Buffet was on CNBC tonight and he talked how he liked steak in restaurants where the price list was reading $10 yesterday and $9 today.

Then our “good advisor” Jim Cramer explained in the lighting round that MSFT was trading $5 below where it was a few weeks ago and that it was a good buy.

I guess both are saying the same in that there are some good buys out there that aren’t really affected by the sub prime crash but whose stock has gone down nevertheless. I think MSFT is a great buy now

My GSK trade of that I talked about last weekend has worked out nicely. I would sell half my position today for a 100+% profit and look at the trading trends today to see if I want to sell more or hold on till Monday.

unfortunately I wasn't able to get in the trade myself as I the order I set never fired. I set it to tight and there wasn't a lot of volume/volatility on order. I also had a busy workday on Tuesday so I wasn't able to adjust the order.

But hey at least it is good to know that my understanding of technicals is getting better.

I was reviewing my stock last week I noticed that my most of my pharma stock (pfe, celg, mrk although I don't own that anymore) have been on or close to their 52 week high.  The RSI for PPH (pharmaceutical industry ETF is around 80.

This could mean that market is ripe to cycle out of pharma.

I have also been following GSK for over a year and they are also on a 52 week high. GSK also has a high RSI and the fast stochastic is also on its peak so they might ready be for a bit of a drop.

I looked at the sep 55 puts which seem quite interesting as GSK had a bit of run up and could easily drop quickly back to their support level around 53.90 -54.

I will keep you posted on how this trade works out.

I am considering going on an option trading course in this month. There is a nice training in Pittsburgh so if I can make the time I will be going there. I have been trading options (and stock) for a few years now but I feel like I am doing it blind folded and am merely using it as leverage instead of using it as a complete trading tool.

One of my colleagues has stories about the trading strategies he uses with options and he makes me jealous with his skills (yes you Steve) I know that the outfit that provided him with skills is doing the training in Pittsburgh. If I really like it I will mention their name here.

Some nice numbers yesterday; I really think investors panicked a bit much after we made our Q3 announcements regarding investing an additional $2.6B.

However I guess we learned from it and yesterday we clarified where the money will be going.

Another really nice item is the tender to buy back large amounts of stock:

From the press release

"Under the terms of the tender offer, the company will repurchase up to $20 billion of its common stock at a price per share not greater than $24.75 and not less than $22.50. This represents the repurchase of up to 808,080,808 shares of common stock, or about 8.1% of the common shares outstanding. "

Disclaimer: I am just a techie and have no insight or influence in MSFT finances beyond what regular employees and outsiders have

If Chris Liddel is saying he will buy back stock back up to a price of 24.75 it must be worth much more. Normally when stock is overvalued excess cash is returned to shareholders by dividend; If a stock is undervalued this happens through share buybacks. If I would be CFO I would only buy it back if I would get a 10% or bigger discount.

Based on that MSFT value (right now) is 24.75+ 2.48=27.23.

Of course this is excluded our upcoming gains from Vista, Office 2007 sales and growth of internet and gaming business.

It takes a long time to turn an oil tanker but once it goes in the right direction it will keep going. I really think we are at the dawn of a significant MS rally that will last several years. It will not be an early 90’s style rally where we double every (few) year(s) but MSFT will grow significantly.

$35 here we come (and we will pass you )

1. Windows Vista will still ship and it will really impact Windows sales. the big reason for the impact is the opportunity for MS to sell premium versions of Windows which carry a higher margin
2. Office 2007 turns Office really into a developers platform. This will have two benefits:
1. faster uptake of office because the business requires the new ap
2. lower risk of people switching to OpenOffice
3. Windows Live: the amount of functionality that has been shipped the last 12 months has been amazing and we are still picking up speed in this space. With adCenter our money generating component finally came online last week. Although I dont expect a material impact this CY by the end of our next FY (July 07) people will start to understand what a landscape change this has been. That is also the time it will really start to impact our earnings.
4. XBOX360; of course it will depend a bit on how bad Sony mangles its PS3; I feel people are holding out buying a 360 till they can make the comparison with the PS3; if we win that comparison I expect a strong uptick here and this will have a material impact due the our game-attach rate.
5. Dynamics. not sure what to say here. we have lot of opportunity but I dont see it materializing in the next 18 months.
6. SQL/Exchange; They will continue to be strong but I dont expect landscape moving stuff here.
7. the good thing in a time like this is that we can easily pay the extra investments we are making form our cashflow or our bank-account so we dont need to borrow money.

Althought the drop in shareprice is a disapointment and the delays in windows/office mean that I had to adjust my timeline for a MSFT breakout to the $35-40 level tha tis just what it is: a short delay.

So after my analisys I decided that this was a good buying mement and decided to buy L08 calls25 with the expectation that they will go to 3-6 times the acquisition price.

• SEPR
• GTXI
• CELG
• CBST
• BIIB

•  Pass FDA approval processes (and stock jumps)
•  Get acquired by PFE/MRK/GSK/Wyeth/Novartis

 Two main reasons for FedEx to get a strong buy recommendations:

First the analisys provided in this BW article:

Some Grim Omens for 2006

"Good Demand Driving Freight-Transportation Credit
Freight-transportation companies (air freight, railroads, trucking, and shipping) should continue to benefit from solid demand, even as economic growth and the ability to recover most higher fuel costs through surcharges moderate. Favorable demand fundamentals for air-freight services, coupled with a continuing focus on efficiency improvements and yield initiatives, should lead to continued solid earnings and cash flow for both the small-package express carriers and heavyweight cargo companies next year.

Fundamentals in the rail sector remain encouraging, with solid demand presently in all end markets except automotive. High imports from Asia support demand for intermodal services (carrying cargo containers or truck trailers on flatcars), which have surpassed coal as the railroads' largest commodity.
"

but also something that is overlooked in this article:

The shift from brick and mortar shopping to online shopping
This will be a strong continuation from a trend started over the last few xmas/shopping seasons and all trends are pointing to a slow growth in buying at actual stores and a much stronger growth in shopping at online stores.

I expect FDX to breakout and go to 110 in the next 6-8 weeks

(disclosure: I have a long position FDX and plan to open a option position as well)

In this forbes article they talk about how Intel is going to supply Apple with memory (NAND-flash) for the ipods

Intel Switches Its Chip Bets

 

Even more impressive is the amount of money Apple is pre-paying for Intel/Micron to start this new JV. They must be quite sure of the amount of ipods they are going to sell and very worried about where to get the memory.

Back to the title of this post:

Of course we all remember the announement that APPL was switching from power to intel chips and recently there have been rumors that that proces is going really well with the first iBooks coming in Q1 CY06.

Does this mean that in Q1 CY06 AMD can finally sign up DELL?

• FLEX is one of the two contract manufactorers for the XBox 360
• Their CFO jut bough 10000 shares (He did this after they stumbled with earnings which is a sign of better things to come)
• Forbes has a nice article on them http://www.forbes.com/2005/11/09/flextronics-earnings-semiconductors-1109markets02.html?partner=msn
• after January 2006 they will be allowed to buy back shares
• there current price is 10 with a 52 week low of 8.97 and a 52 week high of 15.01

i am looking to buy into FLEX on Monday....either in stock or options or both