Tax Stats Yields Performance and Revelations

3/29/2009 04:05:00 PM / Posted by Soullfire / comments (1)

This year I'm ahead of the time curve and managed to completed my tax calculations for 2008. I paid extra care in making sure I included everything so as to avoid any more unintended "stimulus notes" from the IRS such as my experience last year.

Well comparing the current years return with last year's provides some interesting info for my short term trading account......

In 2007, I traded stocks amounting to $300K in transactions. Note, I said "transactions", not sales, as in I didn't make $300K...although that would have been awesome if I did.   For 2008 my stock transactions went up to over $3 Million - a great than 10X increase.
The explanation for that has to do with the fact that I added more money to my account so I had more liquidity to do extra trades, and I had less overtime at work which allowed me to spend more time focusing on trading.

Now for performance: in 2007 my net return was about 15%, and my goal at that time was to improve on that. Well, 2008 was the year of Wall Street's meltdown so was I able to get a better return? The answer return for 2008 was over 35%!!  Not only that, but it would have been even more had I not taken some big losses in day trading mistakes.

The time I was able to spend indulging in additional trading has painted a clearer picture of where my strengths lie. I now know that I don't really excel at "day trading", as in buying and selling stocks on a minute by minute basis constantly watching the stock chart during the day. In my opinion, it's too close to Vegas style gambling and comes with all the emotional excitement - and emotions are a bad thing when it comes to trading stocks. My biggest losses last year were the result of day trades going from bad to worse. The worse thing is, I look back and can clearly see they were stupid trades from a longer term view. As punishment, I made a "play by play"chart of those big losses so I can always see them and never forget what happens when you make stupid mistakes.

On the other hand, I also now know where I my true strength in trading lies - longer term position trading. This is where you analyze a stock and make a forecast for it's future movement based on current business and market conditions. It typically takes longer for trades to pan out - on the order of weeks to months, so there's no day trading immediate excitement, and in reality that's a good thing. The excitement comes later if your trade performs as expected and results in a good profit.

My goal for this year is to take what I learned from all that trading last year, and apply it to this years trades. It's all about striving to gain the superior skills that come from combining book smarts with actual experience. Even in today's rocky economy, there are a ton of opportunities to make money in this market.

Geithner Reveals Toxic Assets Plan = Bank Bailout Part Upty Ump- Market Sizzles

3/23/2009 11:28:00 PM / Posted by Soullfire / comments (0)

The market held a major rally today on hearing the details on the new plan by Treasury Secretary Geithner to rid banks of their toxic debt.

It's not surprising that Wall Street took off like a rocket....


The government is shouldering 85% of the debt for private investors that only need to put up 15%. In English, that means we the taxpayer are soaking up the bad debt with a risk 6X greater than the private enterprise that buys into these assets.

So the banks screw things up, and get to unload the vast majority of their crap on the US....which is "us"......nice. I just hope all this extra debt we are taking on doesn't lead to a bigger devil down the road - runaway massive inflation.

Perhaps this couldn't be helped in order to stave off a depression type scenario- but I do know this- I better see the government move to change the way things are run on Wall Street. No company should ever be "too big to fail". Those that are need to be reduced in size starting NOW.

CNBC Still Doesn't Get It - Stop Defending Wall Street over Main Street!

3/16/2009 06:04:00 PM / Posted by Soullfire / comments (0)

I just tuned into CNBC to see a congressman under attack from CNBC anchor Melissa Lee and another person for daring to attempt to tax the profits of AIG's 160 million bonus package they plan on shelling out to thier employees. At least Donny Deutsch was chiming in siding with the congressman.

What galled me most was Melissa's argument when Donny asked her who she was being so averse to Govt taxing those bonuses.

She said it was the governement's fault for giving AIG the money with no strings attached. Her exact words ended with "That's just the way the cookie crumbles...."

In the interest of remaining civil and not spouting a littany of 4 letter expletives, I'll try to keep composed.

It's the goverment's fault for for giving AIG money with no strings attached, and that's just the wau the "cookie crumbles"? Excuse me? Wasn't the help given out quickly with "no strings attached" due to all the companies AND CNBC proclaiming financial armageddon if we didn't give immediate help to the Wall Street firms and there was no time to delay and look at details? Now you have the utter gall to blame the governemnt for acting swiftly with little restrictions- what the hell is wrong with you Melissa?!?

Pardon me if I as a taxpayer have an issue with misuse of MY MONEY. Just because the government didn't tie a ton of restrictions to the initial bailout money does NOT give them free reign to do as they please with it.It's irresponsible actions like doling out millions in bonuses when under heavy goverment aid that invite tighter restrictions meing imposed. If a company can't or won't govern themselves properly, then they lose the right of autonomy when taxpayer dollars are involved.

This is want sickens me about CNBC and Fox Business and other slimy financial news networks. They're quick to come to the defense of Corporate America, and label government intervention as evil, but remain strangely silent when it comes to looking out for the interests of the average citizen.

Where was your sense of indignation when AIG and similar firms caused the melt down Melissa? You kept your mouth shut then, so kindly keep it closed now.

Six Figure Salaries

3/07/2009 05:51:00 PM / Posted by Soullfire / comments (0)

Did you know that only five percent of Americans earn a six figure income or higher?

Here are some jobs that pay that level with what it takes to get them (credit to writer Clare Kaufman):


Earnings (2007): $48.31/hour $100,480 salary

Health care workers are gaining earning power by the day, as an aging population boosts demand for qualified professionals. Pharmacists play a critical role in long-term care regimens, dispensing medications and advising patients about their use, possible side effects, and interactions with other drugs. Demand for pharmacists is expected to grow by twenty-two percent through 2016.

Needed: Doctor of Pharmacy degree.
The qualification, which has replaced the bachelor's degree in Pharmacy, is much more accessible than a medical or doctoral degree. It begins with the standard two-year undergraduate core curriculum, followed by four academic years (or three calendar years) of professional pharmacy career training. About a quarter of the Pharm.D. program is dedicated to hands-on training in a clinical setting.

Actuary (Management & Technical Consulting)

Earnings (2007): $51.48/hour $107,080 salary

In the wake of two major economic bubbles--the 2001 tech revolution and the 2008 mortgage crisis--better risk analysis suddenly looks like a good idea. The private sector is already putting renewed emphasis on calculating and hedging risk. Actuaries specialize in risk assessment, analyzing statistical data to calculate the probability of different outcomes and forecast risk. 

Job opportunities look strong through 2016, with 24 percent growth predicted across the industry. The Department of Labor indicates the most optimism for health care and consulting firm jobs, where demand and earnings are highest.

Needed: Bachelor degree in Math, Statistics, Corporate Finance, Economics, or Business

Marketing Manager

Earnings (2007): $54.52/hour $113,400 salary

While engineers and industrial designers develop a company's goods and services, marketing managers determine how to make money from these products. Marketing professionals develop pricing strategies, monitor market trends, and oversee the presentation of the product. They are, in effect, the liaison between the company's product or services and its customer base. As a marketing manager, expect to add management and leadership skills to your job description.

Needed: Masters in Business Administration

High School Principal

Earnings (2006): $44.70/hour $92,965 salary

K-12 education administrators enjoy the perks of a teaching career--helping students, summers off--without the "labor of love" salaries. In fact, the administrators at the pinnacle of their profession earn close to six figures. High school principals develop and coordinate the school's program, implementing a curriculum, monitoring students' progress, and managing the school's budget.

Needed: Masters degree in Education Administration (M.Ed). Administrators often start their careers as teachers and work their way up to a leadership role as they gain the necessary experience and credentials.

Petroleum Engineer

Earnings (2007): $54.75/hour $113,890

Engineers command the highest starting salary among bachelor's degree holders--and petroleum specialists rank at the upper end of the engineering salary spectrum. Demand for qualified petroleum engineers is expected to soar in coming years, as energy issues dominate the national agenda. Petroleum engineers create and optimize methods of extracting and processing oil and gas.

Needed: Bachelors degree in Engineering with a program specializing in energy or petroleum engineering curriculum.

These jobs all need degrees, but there are also 6 figure jobs that don't- while I'll create a future post on.

The Grim News: U.S. jobless rate hits 25-year high at 8.1%

3/06/2009 11:37:00 PM / Posted by Soullfire / comments (0)

Another 651K jobs lost in February brings us up to these current record levels. In addition, the January jobs loss numbers were revised upwards to include an additional 161K jobs going bye bye.

Now here's the nasty little secret that's not being proclaimed loudly in the news- the 8.1% figure only reflects those who are receiving unemployment compensation. It doesn't include those who are under-employed, as in working a part time or lower wage job out due to the shrinking market as well as those who have given up looking for work and are no longer getting unemployment compensation. Include these folks and the "true" unemployment rate jumps to around 15%. Not good. It's at the point where just about everyone knows someone who has been impacted by layoffs, if not themselves.

The New Dollar Menu Grows

Company 3/6/2009 Closing Price Closing Price 1 Year Ago (3/6/2008)
American International Group: $0.35 $42.88

CitiGroup: $1.03 $21.17

General Motors: $1.45 $22.35

Bank of America: $3.14 $36.52

Alcoa: $5.22 $38.37

General Electric: $7.06 $32.86

Dell: $8.37 $19.43

American Express Company: $10.26 $41.29

Meanwhile the number failed banks going under FDIC continues to grow:

Bank Name Closing Date
Freedom Bank of Georgia, Commerce, GA 6-Mar-09
Security Savings Bank, Henderson, NV 27-Feb-09
Heritage Community Bank, Glenwood, IL 27-Feb-09
Silver Falls Bank, Silverton, OR 20-Feb-09
Pinnacle Bank of Oregon, Beaverton, OR 13-Feb-09
Corn Belt Bank and Trust Company, Pittsfield, IL 13-Feb-09
Riverside Bank of the Gulf Coast, Cape Coral, FL 13-Feb-09
Sherman County Bank, Loup City, NE 13-Feb-09
County Bank, Merced, CA 6-Feb-09
Alliance Bank, Culver City, CA 6-Feb-09
FirstBank Financial Services, McDonough, GA 6-Feb-09
Ocala National Bank, Ocala, FL 30-Jan-09
Suburban Federal Savings Bank, Crofton, MD 30-Jan-09
MagnetBank, Salt Lake City, UT 30-Jan-09
1st Centennial Bank, Redlands, CA 23-Jan-09
Bank of Clark County, Vancouver, WA 16-Jan-09
National Bank of Commerce, Berkeley, IL 16-Jan-09

That brings the failed bank count up to 17, in a little over 2 months into the new year. For comparisons, in 2008 there were a total of 25 banks that failed, and just 3 for the entire year of 2007.

I find it humorous that there are folks trying to blame Obama for this wreck even though he's only been in office for about all of 6 weeks and the market was already well into free fall under Bush. You really have to wonder about people who think things can magically change overnight with a new presidency- as in if McCain were elected instead, the current situation would be drastically different and life would be rosy. These folks need to get a dose of common sense - we didn't get here overnight, and no one should expect any quick fixes. The problem is too many people tend to ignore finances and have little understanding even now about what the problems are. Of course when the Fed Chief Bernanke continues to pump misinformation out like saying the economy may turn around next year when he really has no clue, it just makes it harder for people to get to the truth.

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Wall Street's "Way-Back" Time Machine: 1996 Revisted

3/02/2009 10:38:00 PM / Posted by Soullfire / comments (0)

Attention- Wall Street has possession of a bonafide time machine!

The year is 1996....

Top Hits:

1. Macarena (Bayside Boys Mix), Los Del Rio
2. One Sweet Day, Mariah Carey and Boyz II Men
3. Because You Loved Me, Celine Dion
4. Nobody Knows, Tony Rich Project
5. Always Be My Baby, Mariah Carey
6. Give Me One Reason, Tracy Chapman
7. Tha Crossroads, Bone Thugs-N-Harmony
8. I Love You Always Forever, Donna Lewis
9. You're Makin' Me High / Let It Flow, Toni Braxton
10. Twisted, Keith Sweat
11. C'mon N' Ride It (The Train), Quad City Dj's
12. Missing, Everything But The Girl

Top Ten News Headlines:

Israel elects Netanyahu
Crash of TWA Flight 800
Russia elects Yeltsin
U.S. elects Clinton
Hutu-Tutsi conflict in central Africa
Peace, elections in Bosnia
U.S. base bombed in Saudi Arabia
Centennial Olympic Games
Advances against AIDS
Unabomb suspect Ted Kaczynski arrested

S&P 500

October: ~ 700 in October

Wall Street has managed to return the S & P once again to October 1996 levels.
One year:

Ten year:

In the movie "Back to the Future", plutonium or lightning was used to power their time machine:

Wall Street's power source is a never ending supply of grim news such as this latest tidbit:

AIG records a 62 billion dollar loss for the 4th quarter of 2008- setting a new record of ALL corporate losses EVER reported.

Even better news- AIG reportedly offered out 500 billion in insurance obligations but kept only 10% in reserve as collateral....I guess they thought no one would ever need to collect on their insurance...

Not to worry through, since the US Govt is bailing out AIG yet again with an additional 30 billion dollar life line.

And people wonder why the arrow continues to point down.....