JBLU (JetBlue): Customer Bill of Rights = Company's Living Will

Today, JetBlue unleashed (on itself) what it calls it's Customer Bill of Rights (essentially putting themselves in a burlap sack and then beating themselves with a freshly made sausage) which details a list of self-imposed penalties on all of it's flights if they are delayed in an attempt to win back passengers after last week's operational screw ups. The release states that:

"JetBlue customers will be compensated based on the length of the delays. The vouchers range from $25 to the full amount of the ticket. The delays include airplanes unable to taxi to the gate within 30 minutes and flight departures held up for a minimum of three hours, according to a program copy provided to The Associated Press."

I am personally a part of this because for the long weekend, we flew out a friend to come join us and her flight was delayed 7 hours. We were thankful that she even made it out considering the icestorm however the delay was a drag. We ended up picking her up at 4 am in the morning at a different airport 40 miles away.

Reading this new this morning was great! I'm glad that we'll be getting a full refund and yes, JetBlue still has our business however this Customer Bill of Rights is essentially death for the stock and what it comes down to is that the company pretty much has given up profitability for half the year. Every time there is fog, rain, snow, a troublesome passenger, a technical malfunction, or a pilot with an overly active bladder, they'll be reaching for their pockets. It's brilliant in terms of customer satifaction but suicide in terms of profits. They'll be breaking even or losing money on any flight that goes wrong. Surely this is an over reaction on their part.

I'm glad I cashed out at $14.50 with my $50 dollar profit because ever since, the stock has been crashing and will continue to crash until they revise their bill of rights or until man learns how to control the weather.





Notes:
In Portfolio: Just got the hell out.
Random Thought: Cats aren't clean, they're covered in spit.
Best Dunk: Dwight Howard's Sticker Dunk

SBUX (Starbucks): A Legal Addiction

What it all comes down to is legalized drug dealing (OK, maybe not that bad but I'm just illustrating a point). Society needs outlets and the three that Uncle Sam has allowed us are smoking, alchohol and caffeine. It begins as a social thing and later becomes a dependancy. It's crazy and it's to a point where my friends make mental notes of each and every Starbucks location as they are driving. I guess what I'm trying to say is that coffee is a neccessity (like gas, food, and water) for many.

My second thought is that drinking a cup of Starbucks is like having a little slice of luxury for a few dollars every day. It's also part of the reason why the iPod has been enjoying so much success, because it's considered a luxury item that can be easily accessed by the general public. It's not a 3,000 rolex or a 35,000 BMW. It's 300 dollars for the iPod and 3.00 for the coffee. Coffee is even better because of the margins but that doesn't need to be delved into.

The most important stat is that Starbuck's goal is for 40,000 thousand stores world wide and they currently are at 14,000. “We keep getting surprised by how successful we are each time,” says Peter Maslen, president of Starbucks Coffee International, commenting on how new international customers have reacted. They are gaining nice traction in non-US countries and although the stock seems pricey now, I don't see it going anywhere but up. It's currently expensive however it will seem relatively cheap a while from now. We'll see tho, but from the way my friends are mad about their coffee, it's a great buy for me. Witness.





Notes:
In Portfolio: Entry buy at 32.75 and will buy more as it goes down.
Duration: Long term
Random Thought: Justin Timberlake has a higher voice than the girl he sang with at the Grammy's... that's just wrong.

AMD (Advanced Micro Devices): A Fighter. Always Has and Always Will Be

AMD and I go way back... waaaaaaaaaaay back. Gosh, this stock has been with me ever since I was in college. Through the years, I have seen this stock get pummeled time and time again and each time it's been pummeled, I've seen it fight back. This is a company of fighters and it's in an epic battle between Intel. So even tho the stock is down now, and will continue to drop in the near term, from what I know as a computer guy and from everything I read, this is why and how I think AMD will fight and fight back in a big way.

Actually, there was an entry in CAPS that solidified everything I believe. So rather than rewrite everything. I'll just let the beauty of the entry speak for itself.

"Engineers of AMD have a new brilliant and revolutionary idea. Together with ATI they'll bring the CPU and GPU on the same chip. But this is just the beginning of a new era. In near future they will probably mold a physic-engine, and any kind of accelerated units that your imagination allows, within a single chip. (Ref: AMDs analyst day at 14. Dec. 2006, presentation of Phil Hester, AMD's Corporate Vice President and Chief Technology Officer, http://www.amd.com/us-en/Corporate/
InvestorRelations/0,,51_306_14668,0
0.html)

This means no more FSB speed limit between CPU and GPU. After this fact was declared (actually much before 14.Dec), NVDA has tried an urgent counter attack, and announced a new NFORCE motherboard with 1033 MHz FSB speed in addition to its new 8800 GeForce serie. This however doesn't compensate the fascinating idea of hardwired CPU-GPU.

Similarly Intel's hurriedly planned 45 nm chips cannot counterbalance this revolutionary idea. In fact most of the end-users will not even have interested about the nm scala of these chips.

If the system intelligently optimized and perform better, it should sell better. Marriage of AMD and ATI is something more than targeting the game and multimedia market. With this new concept, they will change the rules. They will redefine the art of computing and they will break the new speed limits.

Imagine how the motherboards will shrink. And imagine how AMD will invade the laptop market. Hardware that we add on today's motherboards, or some addons like on board vga's will be shifted from the surface of motherboards into the processor. This means however means cheaper laptops, cheaper motherboards, but more apportionment for AMD since it offers more functionality on its chips.

In long term this means motherboards will be cheaper, but AMD chips will be sold for higher prices, because on their chips they will bring more than multiple-cpu's. They will cancel the need for graphic cards, or on the board vga's. And in future, they will probably cancel the need for basic audio functions, they can easily bring physic -engines for gamers, etc. etc... Possibilities are limited with your imagination."

It is vision like this that brought apple from it's mediocrity. And what it comes down to is something truly unique, powerful and desireable. That's for the long term though.

In the short term. I think that AMD's newer lines of processors (It's current generation is pretty old), it's growth and integration of the ATI brand, and the Vista bump will bring it back up from the depths. i think it's a fairly solid, innovative company that has made pretty big gains in market share. Even though the price war between itself and Intel is hurting them both, I don't see either going anywhere significant in the near term.

The way I look at things, the near term drop in prices as a AMD cocking it's fist to throw a massive punch.





Notes:
In Portfolio: Yes, got in at 19... *tear*
Duration: (Pre-Earnings) Long term, (Post-Earnings) Really, really long term
Superbowl Prediction: Bears... No, Colts, No, Bears... I dunno... It's gonna be a great game!

MOT (Motorola) : Hello Moto...?

Superior design, desirability and cutting edge technology have always defined Motorola and their phones and the result has always been an edge in the mobile phone market. However, even with all of that, and I can't believe I'm saying this, I don't think it's going to be enough to send Motorola back to the top.

The competition is going nowhere as well. Overall, the rest of the market (Samsung, Nokia, & Sanyo) has the same homogeneous look and feel that induces sterility in addition to my yawns.

What it all comes down to is that Motorola needs to have that one "IT" product that they had in the RAZR 2 years ago. The KRZR, PEBL, SLVR and the Q (Which one doesn't belong) have all failed to take it's place in the uber-desirable range. The stock has dropped to a 52 week low of $18.50 and has dropped 40% from its 52 week high of $26.30 and like my expectations for Brittany Spears, I just have a feeling that this isn't the bottom yet.


They have 2 new products come out soon in the MING and the RIZR. As with all Motorola phones with the exception of the Q (stands for Qausimoto), The MING is very attractive and features a touch screen with stylus which is something we haven't seen in the non-smart phone range. My only concern is that how useful will it really be. I dub this phone Diet Smart Phone. All the function, half the features... Not a winning combo. While the former looks promising, the RIZR is just a sliding KRZR/RAZR. I doubt the type of hinge in which the phone opens up will really make a difference.

So the CEO has already warned that Motorola has had a miserable Q4, 2006 so the two questions we should all have is how bad and how much lower. For me, the bottomline is I don't care how far it falls, What will spur me to buy is whether or not it can produce another hit like the RAZR and the StarTAC of yesteryear (Remember that bad boy?). Either way, the stock is at 18 and was in he 7 range pre-RAZR and as low as 15 post RAZR. Bottomline is this... a long term 40% just isn't attractive enough. Let's talk again when the stock hits 15.





Notes:
In Portfolio: Not just yet
Thinking: GO YHOO, GO YHOO, GO!
Wish Was Public: IKEA (Man, that place is like Disneyland for adults)

VLO (Valero) : Black Gold Never Gets Old in the Winter

There are 2 buys that are consistent staples in my yearly buying routine. The first is Best Buy (BBY) in the fall and the second is oil in the winter. It's as sure as Mike Tyson doing something nutty in the boxing ring. The bottomline is this. More people are driving than ever and two, cars aren't that much more efficient (actual fuel economy has been stable for the past decade at around 21 miles per gallon). On top of that, Saddam's death won't go over well and I expect greater resolve from rebel forces in the Middle East because of it. We'll see however whether we win the war or not, I'm in on oil.

Currently, the prices of oil are dropping and actually briefly dipped below $50 dollars a barrel today. The economists say that it will go as low as $40 but gosh, I just don't see it. World demand is way higher than before as other countries begin to industrialize and beginning Feb 1st (2007) OPEC will cut production even more. The so-called experts say, it going to continue the drop. OPEC (the real experts) says it's not really concerned. The only thing I have to say is that I got flash backs of Apple snickering when people said that the Zune was a threat to the iPod empire.

What it comes to is this. Oil is down now because surpluses are up but that doesn't mean demand is down as well. Equal or greater demand plus reduced production equals higher prices for us all. I'm sure the "experts" see a lot of things but if you haven't noticed, gas prices haven't really gone down all that much but Valero (as well as many other oil related stocks) are near 52 week lows. Opportunity isn't just knocking. It just kicked down the door, got down on one knee, and told you she wants to marry you.

As always. We'll see...



Notes:
In Portfolio: Yuppers
Duration: Sell right before Labor Day
Waiting for: 9pm to roll around. Grey's Anatomy left me hanging last week. Those bastards.

BBI (Blockbuster): The Old Champ Throws a Left Uppercut to Deliver the Knock-Out Blow

Netflix had a great run. They revolutionized the whole Movie Rental Business. And for a long time, they were beating the crap out of the champ, Blockbuster. But the champ started fighting back. They opened their own online business and ended the Netflix's monopoly over the straight to your door subscription service. And now, they have done something that Netflix can't. We now can trade in our DVDs at their physical locations.

I saw the new ads for Blockbuster's Total Access last Thursday night when I was watching Grey's Anatomy (Ya, that's right, I watch Grey's... Shut up already). Within the first 7 seconds, the ad reminds you of NetFlix is (trading jabs) and then reminds you of the two day wait you have to endure before you get your next DVD (a fierce right hook) and then finishes with that you now don' t have to wait anymore because you can now return your latest DVD at their brick and mortar stores and pick up your next one immediately (The devastating left upper-cut to the glass jaw of Netflix). The moment after the ad finished, I was online cancelling my Netflix membership and signing up on Blockbuster.com.

The biggest play here is not the store trade-ins or the instant gratification (Okay maybe it is, but indulge me as I try to sound poetic... Sheeesh!). But for me, It's about having choices. With the Netflix model, you were forced into a system where you had to wait. It was great but this is better. I don't have time to watch DVDs everyday but when I find myself with some time to kill, it's wonderful that I now have the ability to walk into a store and get the instant gratification that I never had with Netflix. Before, in order to watch movies on the weekend, I had to time when I sent in my previously viewed DVD so that I could get in on Saturday. But even that wasn't guaranteed.

In any case, the CEO of Blockbuster, John Antioco, should be given the medal of honor or at least a congratulatory gift certificate to Chuck-E-Cheese (That silly rat always brings a smile to my face) for having the balls to go through with this. I know all too many so called "leaders" that wouldn't.

Right now, Netflix (NFLX) is at $22.71 and Blockbuster (BBI) is at $6.43. Before Netflix came around BBI was a consistently around the 20-25 range. I don't know about you all, but I see a switch-a-roo about to happen. But as always, we'll see.

Oh and by the way, Blockbuster CEO John Antioco recently purchased 220,000 shares, bringing his stake in the company to 1.1 million shares.



Notes:
In Portfolio: I love the smell of freshly minted shares
Duration: Maybe a year of so... We'll see
Word of the Day: scrumtulescent - More than delightful; More than brilliant; A made-up adjective used when no word can describe the perfection of something.

Willkommen bei Bagger John.

Hi all, my name is John and I'm a day trader. I've been investing in the stock market since I was 18 (I'm 28 now) and I have endured 7 years of mediocrity until I had my first solid year. I've seen stocks fall from the hundreds to pennies. I have survived the dot bomb. And I have seen companies raise themselves from the dead. The market never ceases to amaze me. Afterall, it is the only instrument on the face of the earth that can accurately measure human emotion.

It makes me laugh that it took so long for my first lesson to sink in. "Buy Low, Sell High" Who would have thunk it? It sounds easy... but it's a lot harder than it seems. What is low? When is high? And don't get me started on the emotions that run through it all. Learning to temper my emotions and be disciplined is why it took me seven years to "get it."

Along the way, I've written down the tricks I've learned and my experiences on random pieces of paper that are scattered throughout my life. So this blog is the physical collection of my on going, never-ending education in the stock market. It's about the picks I make, my mistakes and about the pursuit of the fabled multi-bagger.

Who knows, we just might all get rich.

Cheers, John