Investing Adventures

Sunday, July 29, 2007

Portfolio Progress – Week of July 30, 2007

Filed under: Equities, Portfolio Progress — Jorge @ 9:17 pm

This hasn’t been the best of weeks to be in the stock market. Some highlights of the week:

  • I bought to close the options contract I created with my Level 3 (LVLT) position. In short, I placed my 100 shares of LVLT up for sale using an options contract. I was willing to sell the LVLT shares at $5 per share. In return for creating the contract, I received $125 as a premium. Since the market nosedived toward the end of the week, I was able to buy back my contract for half the premium. In short, I made $40 (after fees) on my LVLT position even though the market dropped severely (DJIA dropped about 4% this week).
  • DJIA dropped more than 4% this week. Amazon’s (AMZN) earnings were much higher than expected and as such sent the stock skyrocketing. Baidu (BIDU), the Chinese Google, also beat earnings and shot up about 20% after their earnings report this week. Ford (F) turned a profit for the first time in quite some time. Level 3 reported a loss per share as was expected and had its stock price drop accordingly.
  • Total Deposits: $1,188.81
  • Current Market Value: $1,153.02
  • Profit (Loss) as of July 30, 2007: -$35.79
  • Profit (Loss) as of July 23, 2007: -$23.24

Although I’ve lost a little over $10 this week, the damage could have been much greater. I lost about 1% of my portfolio value compared to the losses overall in the market this week. I predict I’ll break even this week. I’m optimistic. I just hope the rest of the market is.

Friday, July 27, 2007

If you could ask the White House economic team one question, what would it be?

Filed under: Financial Website — Jorge @ 1:44 pm

CNBC asked this question on their website yesterday. I submitted a question, and to my surprise, CNBC posted it. Score one for the college grads! See if you can find it on their website.

CNBC Economic Question of the Week

#1 Threat to the Country – Bears

Filed under: Market Pulse — Jorge @ 8:52 am

I love Stephen Colbert…

Seems like the bears are winning once again today. DJIA’s down 105 points in a roller coaster session. It has not been the best week at all. Although it is fun watching folks panic left and right. The market’s not going anywhere. It will rebound soon so stick to your discipline.

Update (12:12): DJIA down 148 points. I expect Trading Curbs to come into effect soon.

Update (16:01): Market’s down another 200 points today. It was looking good until the last 30 minutes or so where the market dropped 140+ points almost instantly. It’s times like this I wish I was more familiar to know what the heck’s going on and how the market can drop so far so fast.

Thursday, July 26, 2007

Trading Curbs Imposed

Filed under: Alerts, Market Pulse — Jorge @ 8:17 am

CNBC Alert: Trading Curbs in Effect on NYSE as Stocks Extend Declines

Sigh… another rough day and it’s only 11:30. Down 185 points and the a/c in the office is offline. Great.

Update (14:55): DJIA down 434 points

LVLT Releases Earnings

Filed under: Earnings Report, Equities — Jorge @ 6:32 am

My speculative play, and my largest holding, LVLT, is down 10% in pre-market trading after they released their earnings report. Thank goodness for selling a covered call (I’ll explain in detail in my Options series sometime in the future).

From Level 3’s Investor’s Relations site:

BROOMFIELD, Colo., July 26, 2007 – Level 3 Communications, Inc. (NASDAQ: LVLT) reported consolidated revenue of $1.052 billion for the second quarter 2007, compared to consolidated revenue of $1.056 billion for the first quarter 2007.

The net loss for the second quarter 2007 was $202 million, or $0.13 per share, compared to a net loss of $647 million, or $0.44 per share, for the previous quarter. Included in the net loss for the first quarter 2007 was a $427 million loss or $0.29 per share on the extinguishment or refinancing of long-term debt.

“While we have a great deal of work remaining, we made good progress on our overall integration of acquired companies,” said James Q. Crowe, CEO of Level 3. “We are pleased with the continued positive operating environment in terms of demand and importantly, our efforts from integration and continued cost savings resulted in improved profitability and growth in Consolidated Adjusted EBITDA.”

Consolidated Adjusted EBITDA(1) was $193 million in the second quarter 2007, compared to $170 million for the first quarter 2007.

I haven’t had a chance to look over their numbers yet. They’re having an earnings call at 10am EST to discuss this quarter. I may sneak away from my desk at work to listen in for a bit. It’s mornings like these that make me want to crawl back into bed. LVLT’s put my portfolio in the hole $90; however, by using a covered call (it’s like insurance for stocks), I’ve mitigated about $70. In other words, I’m only down about $20 which is very easy to recover and I still own all of my shares of LVLT. It’s a neat concept that I’ll get around to explaining (read Getting Started in Options by Thomsett for an in-depth but excellent explanation).

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