General Electric Follow Up
I just wanted to post a quick follow up (after a well satisfying Pakistani meal). On Friday I was disappointed on the GE stock price performance. Yes they missed revenue, but it's still a solid company. However, one thing I did say was that I felt it would recover back to the prior day's close, and it did! Closed at $19.15, exactly the same as the prior day's close. I'm actually pretty impressed at myself, I firmly believe this company should support a strong stock price, and there is a case for a minimum price of $20.
Let's see in a couple weeks what they do with the dividend. It looks like they may be able to resume the dividend from GE Capital, and this would get passed onto shareholders. This is subject to fed approval, and so it seems somewhat unlikely given what they've done for the rest of financial sector dividends. Based on history, I'm looking for a dividend announcement on the 3rd of February. Even if GE Capital cannot resume their dividend, perhaps they will still give us an extra penny per share. I'm an optimist.
I look forward to seeing where this will go this week, I'm bullish, of course, but it's a low volatility stock and it might hover in the mid-19's for the week before breaking out past $20 next week.
Good luck to all
My Quest to Save More Money
I don't budget. I tried to do it, but it was difficult to track and balance, and I never really spent beyond what I set aside. Budgets never worked for me because I never really needed a budget. Most of my saving is automatic, and whatever is left becomes my living expenses. Beyond that, if there is excess, I typically dump that into the savings account or stock market.
So why am I trying to save more? I feel like it, that's why. I've realised that over the last year I've gotten less disciplined with my spending. Yes, I still put away a set minimum amount into savings every month, but in some respects my spending has gotten out of control. Also, as a single male American living in the UK, I have additional expenses that crop up from time to time. Even if you aren't an ex-pat like me, you might find yourself spending a bit too much on some of these things:
- Eating Lunch Out: I eat out every day at lunch. I try to keep the cost down by shopping for cheap stuff at the grocery store or limiting my portions, but either way I find it practically impossible to bring my own lunch. Average expense £5.00 per lunch. At a sit-down place with maybe one pint involved, £10-12 per lunch.
- Drinks after work: Since I work really hard I need to blow off some steam with my workmates at the pub. And since this is London, it's much easier to find drinking buddies on any given day of the week, whereas in the US I'd be hard up to find someone willing to have a few jars on a Tuesday night. Sometimes it becomes very frequent, especially around the holidays when, for various reasons, I find myself going out five or six nights a week. On top of that, the larger the crowd the larger the expense: when it's just me and one mate, we buy rounds back and forth in even numbers, but when you add a third or a fourth it starts to add up because an asymmetrical distribution begins to occur. Average cost £25 per night out
- Spontaneous / unplanned dinners: Most likely I'm out for a drinks and a few of us decide to get some dinner, a nice sit-down place might be relatively inexpensive, but add in drinks and we could be looking at £20 per person, or in the case of last Friday night, £40 per person. On the cheaper end of the spectrum, it may be too late in the evening to cook at home or I simply may not have the energy; enter kebabs, sandwiches, and even McDonald's (I love you MCD!). This isn't that bad, less than £5 usually. On average the spontaneous dinner might cost about £15 per event.
- Other random stuff: Taxi fares are usually the result of being out after midnight, when the tube shuts down and bus routes might not be optimal from my location. I usually try to get a night bus, but in some cases it's totally inconvenient and a cab will have to do. This could be anywhere from £10 to £30 depending on where I find myself. Or what about spoilage, which is also highly correlated to the number of times I go out in a week. If I buy fresh fruit or other quickly perishable fresh foods and don't finish them all before they go bad, I've just wasted money. I recently threw out half a tub of grapes worth £1.50 because they were well past the "use by" date. I suppose we could debate the merits of those dates, but after a while they look OK but I'm uncomfortable with the prospect of what half-fermented grapes are going to do to my bowels.
So the goal here is simple: minimise those expense events. Recognise when these are going to happen or when they are in the making. It's not necessary to eliminate them entirely, in fact I need time to hang out with my friends, drink a few beers, eat out, and get away from the house. There is a certain amount of utility derived from these activities. Yes I am spending money, but I'm also getting satisfaction of blowing off steam with my mates over some pints and a curry dish. Plus I can't really make my own curry, so if I really want it I'm going to pay for it at a restaurant.
The point here is that I need not make drastic changes, I just don't need to overindulge. On top of the expense, I think the utility is actually diminishing as I increase the frequency. Being at the pub every night of the week can be less and less therapeutic as the week goes on, and it's not healthy. Being even mildly hungover at work the next day is not pleasant.
So what now, and why should you care? Well I'm not asking you to care, all I'm saying is that you might have some of the same experiences as me; i.e. you make good money and save most of it, but would like to cut out these unnecessary and potentially utility-neutral/negative expenses. I think that by paying more attention to these things, and writing about it, can help me to identify and reduce their frequency. So for the next few weeks I'm going to track my expenses and note where I have actively taken steps to avoid or reduce them. I will continuously reflect on this to make improvements, and measure my results with money in the bank. It's not altogether easily measured, but I'll take my best shot. I hope that the readers of this experience will get some benefit, and hopefully share their own experiences in similar endeavours.
As it stands right now, I've procured about £11 worth of groceries to cover me for at least three or four days, but I've also got plans to go to a curry house tonight. I'll probably spend about £20, but I'm seeing friends and having a good time out of my flat. I'll probably make up for it next week by avoiding pubs and packing a lunch two or three days, or maybe I'll fall back into my prior routine. We'll see, but my hope is that by documenting it I can reflect better on the true impact of my behaviour.
Tune in later for more updates.
Do you have a similar experience, please comment below!
Market Perspectives for 18 January 2011
We've got mixed news in the markets today, Goldman beat the street, but their numbers were down overall. Enthusiasm from Europe seems to be wearing out, but I think US investors are still very optimistic about a stateside recovery.
Big movers this morning from my watch list:
TTM up 2.5%
DD up 1.65%
MCD up 1.1% (acting a bit volatile in the early session, sputtering up and down between 101.45 and 101.75), looking for a lead back down to closing levels of about 101
GE up 1% (I'm watching this one closely, as it popped pretty big yesterday morning and slowly but surely fizzled out to a loss on the day, opened this morning at a loss and is slowly recovering, looking for it to hit 19 before the close).
Still bullish on GE! Long term bullish on MCD, but looking for a pullback from 52-week high set today. MCD has been setting 52-week highs pretty regularly for the last few weeks, and they always drop from them, expect this to fall back to 101, if not below.
That is all for now, check in later in the day!
Market Perspectives for 17 January 2011
It was an exciting morning, starting off with great numbers from Asia, followed by a European rally on the French bond sale and a buoy in the Eurodollar, then an immediate early morning rally in the US markets. There was great excitement this morning coming off the three day holiday weekend.
Then, around lunchtime, it slowly started to fizzle out as selling pressure began to weigh in. That's the problem with quick pop rallies, they always precede a sell off. If I was holding short bullish positions over the weekend I would take this mornings activity as a godsend opportunity to take profits, and I recon that's what most traders did today. Everything looks pretty beautiful for the first two hours of trading, pulling in lots of buying volume, followed by even heavier selling volume.
My sentiment this week is bullish going into some big names in earnings, and I'm particularly looking forward to GE earnings this Friday. I'm really counting on them to raise the dividend again, even if just a tiny bit. See, a few years ago GE cut back it's healthy dividend and held it steady for a year before slowly raising it. They have been consistent in raising their dividend more frequently than once a year, and I feel that the pace will increase further.
Check here for GE dividend history over the last five years
Now then, my guess is as good as anyone else, since they just raised their dividend payable January 25. However, GE is sitting on a lot of cash and I think their earnings are going to surprise the street, and shareholders are demanding a lot more return for their loyal investment, I know I am. I don't think they have much choice except to raise the dividend, even if only $0.005 or $0.01 per share, every little bit counts for those holding large blocks. My price target here is $20/share after earnings, and higher leading into the next quarter's release.
As for the rest of wall street, the market sentiment for 2012 will be a bit more firm after we get through the next two weeks of earnings, particularly with tech releasing results early in the week, and the big conglomerates next week. Economic indicators are showing improvements, but corporate earnings are the true test of growth. If the big boys can show cash earnings growth then I'll take it as a bullish signal for the next few weeks, until more numbers are released. Options are key in this volatile market, hedge your bets and bet your instincts. Good luck to all
Full disclosure: I am long GE and holding a small position.
Paris 2011: November 29 – Day 2
This morning was the first time I was able to take advantage of the breakfast, which wasn’t included in the booking that I paid for myself on Sunday. While I wasn’t expecting a full American spread the likes of most large Marriotts or Hiltons in the states, I was a bit suprised to see such a limited selection of food. It consisted mostly of cheese, slices of ham and salami, various breads, a bit of fruit, yogurt, juice and coffee. Well, I made due quite well and tried to fill myself as much as possible since I knew I wouldn’t have lunch for another 5-6 hours. I don’t do well when I haven’t eaten in a while, and I figured the best start to the day was a good breakfast.
We headed to CarlsonWagonLit on the metro, which was really crowded but surprisingly efficient. This is a travel advisory business that works with medium and large companies to help manage their business travel. They handle 100% of US Government travel, no small feat, and manage over 57 million bookings annually. They also offer other services like travel alerts, meeting optimizers, and other valuable services for busy firms. This company was pretty interesting because its similar to American Express in that it manages travel, but it provides a more full-service approach to the customer experience. I have used American Express travel tools at my company, and I really like the web interface and booking capabilities. I actually prefer to be in control of my own itinerary and only turn to our dedicated support specialist when I really need help. However, I can see how large organizations, such as the US Government, would benefit from a full service travel management company.
After this got out we had the afternoon to ourselves so I joined Dr. Kelly and a group of other students on a trip to Montemartre, where the Sacré-Cœur Basilica sits. It was a truly beautiful view of the city from a high vantage point, and despite the overcast conditions it was mostly clear for some photo ops. We spent a bit of time outdoors walking around and taking in the sights before entering the Basilica. The interior of the church was jammed with tourists, but we still managed to have a peaceful stroll through the church and get a feel for the intricate architecture. Following this we stopped in for some lunch, where I ordered my first croque monsieur, a basic ham sandwich with cheese melted on top. This was no hand-to-mouth sandwich, this bad boy required knife and fork.
After lunch I joined Jenna, Ashley and Wayne for a trip to the Moulin Rouge to take in the more “adult” side of Paris. Since it was daytime it was pretty tame, but I can imagine that it livens up pretty well in the evening. After a few photo ops we decided to head back toward the hotel to change out of business attire and get a bit more casual before going back out for more exploring. The sun had started to peek out of the clouds so Jenna, Ashley and I took the opportunity to explore through Luxembourg gardens, making our way up to Saint-Sulpice, through the Saint-Germain and onto Notre Dame Cathedral.
It was getting dark at this point and our legs were getting tired, so we popped into a pub for a drink. The nice gentleman at the door called out to us in Frech as we walked by, looking in the windows to determine the exact nature of this pub, before looking at each other and saying “beer?” At which point the barman at the door started speaking in a perfect American accent, inviting us in. Turns out he’s French Canadian and also incredibly accommodating. We had a few pints while looking over Jenna’s guidebook of affordable restaurants. We settled on a very highly rated Italian spot called Naples, which turned out to be in very close proximity to our hotel.
After agreeing that it wasn’t at all out of place to eat Italian food in France, we hoofed it over to Naples. It’s a good thing we got there at 7pm because all the tables were full by 8. The food was absolutely delicious, and despite my surprise to find an egg in my calzone I was thoroughly satisfied with my meal. We couldn’t pass up the tiramisu at the end of the meal.
The night was still young and we were well fueled with food and wine. The girls wanted to do something, and while my suggestion of Eiffel tower came with a bit of resistence I finally convinced them. While we were all meant to go as a group the following week, we decided it would be a good idea to go there at night. This time the crowds were a bit larger, but not difficult to overcome. Once they saw its awesomeness from the ground we all agreed to venture to the top. The lines weren’t that long and neither was the ride up. We spent quite a bit of time on level two taking photos of each other and the entire perimeter before heading up to level three. Due to the increasing wind and rain, level three was much less bearable and we opted to head back down. All in all, it was a totally worthwhile experience as we may have just returned to the hotel after dinner, and there was absolutely no sense doing that so early in the trip - there was energy to spare!
Given the extent of our exploring that day we decided to head back and retired to our rooms for some much needed R&R. Onward to another day of business school adventures!
Paris 2011: November 28 – Day 1
Today I got to meet my classmates for the first time. I was a bit nervous, but very optimistic. I was not able to attend the pre-trip meetings due to my secondment in London, but was assured that all would be well, and it was.
I woke up early after a restless sleep and headed to Paul for a coffee and pastry. After a few sips of my latte I was ready to truly face the day. I still had a few hours to go before my classmates arrived so I retired to my room and got some work done for my day job. Although I’m technically on vacation, I have a commitment to ensure log jams don’t occur while I’m out, especially with a recent catastrophic facilities incident still under repair back in London.
I stepped outside right on time to find a full length bus unloading severely jet-lagged students, I knew these were my people. I quickly recognized Kate in the crowd and introduced myself in person. I made a round of introductions to a few students waiting to get their rooms sorted, and waited patiently with them in support of their plight. I’m lucky since my room had already been rearranged this morning, and I was well settled in.
After some jostling around with luggage we headed off on a short walking tour toward the riverboat docks. It’s been seven years since my last study abroad program in the Benelux countries, and I had forgotten what it’s like to run in such a huge pack. I’m looking forward to settling into a smaller group of classmates for our own excursions.
Kate and Dr. Kelly helped to familiarize us with the area around our hotel, which was helpful since it appears there are two or three separate ways to get there, and a number of transportation hubs servicing different metro lines. We worked our way up to the docs with plenty of time to spare, so a few groups split off to do different things. Being the bad influence that I am, I suggested we all run out for a quick pint of beer before getting on the boat! A few of the more jet-lagged students looked a bit weary about the idea, but others agreed that it would probably be helpful to their situation.
We headed up to the north bank of the river and found a nice little pub. After a pint each and some difficulty splitting the bill we headed back, but not without stopping in the pet shop! Can you believe it cost over €1000 to buy a puppy? Must be a component of the overall expensive nature of a city like Paris, in addition to the Parisian love of dogs. No time for that, we were going to be late for the boat!
We made it back to the boat and took our seats in the top. I was determined to snap some good pictures since I’m normally not much of a photographer on vacation or otherwise. I got a bit carried away and started snapping left and right until I realized I had already taken 200 photographs, and we weren’t even halfway through the tour! By the end of our journey up and down the Seine I had taken over 400 pictures. Surely this would need to be culled down, as my 16GB iPhone 4S didn’t have the capacity for such flagrant abuse of the shutter.
We had the rest of the afternoon to ourselves, and so decided to chill out for a while. Everyone wanted to settle into their rooms and possibly take naps, which is totally acceptable in my book. I took the opportunity to again catch up on my day job, and have a look see into what the markets were doing. Since we had quite a bit of time before we needed to meet up for our group dinner, I got a bit trigger happy on an option trade. There was a bit of volatility in the S&P and it was showing overbought signals for the day, so I initiated a put position on the index ETF at 119. I wasn’t too sure how much risk I was willing to take so I put in a limit order for a modest gain in the hopes that I could go to dinner and get it executed. Sure enough, it dipped below 119 and the put premium rose enough to take out my limit. 7.23% gain on a holding period of 90 minutes. That’s not bad on an annualized basis, but in hindsight I’m not here to trade, I’m here to learn.
Dinner was amazing, I opted to stay on the safe side and ordered a simple salmon dish while I watched my classmates breaking into snail shells. I shared some really interesting conversations with the classmates at my table: Ashley, Jenna, Jimmy, Allison and Ben. I was really starting to break the ice tonight with some great people, and I was really happy to see how easy going and excited they were about this entire trip. I think I’ve found my “crew,” so-to-speak.
I was in the mood for another pint after dinner, but nobody was really keen to join me as they had been up all day in their jet-lagged state. I don’t blame them, it was definitely time for bed as tomorrow will be our first business visit and we need to be in good form.
Paris 2011: November 27 – Day 0
I arrived this afternoon on the fast train from London, a journey of about two hours and change. I’ve heard a lot of things about the Eurostar, and I was quite impressed with the fast door-to-door service. If only we had trains like this in the US it might be more convenient and comfortable than air travel. But, alas, we have so many wide open spaces that it may not be feasible until new infrastructure can be built. Where are all the deep pocket financiers when we need them?
Checked into the hotel, got settled, and went out for a walk. I was running short on metro passes so I decided to skip that and just walk, with no particular direction in mind. I start south through Luxembourg gardens, but they were closed by the time I got there. I settled for walking the entire perimeter of the gardens and back north toward the river so I could maintain a constant bearing. I had been to Paris over eight years ago and had vague recollections of directions, but to be sure I wanted to retrace my old steps next to a familiar landmark: the seine.
As I said, I had no particular missing here, I just needed to get out and move my legs. Even though the train ride was short, it was a bit cramped and I was worn out from dragging my luggage around. I had a choice: sit around in the hotel, or get some fresh air and grab some food. Besides, I had nothing better to do since my classmates won’t arrive until Monday. As I walked alone in the chilly dusk I took in all the city lights with a smile painted on my face. Everything was so alive, vibrant and filled with excitement. Surely my opinion was skewed by my status as a tourist, but what an amazing city.
As I walked west along the north bank I could see the Eiffel Tower twinkling in the distance. It was calling to me, a beacon for adventure. It may be the most cliche thing to do in Paris, especially on the first night, but I knew that’s where I was headed. Its sheer size created the illusion of proximity, and with a quick glance at google maps I decided it wasn’t that far away. As I continued to walk, minute after minute, I began to realize that things here look a lot closer on a map than they are in real life. No problem though, onward with the journey!
I approached the tower and began to gawk like a proper tourist, taking photos from all possible angles without actually going to the top. The crowd was surprisingly light, probably a combination of the cold weather and the fact that it’s Sunday. It made my casual stroll just a bit more casual.
After getting my fill of photography and cold air, I decided to turn back. This time I wasn’t going to rely on a landmark to guide me home and decided to look at shorter distances on my map, which took me through a variety of ritzy neighborhoods. It was incredibly quiet, as residents and students were settling in for the evening and getting ready for the hustle and bustle of their normal lives on Monday. On my way back I stopped by a few sandwich bars and instead settled on two slices of pizza. I had ignored my growling stomach for hours at this point, and was happy to see that these establishments were open late and in close proximity to the hotel.