Tuesday, December 30, 2008

Dominance II - The LeBeau Wall

Steelers Defense this Season:
  • First in points allowed per game by .7 points over second place and by 8.0 points better tan the median.
  • First in yards per game allowed by 23.9 yards over second place and by 122.2 yards better than the median.
  • First in pass yards per game allowed by 22.8 yards over second place and by 48.5 yards better then the median.
  • Second in rush yards 3.4 yards behind first and 30.0 yards better then the median

Still Alive Sour Kraut

Though work and family have given me a run for my money the last few days, I am indeed still quite alive. I apologize for the massive delay in posting, but I'm sure you all managed to survive without me.

Now, the tasty bits of cabbage:
  • Burgher's farewell from Bram has a peculiar comment thread. The Judge and O have some hilarious musings. Maybe the Judge was Burgher, after all, it is widely assumed the Burgher had inside information, and who has more info then a Judge?
  • How bad are cell phone carriers? Check out this NY Times piece that speculates how much money they must be making on text messages. A text message is so small you could send it by carrier pigeon for $.20 and still make a margin. Ridiculous.
  • Interesting post over at The World of Threes. Keep an eye on him, he's writing some good stuff. Three, any chance you make it so I can read your whole post in my RSS reader?

Sunday, December 21, 2008

Dominance - PSU Repeats as National Champs

Penn State Women's Volleyball Highlights This Year:
  • The title's is there second in as many years.
  • The team has four first-team all-Americans. FOUR, there's only 6 (7 with the libero) players on the court at a time in volleyball.
  • National Player of the Year is a Penn Stater, and only a Junior.
  • Oh ya, and she won player of the year last year too. If Tim Tebow played women's volleyball, he'd be Nicole Fawcett.
  • 38-0
  • #1 Seed from wire to wire
  • They lost two sets all season (volleyball is best of 5 sets), TWO. That makes them 114-2. That means they lost one set for every 57 that they played.
Congratulations ladies, from a guy who once was an avid fan (hey, you have to do something while you wait for the bars to get humming, why not watch some world class volleyball?)

Investing Pittsburgh: A Little Weekly Wrapup

This wrapup is little because little happened. The Dow Jones was up 0.17% and the Pittsburgh Fund was up 0.45%. It’s nice to be doing almost three times as well as the market, but I’d prefer to be doing it when the market is up 5%. Individually:
  • It’s worth noting that US Steel may have been halted on their ridiculous run, actually down on the week.
  • Heinz was up, mostly because of the dividend.
  • PNC was down (but up from where bought it), is only a buck or so off its 52 week low.
Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click here.

Thursday, December 18, 2008

Investing Pittsburgh: Welcome PNC and X Adjustment

PNC's stock has fallen over 37% since the first time I wrote it up in this blog as an exception to the downward market trend. The company has remained primarily the same, the major differences being that it has taken a few hits on anticipated loan defaults and it has acquired National City. I believe that given the sweetheart deal PNC was given, the National City merger will be a successful one. Furthermore, I believe that PNC will continue to be viewed as one of the few banks to have fairly low impact from the sub-prime mess. With that in mind, I want to add PNC to the portfolio.

The problem is, I'm not sure when to do it. The stock took a huge hit yesterday, and I think it will recover some today, but I'm not sure it has hit its floor. For this reason I'm going to take a conservative position, only buying 40 shares. I'll complete the position with another 40 when I'm more confident that the stock is rebounding.

Also this morning, I'm selling roughly a third of the position in US Steel. I'm doing this for three reasons, all three have to do with the stock's 64% return since we purchased it. First, because of the large return, the stock now occupies a higher percentage of the portfolio then I'd like any one investment to occupy (a full 10% more then Heinz, the second largest position). Second, I'm not sure how much short term growth the stock will bring. I still think it's a hold, but I don't want a large portion of the portfolio tied up in a stock without much short term upside, not when there are so many bargains in the market. Third, as I have mentioned, I want to maintain a large cash position to hedge any huge market drops (which I think are still possible).

There are your moves for the morning. In case you're keeping track at home, that leaves us with the following positions (weird that three of the four positions currently have a value with no change following the decimal):

PPG (NYSE: PPG) - 40 Shares - $1780.00 - 10.3% of Portfolio
US Steel (NYSE: X) - 75 Shares - $3159.00 - 18.2% of Portfolio
HJ Heinz (NYSE: HNZ) - 75 Shares - $2946.00 - 17.0% of Portfolio
PNC Financial Services (NYSE: PNC) - $1839.20 - 10.6% of Portfolio
Cash - $7597.50 - 43.9% of Portfolio

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click here.

Tuesday, December 16, 2008

New Addition to the Blogroll

The Honorable Rufus Peckham is not new to the blogroll. He is a regular contributor to the Men's Blogging Society and the primary mastermind behind Carbolic Smoke Ball. He's branching out now though on his own with Amicus Curiae. The about this blog reads, "We needed a forum to get a few things off our chests -- the stuff we don't get to write due to the space and format constraints of Carbolic Smoke Ball." I'm going to put the blog in "Interesting/Fun" for now, but I remain hopeful that the brain behind the Judge, TM, will dive in to some serious issues and force me to move the blog in to the "Essential Pittsburgh Blogs" category. There have been too many exits from that category, and not enough entrants.

The blog is subtitled "The Blog of the Hon. Rufus Peckham", which is clearly copied from "The Blog of Burgher Jon" without so much as a mention.

Who in the world is Carmen Robinson?

She's running for mayor. The interview with Sheldon Ingram makes her sound like an intelligent, viable candidate for mayor. At the end Sheldon points out that name recognition and political qualifications may be an issue. Let me just say that if Matt at Pittsburgh Hoagie is beating the P-G and Trib to a story on you, you're not on peoples radar. That's not a dig on Matt, I'd feel the same way if I had written the post.

In the two minutes on KDKA she seemed like the kind of person I'd vote for, but unfortunately that's all going to get lost in the fray. Luke has way too much money and local sway for anyone other then a respected, revered, qualified and spotless local to come anywhere close.

Woy's Thoughts

If you're not a regular participant in the Burghosphere you may not know who Mike Woycheck is. He is one of the "godfathers" of the Burghosphere. His blog, Have a Good Sandwich, is one of the oldest in the Burghosphere and he is at least partially responsible for Pittsburgh Bloggers, WearPittsburgh and PodCamp Pittsburgh. This is all in addition to being the technical brains behind the creative genius that was PittGirl and The Burgh Blog.

With that introduction, I think it's pretty clear that if you were a fan of PittGirl at all, you need to read his farewell post to PittGirl.

Sunday, December 14, 2008

Investing Pittsburgh: Week in Review 12/8 - 12/12

I made several posts this week, so I don't have a lot to add here, but:

This was a good week, mostly because of Monday. The market was down 3.41% but the Pittsburgh Portfolio was up 2.36%. That's why we have a large cash position, so that we can survive some losses in the market; this week, our cash beat the market. US Steel was up 9.05% and Alcoa was up 5.22% which made up for a sluggish PPG.

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click here.

Investing Pittsburgh: Goodbye Alcoa and Good Luck

I've been sweating wether or not to shed Alcoa for the last few days, and I have just this morning come to a definitive resolution, it has to go.

The logic for keeping Alcoa is that it is a potential acquisition target (in such a case the acquiring company would probably value the stock at 12 or 13 and give us a tidy little profit). There's also the chance that with an economic turnaround, particularly with an infrastructure investment by Obama, Alcoa will be fine. There's the chance that it makes its next dividend and is up to 15 or 20 by the end of the first quarter 2009.

While I can definitely see all of this happening, it's just not worth the risk. Alcoa is the only stock in our current portfolio that I can see falling dramatically in the next several months. It is also the only stock that I can see failing to pay its dividend. Why not take advantage of a mini-winning streak and cash out? It won't hurt us to have a little more cash. After the Heinz purchase we are 41% cash, I wouldn't mind being closer to 50%. If the market continues to turn, there are going to be some bargains to be had in the next few weeks and I want to have the cash to buy them. Besides, we have made 8.27% in the last couple weeks on a risky stock. It's time to not be greedy and cash out.

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click here.

Friday, December 12, 2008

Investing Pittsburgh: Welcome to the Portfolio, Heinz

The above charts are Heinz (HNZ) for the last couple weeks. I don't know why the resolution turned out so bad, but I don't really have time to fix it. Essentially it hit it's 52 week low earlier this week and then has been relatively flat. It looks to me that it has met some resistance at about 35 or 36. Since it's trading at 36.14, I don't think there's too much more give in it. The other nice thing about HNZ is that today is the dividend date, so it's time to buy in and get that dividend. Especially with a current yield of 4.59%.

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click here.

Tuesday, December 9, 2008

Investing Pittsburgh: Yesterday

The chart above is of USX (X) and Alcoa (AA) compared to the Dow Jones Industrial Average for yesterday. Yesterday is not the kind of day that happens often. However, when you make smart investing moves you occasionally get rewarded with a huge day. Yesterday, on the wings of Alcoa's 17.55% jump and US Steel's 24.44% jump the Portfolio was up close to 6.56%
(that figure counts the cash position. The invested positions were up 17.64%). Yesterday is largely thanks to rumors of Obama's infrastructure plan that would help Alcoa and US Steel and an upgrade in Goldman Sach's advice on USX. I can't claim to have predicted the US Steel upgrade, but I did enjoy it. I did say to look out for the boost in infrastructure spending to effect both stocks. Even more help would come from a finalized auto bailout.

Investing Pittsburgh is a regular part of this blog. It details the ins and outs of a mock portfolio of Pittsburgh Stocks invested and managed by me. For a list of all of the previous "Investing Pittsburgh" posts, click

Sour Kraut

This kraut is especially sour, but there are a few things I wanted to comment on:
  • I'm a pretty successful young man, but I'm sure that Obama's Lead Speach Writer (at 27 years old) is more wealthy and powerful then I will be at his age. Unfortunately for him, when you accept wealth and power in the way that he has, you lose the right to have a personal persona. You have only your public persona and this photo (Washington Post) is an unacceptable portion of your public persona. Gotta take the good with the bad young man.
  • I finally made it to a Pittsburgh Steeler game. You may recall that I attended the Steelers vs. Indianapolis a few weeks ago. That didn't count as a Steeler game though. Last night, while I watched from section 517, the Carolina Panthers took a one touchdown lead on the Tampa Bay Bucaneers and then proceeded to play a prevent defense and run the ball mercilessly and there was nothing Tampa Bay could do. They put 8 men in the box, then 9 and Carolina kept feeding them a steady stream of running plays. Somewhere the spittle was flying all over The Chin's TV.
  • Fran Drescher can not be elected to office. I'm for democrats and I'm for women's rights, I'm not for squeeling on the sentate floor. Seriously, I'd rather have Chris Matthews.

Monday, December 8, 2008

Investing Pittsburgh: Week in Review 12/1 - 12/5

Here's how our portfolio fared since I bought in on Tuesday:

Company (Ticker) || Purchase Price || Friday Close || % Change
US Steel (X) || 25.64 || 28.76 || 12.17%
Alcoa (AA) || 9.31 || 8.15 || -12.46
PPG (PPG) || 39.59 || 43.50 || 9.88%
Overall Fund || 15000 || 15383.60 || 2.56%
Dow Jones Industrial (DJI) || 8149.09 || 8635.42 || 5.97%

So we lost to the market, that's ok. It's still a heavily cash portfolio and that is for good reason. If the market were to take a nose dive next week, we would be fine because of the cash reserves. The idea was to buy in, but still leave some room to maneuver.

Individually, PPG and US Steel were very good to our portfolio, making 9.88 and 12.17 percent respectively. There was no major news for either company, both just enjoyed an up market and an undervaluation.

Alcoa on the other hand suffered from the news that it was in a fight to remain viable. I believe that it's trading so low right now, that there is not much risk. Even in a bankruptcy or a takeover stock prices are unlikely to plummet from where they are right now. I'm sticking with the stock, though I don't intend to increase the position unless the stock prices fall off pretty significantly.

Finally, I'm not even going to comment on what is going on today as far as a general market trend (though I am knocking on wood as the dow is up 200+). In Pittsburgh, it looks like people may have realized that Alcoa can only go so low without acquisition talks starting it also doesn't hurt that new government spending may require US based companies be used.

To view all the posts on Investing Pittsburgh, including the early posts about how the fund was formed and the purpose, click here.

Thursday, December 4, 2008

Sour Kraut

A whole bunch of things caught my eye as I flipped through the evening's Post-Gazette.
  1. The pension fund is in serious serious serious trouble. If the markets were up 25% this year instead of down 25%, the pension fund would be in serious serious serious trouble. I am impressed that Ravenstahl seems to be taking some responsible steps to deal with it (namely, involving Harrisburg early, letting younger employees opt out and allocating some extra funds). Let's just hope that those (and a rapid economic recovery are enough to pull out of this,.
  2. Another thought on the article... Couldn't the title mention something about the fact that Ravenstahl and the committee are enacting plans to deal with it, rather then just saying money was lost.
  3. City Council and Hilary Clinton might have to do the politically noble thing and turn down some money. The Clinton story is interesting, did Obama (A constitutional law professor) violate constitutional law in his appointment?
  4. The Special Election will be 2/5
  5. Chelsea Wagner is NOT going to run for mayor. I think she'd lose, so if I were her close friend I would certainly have advised her not to run. However, as a Pittsburgher I think it's a shame that there's unlikely to be a serious threat to Ravenstahl, apologies to Mark R.
  6. The Pirates have decided NOT to lower ticket prices. After hinting that they would, they instead decided to keep them the same. Of course that didn't stop them from pretending that they were keeping them the same "difficult economic climate." Sometimes I just want to smack the buccos. I love them, but sometimes they just break my heart.
  7. Speaking of the bucs breaking my heart... Jack Wilson will be gone, and soon. I know it's the right baseball decision, but it still hurts to see a great Pittsburgher leave the town.

Wednesday, December 3, 2008

Investing Pittsburgh: News Roundup

A couple of places where the national news covered companies in the Investing Pittsburgh portfolio over the last couple days:
  • US Steel is slimming production by idling some of its plants (Business Week). Unfortunately, this is a necessary step. Hopefully a Detroit bailout and an economic resurgance (fingers and toes crossed) can keep them from having to shut down these plants any more permanently.

Investing Pittsburgh: Retailers

Schultz pointed out that I should look at AEO for the fund. In fact, I have. I am avoiding retailers like the plague right now. Especially anyone who is not Walmart or Target (and unfortunately neither of those are Pittsburgh based).

That being said, I think that AEO is a decent buy right now, if you're willing to wade through the shark infested retail waters. I will be shocked if their market value does not increase from where it is now over the next year. They are a company that still has some growth left in them but is already paying a dividend. Additionally, their P/E ratio at 6.24 makes them a rare company that could be looked at by either growth or value investors. Because of that, I don't think they are a bad investment.

However, I think that we'll start to see retailers turn around long before it's too late to get in the game (making momentum trades possible). Consequently, if I had to make a trade with AEO it would be a stop trade, probably at around $11.25. It hasn't traded at that level since early October (when it lowered projections), so I think once it hits $11.25 it will be because of a firm upward trend. Will we have lost out on $2 per share, yep. However, I'll sleep better at night knowing that I have some cash in the bank during this recession time. Especially if something crazy happens.

BTW, there is a similar story to be told about Dick's.

Tuesday, December 2, 2008

Investing Pittsburgh

I'm going to be adding a segment to the blog called "Investing Pittsburgh." It will focus on business in the burgh and how to invest in it. Many financial experts will tell you that if you want to invest your own money, it is important to segment the market and look at only some subset, otherwise it becomes too overwhelming. With that in mind, I'm going to be looking at only companies that have a substantial presence in the Burgh.

I am going to keep a mock portfolio/fund and provide regular updates as well as information on when I'm buying and selling and why. I'm not recommending that you do as I do and I am by no means an expert, but I think whether or not the mock portfolio makes any money, we can all learn a little something about how the Pittsburgh business scene operates. So follow along and feel free to offer your insights.

I am going to start the fund with $15,000. I'm going to assume that I'm not making any interest on unused cash and that I do not have any credit. I'm also going to limit myself, for now, to long positions. I may soon decide that short positions and derivatives are fair game for this hypothetical account, but I think that for now I will leave it simple so that everyone can follow it.

For starters, I think now is a good time to get in to the market. The Fed has made some aggressive moves to save the economy and while there may be some give left in the market, there are certainly some values out there.

I'm going to start the fund with 3 Pittsburgh Stocks at varying positions. I'm only going to use about a third of the funds because I am not sure exactly where the market is headed and I want to leave some cash in case there's a lot more downward action left.

The three stocks I'm going to use are US Steel (NYSE:X), PPG Industries (NYSE:PPG) and Alcoa (NYSE:AA). Generally, the reason for these three stocks is that they are stable companies that make solid products and offer a dividend. Additionally, they are all materials companies, not a bad thing to hold with an administration that is promising major public works projects about ready to enter office. Individually, here are some thoughts on each:
  • US Steel (X) - Their P/E ratio at the moment is 1.63 and the current price of $25.64 puts them $4.93 from their 52 week low, but $170.36 from their 52 week high. That's a value stock if I've ever heard of one. Additionally, they paid a $.30 dividend in November and they pay dividends quarterly. At their current stock price, that's a 4.68% dividend yield. That means that (assuming they don't have to lower dividends, which is admittedly possible), I can make almost 5% return on the dividends while I sit around and wait for the stock to turn around. If it takes 5 years, at least I'll be making almost 5% on the money while I wait.
  • PPG Industries (PPG) - The individual reasons are similar to those of US Steel. They are $3.65 off their 52 week low and $42.62 off their 52 week high. They also have a low P/E (9.94) and a high dividend yield (5.35%). Additionally, they have somewhat better growth potential as it appears that they have been a bit more innovative then Alcoa or US Steel, perhaps because they are not tied to a specific metal.
  • Alcoa (AA) - Again, this is pretty similar. In this case the P/E is 4.45, $2.51 off 52 week low and $35.46 off 52 week high and the dividend yield is a whopping 7.3%. If that dividend yield sounds to good to be true, it's because it may be. Net income will be less then half this year of what it was last, so it is not impossible to see the dividend falling. I plan to take a somewhat smaller position in Alcoa and wait to see if the dividend falls. If it does the stock will take a hit and at a further reduced price I might be able to increase my position. On the other hand, I will have some stock if they make their payment or raise it (which would cause the stock to increase more then slightly).
There are several things I don't like about this portfolio. It's pretty tied to the indices, in a bear market no less. It's also not very diverse. I will attempt to fix this to a degree over the course of the next several months, but for now I figured why not start playing? So here are the buys:
  • 100 shares of Alcoa (NYSE: AA) at $9.31 for $931.00
  • 40 share of PPG (NYSE: PPG) at $39.59 for $1583.60
  • 110 US Steel (NYSE: X) at $25.64 for $2820.40
That leaves us with the following holdings:
  • PPG - 40 - $39.59 - $1583.60 - 0.00%
  • X - 110 - $25.64 - $2820.40 - 0.00%
  • AA - 100 - $9.31 - $931.00 - 0.00%
  • Cash: $9,665.00
Everyone keep your fingers crossed that Detroit gets a bailout (not that I think it's the best idea ever, but for this stock fund, it would help).

Monday, December 1, 2008

Senator Mathews?

So after a crazy week back in the burgh for Thanksgiving, I'm as far behind at my actual job as I am in the burghosphere. Consequently, I have to be brief and get to the job that pays the bills. However, I thought you would like to see this:

(CNN) — As speculation continues to swirl about a possible Pennsylvania senate bid by MSNBC anchor Chris Matthews, Republican Sen. Arlen Specter said on Sunday that he’s not worried about it.

“I’m going to have an opponent, in fact I’m going to have two opponents — one in the primary, where I always have a tough race, and again in the general,” Specter told CNN’s Wolf Blitzer on "Late Edition." “I never look over my shoulder, I never look behind. Somebody may be gaining on me. I run with blinders. I’ll be prepared no matter who my opponents are.”

The Patriot-News of Harrisburg reported on Saturday that Matthews met with Pennsylvania Democratic Party leaders to discuss a possible senate run in 2010 against the incumbent Specter. The senior Republican is currently serving his 5th term, having first been elected in 1980.

Matthews, in a statement on the political Web site FiveThirtyEight.com, said reports of him staffing up for a run are "absolutely not true."

Specter said he’s only concerned with his own bid for re-election in 2010.

“I don’t know what anyone else is doing, but I know what one man is doing—Arlen Specter is running,” he said on "Late Edition."

A Quinnipiac poll released this week shows strong support for the incumbent Specter. Specter leads 45 percent to Matthews’ 33 percent among overall voters. Among Democratic voters, however, Matthews leads Specter 55 to 25 percent.

Robert Menendez, the recently elected Chairman of the Democratic Senatorial Campaign Committee, said he hadn’t talked to anyone who could confirm Matthews’ run.

“Wolf, we’ll see who decides to run. I haven’t seen any firm announcements by anyone, in terms of running,” the New Jersey senator said.