pump and dump

some idiot is wailing my inbox about 30 times a day with stock spam, the latest for GDKI.PK. here it is over on spamnation. the information available is sketchy, and the yahoo finance chart isn’t printing properly, but the intense pump and dump action needs a bad porn music soundtrack. according to the FAQ over at spamnation, this kind of a scam is usually perpetrated by some third party and not the company itself.

the pressure to rack up the big returns at those hedge funds must be intense these days! thanks, whoever you are, for giving me a list of stocks to steer clear of. here’s someone who created a tracking portfolio out of stock spam he received.

if you are getting hit by stock spam, you can forward them to the SEC.

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dell

i sold dell today at a 6.8% profit. the more i read about it and talked with people over the weekend, the less excited i was for the trade to become an investment. i wasn’t particularly good with the timing of the sale either, this morning it was up over 8% from where i bought it, but i was hemming and hawing a bit weighing the decision.

i bought back into PHO today, the powershares water resources ETF. i had bought it earlier in the year for a runup, and then when it turned around on may 10 with everything else i got out at a fractional loss. i’m probably early getting back into it, but i am still confident that water is one of the bigger stories out there. i also think that the utility constituents of the palisades water index should start getting a lift at some point as the tightening cycle pauses or ends and the economy shows more signs of slowing. the risk there is oil prices, because most utilities are energy intensive. i suppose i am “hedged” against that by penn west (PWE). i received those shares in a buyout of the petrofund canada i had.

my gut tells me i should think about buying puts on the QQQQ on days like this. i’m not complaining, mind you. everything is green on my screen right now. sandisk announces at 3PM  the close, and i sure hope they have some happy things to say about the next two quarters.

UPDATE: sandisk had good things to say.

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stock category added

i’ve been reading fred wilson’s blog for a while, and just read his post encouraging people to add a category for stocks, and hooked it up here. i like his idea of aggregating these stock related posts somewhere, although being a heavy consumer of stock related feeds i think it would be challenging to make sense of all that’s out there. reading a lot of posts about breakouts on 5 times average volume or eliot wave patterns aligning with jupiter (ok i’m being facetious) is not going to be that useful if you are ben graham disciple. or possibly it will. i have learned a huge amount about different approaches to trading and investing reading the hundred or so stock-related feeds i follow daily.

i have been messing around with stocktickr lately as well. i’m seacaptain on there. i just threw some random stocks in there when i first signed up and haven’t edited my portfolio there, so don’t wail me about my performance. it’s a bit more of a TA and momentum crowd, but the germ of an idea is there for using social and trusted network tools for stock selection and personal finance. i have a pretty good idea of the app i would like to build, or would like to see built so that i could use it. but i think i’m going to keep that one in stealth mode for now.

recession proof investment? PRISONS

here’s a stock story that you might be a little hesitant to share with your more narrowly-minded liberal friends. the economy is slowing, and times are getting tougher. real wages are going nowhere. central bankers around the world are pulling liquidity out of the markets trying to keep ahead of inflation. stagflation and/or recession seem well within the realm of possibility in the next 6 to 12 months. in more difficult economic times, people generally behave a little more badly. they steal, they break things, they get drunk, tempers flare. they get mad at illegal immigrants who they perceive as the source of their employment woes.
how do you capitalize on this emerging trend you ask? well luckily the private sector is lending a big hand to uncle sam by incarcerating people more efficiently than the government can. right now, they are making a KILLING on all this illegal immigrant hysteria. business is BOOMING!

By the fall of 2007, the administration expects that about 27,500 immigrants will be in detention each night, an increase of 6,700 over the current number in custody. At the average cost these days of $95 a night, that adds up to an estimated total annual cost of nearly $1 billion.

[…]

Wall Street has taken notice of the potential growth in the industry. The stock of Corrections Corp. has climbed to $53.77 from $42.50, an increase of about 27 percent, since February when President Bush proposed adding to spending on immigrant detention.

Geo’s stock rose about 68 percent in the period, to $39.24 a share from $23.36.

the bread and butter are still regular old prisoners, but the margin on illegal immigrants is pretty sweet. in the following excerpt from the article i have bolded a sentence that i feel indicates the possibility for exponential growth in the event of some sudden “market event”:

While the companies would not comment on profit margins from their
immigration business, Wall Street analysts said that detention centers
produce profit margins of more than 20 percent.

That compares with margins in the mid-teens for traditional prison management, they
said, because prisoners are provided with more costly services like
high school degree programs and recreational activities.

Even with the expected growth in the number of immigrant detainees, the main
source of income for the private prison companies will continue to be
revenue from state and federal governments for housing regular inmates.

The state and local prison population totaled more than 1.5
million last year, with about 100,000 of those held in privately
managed prisons. But the number of state and federal inmates rose by
just 1.4 percent from June 2004 to June 2005, slower growth than the
average 4.3 percent annual increases from 1995 to 2000.

By contrast, the number of immigrants in detention is expected to increase
by about 20 percent over the next three months alone.

Federal immigration contracts generated about $95.2 million, or 8 percent, of
Correction Corp.’s $1.19 billion in revenue last year, and about $30.6
million, or 5 percent, of Geo’s $612 million total income.

In the first quarter of 2006, Corrections Corp.’s detention revenue rose
to $25.5 million. The federal immigration agency is now the company’s
third-largest customer, after the federal Bureau of Prisons and the
United States Marshals Service.

The detention market is projected to increase by $200 million to $250 million over the next 12
to 18 months, according to Patrick Swindle, a managing director at
Avondale L.L.C., an investment banking firm that has done business with
both Geo and Corrections Corp. He said that a company’s capacity would
play an important role in how much of the market it would be able to
capture.

The company “currently has 4,000 empty beds in their system,” Mr. Swindle said. “They are bringing on an additional 1,500 beds within the border region.’’

“Reasonably, about 3,000 to 4,000 beds could be made available” for immigrant detention, he said.

Having empty cell space that can be made available quickly is
considered an advantage in the industry since the government’s need for
prison space is often immediate and unpredictable.
Decisions about
where to detain an immigrant are based on what is nearby and available.
Immigration officials consider the logistics and cost of transportation
to the detention center and out of the country.

bargain hunting

i picked up some yahoo yesterday and some dell today. i added a new yahoo finance badge in the sidebar, if you scroll down a ways, that shows most of the stocks i own. i am not quite at the point where i put it all up there, the number of shares, the performance, etc., although that is where i am headed. as a caveat, i am over 80% in cash right now, and believe there is likely more pain yet to come in the market. it is a bear market until proved otherwise at this point. taking small positions in mega-companies that have just gotten over-hammered seems less risky than other strategies at this point. besides, i really like this dell monitor i have and although yahoo pisses me off occasionally (think sbc/yahoo and their recent privacy policy changes) i use their services every day. no groundbreaking strategy here. these are pretty pedestrian trades, just picking up some poor slapped-up tech stocks to keep another recent acquisition, sandisk, company. the slaps continue to come for SNDK today, hopefully their guidance on monday will turn things around.

i started dabbling in t-bills a couple weeks ago. i haven’t bought treasuries before (i might be wrong about that, i am remembering some kind of bank product i had as a teenager), but they have made it painless with treasury direct. i set up the account in january but left it alone until now. bond prices have moved steadily up since i ordered on the 7th. (you place an order and it gets filled at the next auction). i don’t anticipate buying many treasuries, it is more like an experiment, and i really don’t see myself trading in and out of bond positions.

i guess in a way i really do get a rush from consumerism, it’s just that i get way more of a rush out of buying things i believe are going to appreciate in value. with exceptions made for computers, consumer electronics, and boats of course.