Friday, March 30, 2007

ARNA (Arena Pharmasutcials): Phat for Fat

We're big and we ain't so bad. Although you as a reader might not be in this category, let's face it, or rather, we have to face it, Obesity is a serious issue.

More than 30 percent of Americans are obese, a figure that has risen sharply over the past decade, according to the Centers for Disease Control and Prevention. Substantial health risks (cardiovascular disease, hypertension, and type two diabetes) are associated with being overweight and obesity, leading to increased morbidity and mortality (2.6 million deaths annually worldwide from type two diabetes). The U.S. Surgeon General has estimated the direct and indirect economic costs of obesity at $117 billion per year.

So here's the big idea or rather, "the skinny." Arena has developed a top drug candidate Lorcaserin for Obesity entering phase 3 Insomnia APD125 in phase 2. Several more promising compound are also on deck (phase 1 or about to enter phase 1) and I'm liking the odds. What the drug essentially does is stimulates the 5-HT2C serotonin receptor, located in the part of the brain called the hypothalamus, which helps regulate satiety and influences metabolic rate. In English, it makes you feel full.

Data from a Phase 2b trial of lorcaserin demonstrated that patients who received the drug experienced significantly greater weight loss than patients who received placebo. So it's a miracle diet pill. Solid right? No you say? Okay, let's consider the alternatives we currently have:

Stomach Stapling: Needs strict patient compliance to diet, Vertical Banded Gastroplasty (the medical name for Stomach Stapling) is in no way a magic bullet or pill (ah, but Lorcaserin is). It must be emphasized that lifestyle changes (boo), i.e. diet (boo) and exercise (boo), are absolutely imperative for weight loss to occur and be maintained. As with any surgical procedure, there are risks of complications. It has been observed that approximately one in every hundred patients undergoing VBG die within a year.

Diets: Normal diets stress a lifestyle change and strange or extreme diets can be very dangerous, and they are often ineffective.

Liposuction: Who can afford it?

Fat Burners: There is no good reason for speeding up your heart but I guess the silver lining is that it proves that people are willing to pay for weight loss pills.

Richard Simmons: Side effects include embarrassment, a tacky wardrobe, and if you are a male, a significant increase of effeminate tendencies.

Let's face it, current weight loss systems are ineffective and in some cases, dangerous. As for alternatives involving medication, there are currently only two approved drugs to treat obesity and concerns about side effects and efficacy have limited the use of these, presenting an opportunity to help millions of patients with a new, safe and effective therapy and Arena has a viable drug candidate. The fate of this will turn initially on the results of the safety portion of the BLOOM (Behavioral modification and Lorcaserin for Overweight and Obesity Management) trial in the 3rd Quarter of 2007 however the result will be huge if they pass.

In Portfolio: Yesh. (Sean Connery in da house!)
Duration: Until obesity is eridacated.
Over with: American Idol (Booooring). It's all about the Search for the next Pussy Cat Doll! P-C-D-4-LYF!!!

Sunday, March 25, 2007

GRMN (Garmin): In 100 Meters... Don't Buy

To begin with, I own a Garmin. I love it. It's really changed the life of this person who is forever cursed with wanderlust. For the 300-400 bucks that was paid, it was worth every penny. The money is paid back 10 fold with the time and gas that was saved from not getting lost (it's a common thing for me).

OK, So there are a lot of good things about the product however the business is a completely different story. So right now, the stock is soaring at near 52 week, not to mention lifetime highs at $56 a share. Nearly every article and nearly every person who comments on CAPS on Motley Fool, thinks this is a winner. But I'm having trouble believing that it's going to be the next AAPL or GOOG and that it's just going to keep on going up. It just doesn't feel right. So I put some thought into it and wrote them all down. Here are my notes:

While they currently have 60% of the market, there is nothing that is keeping a consumer stuck to them. I think of Apple's iPod and the amazing success they have had. While the product is gorgeously designed, I can think of a hundred other MP3 players are that just as beautiful, usable and frankly, more capable. What keeps someone from buying another player is iTunes. Buying another player means giving up all the money you invested into iTunes and starting over from scratch. So tell me. What's holding back a buyer from buying an alternate system from say, Tom Tom?

We all know that it's inevitable that the prices will go down as competition within this space becomes more fierce. Units that now sell for $400+ will soon be sold for $150. Unfortunately, they can't control prices like iPod and the bottom line is that in the short term, they might be OK as everyone else begins to buy GPS devices because of the low cost, but I see a very similar future for Garmin much like what has happened for Motorola and the RAZR.

So I recently had lunch with a co-worker who just bought a brand spanking new Mercedes CLK and I was oohing and ahhing over her new ride. I asked her if she got it fully loaded and she said: "No, we left off the GPS navigation system."

I got all excited and said: "Oh, you can get a Garmin! It's only $400 bucks and you can put it both of your cars."

She politely passed and mentioned that she didn't need to because she could just install GPS software onto her cellphone. I then thought: "Gosh, it would really suck for Garmin if everyone started putting it into their mobile devices."


So ya, I hear everyone that Garmin is pretty bad ass. Heck, I'm one of the people saying it. But with all the hoopla around the stock, I just don't feel good putting the money into it. What ever happened to "Buy low, sell high..." We need to feel good in a trade and believe we picked it for the right reasons because when the stock drops, we won't freak out. It's at all time highs, there is no stickiness to the product, the prices are going down and soon, anything mobile with a screen will be doing the same thing. I'm sure that there are a lot of things I don't know about the company and their strategy however 1) If you don't know the business, don't invest in it and 2) It doesn't pass the common sense test.

We'll see how well it does but I'll pass on this one.

In Portfolio: Gosh no, Heck no, Please no.
Remember: The Silverhawks?
Bullshit: Sajaya Malakar is still on American Idol

Tuesday, March 20, 2007

Qoute of the Day: Jim Cramer

"Who cares about the fundamentals? The great thing about the market is that it has nothing to do with the actual stocks."

Friday, March 16, 2007

Market Strategy: Keeping One's Self Sane in a Choppy Market

Gosh, I hate a choppy the market the most. It evokes my most hated enemy: Emotion.

I can't stand it. Although I'm in better shape than I was last week and although I'm currently beating the market. I hate the feeling that I'm not moving fast enough. Not getting to where I want to be. Yet through all these things that I'm feeling, I have to always remind myself that: Being Emotional plus Impatient equals Losing a crap load of money. So let's focus on the Pros & Cons and decide what to do from there.

- With the Nasdaq lower by 1.5% and the DOW down 2.5% than compared to the start of the year, I'm beating out the market however, I'm still at EVEN. Booooo!
- I really like my portfolio. I truly believe they will all be winners!
- It easily could be waaaay worse

- I feel like I'm going no-where financially
- I feel I could be doing more
- I'm getting impatient


The truth of the matter is that I'm doing OK. In reality, the way I have my sell prices set at, I'll do pretty darn well (assuming the market recovers and all goes as planned). The Pros definitely speak to that. The Cons, if you haven't already noticed, are overwhelmingly emotional. Irrelevant right?

So the million dollar lesson that I constantly have to re-teach myself: When stocks go up... It goes up fast. Really, really fast. The majority of the time, we're just getting ourselves in position to reap the profits.

Here's what I have come up with.

To address my need for action, I have designated a set number of shares for trading and left the majority for investment. So as the market experiences volatility as it tries to find some direction, I can buy and sell and pretty much address my concerns as listed in my CONS. This way, I can get a leg up in the market while still being in position to enjoy the long term (and many times more rewarding) benefits when the bulls decides wakes up and run.

So yes, while I'm fully aware that buying at the lows and holding rather than putting aside shares to trade will probably end in the same gain. I think we have to remember who we are. As investors, we need to keep, hold and believe in the investments we make. But as my patience gives way to my emotions... I think I still need to be true to who I am. Flaws included.

Friday, March 9, 2007

GM (General Motors): What Words are Synonymous with Ressurection?

Reliability, Performance, Design and Value. These are the 4 pillars that the entire auto industry is built upon. It's product centric. It has nothing to do with clever marketing (remember the 48 hour test drive), or amazing deals (remember the Employee Discount F'up?) or even America in general. It's about making beautiful to look at, innovative, fun to drive cars.

GMC's new product is amazing. From the revitilization of Cadillac and Saturn to the exciting new concepts from Chevy... I can't wait for this American company to remind the world where cars we're born. Let's take a look at the line up.

Saturn/Opel/Vauxhall: Awesome new set of cars and SUVs. It's amazing how they have executed a complete line change within 2 years.

Cadillac: Won't become the standard of the world again but it sure as heck will be up there with the other big hitters.

Buick: Being reborn (much like Saturn and Cadillac) as we speak... New Enclave SUV is the start of a new generation of great Buicks.

Chevy: I love the new product coming out. HHR, Silverado (MotorTrend: Co-Truck of the Year), Avalance, Tahoe and new Malibu are SOLID. Concept cars (Camaro) on tour are gorgeous and intiial drawings of the new impala and monte carlo are stunners. Don't forget the Corvette (Best v8 in the world... 400HP and 28 MPG).

GMC: The Sierra was the MotorTrend Co-Truck of the Year, The Acadia, The awesomeness is here.

Pontiac/Holden: The real "Thunder From Down Under" Not that I've ever seen that show... or know of it... shut up! ALL OF YOU... SHUT! UP! *cry*

Hummer: The lone dark spot

Saab: Okaaay... two dark spots

With the quality gap between European and Japanese product quickly closing. What's going to make the difference? It's going to be the past. It's going to be the heritage that America's once great companies once had. Finally, we have cars that are worthy of that rich spirit and it's going to be the difference. I see GM back down in the 20's as new product begins to roll out but give it a few years, and I'm predicting that this stock see's it's glory days back at 60+. As always... we'll see. For now, we're seeing some pretty amazing product come off the lines.

In Portfolio: Not just yet, waiting for sub-30 to get in.
Duration: In it for the long term baby, well, once I get in.
And then?: I'm going to buy a 2008 Camaro, a 2008 Cadillac CTS, or the new Saturn SUV *drool*

Tuesday, March 6, 2007

The Market Finally Wakes Up

Hahahah... wow... only one day after I post and it turns back around. Hope the uptrend continues. It baffles me why the Stock Exchange is the only market where people panic when there is a sale.

Monday, March 5, 2007

Resolve, Resolve, Resolve

I think it's appropiate to write now that the market has been taken out to the woodshed and been given the beating of a lifetime. Like everyone else, I'm still bleeding... badly. So the question is, what do you do? The bleeding seems to never end and yes, it's scary... really, really scary.

So let's pull it back a little and go through the list and see how we are doing? Well, first off, I'm in much better shape than from where we started (I'm where I started with the market down 15% from where I started). OK, so we're in good shape. So let's take a look at the picks and re-evaluate. Sell the ones that we're not confident in, and keep (maybe invest more into) the stocks that we like.

I guess what I'm trying to say is this: If you really like your picks, why are you bailing out so early? It's easy to stay in when things are good however I will personally say that my best gains have come from sticking it out; In and out of the stock market.

So here's mine, how did yours pan out?


AMD - Yes, They are getting their asses kicked but at some point, they're going to turn the corner and I'm going to be there. It doesn't have much more to fall but buy more as it goes down. Accumulate.

BBI - I still like this stock. It's a superior product to Netflix and they are already laying the groundwork for online downloads. To $20 Scotty! Hold.

COGT - Pursuing more than 20 significant projects in more than 15 countries and any new contracts will send this bad boy soaring. It'll disappear if it goes any lower. Hold.

EXEL - Just like Cogent. It has so many products in the pipeline and is so small that any approval will send this bad boy soaring. Accumulate.

GTW - Ya ya, but I only have a small bet for a turnaround prospect. Leave me alone. Hold.

ISV - It's a 5 star stock on CAPS and is at a low price but I'm ashamed to admit that I only bought the stock because my fiance has it as well. Can't let her have all the fun. Besides, it's a tiny bet. Hold.

WFMI - Now I got out of this one after it jumped 5 dollars two weeks ago. I've always been iffy on a couple of sectors and they are the airline industry and the supermarket industry. Sell

LOOP - It's still higher than the $13.50 price that I got into it with. I'm personally am excited about this one. Hold.

PANL - I am so enamored by the potential of this company's technology. It's lower than what I bought it at and I'll buy more as it goes down. Accumulate.

RRGB - I have a decent bet in this stock and it's still higher than what I bought it at. I can't wait to see how this one rebounds once the market starts to go back up again. Hold.

SBUX - Near 52 week lows and I will continue to buy more as it goes down. Accumulate.

USO - It's higher than where I bought it at and Crude Oil 'ain't' going nowhere but up. Hold.

VLO - It's much higher than where I bought it at and it's gas. Enough said. Hold.

KANA - I only have a small bet for a turnaround prospect. Haven't lost anything, didn't make anything. To be honest, I'm really just in this stock because my uncle Chuck has this as one of his big potentials. Nothing beats making money with your friends and family. Hold.

YHOO - It's way higher than where I bought it at and Panama is picking up traction earlier than expected. Hold.

ATVI - The game companies are still gaining tracking. I'll be buying more as this stock goes down. Accumulate.