Tuesday, January 31, 2006

3 posts in one day! That is a record.

For 6 months now I have said Google's stock is over priced. When it was at 450, (just a few weeks ago!) thirty-eight analyst said to buy more.

Greggie said to short it.

Well as of this second it's at 360.

All of these experts that won't hire me because I didn't go to college for this just lost their clients literally billions of dollars.

Now if analysts had balls, they will say GOOG is a strong buy now....if they liked it at 450, then they have got to love it at 369. But that won't happen, they will all start to switch to "Hold" and "Sell".

I have a complex where I think everyone underestimates me...because everyone underestimates me!

Dear Analysts and Mutual Fund Managers: "I told you so." Its published and date stamped. Its on my blog. I've been saying to sell....while nearly all of you have been saying to buy.

....and MSFT is going to knock another leg out from Google's table in 2006.

The masses are always wrong. At least Greggie is sometimes right.


As I heard a coworker talk today, I gave birth to a new word to describe the retarks that I was hearing.


1) a remark by a retard.
2) a retarded remark.
3) a bark by a retarded dog.

Can be used as a noun, verb, whatever you want....as long as you use it.

Origin: Greggie. 1/31/06.


Philly is giving wifi away for $9.

I finally got a response re: this from my council woman. She said I certainly am an idealist.

Why is Philly being Realists, and my city thinks its idealism?

Its only takes a few seconds. Contact your local government and ask for wifi. If you live in Florissant, CityMail@florissantmo.com

Monday, January 30, 2006

I always wanted to be a stock analyst when I grew up.....

....until last year.

I love following companies...you probably came to my blog hoping that I did not write another post about a stock....but I write about companies because thats my sport.

I always wanted to be a stock analyst. I've always thought it'd be fun to get paid to follow a company. To me it'd be like getting paid to play football, but instead of my knees hurting, my brain would.

So I always thought interviewers would think like I do. I was wrong. I thought, hey I just need to show the interviewer my performance, and justify my stock decision, they have got to hire me. I thought, hey I'm putting my money where my mouth is, and have a documentable track record. That has to be better than some kids out of school who studied this stuff. I was wrong. I was really wrong.

It turns out that to get a job as a stock analyst you need to go to school for finance and get a CFA. So I spent a couple years pursuing my MBA and studied for the CFA. The more I studied the more I realized why the Wall Street Journal has a section that picks stocks by throwing darts at a dart board, and that strategy does as good as the stock analysts. The more I studied the more I realized why mutual fund managers and most stock analysts can not beat the stock market.

As an undergrad I took a music class. The professor was ripping on all 500 students in his class. He said we were a part of assembly line education. At that moment I realized why I didnt want to go to school for business. I realized that there are millions of finance, economics, and accounting students that graduate each year. They learned the same thing, so they look at the world and problems the same way. I didn't want that problem.

Stock analysts and Mutual Fund managers tend to not beat the market because they were all taught the same thing! They were all taught the world is flat....and they are mostly all wrong.

Here's the deal. Here's what I learned. By learning this I can't get a job doing what I love. Ignorance is bliss.

The stock market is a market. Rational does not move markets. Ever. Emotion moves markets. Emotion drives stock prices up and down until fundamentals catch up. All these formulae that I learned studying for the CFA estimates future stock price on a number of factors. They are simple and common sense formulae. But they leave the most important variable out of the equation: They leave emotion out. They don't factor in that people are buying/selling stocks.

All of these formuale will work, and are valid, if computers were placing trades, instead of people who have hunches.

No interviewer has asked to see my portfolio performance, only my report cards (going back to high school report cards!). So noone will hire me because I know what they don't. I know that its not what school you went to, or what grades you got in high school, or what major you had.

I know that it's about looking at the world from angles that everyone else misses. Because the world is not flat. The masses are always wrong. Always.

Thursday, January 26, 2006

Goodbye GM

I like Innovation and cash (in) flow.

Goodbye GM

My take from June 05

Monday, January 23, 2006

My solution to Florissant's rental property inspection ordinance.

If I complain about a problem, I damn well better have a solution. Critics are worthless...anyone can criticize. I've been bouncing emails back and forth with my council person. Here is my solution, as copied from an email:


can I at least propose this:

Have a $25-40 initial inspection. If material problems exist, require another inspection 6 months later, at a higher charge. If further problems exist another 6 months later have an even high charge. Once the house passes inspection give us another 3 to 5 years before the next inspection.

By having escalating penalties you do not penalize the landlords like me. I keep good care of my houses. I want my tenants to be comfortable. I want them to rent a home, and not a house. This isn't necessarily because I am a nice guy....its because by keeping my house in great condition I can charge more rent, have less turnover, and most importantly make my money off of the appreciation when I sell the house down the road. My style increases property values.

...and by giving my tenants a few years between inspections, it is not so intrusive on their privacy. Imagine the level of babysitting that they are going to feel over this. They are not second class citizens, they just rent instead of own.....in fact my tenants actually make more than I do. :-) and for those tenants that don't stay for a few years, Florissant will go ahead and have the occupancy permit inspection, just as it always has.

Escalating inspection penalties is more than reasonable. I will comply with any guideline above what is requested of me....and in return I only request that the government that represents me does that: represent me and give me a chance to make my tenants happy, make me a little bit of money, and make Florissant a nicer place than it was before me. Can you and your council give me the chance to do that? :-)

Please strongly consider this solution, and let me know your thoughts. :-)


her thoughts were that it will be reevaluated...this doesn't mean the ordinance will change, but just getting them to reevaluate it is a win for both landlords, tenants, and Florissant as a whole.

Friday, January 20, 2006

Florissant pisses Greggie off.

My city has decided that landlords need to pay $100 twice a year to have rental houses inspected to make sure they are in good condition.

I sent the below email to my councilman and mayor:


I was in City Hall paying my license fee for being a landlord today when I was told about the new ordinance.

I have some questions:

1) Where did the $100 figure come from? Does it really cost 100 for someone to inspect a house?
2) Why weren't tenants surveyed? Why weren't landlords surveyed?...instead of the decision being made for us?
3) How long until Florissant imposes this on owner occupied houses?
4) This is purely about revenue, ins't it?
5) My tenants are people. You are treating them like they are not. Now they have to be babysat by inspectors twice a year to make sure they can take care of themselves and something that I own? That's what I screen for. This is not protecting me, nor my tenants, nor the value of my homes. It is intruding on our rights to privacy and property.

I am not a slumlord. I realize there are people who don't take care of their houses. But that should not be my problem. I rent homes, not houses.

6) What about the economics of this? You say this is to maintain the value of houses, but this will not do that. As interest rates go up, who is going to buy houses? Investors like myself. You have just lowered the demand for investors to buy houses in Florissant which increases the supply. Hence prices don't appreciate as fast as they otherwise would.

If my tenants destroy my house, its my problem, not Florissant's. I won't be able to sell it for as much, but someone will come in and rehab it, or else it won't pass Florissant's purchasing inspection. Doesn't that solve the problem right there? Its capitalism, not socialism.

7) This is purely a revenue generator isn't it? Florissant couldn't have made this big of an economics blunder right?

8) How many complaints will it take to get you to represent your constituents and get this reevaluated immediately?

Your timely response to my questions is greatly appreciated.

Thank you, and have a great day!

Wednesday, January 18, 2006

I want to meet a woman.....and eminem

I didn't write this, but I could not have written it any better.

"I want to meet a woman that will make me stop and listen to what she has to say. I want a woman who will make my jaw drop in awe. A woman that has little time for me. One who does not throw herself at me. One who respects herself who has a sense of herself. Where is she?" - from Black Coffee Blues by Henry Rollins


I did however write this in the attempts to write in his style...which is extremely difficult. If I did a good job than you did not know I wrote it.

Sunday, January 15, 2006

A message from "Yard Gnome"

A few days ago I emailed a buddy telling him the dumbest thing I have ever heard, and how after hearing it I was dumber than I was before I heard it.

He quickly replied with the following email sent to him from a friend. please note I have changed the names to protect the innocent/guilty, and this has been posted with the Yard Gnome's (the author) permission. I generally don't post things of this nature, but its dumbfounding and entertaining!:

"Actually, there's absolutely nothing important about this email at all. I'm just bored waiting for my next class which starts in approximately 34 minutes. Also, I'm going on maybe 9 hours of sleep for the last two days and I've decided that that truly sucks. Honestly, it's not bad but I'm just saying that I'd rather not do it again. Which brings me to my next point. For all of those who are still reading this You're probably wondering what my first point was. There was no first point, I start n point two cuz that's what Chuck Norris would do.

Although Chuck Norris would probably do that simply because he is point one. I'm
thinking about eating at Chipotles after class, then taking a nap, then getting ready to go out, and finally I shall go out and drink. As Abe used to say, "Is that ok with you?" If that is not ok with you then take it up with nick at (edit)@hotmail.com

Flint's favorite thing in the whole wide world is a bouquet of daisies.

For those of you who are thinking that this is a small arrangement of my parents' dog, and clones of her, then you are wrong. Frankly, I don't know why the hell you would ever think that. It's preposterous really. Moving on, Flint likes to hang the flowers above his bed so that he can dream of daisies all night long. I know this only cuz he told it to me himself. My 20th point is this, if this moon is a sphere and is "made out of cheese" as nick claims then why isn't all cheese sold in ball form? And when will Sunshine crackers realize that they have misspelled "cheese" on
their "Cheez-its" products? Furthermore, if you are still reading this then maybe you have nothing better to do right at this moment. That's why I'm writing it, cuz I have nothing better to do at this moment.

My 7th point is this, if Star Wars happened in a galaxy far, far away in a time long, long ago then how come they never made it out here? We have no evidence that they did yet look at the amazing technology that they had. I'm throwing out the "bullshit flag" on George Lucas on this one. My disbelief can only be suspended so far.

Collin likes to sing the blues yet he is never sad.

Jason eats little children for breakfast everyday, this is why his weight stays constant.

Adam once saw someone else who looked like him and it pissed him off, since he is one of a kind, so Adam walked up to the guy to beat his ass only to realize that he was looking right into a mirror. Adam now owns said mirror and kills anyone who tries to look at themselves in it.

For anyone who has read all of this I shall give you nothing. Ah nothing, what a gift. It's almost like everything, only the exact opposite.

I hate snow. Does the snow hate me?

-Yard Gnome (gregie's edit)

Friday, January 13, 2006

Anything worth having, is worth sacrificing for.....

Its hard to be a landlord. Noone told me it'd be easy. I knew what I was getting into...I also know I am just getting started and there are many large challenges on the way.

-Its not easy finding a property.
-Its not easy getting financing...especially when you are barely making more than average american.
-Its not easy finding time to find a house, and then get the house appraised, inspected, etc, while still working 40 hours a week.
-Its not easy finding a quality tenant.
-I don't want to rent a house to anyone, I want to rent a home to people. Its not easy to spend the extra time and money it takes to make a house into a home.
-Its not easy seeing how much debt I have.
-Its not easy being patient. I am sacrificing today for tomorrow. There is no immediate gratification.
-Its not easy satisfying and coordinating a tenant who's AC went out in the hottest part of the year, and all AC people are backed up for weeks.
-All the unknowns will not be easy (evictions, vandelisms, multiple vacancies, etc)

All of the above are challenges. If you overcome the challenges there is alot of money to be made. By overcoming the above obstacles, many people have gained financial independance. I have never heard anyone say they lost their ass on real estate. But this is alot of work and stress....and its fun. Its fun to overcome a bombardment of challenges....after you overcome them.

I want financial independance. I don't want to bitch about my job like everyone else does. I want to take control of my days, instead of being under the control of an employer.

Anything worth having is worth sacrificing for. If I fall short of my goals, so be it....but I sleep at night knowing that I stepped up to the plate.

Wednesday, January 11, 2006

My first attempt at a research report.

Are you a value investor or a growth investor? Why not be both? PetSmart represents both a value and room for growth. Think I'm a fool? Bring your dog to Walmart, Target, PetSmart, and Petco, and see which store gets the tail wagging. What does your dog know that the market doesn't? It all starts with being as smart as pets. While every other retail is focusing on capturing more human customers, PetSmart is focusing on a largely untapped customer base of pets.

70% of Americans have pets. Pets in the last decade have become an extension of our families. PetSmart has high profit margins off of their services (not products). The market thinks PETM's competition is Wal-Mart, and in the last few earnings conference calls, analysts have asked about Target as competition. But Target and Wal-Mart sell dog food, not services. Target will not let you leave your dog in a doggie hotel, or groom your cat, nor sell you pet medications (unless of course you knock on the back door three times and ask for Carlos). PetSmart's real competition is Petco and themselves. It is a near oligopoly situation, with room for more growth, both in number of stores and in services such as in store veterinarians.

The market is overlooking how many people have pets, and how many people think of their pet as a child. If there is a recession, are people going to stop buying pet meds, or grooming their dog? No. In fact PetSmart's sales have been high through the last few years. After Katrina hit they announced that they were concerned about their upcoming quarter because they didn't know where the economy was going. That is more than fair. Every company should be so honest. The fact is when gas was getting up to $3 a gallon no one could predict what would happen. Families were spending several hundred dollars more than they were weeks earlier on gas. That hurts. PetSmart acknowledged that and it hurt their stock. But they are strong...and the market will recognize that when they announce their earnings each quarter over the next 12 months.
But who cares about words? Let's look at the numbers. Net Income has steadily increased over the years, as has cash flow from operations. In fact, PETM has experienced double-digit growth in cash flow from operations over the last few years. You have got to like a company that can make cash.

They are quite liquid as evidenced by their 1.8 current ratio, and impressive .66 quick ratio. The latter tells me that PETM could pay off two-thirds of the debt tomorrow if they wanted to. PETM doesn't need to roll over, nor beg to get a treat from lenders.

They are growing. We saw that with a few of their aforementioned ratios, but they are also adding stores and incorporating a new distribution center. PETM opened 5% more stores last quarter alone. Their higher margin services sales increased 23.9% last quarter.

PETM’s Operating Profit Margin of 7.9% means that PETM is making $7.90 on every $100 dollars of sales, which is almost an entire dollar below the top 100 average. It would appear that the top 100 retail companies are outperforming PetSmart in terms of profitability from operating margins. But PETM’s ROA fairs better against the industry’s top 100. PETM returned nearly $2 more per $100 of assets than their peers. PETM’s ROCE was in line with their peers.

Management is also buying back shares, which shows that they believe the best investment right now is themselves. The market isn't throwing PETM a bone, so they are uncovering their value by buying up themselves.

Is PETM a buy? Don't take my word for it, your dog's wagging tail says it all.

Friday, January 06, 2006

Gates vs. Google

I continue to assert that you should be buying the stronger company.

Gates on who MSFT's competition really is.

Gates on Google.

If he were just some arrogant billionaire that would be one thing....but Bill Gates has gotten wealthy, and made alot of people wealthy by driving the way we live and work. He understands his competition. If investor's understood his competition, they would not be buying Google. But Google is the media darling...just like alta vista once was, aol once was, netscape once was, apple once was (and is again), java once was, yahoo once was, do you see the trend? The only constant is Microsoft.

I hope to post over the next few days while I am at the CES....but I probably won't be able to.

Thursday, January 05, 2006

Microsoft vs Google.

2006 and 2007 will be the rebirth of Microsoft.

Click here and watch Bill Gates speach.

Fast Forward 12 minutes. Watch all of the mesmerizing products that Microsoft is rolling out. I was awestruck. They don't talk about what they are releasing, they show you. Google, and noone else can compete with all the shere volume of high quality, earth changing products that Microsoft is releasing.


So I keep uncovering overwhelming proof that google is a blip on microsoft's radar.

consider: Microsoft will pay out an estimated $3.4B in dividends to their shareholders. Dividends are paid when a company has "too much cash." Google had cash flow from operations of almost $1B last year. Do you understand this? Microsoft is distributing spare cash in excess of 3 times the amount of cash that google made! So in theory Microsoft shareholders made 3.4 times as much cash (merely off of dividends) as Google as a company brought in.

Cash is king! Google is a media darling with incredible tools and brilliance, but Microsoft could buy them if there weren't monopoly laws.


now its time for me to go to the CES show in Vegas...I can't wait to see what's next!

Tuesday, January 03, 2006

Great Article on Housing Bubble....

Here's a great article on the possibility of a housing bubble, or depreciating home prices...Note its by a Cendant official, and I own cendant stock, so I may be biased.

I have asserted in the past that there is no housing bubble. ...only the strong liklihood of houses not appreciating as fast as they have been. The most striking thing that is mentioned in the above article and that I have never thought about is supply and demand. regardless of interest rates, houses will always be in demand. Always. Demand causes price increases. Always. Houses will always be in demand because of population growth. Every year there are a few more million people in the US then there were the year before. Furthermore its a compounding growth rate.

According to this website: "By 2050, U.S. population is projected to grow to over 403 million people" This number sounds about right. Where are these additional 130 million people going to live?

On aggregate Real Estate will continue to appreciate, as long as the population appreciates in volume. Only the rate of appreciation will change. Real Estate bubbles only exist in isolated and easily noticable areas.

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