ODP

[squiffy]

ODP took about a 6% pop up today. Two days before the earnings report is due. It will be out on Wed. Feb. 11.

I bought ODP back in Sept. 2003 at an average price of 15.75. Would have done better trading in and out instead of buying and holding. But I bought and held because on MCD and HD I would have done better buying and holding. Oh well.

I have sold most of my shares, but am keeping about 3000 shares in the hope that ODP will still spike up a bit over the next two days. But not sure.

Anyway, have made about $6,776.21 on ODP over 5 months. May make another $5000 if I can sell the remaining 3000 shares over the next few days at 17.00 or better.

Percentagewise, not a steller return, possibly about 4.5% or so over 5 months. But better than losing money.

Again, if I had sold in Dec./Jan. at 16.90 and then bought in a week or two ago at 15.75, would have made more.

Adios was absolutely correct about CFC. Would have been a great buy at 60 or 70. Don't remember where he recommended it.

I am selling it short though at 83 and 85. Ran out of money when it hit 88. And bought about 10 contracts of the 2 year puts at strike 80. Hoping that over the VERY LONG TERM next two years it will be much much lower. But over the short term, Adios was on the money that it was a good bet.

Would like to get into MRK Merck, but it has gone up since Dec. All my money was still tied up in ODP. Haven't seen any large pullbacks on MRK, but would love to get in if it drops a bit. Down today a tiny bit, I guess on news that the CEO is exercising tons of options to buy stock.

[adios]

Don't mess with my stocks man /images/graemlins/smile.gif.

[squiffy]

Update on ODP. Office Depot took about a 6% pop again on the day of the earnings announcement on Feb. 11. Now, I wish I had held more shares a bit longer. But it's scary to have all your retirement money tied up in one stock.

Anyway, since buying share on 9/3/03 and selling on 2/11/04, a period of about 5 months, I made a profit after trading costs of $13,025.33, which according to my Quicken program is a 17.68% annual rate of return on the money invested.

Again, not a great return considering some of the other stocks out there, but better than losing money.

The problem with the market now is that using my style of investing it is hard to find anything that is "undervalued" and has little downside. Most of the market seems fairly valued or overvalued. And most of the stocks seem to have considerable downside. So it's a much scarier time to invest.

Much of the profit, fortunately, was in my retirement account. So it's not taxable until I retire and start withdrawing it at age 59.5.

So the next trick is to hold onto it, without losing any of it, for another 20 years, and to make sure I don't die of a heart attack or get hit by a bus before then. Wish me luck.

Another way to look at the gain is that I made $13,000 over 5 months, so about $2600 per month, some of it tax deferred.

My dream is to accumulate enough capital so that I can earn as much through my stock trading as I do through my day-job as a law clerk diong legal research for state court judges.

One huge problem with trading in a retirement account is that you cannot buy options. You can sell covered calls. But it would be nice, if the price is right, to be able to buy puts to cover the downside risk that you face when investing in stocks that are medium-priced and look like them have upside, but also have considerable downside in the event of an unexpected negative news release.

Also, many of these high-flying tech stocks are so speculative, that I would rather not buy the underlying shares. But I might be tempted to buy some naked calls for a few thousand here and there. Of course, the huge problem there are the outrageous trading costs, which makes me think trading options really isn't a sensible approach, unless you are hedging risk.

Oh, well. Learning more every day.

[adios]

"The problem with the market now is that using my style of investing it is hard to find anything that is "undervalued" and has little downside. Most of the market seems fairly valued or overvalued. And most of the stocks seem to have considerable downside. So it's a much scarier time to invest."

Yep that's a problem. Remember when the market was tanking in 2002 and how many people were saying how bad the market was? Now the bullish sentiment is off the charts if you go by what the talking head pundits on the boob tube are stating at least that's my take. When the market is trading at much lower prices this is apparently bad, when the market is trading at much higher prices this is apparently good. For me it's the other way around and apparently you agree with me.