing more expensive protein (meat) with less expensive protein (beans & nuts) saved us at least $50 per month. Minimum savings for 2012: $600.
Communication - Switching to cheaper cell phone plan. On average, per our current plan we were paying $153.30 per month. Per new plan, our monthly bill was reduced to ~$95, which represents monthly saving of $58.30. Total gross yearly savings = $58.30 x 12 = $700. To break our contract 12 months ahead of its expiration, we had to pay a $300 penalty. Therefore, total savings for 2012: $400.
Entertainment - Switching to cheaper Netflix plan. We truly enjoy our Netflix service. We have been members for more than five years now. In 2011, we have not been utilizing their DVD mailing services that much. That prompt me to switch us to less expensive 1-DVD out at-the-time + unlimited streaming plan (old plan $21.84 vs. new plan $17.47). Total savings in 2012: $52.44.

Again, all initiatives listed above have no negative impact to the quality of our life. We did not sacrifice anything to cut our costs. We simply focused on spending inefficiencies. I am sure there are other "low-hanging fruit" type opportunities out there, which I have not taken into account, but this is a good start.

Performance Check

2011-12-10T10:01:00.001-05:00

ECB Will Continue Printing Money

2011-12-09T23:28:00.000-05:00

Consumer Confidence Up

2011-12-09T22:59:00.003-05:00

S&P500 +1.7%
Added $$ to investment position (members)
Consumer confidence up in November
EU tragicomedy continues
EU CEO's hide cash in Germany
Euro pact is not the solution
Only 14 trading days left in 2011
Net worth growth +18.1% YTD

EU: Back To Reality

2011-12-08T22:56:00.000-05:00

S&P500 -2.1%
DOW "leans" against 12K
ECB's weak response
Asian markets moving lower
Scary chart of Food Stamp usage
No new trades today

Grinding Higher

2011-12-07T23:18:00.000-05:00

No new trades today
S&P500 +0.2% today
S&P500 +0.3% YTD
Can ECB save Europe?
China banks are next?
16 trading days left in 2011

Hopeful & Jittery

2011-12-06T23:56:00.002-05:00

S&P500 +0.1%
Added $$ to trade position (members)
Another day, another EU deal
With record Saudi's production, oil above $100
Jim Rogers - "Fed is ruining investors"
Stock portfolio 6-year gain: 60.8%
2011 net worth growth: 18.4%

Market Gains Despite Bad News

2011-12-05T22:59:00.001-05:00

S&P500 +1.0%
All day meetings
No new trades today
Factory orders down in October
ISM index fell unexpectedly
EU's crisis front & center again
P. Krugman - "Send in the Clueless"
50F tonight in Arizona

Economic Calendar This Week

2011-12-04T20:35:00.000-05:00

Monday
10:00 AM Factory Orders Oct
10:00 AM ISM Services Nov

Wednesday
7:00 AM MBA Mortgage Index 12/03
10:30 AM Crude Inventories 12/03
3:00 PM Consumer Credit Oct

Thursday
8:30 AM Initial Claims 12/03
8:30 AM Continuing Claims 11/26
10:00 AM Wholesale Inventories Oct

Friday
8:30 AM Trade Balance Oct
9:55 AM Mich Sentiment Dec

Books on Market History

2011-12-04T11:04:00.001-05:00

I find it useful to read and learn about market's history and its most influential men. These books will, in my opinion, help you put current market and economic conditions in historical perspective. For any long term investor, it is important to keep the recency importance effect in check and under control.

"Wall Street & Its Mystery Men" - Robert Sobel
"Gold, Hard Money & Financial Gurus" - Michael Ketcher
"Bargain Hunters, Contrarians & Waves" - Janet Lowe
"Stocks Frauds, Manipulations & Insider Trading" - T. D. Saler
"Crashes, Booms, Panics & Government Regulation" - Roger. Lowenstein

Good Investing

2011-12-04T10:31:00.000-05:00

"If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring." ~ George Soros

Performance Check

2011-12-03T09:28:00.000-05:00

Stellar Week For Stocks

2011-12-03T01:44:00.000-05:00

S&P500 -0.02%
Best week for equities in 3 years
Jobless rate at 2.5 year low
Oil above $100/barrel
Gold at $1745/oz
Silver $32.50/oz
Added $$ to trade position (members)
2011 net worth growth 17.9%

Consolidation Day

2011-12-01T18:43:00.004-05:00

New investment (members only)
Bulls nicely defended recent gains
S&P500 -0.2%
2011 net worth growth +18.1%
Global PMI hints world recession
EU economy already contracting?

Net Worth 2011

2011-12-01T08:20:00.002-05:00

Bull Market Junkies

2011-11-30T15:26:00.002-05:00

Two new trades today (members)
One new investment (members)
Optimism about EU pushed stocks higher
DOW pushing against 12,000
Job market: signs of improvement?
New way to prosperity?
Precious metals rally ahead?
Thin crust veggie pizza for dinner

Strong Bounce

2011-11-28T23:03:00.002-05:00

S&P500 +2.9%
Day's range: 1159-1197
No new trades today
Europe hopeful about bailout fund
EU banks facing lower debt ratings
Net worth 94.7% to 2011 goal
Very sleepy; hitting bed early tonight...

Economic Calendar This Week

2011-11-27T21:44:00.000-05:00

Monday
10:00 AM New Home Sales Oct

Tuesday
9:00 AM Case-Shiller 20-city Index Sep
10:00 AM Consumer Confidence Nov
10:00 AM FHFA Housing Price Index Sep

Wednesday
7:00 AM MBA Mortgage Index 11/26
7:30 AM Challenger Job Cuts Nov
8:15 AM ADP Employment Change Nov
8:30 AM Productivity-Rev. Q3
8:30 AM Unit Labor Costs Q3
9:45 AM Chicago PMI Nov
10:00 AM Pending Home Sales Sep
10:30 AM Crude Inventories 11/26
2:00 PM Fed's Beige Book Nov

Thursday
8:30 AM Initial Claims 11/26
8:30 AM Continuing Claims 11/19
10:00 AM ISM Index Nov
10:00 AM Construction Spending Oct
3:00 PM Auto Sales Dec
3:00 PM Truck Sales Dec

Friday
8:30 AM Nonfarm Payrolls Nov
8:30 AM Nonfarm Private Payrolls Nov
8:30 AM Unemployment Rate Nov
8:30 AM Hourly Earnings Nov
8:30 AM Average Workweek Nov

Setting Inspiring Goals

2011-11-27T14:51:00.001-05:00

As the year is coming to an end, I am starting to think about my 2012 goals. Usually around this time of the year, I work on setting a few goals for myself for an upcoming year. There are few things to keep in mind when it comes to setting personal goals:

Be specific about what your goal is, since broad targets tend to be missed.
When designing your goals, include action items which will describe what you intend to do to reach your goals.
Setting your targets high will challenge your imagination in execution stage.
I learned over time it is actually more important what a goal does to your motivation than what the goal is. Pay attention to what impact goal has to your motivation. Are you excited about executing to it? Are you eager to start working on it?
After you finish goal setting, pause for a moment, and ask yourself what would it take to double, triple or quadruple the goal you just set. Notice how a brand new set of solutions suddenly entered your thinking. Was your goal too low after all?

I will share my 2012 goals with you in December.

Even Buffett Isn't Perfect

2011-11-27T04:41:00.001-05:00

A couple of years ago, I read "Even Buffett Isn't Perfect" by Vahan Janjigian. The book is a very unique look at Buffett's investing philosophy. The author is not putting Buffett down in any way, nor he is writing him love letters. Simply put, it is an in-depth analysis of Buffett's investments and results. The book is full of valuable research on value, growth, index, momentum, long-term and short-term investing. I think time spent with this book was a time well spent. Therefore, I am recommending this title to you.

Last Week @ Members Only Site

2011-11-26T22:05:00.003-05:00

Saturday - Consumer trends decoupling
Monday - New investment ideas (entries) & trade account update
Tuesday - Trade account update
Wednesday - Consumer confidence analysis & trade update
Thursday - OFF
Friday - New investment position, trade account update & eight trade picks for next week

Performance Check

2011-11-26T01:01:00.000-05:00