wisdomous.com

So far the games have been interesting to watch.

Mother nature and global warming are not cooperating, but all the people in Vancouver and Whistler seem to be having fun. The streets are packed, yesterday after the fist Canada hockey game there were about 50 thousand people at Robson Square.

Here is a medal table:

The value of a telecommunications network is proportional to the square of the number of connected users of the system (n²).

Furthermore the number of unique connections in a network of a number of nodes (n) can be expressed mathematically as n(n - 1)/2

Why is this important?

It can be directly related to the value of social networks, the more user a social network has the more valuable it becomes. There is also an added twist of sub-networks within a network (Reed’s Law) which we will discuss next.

A few things have happened since i last reported on my market activities:

New Purchases:

JNJ - it’s a great company and I picked it up for 55.44. It should also benefit from the stimulus money and an aging population

ABT - The benefits of the stimulus should also be felt by Abbott Labs. Got is at $44.20

RYU - Weighted utilities, can’t go wrong at $39.00

TAN - I believe solar power is the best out there and eventually it will dominate over others. The key is: no movable parts.

Sales:

F - Although ford may rebound in the future, i dont believe it is a good long term investment. Sold it for a capital gains loss.

SIRI - I was going to rebuy SIRI, but i think there are better opportunities out there.

Previous Holdings:

WM, LEH, NT - I’m holding on to these  to see how the bankruptcies play out.

BAC - I still like this copmany, 2nd quarter of 2009 was poor, but once all the loan losses are absorbed, the should be in the big time money.

IRBT - Holding on.

DOW and S&P 500 - Holding on, it’s kind of a no brainer

XLF - i think the potential is big for financials. Plus XLF also holds real estate companies, upside only.

GE - Holding on.

BX - a little recovery this week, the stock shot up before the earnings release, Im holding on till it hits at least $25

The Dow hit 6820 this morning.

S&P 500 hit 707

I thought DOW was a good buy at 10000 and the S&P500 at 1000.

Boy, was I wrong.

I still see the S&P 500 doubling in 5 years, so long term is still looking good to me.

but we’ll see what the future holds.

I see more and more experts feeling fearful. This means that we either hit bottom or bottom is very near.  When experts say cash is king that’s when you know it is time to start buying stocks.

I have been and will continue buying the S&P 500 index.

I have also found and started buying a mutual fund tied to international indexes.

Every now and then I happen to create a new word.

Pletharded is a combination of pathetic and retarded

Current economics theory suggests to spend our way out of a recession, but is that a good thing?

I disagree, i think the economy needs to fix itself, give it time to heal. A bailout is the equivalent of curing a hang over by drinking more. It may feel better in a short term, but long term you still are going to feel the pain.

What happens if the bailout does not work? Governments will be deep in debt with no revenue to pay for it. Interest rates will have to go up (to sell debt bonds) and the economy once again will slow down.

I think recessions are a good thing, they remind us to save for a rainy day, the reprice things back to affordable, and show us which investment managers are running scams.

I guess we will have to just sit and watch how this unfolds, but i have a bad feeling about all these bailouts.

This article was guest authored by B.B.

Here is somewhat of a prediction:
I see real estate prices in greater Vancouver come down substantially
Today’s prices are just ridiculous. $500K for a 2 bedroom condo in White Rock or Port Moody? $500K for an old house in surrey? C’mon! People can not afford that.
In the downtown core i see prices falling back to 2003-04 level. A one bedroom, basic apartment should be $200K, and that’s still stretching it. A new university grad earning $60K would have a hard time paying for  $200K condo.
So for all your buyers out there that is good news. Just wait and watch the prices fall, also you may get a “one of” good deal in situations where the seller is forced to sell.

A few things have happened since i last reported on my market activities

BBT - sold it at $43.50 on Sep. 19 2008 - here for once I made the right move.

BHBC - in August 2008 i bought at $0.90 and sold a week later at $1.61 - i just could not resist.

WM - Washington Mutual got taken over by FDIC and equity was wiped out - that one hurt

LEH - Lehman Brothers was pushed into bankruptcy  and all the equity was wiped out - ouch

NT - Nortel filed for bankruptcy wiping out shareholders - ouch again

BAC - Bank of America shares fell to as low as $3.77 (Feb 5 2009) and they slashed their dividend to a 4 cents (annually)

F - well it is down to around $2, I still have faith in Ford long term, they seem to be the healthiest out of the big three (Ford, GM, Chrysler). I sold F at a loss to book a tax loss. I will re-buy in 30 days as i don’t feel the stock will move much during that time

SIRI - Sirus has merged with XM which is good, but they have a mountain of debt, and in the current environment that’s not something to be taken lightly. I don’t think the stock will go anywhere in the next 30 days so i have sold it for a tax loss and will rebuy in 30 days. I still feel that long term they are a good prospect. Although, satelite telephones never went mainstream.

IRBT -  Irobot is a company that will be huge in the future, they are the leading robotics company and in my opinion robotics will be HUGE in the future. They are a steal (in my opinion) at the current price ($8)

DOW and S&P 500 bothe indexes are good places to putmoney in, I thought the DOW presents value at 10000 and S&P at 1000. As of today (FEB 6 2009) the Dow is at 8250 and S&P is at 850, which in my mind is a steal of a long term investment. Like i said i am spacing my purchases 2 weeks apart and buying on negative days (where the indexes dip)

XLF - In my last update i wrote that despite of the risk i do like financial stocks. Well, after taking a hit on Lehman and WaMu I decided to go a bit safer route. XLF is an Exchange Traded Fund (ETF) that holds all the major financials. I got into it twice: first at $11 and then at $10. As of today it is at $9.62

GE - General Electric is well diversified, plus it hold my favorite TV network: NBC. I got in at $13.01. For now they are sticking with their dividend and they are still making money.

BX - Here i was betting on the “smart money”. I thinkBlackstone’s business is going to thrive once we get past this downturn. Yes, they reported a loss but I still have faith. I got in at $8, today they are sitting at $5.38

The receiver (www.bowragroup.com) decided to drop the prices to clear out all the remaining units in the Homer + Helmcken Yaletown building.
They will be accepting offers on site this weekend (Feb 7,8 2009).
There was an open house during the last 2 weekends.
Posted prices were from $266K for a 533 sq. ft studio to $599K for a 1273 sq. ft townhouse with Homer street and hallway entrance. My favourite (value wise) was the 605 unit: 2 Bedrooms + Flex (small office), 1 Bathroom, 721 sq. ft for a listed price of $379K
Some units are nice, but i think the pricing is not that great yet.
See the Bowra Group website for full details.

I believe the developers in Vancouver area are scared and are trying to unload inventory before a bigger price drop materializes.
Realistically, 500 sq ft downtown should be about $200K

the indexes are great deals at the following levels:

DJIA (DOW) at or below 10,000

S&P500 at or below 1000

TSX  at or below 8000

as of today (oct 07 2008) the DOW and S&P500 have crossed those thresholds on their way down

TSX should be along soon.

Find a index fund with an MER less than 0.5% and put some money there. I think it should be rewarding. But of course only time can tell.