Wednesday, September 30, 2009
I try not to think about it too often, but every once in a while, what the arrogant, pompous, rude super alpha male told me at the Las Vegas expo starts playing in my head - and not to the beat of a Coldplay song. Perhaps I should go apologise to him. Maybe he's actually got a point and I should put my trading ego aside and learn from his scalping techniques.
It hurts to be poor. If I'm not begging my banks for a lower interest rate or an unbeatable balance transfer offer, I'm being treated like I'm some sub-par junk bond by E*Trade. It has been at least three years of this, plus all the visits to my most hated place on earth - the Bursar's office, years before.
Money has been an issue for me ever since I could remember. And lately, I've been overspending again. It's like I have some sort of financial death wish.
I really hope that when I finally become financially free, I'll also finally have a bit of financial dignity. I have a small account. But does it mean I have to be treated small?
Once in a while, I get a small glimpse of sunshine. It actually feels like I'm making a quantum leap because I know one day my junk bonds will end up paying off - maybe for more than I expected or maybe for less than I expected. I will continue to trade equities and forex, but they are almost on the back burner.
Less emotional volatility = more objectivity
Tuesday, September 29, 2009
I know this has nothing to do with trading, but seeing this article really makes me feel that the abortion issue should be left to individuals to decide. I'm semi-Republican and Catholic, or should it now be semi-Catholic since this is against church teaching. However, I'm not going to impose my beliefs on other people, nor should the government.
The abortion issue is just another excuse for politicians to win votes, really.
Separation of church and state.
And what's worse than forcing a woman to live a life she hasn't chosen is bringing an unwanted child into the world.
Most people probably want their money to be fast and easy.
So what am I doing here being in bad trades for one or two years? It's like sometimes I'm thinking a bad trade is better than no trade. But no. I've got to become faster, more proactive, and more accurate.
I think turning a bad trade into a good one involves using cost-averaging and stringent money management more effectively.
I've never been very good at math and like to make decisions slowly, but thankfully, there's Excel, which I am admittedly pretty good at.
I am therefore considering placing a time limit on my trades. No more procrastination. But since I'm so good at doing the whole all talk and no action thing, I might still occasionally contradict myself a bit.
But more ABK? Thanks, but no thanks on that bridge to nowhere.
I do not on any level support Sarah Palin, but that quote was just too fun to resist.
This is of course false. But my credit report apparently thinks it's true - probably even as a trader. Hahaha... think about the additional bailouts they would need.
I suppose this is one of those rare moments when subscribing to a monthly credit monitoring service actually helps.
It's really rather strange. The only connection I've ever had to Citigroup is being a proud shareholder and having a few too many credit cards from them.
Other than that, my portfolio isn't doing much today - small decline so far.
Oxfam apparently published an interesting report on how a small forex tax in G20 countries could raise up to $280 billion for impoverished nations. Being semi-Republican, I do not support this tax. Moreover, philanthropy itself demands an investigation. It's of course good to be philanthropic, but are non-profit organisations using their funds in the most efficient and progressive ways? When I get around to it, I'm going to start reading Billions of Drops in Millions of Buckets: Why Philanthropy Doesn't Advance Social Progress, which sounds like a very compelling read.
Monday, September 28, 2009
Interestingly, independent retailers in the US are only partially replenishing their Harry Winston inventory.
Even KO is up today. Apparently, people are expecting companies with international sales to benefit from the weaker dollar. Since the next earnings announcement is scheduled for 12 October 2009, I'm waiting until then to sell in hope that it'll be able to hit its 52 week high.
I somehow ended up finding some more Finlay bonds on the secondary market and added to my position. I hope I've done the right thing, especially since I paid more than $0.05 on the dollar.
Sunday, September 27, 2009
We all have our moments is what it is.
In honour of debt obliteration, I may have to sell my shares in KO very soon. The reason I am choosing KO is I feel the upwards potential is much less compared to other companies, such as BAC, NYX, or HWD. Moreover, I am fairly confident that I'll be able to buy KO back at a similar price in the near future. Additionally, when I do buy KO back, I want to place it in my Roth IRA and will also be choosing between either buying KO or COKE.
Some time back, I had been trading COKE and felt that it was much more volatile than KO. So, I want to figure out exactly why with some actual analysis of the two.
I am ready to tell Harry Winston: love me, love me, say that you love me. Does that make me desperate? Probably. But at this point, I don't care. Harry Winston, my life is meaningless without you...
No smirking please!
Ever since I officially got Age 30 stamped on my forehead, I've been feeling a lot more pressure with regard to establishing and developing my financial security. Considering that I'd like to go for the Early Retirement option as well, I now have at least 70 years of financial responsibility on my shoulders due to the need to reverse 30 years of fiscal irresponsibility as well as 40 years of retirement income to be built up. That's a lot to achieve in a very short amount of time.
Whilst I look forward to the day that I will no longer be able to contribute to my Roth IRA as that would mean that my salary has skyrocketed, I am still taking every advantage of it whilst the option is still available to me. And why shouldn't I? It's obviously got a lot of perks.
Looking back, I've committed some IRA mistakes I wish I hadn't made, including:
1. starting too late. I was only able to contribute to tax years 2007, 2008, and 2009 so far. I should have done it sooner.
2. imperfect asset allocation. In hindsight, I should have allocated more Roth IRA funds to low beta / high dividend stocks. Additionally, I should have placed some of my bond purchases in my Roth IRA rather than my regular brokerage account. In the future, when I perfect my forex trading strategy, I might also consider allocating a good amount of capital to a Roth IRA forex account.
3. not trading enough. I am a firm believer that the buy and hold strategy should not be applicable to an IRA account. Even with a low beta / high dividend strategy, I believe there are times when it makes total sense to rebalance the portfolio by cashing in on some investments and waiting for another buy opportunity.
4. not including CDs, Municipal Bonds, and Treasuries in my asset allocation. Though the yields are usually lower on CDs, Municipal Bonds, and Treasuries, due to the tax benefits, these asset classes could make a lot of sense in a Roth IRA at certain points in time. However, current fixed income yields at this point aren't at the irresistible levels they once were earlier on in the year. We're now looking at less than 7% yields on long term bonds, which to me isn't sufficient ROI - especially on corporate bonds, considering the higher default risks.
5. placing a junk bond in a Roth IRA. When I first started out in junk bond investing, I thought I did the right thing by placing Ambac bonds in my Roth IRA. Whilst I was able to collect some tax-free interest on this bond, due to Ambac's failure to pay interest on this bond issue, the cash is now not only idle, but I wouldn't be able to write it off as a loss and take a tax deduction on it. This is because it is much more difficult to take tax deductions on IRA accounts.
It might be wishful thinking, but I wish the government would get rid of social security for Gen X & Y and just enable us to contribute unlimited amounts of money to our Roth IRAs.
Thursday, September 24, 2009
Overall, my portfolio was down -2.88%.
For anyone else following the Finlay bandaid ripping saga, Gordon Brothers Retail Partners LLC has won yesterday's auction of Finlay assets. The final court approval hearing will take place tomorrow, 25 September 2009. If the approval goes through, then the transaction is expected to be completed on or before 28 February 2010.
No details on the offer price of the winning bid were released, but according to JCK Online, the winning bid represented about 85.75% of asset inventory - approximately $116 million.
The whole thing, to me, is still extremely unfair. I hope other bidders step in tomorrow with some higher bids. Otherwise, Finlay bondholders and suppliers are clearly getting ripped off.
Interestingly, with the winning bid valued at $116 million, this is more than enough to cover the Senior Notes that Finlay had issued (page 51), which had a value of $40 million as of 31 January 2009. I therefore tried to buy more Senior Notes, but found someone faster than me had snatched them up already.
Could I be happily looking at a full recovery on my Finlay bonds in the near future?
That would sure beat my current status of nursing equity positions by placing bandaids on broken ankles.
Oh, but a full recovery would be a dream come true!
Wednesday, September 23, 2009
Ouch, my portfolio performed twice as bad as the broader market today even though HWD is clearly still winking at me and even doing the whole low voice soft whisper thing. Lovely.
But is risk now two seasons ago? My portfolio, which is admittedly high beta, has had about a week of outperforming the market. Should I really be getting out the bandaids?
Now, I'm even doubting my JBQ strategy.
I need some bread and butter and fear that my chance to get rid of ABK has now passed... Maybe I should try the glass half full approach?
HWD totally had me at bonjour. I'm here wondering why I hadn't bought more.
This was one of my worst positions going into the global financial crisis. I had bought some HWD shares literally weeks before Lehman collapsed and HWD had been one of those stocks that lost more than 90% of its value when it hit its 52 week low. I'm not sure how bad the market got, but I seem to remember really holding the shorter end of the stick, having a number of stocks that lost more than 90% of its value.
Finally, after months of waiting, my position in HWD is actually profiting! This is not only the result of patience. I had to average into the position as well.
So will HWD continue to take my breath away and accelerate this uptrend? Or will I need to start getting out the bandaids again?
No more bandaids, please...
However, unfortunately, most investors haven't got this type of inside knowledge about the markets they trade in. Does it actually put us at a disadvantage? Is it only a psychological disadvantage?
Tuesday, September 22, 2009
I've been a fan of the Shopaholic book series for a few years and in the recent movie, the producers omitted a very important bit of financial advice that Becky's Dad always told her: "You know, there are two solutions to money troubles... Cut Back or Make More Money. Which is it to be?"
To which she replied, "Oh, both, I expect."
I rather like the idea of making more money better than cutting back, but have learned that indeed, Becky's actually right in that you need to both cut back and make more money.
This interesting article was a fun read, but having been on a very strict financial diet myself for a few weeks, I'll tell you cutting back is no fun and definitely unsustainable if you don't want to feel trapped in a boring, oppressive lifestyle.
Yet, if we allow ourselves to be undisciplined, no matter how much we make, we'll always have more month left at the end of our money. This I know too well. Once you start making more money, you'll want a different lifestyle and you'll have different standards of luxury as well. At least it was true for me. Did I always want an Hermes handbag? Or Bulgari watches? Or Harry Winston? Probably not always. But when you get close enough financially as to be able to afford luxury items, they will become somewhat of a necessity. It's kind of addictive, really and there's no point in being half-hearted about spending. If you're going to spend, then do it with some passion, right?
It's a very fine balancing act - cutting back vs. making more money.
I started out the day reading an email from someone who apparently found it appropriate to address a customer service issue by emphasising how their company has been providing other clients with impeccable service. Right. Rub it in that other people had received impeccable service, whilst I'm stuck here suffering below par standards. Then, I had technological issues all day at work, meaning I didn't get much done. How annoying is that - especially to a workaholic?
And now, I see this: GIC makes $1.6 billion from Citi stake sale... news like this makes me wonder if I'm the only person on this earth still not profiting from C... in all likelihood!
Thankfully, now that my portfolio is now standing on more stable ground, every 1% it moves forward is more meaningful. And now I've had a few good days like this where my portfolio has managed to outpace the broader market thanks to (the strong and handsome) Harry Winston. I hope this continues for some time, although I'm going to be realistic and manage my expectations a bit.
It would make me want to sacrifice booking a 10% gain this year in favour of the longer term trend.
As for ABK... whether I keep ABK in my portfolio will depend on the FOMC statement. My feeling is to get rid of it the first chance I get, but if there's some news supporting further growth potential, I might keep it in my portfolio.
Funnily, AMD is now turning out to be a semi-favourite of mine now that its ascent has been so swift.
High beta is now working in my favour - at least temporarily. But I suppose it's necessary to move with the market.
Let the trading saga continue...
Monday, September 21, 2009
I know I said I would try not to digress, but Coldplay is just too cool to be true. They were giving out a free copy of a CD at their concert, which I hadn't collected during the concert. I went on their Web site and saw they were offering a free download of the same album.
This makes me love them even more...
They totally make this world a better place!
Anyway, I forgot to bring my camera to the Coldplay concert. That's like forgetting to bring your brain to a trading session. Do I even have one?
Before I get accused of digressing too much, I have some ideas about trading I want to brainstorm on.
I've been thinking that people require a sort of Bread & Butter type trade. Every successful business has a Bread & Butter type product or service. Every successful trader therefore requires a Bread & Butter type strategy. Lately, Little Black Dress and Little Red Dress have both been MIA. Good Harry Winston had been carrying my portfolio all week last week, but today I feel like he's loved me and left me... -2.94% so far!
I don't know why I've been so lost lately. The two sparks I've had lately related to trading are:
1. have multiple contingency plans by diversifying according to asset class, market sectors, and perhaps more importantly, volatility. For stocks, this would include beta diversification. I would argue this is even more critical than sector diversification.
2. move your money from one asset class into the next.
Perhaps it isn't much of a spark, but I was definitely happy to see this report that Bank of America and Merrill Lynch see the level of junk bond defaults reaching 40% by 2013.
Am I actually on the right track here? Maybe?! Time will tell.
I hope I'm on the right track with the positioning of my junk bond holdings though as that will attribute to my success rate with these bonds.
One woman's junk is another woman's Harry Winston, I guess...
Sunday, September 20, 2009
After a few weeks of internal debate about whether to actually attend the Coldplay concert in London, I decided to go after all. My friend was supposed to go with me, but I ended up being stood up at the last minute. Who has the heart to say no to Coldplay, right? But the reason for the last-minute Coldplay rejection was legitimate.
Still, I had a good time alone, although admittedly, the first Coldplay concert I'd been to at The O2 was much better. This one, I felt, had a bit of an over-processed tone. I think the acoustics at Wembley Stadium probably caused this. Plus, the audience was a bit dull. The top half of the stadium seemed asleep, but that didn't stop me from screaming at the top of my lungs. My neighbours were also fun - one girl was playing air piano throughout the concert and two other guys were doing 60s dance moves a la Austin Powers. LOL.
Coldplay had a very dramatic entrance in that the minute they came out, the rain started pouring. Still, Chris Martin has such passion. He ran about the stage and got soaking wet, which admittedly sent my heart soaring - not that I'm into polygamy. Gosh, I'm so repressed. But that guy is sincere and he's real. It's totally worth all the travel and the effort to go to London especially to see them.
I suppose the highlight of the night was when they performed Politik. This isn't one of their most popular songs and for them to have performed it during this concert was really such a special moment. It's clearly a song where the live performance ends up being much better than the recorded version. That song makes me cry every time. Plus, there were fireworks, big yellow balloons, and tons of butterfly confetti.
I had Club Wembley Bobby Moore Level 1 seating. If this were a football match, people would have paid dearly for my tickets. Coldplay decided not to place the stage centre field, which would have made my seat even better, but I still love those guys. : )
Other than Coldplay, whenever I'm in London, I always seem to meet the most interesting London taxi drivers. Both the taxis and the taxi drivers are much more fun in London. I like how they spray paint some taxis with advertisements in London. I was once in a Tiffany & Co one as well as an Agent Provocateur one. That one made me blush, but the taxi driver wasn't one bit ashamed and ended up converting me.
The taxi drivers in London are actually interested in having thought-provoking conversation, plus they don't have road rage. I always end up learning something new when such conversations crop up, taking away a new perspective.
This time, one of them got me thinking about how I've been short-changing myself. He essentially told me I can't be so easy. I was initially thinking, is this the same person we're talking about - easy? But then, I realised that maybe I do make things too easy and don't set enough boundaries. I know I have high expectations of others. However, I'm just as demanding with myself. When people ask for an inch, I typically give them a yard.
What kind of diva is that? A semi one that's what.
So it's no wonder I don't get much respect. I don't even respect myself very much, do I?
London taxi drivers are really something.
Wednesday, September 16, 2009
Including some part time jobs I've had during college, I've been working for close to 12 years. So, to only have the small amount of money I have saved up is pretty much prime material for another colossal failure book.
Every once in a while, something happens that makes me feel like giving up, which is just the story of my life. However, three of my close friends really changed my perspective on life. When I was going through some quite challenging times, they told me not to give up because when you give up, you not only give up on yourself, but you indirectly drag other people down.
One had gone through a divorce at a very young age and she's now ended up with the love of her life. One had the patience to be there whilst I was being stubborn and then finally tell me I had to change direction if things were to be different in the future. One had just been there, encouraging others with kindness and leading by example.
It seems like common sense to persevere. However, it's much easier to say than to do.
But I'm glad I didn't quit.
The point is, I probably would have given up if it were not for people like this. We need to surround ourselves with positive people and I suppose I've just been one of the luckier ones with that regard.
Since I became a BondDiva, I've come to the realisation that even if my entire equities portfolio breaks even, I will still have to count on being at least -21% for the next year to two years.
The cash I've invested in bonds will be locked in for at least this amount of time.
I've been trying to keep a level head with regard to too much daydreaming about recovering the full face value on these bonds. After all, there's a very fine line between hope and disappointment.
Still, as evil as it sounds, I'm kind of hoping that the market will still be ripe for junk bond investing over the next few years. If all goes according to plan, this could be the dramatic entrance I've always dreamed about!
My name in bright lights and everything!
How did I miss out on this Lamborghini Gallardo commercial?
I'd say more often than not, the fantasy turns out to be much more appealing than reality. Who really wants to be driving a Lamborghini?
Tuesday, September 15, 2009
I mean now that the market value of some of my positions are finally higher than my unrealised losses, should I be jumping for joy? And since when did my happiness become correlated with the direction of my portfolio?
There's just one position where I'm still in a very precarious position and that is C, which is nearly -9% today! How did it manage that?
And here come the Republicans crying out for the bankruptcy process to be expedited.
I'm not sure I agree... sometimes I feel bondholders actually will recover greater value from a prolonged bankruptcy process, especially where retailers are concerned. I would rather wait a bit longer if we can recover significantly more value. However, the bankruptcy application itself should not be prolonged, but expedited as this will ensure that the company does not take on any further liabilities and operating losses.
I haven't actually done any forex trades lately, so perhaps I need to change my name to... BondDiva? Has a bit of a ring to it, doesn't it?
On another note, I think I'm more nervous about the upcoming Coldplay concert than Coldplay themselves. I think all of London will be there - well, about 90,000 guests to be precise. This would be my second Coldplay concert in London. I'm quite excited, actually.
Sadly, I will be saying goodbye to a colleague on the same day. He recently passed away and the funeral is on the same day. He was the first person I met here in Belgium - such a strong, kind-hearted man who lived to be 78. He survived a heart attack and was exactly the type of person who the doctor said would have another two years to live, but ended up living another four instead.
Monday, September 14, 2009
I never noticed how I've got so many high beta stocks - all of which are still down in the double digits, although not as drastically.
However, I suppose I'm not so worried if the market is indeed headed further north.
High beta stocks are supposedly able to increase in price relatively quickly compared to the broader market if the market is trending up in general. They will also trend down much faster than the broader market if we're in a downtrending market, which is what happened with my portfolio back in late 2008 and early 2009.
But how else would you explain something like HWD, which is practically +8% today? It's got a 2.7 beta and a negative EPS.
I hope I'm on the right side for once.
I suppose C was my worst trading mishap this year. That was totally missing the forest for the trees.
Tiffany, Bulgari, and Harry Winston are the last remaining publicly-traded luxury jewellers that are not part of a luxury conglomerate such as Richemont, PPR, or the Swatch Group. I have shares in both HWD and BULIF.
Given that I'm such a Tiffany fan, I'd some day also like to own some TIF shares.
Some time back, I had a chance to buy TIF, but unfortunately thought it was overpriced. It has since rallied at least $6 per share.
I wonder if I'll have a chance to buy the dip, as Rusty suggests. Wait, maybe I'm putting words in his mouth since he didn't actually suggest to buy the dip with TIF, but just buy the dip in general.
In any case, I'm kind of losing patience with my trading. I've been waiting for a pullback for some time - maybe two months, but it has not happened. Sooner or later, I'm either going to do something impulsive or I'm going to die waiting.
Why can't trading be easier?
Still, if the market's going straight up, then why am I complaining?
Thursday, September 10, 2009
My portfolio's surprisingly +1.88% today. Whilst I've got some good partial positions going on (BAC, NYX, HWD, even AMD), when you see a market like this, you start regretting how you didn't buy enough. However, clearly there's a time to buy and a time to sigh. I think this is a time to sigh about anything really - sigh about how you didn't buy enough when you had a chance... sigh about how the profits on part of your position are approaching +110% and how you wish you'd bought more...
However, I'm not sure this is actually a time to buy more. I'm actually getting a bit worried and perplexed that the market just keeps running up for no apparent reason. Warren Buffett seems to be pulling back from the stock market and getting into bonds. However, for me, the bond market also seems to be running too fast. Some of my junk bonds are up 45% all of a sudden.
I've added to my junk bond holdings, but bonds are not something that could be very actively traded. They require years of patience.
I have been looking into high dividend / low beta stocks lately. I plan on making this a more important part of my portfolio when I finally become financially free. When the dividend yield's good enough on those stocks, I'll allocate a good part of my portfolio to them. The low beta means less price volatility, more stability. A good dividend yield is the main attraction point here. It's similar to buying a bond, actually - only much more liquid.
Another strategy I'm considering is high beta / low P/E stocks. This I'll trade with limited funds. I like the high beta for quick increases in share price. However, sometimes, you'll end up with a case like AMD where there's a lot of price stagnation for a dull and prolonged period of time. I've been in that trade for at least two years. I know it's nothing to brag about. However, when it starts moving, you better believe it and hold onto it for dear life.
My only real regret is ABK now. I'm praying for ABK and AMD to reach breakeven territory, after which I'll be a much less frazzled diva.
Tuesday, September 8, 2009
Thankfully, I've got my asset allocation strategy all planned out, which I am sticking to. That should minimise the disappointment. Moreover, I am using a very conservative approach to calculate how much each bond might actually be worth.
I plan to top up on distressed debt whilst the market's still around. When the economy improves, the distressed debt market will probably cool down. I highly recommend reading the Lawrence G. McDonald "A Colossal Failure of Common Sense" book if you're remotely interested in distressed debt. I found it such a fascinating read and learned so much about distressed companies.
The only real disadvantage of distressed debt investing would probably be the taxes and the long wait. The process could take years, although some retailers have emerged out of Chapter 11 relatively quickly.
I just keep daydreaming about getting future equity in Lehman... with their 49% stake in Neuberger Berman, I would be one lucky woman!
Lehman, my Dr. McDreamy look-alike knight in shining armour?
I'll be on Cloud 9...
Does everyone commit bimbo moves every once in a while or am I the only one? It's also possible I'm the only one to broadcast my bimbo-ness, which only makes it more bimbo.
Anyway, no eye-rolling please...
Last night, I took airheadedness to a higher level. My pair of diamond earrings fell down the drain. I should probably rephrase that since it makes it sound like I had nothing to do with it. I had everything to do with it. After showering, I somehow let my pair of sparkly, beautiful diamond earrings slip out of my hands and into the drain. I was just going on with my normal routine, which means that I've been careless and neglectful all along, but just never had to suffer the consequences. I have no excuse.
Obviously, I did not have a good night, thinking about whether I'll be able to get them back. I've heard so many stories about women who drop earrings down the drain and so many times past, I've secretly rolled my eyes at their carelessness. Now that it's happened to me, I will never judge anyone again.
First thing in the morning, I called my plumber and as he was fully booked, I had to sit through one full day trying not to think about whether my plumber will be able to somehow get the earrings back. Now that he has, and it was simple work, I am not only so grateful, but I've learned my lesson.
I had a full night and a day to feel guilty about what I'd done. I condemned myself for always seeming to ruin everything. I realised just how careless and neglectful I've been. I started questioning whether I'll be able to trust myself with more precious jewellery - such as, oh I don't know, Harry Winston? If I can't even handle a simple pair of diamond studs, how can I trust myself with Harry Winston?
But then, I started thinking more positively. I know this pattern all too well. I've done it before with my trading. I've carelessly let money fall down the drain whilst trading and have told myself if I can't even handle that small amount of money, how am I going to handle more?
I told myself to remain calm. I hadn't let any water into the drain after my earrings fell. I knew there was a good chance that I'd still see them again. And I did. My heroic plumber saved the day!
And I am not letting those earrings or my cash near a drain ever again...
I know this is totally inappropriate, but I also had some time to think about upgrading my earrings, hopefully soon, though I am glad they are back. These are the earrings that have been with me to Botswana, India, the Czech Republic, etc. They've been with me through every trading profit I've made and every trading mishap as well. They've been with me when I had to look haughtily at the CEO of a competitor who thought he could shake my confidence by laughing at me. Laugh at me, but you have nothing to say about my work, I thought. They've been with me through so much pain and so many setbacks, but I hope they'll be with me when I experience the level of happiness I've always dreamed of.
Those earrings meant more to me than what I'd paid for them, but I was careless and will never be careless again.
Monday, September 7, 2009
Sunday, September 6, 2009
This past weekend, I was sitting near a table of ladies who lunch. One was saying how shopping was so tiring and how her husband expected her to shop because he doesn't want her to have a dull and boring wardrobe. Their conversation progressed to the season's colours and how it's always more economical to purchase a dress in the season's hottest colour from a second-tier designer then pair it with high-end accessories to complete the look. I was biting my tongue, trying not to join in on such an interesting topic.
However, when the conversation evolved to how one lady knew another lady who ended up buying something that was already in her closet, I knew my life purpose was not to become a lady who lunches.
However much fun my London Luxury Lifestyle sounds now, I know I cannot enjoy a life like that for more than a year - maybe two. Then, I'd get bored. It's not like anyone could ever see the whole world and I only like cities. So, even if I could go on a holiday every two months, I'm not sure there are that many cities I could realistically visit.
Moreover, I cannot be living a double standard. I can't be here telling people that we've survived for a reason and then not do anything about it myself.
I need a Grand Plan, or at least something that does not involve me becoming A Lady Who Lunches.
I suppose I have some time to figure it all out since it'll take me a while to get to my London Luxury Lifestyle.
I've managed to increase my junk bond holdings to a respectable six figure level last week. So technically and legally, some companies owe me a good six figures. In a few years, if all goes well, I'm going to be a mini-heiress!
Given that Paris Hilton ruined the family name, becoming an airhead socialite is not on my list of goals to achieve, although some people might argue that I'm certainly bimbo enough for the job.
Ah, decisions... decisions...
I personally feel the rebuilding of the old WTC site should accelerate and approach completion as quickly as possible because it symbolises that we've moved on as a country and as an economy. Perhaps I tend to over-complicate situations and perhaps I'm being politically incorrect yet again. However, I really feel that the longer it takes to rebuild the old WTC site, the greater the emotional toll will be on NYC.
We have all somehow survived another lesser tragedy these past twelve months - one where our livelihood, our portfolios, or perhaps our homes were somehow challenged. Perhaps it felt like everything had changed in what seemed like a split second and sometimes, it really felt like we were swimming against the tides.
To some degree, survivor's remorse will be inevitable. However, those that are from the what doesn't kill us only makes us stronger school will say this is one of those cases.
I feel people survive for a reason. So, perhaps instead of feeling remorse, we should feel grateful that we can someday, somehow help someone else rebuild or recharge.
We're not out of the woods yet, but the light at the end of the tunnel has to be getting brighter.
Thursday, September 3, 2009
I remember when Lehman collapsed, I was in Hong Kong. Coincidentally, I was so ill with the flu at that time that I thought I was about to die. Still, I managed to buy some Lehman bonds at that time. To make a short story long, I remember calling in to E*Trade and frantically trying to cancel my buy order on Lehman shares. The E*Trade guy was joking with me on that one. Then, a light bulb went on and I thought, why not buy their bonds?
Anyway, if what people are saying is true and we'll really get a return of $0.80 on the dollar, then that was one wise trade.
So, how much longer do we have to wait?
I'm going to have to do some more gold digging and study the Lehman pre-bankruptcy balance sheet. From what I could tell, long term debt was about $123 billion. If they've only collected $6 billion so far, that's just $0.048 on the dollar for bondholders. Their assets could be well over-inflated. If we assume they'll receive all the receivables they listed on their balance sheet, we'll arrive at an expected bondholder return of $0.35 on the dollar.
Ideally, I'd like to see a combination of a good percentage cash payout together with receiving some future equity in the company. The consensus is that Lehman has ceased to exist, but why do people say that when they've still got a 49% stake in Neuberger Berman?
I know I contradict myself a lot, but I am adamant about not buying stocks of already bankrupt companies. For me, if the bond could be had for pennies, it's much better to buy a bond of an already bankrupt company.
Yes, life is unfair at times. Not only do I have to miss out on the Tiffany Fashion's Night Out event, I also will miss Brian Dolan at the Traders Expo? I might even have to miss out on the Coldplay concert in London in a few weeks' time. I have been looking forward to this all year and I have tickets, but probably can't go. Long story.
And since we're on the topic of life being unfair, why do women get called gold diggers when men are known as opportunists? And our salaries are even at least 20% off too?
Whilst I'm actually very happy with my salary since it seems I beat out eveyone's median salary in that survey, I can't say it was always the case. And I often wonder if I were a guy, not that I would ever want to be one, would I be getting paid more?
I suppose I should be grateful that my portfolio's +1.92% so far. That Harry Winston is a charmer!
Wednesday, September 2, 2009
Paul Smith shirts are nice. I'd say a guy who wears Paul Smith shirts would have quite impeccable taste.
However, did Paul Smith ruin the tie this season or what?
What is up with the flower ties?
And the bags?
Did I totally miss out on a cultural shift? Are guys allowed to wear flower ties and carry handbags nowadays?
At one point, I was contemplating completely getting out of distressed debt investing (i.e. junk bonds) because I was feeling so guilty about the potential karmic retribution that might result from bandaid ripping. I know it sounds crazy, but I'm convinced that people reap what they sow.
Now, I see Pfizer being fined $2.3 billion for what should be deemed broad-based bribery of medical professionals. How can this be called a marketing breach of conduct? This has nothing to do with marketing! It's pure, unadulterated bribery.
I swear... lawyers and marketing people get such bad reputations. It gets me so ticked off.
Anyway, I digress. My point is, after seeing this article, I felt less guilty because my bandaid ripping is clearly nothing compared to this.
I did not cause their financial mis-management. Plus, distressed debt investing can potentially yield lots and lots of ROI.
Imagine a distressed debt portfolio with a face value of $2,000,000. You could build a portfolio like this with just $0.01 on the dollar if you time it right. If you make just a $0.01 on the dollar return, that's already good enough for Hermes. A $0.10 on the dollar return puts you inside the Harry Winston on Fifth without the sales representative laughing at you and showing you the door.
Oh, maybe there's hope for me after all.
It feels like I've got an inferno raging inside of me. Maybe I'm being a tad bit dramatic, but the market has been driving me absolutely mad lately. If I wasn't so careful, I would have done a lot of emotional buying. Not that AIG wasn't, but I might have done worse. I might have taken a $1,000,000 long GBP/JPY position or something.
HWD loves me again, but I'm getting a bit of the cold shoulder from BAC and NYX.
I was so happy that I might have been done nursing BAC, but its recent retracement has me getting out the bandaids again.
A market like this gets me thinking second thoughts about my Grand Retirement Plan - the one that involves London and lots more Hermes whilst I'm still young enough for people to call me young lady, which they still sometimes do.
Since I love Harry Winston so much, it has never occurred to me that it might not one day be a reality for me. But if I'm finding it so challenging to book a consistent 10% profit now, will my Grand Retirement Plan ever work out?
I know building up the six figure account is realistic. It's getting to the consistent double digit return that's the real challenge.
I have some real thinking to do.
Tuesday, September 1, 2009
Mind you, this is the same colleague who has a theory that whenever I buy a stock is when the price will go down and whenever I sell a stock is when the price will go up. The unfortunate thing is I can't disagree with him there.
Anyway, he's bearish now and apparently, so are a lot of other people.
Oh, how can the market be so cruel? I was just getting used to the happier atmosphere. My portfolio was down 2.84% today - much worse than DJIA. I am not in a great mood!
There is, though, a little part of me that is looking forward to the buying opportunities that might unfold as a result of the impending market correction.
This time around, I hope I'll make wiser moves. After all, I've already missed out on the biggest sale of my life. If there's a second chance presenting itself, I have to do the right thing!
Whilst it's really hard to say, we do know that Lehman still has some quite valuable assets, including:
1. a 49% stake in Neuberger Berman (Neuberger has assets of about $130 billion)
2. Extensive multi-million art collection with about 4,400 works (900 from Neuberger Berman and 3,500 from Lehman)
3. proceeds from sale of $24.9 million corporate plane
4. selling $6.25 million undeveloped land in Hamilton Township, NJ
5. proceeds from Barclays' partial acquisition of Lehman businesses and assets ($1.75 billion purchase of Lehman core business + $1.5 billion purchase of Lehman headquarters)
6. Lehman retained $20 billion in securities assets that were not transferred to Barclays as part of the transaction
7. proceeds from $225 million sale of Lehman's Asia Pacific business to Nomura
8. sale of Lehman business in Europe and the Middle East to Nomura for $2
9. other assets on balance sheet that have not been spun off yet
Meanwhile, fees threaten to bring the bankrupt Lehman Estate into a further downtrend:
1. Lawsuits alleging fraud from shareholders
2. Lehman Brothers UK sues US arm for £61 billion
3. Accountancy fees of more than £120 million
4. $5 million lawsuit from former Lehman employee
5. Legal fees of more than $100 million to date
What will the recovery for shareholders and bondholders be? With the legal battle heating up so much, delays are inevitable. But the fact that the Lehman Estate has managed to retain a 49% stake in Neuberger Berman is good news. Plus, what an art collection!