Friday, October 27, 2006

"Revolt of the Fairly Rich"

Fortune magazine has an interesting article on its websiste regarding entitled "Revolt of the Fairly Rich." This article exposes alleged economic resentment between between people at the lower end of the upper 1% of the weathiest people in the U.S. versus those at the high end of the upper 1%.

According to Fortune some of the "lower uppers" are doctors, accountants, engineers, and lawyers, and these successful people work very hard are are somewhat jealous of the "high uppers" who are perceived as sometimes making 10 times as much money without working 10 times as hard as do they.

I personally think that this alleged resentment is overblown. It is true that some of those professionals who are lower uppers are jealous to a certain extent that people at the high end make so much more money. However, I don't see an impending revolt anytime soon. Many professionals are in highly competitive and stressful businesses/industries and they often feel as though they are not being paid what they are worth. Even though they might not be making as much as the person next door, they certainly must realize that in the grand scheme of things they do have it pretty good.

Thursday, October 26, 2006

LSI Logic Finally Delivers!

LSI Logic (symbol: LSI), an integrated circuit and data storage chip designer, is the only individual stock I own in my non-IRA portfolio. LSI, like all semiconductor stocks, is extremely volatile and has stretches of time where it has risen or fallen by 30% in a 2-3 month time span.

I accumulated my LSI position over a period of 2 years, buying shares periodically on dips between October 2002 and July 2004. My average cost basis is $6/share and I have been waiting for LSI to break above $12 so that I can sell my shares and realize a 100+% gain.

LSI closed at $8 on the last trading day in December 2005. It rose to $11.81 on March 31st, but has floundered since then, dropping down below $8, with its lowest close occurring on August 25th, when it closed at $7.46/share.

LSI reported its earnings for its 3rd fiscal quarter yesterday. I expected them to be lackluster, but I was pleasantly surprised. The Street was expecting earnings of 12 cents per share, and LSI reported non-GAAP earnings of 16 cents per share. LSI also provided decent guidance for the upcoming quarter. Wall Street took notice and has bid LSI higher by about 16% today, up to $9.69/share.

Wednesday, October 25, 2006

Add My Financeandinvestments Blog to My Yahoo!

I was recently playing around on My Yahoo! and I discovered a way to link content from my blog to my My Yahoo! page so that recent posts are listed along with the standard categorized news. I am no HTML expert, but I think that this was relatively simple to do.

If you want to add to your My Yahoo! page so that you can see my most recent posts about stocks and personal finance, all you need to do is click on the "Add Content" link at the bottom of your My Yahoo! page. On the next page you will need to click on the link entitled "Add RSS by URL" to the right of the displayed "Find Content" box. On the subsequent page, type this URL into the box:

Finally, you can click on the link to return to My Yahoo! Once back on the My Yahoo! page, I clicked the "edit" button on the tab for my my blog. I personalized the tab so that the 3 most recent posts are always linked to my My Yahoo! page, regardless of when those posts were created.

Tuesday, October 24, 2006

I'm Still Saving U.S. Nickel Coins

Back on April 6, 2006 I wrote that I was saving all of the U.S. nickels I acquire in change because the melt value of nickels was about 4.24936 cents, or 84.98% of the 5-cent face value ofthe U.S. nickel coin. Almost all U.S. nickel coins made between 1938 and 2006 contain 75% copper and 25% nickel (the exception was during 1942-1945 when almost all nickels contained silver and manganese instead of nickel). At the time of my previous post, nickel was trading at $7.7564 per pound and copper was trading at $2.6112 per pound.

It's a good thing that I've been saving nickels because the value of nickel and copper has soared since April. One pound of nickel is now worth $15.4909, nearly twice what it was a mere 6 months ago. Copper has risen a slightly less impressive 31%, with one pound of copper now trading for $3.4302 per pound. The melt value of U.S. nickel coins is now about 7.10471 cents, or 142.09% of its 5 cent face value. The melt value of U.S. nickel coins has therefore risen about 67% since April.

If the value of copper and nickel remains strong, it's only a matter of time until everyone starts hoarding U.S. nickel coins, just like the U.S. population did in the 1960 when quarters used to be made of silver and the price of silver rose so much that the value of the silver in quarters exceeded the 25-cent face value of the quarters. Accordingly, I continue to recommend that people saved their nickels.

FYI, numismatic news has a great article about hording coins.

Friday, October 13, 2006

Interesting Website With Information About Dow Jones Indices

I have discovered a Dow Jones Index website that contains data for various Dow Jones indices. I especially enjoy looking at the current fundamental data for the Dow Jones 30 index. The website also lists miscellaneous trivia such as the best and worst one-day changes in the Dow Jones Industrial Average, the best and worst one-year returns, and the dates upon which certain milestones occurred (such as the day the Dow Jones Industrial Average closed above 10,000 for the first time).

Monday, October 02, 2006

September 2006 Returns For My Model Long-Term Portfolio

My Hypothetical Model Portfolio had decent returns during the month of September. As of the market close on September 29, 2006, the Hypothetical Model Portfolio* increased in value by $1272.34, or about 1.18% during the month of September. The Hypothetical Model Portfolio is now up $9395.02 in 2006, a gain of 9.40%, as shown on the table below (click for a larger image of the table).

The portfolio was strong throughout the month. Tech stocks led the way for the second straight moneth, with the Nasdaq 100 ETF (QQQQ) rising 4.58%. The second biggest winner (on a percentage basis) was the S&P 500 Financial components ETF (XLF), which appreciated by 3.56%. Large cap stocks also performed very well - the Vanguard S&P 500 Index fund (VFINX) rose about 2.56%.

Small caps and international stocks were laggards during September, possibly due to a stronger U.S. dollar. The Templeton Russia closed-end fund (TRF) and
the iShares Emerging Markets ETF (EEM) both posted negative returns, falling about 4.00% and 0.87%, respectively. Other dogs include the Vanguard Developed Markets Index fund (VDMIX), the Vanguard Small Cap Value Index (VISVX), and the Vanguard Small Cap Index (NAESX) which rose just 0.17%, 0.88%, and 0.90%, respectively.

One of the holdings in my Hypothetical Model Portfolio, VFINX, paid dividends during Septmember. As I mentioned in a previous post, the dividends from mutual fund holdings are reinvested, but the dividends from ETFs or the closed end fund (i.e., the Templeton Russia closed-end fund (TRF)) are not reinvested- they will accumulate as "CASH" on the performance table below. VFINX paid a dividend of $0.52/share (a total of $100.40) which was reinvested on September 22 to purchase an additional 0.829 shares at a price of $121.08/share.

I was glad to see decent returns in August. Hopefully stocks will perform well during the 4th quarter of 2006 so that my Hypothetical Model Portfolio will end 2006 up 10-15%.

*The Hypothetical Model Portfolio was hypothetically created with an investment of $100,000 with investments made as of the closing values on December 30, 2005. The reason why the total cost in the chart is greater than $100,000 is because the total cost accounts for the value of dividends reinvested into the mutual funds in the portfolio.