Monday, December 14, 2009

Dr.Pepper coming to Chicago Merc?

Why there is not a pit in Chicago for Dr.Pepper is beyond my comprehension. I can guarantee there is money to be made. Ask anyone and they will tell you I suck down my fair share of Dr.Pepper daily. Been doing that since my late teens when I was working in restaurants. It is this addiction that puts me in constant contact with the schizophrenic pricing policies of my local bottler and the all mighty Dr. Pepper Snapple Group down in Plano Texas. Now here’s the thing; I live in a good size Midwestern market and the price swings here are enough to have an oil trader holding on with both hands.

On a “normal” day prices run $4.59 per 12 pack and $1.69 for a two liter. The bargains start (as in scoop up the store limit multiple days of the sale) when 12-packs hit $2.50 and two liters go for $1. For those doing the math in their heads let me help. A drop from $4.59 a twelve to $2.50 is a 46% drop. For the two liters it is a drop of 41%. Then there is the gray area, sales like 3 12-packs for $10 or 4 for $12. This is not a once a year price move. I am talking every couple of weeks if not weekly there will be a reversal in trend. Addictive consumption and consistent high percentage price swings, how is that not a recipe for money to be made on futures contracts? The oil boys seem to be making out ok.

Carbonated water, high fructose corn syrup, caramel color, phosphoric acid, natural and artificial flavors, sodium benzoate, caffeine (my personal favorite). Now someone please tell me which of these pieces cause prices to swing 50%?

So enough already, start a pit and let’s get a position on. I have watched prices and timed my purchases well enough to have a running stockpile of about 14 12-packs in the basement. Average price somewhere south of $2.90 per. I am highly confident I am ready for the big time. Been practicing my hand signals and screaming. Wake up Merc! Both of us are missing out on some money here.

So if you have some strings to pull with the Chicago Merc then start yankin’, send me an e-mail right after. I can be ready to start trading an account within 48 hours. Or if you can explain why prices swing 50% or more please post a comment. I am sure I am not alone in questioning the soda people’s pricing policies. Thanks and let me know.

Tuesday, December 08, 2009

There is no spoon

What happens if it isn’t the greedy evil banks that are limiting credit to people? What happens if it is the people themselves? “There is no spoon” The financial world almost came to an end or so we have been told and yet now there seems to be a need to see things return to “normal”. It seems that there are plenty of people in government and on the money shows that know who is to blame and aren’t that shy at pointing them out. Yet no one it seems is putting forth the idea that the near miss with Armageddon has fundamentally changed the way people manage, spend, and save their money. “Free your mind” If people are pulling back their need for credit because they have decided that it is far more wise to unplug from the credit card matrix then the bank’s willingness to lend is taken out of the equation. It is us that are in control of ourselves now. “Were you listening to me, Neo? Or were you looking at the woman in the red dress?” It seems that all the solutions being put forth are designed to do little except blur our perceptions of reality and being us back to the old normal. Our perception is clouded even more as the sentinels of the information dictate what is news and what is to be believed. Shovel ready projects, TARP, bailouts, rates kept at zero, spending as if the money was real, and still believing that the consumer not only can but wants to make up 70% of GDP. Efforts made to calm out fears and get us spending like what… like we used to? As if it was even possible to return. “The answer is out there, Neo, and it's looking for you, and it will find you if you want it to” And if the past two years have unplugged the average American from our unsustainable behaviors forever, what then? In time the nation and the world adapts to a new level of consumption. One that is based off of our net worth instead of the size of credit lines. The great bubbles of tech and real estate get taught as part of history. The young adults of tomorrow look back and wonder how their parents could have stayed delusional for so long. Politicians slowly get voted out until members of government reflect the spending habits of the average person. New businesses spring up, compete, and adapt to the now normal. Dave Ramsey’s business stumbles then falls because there is no one left to teach how to be responsible with their money.

"You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to. You take the red pill, and stay in Wonderland, and I show you how deep the rabbit hole goes."

Sunday, August 16, 2009

Buying JNK while trying to avoid junk

I have been out of junk bonds ever since Milken went to jail. Back in February of this year I was “highly confident” that junk bonds were going to survive. At least I hoped, for I was finally ready to jump back in and wallow around in some junk. Since finding ETF religion I decided that was a good place to look first. I have to respect any company that just says it the way it is. When Barclay named its ETF JNK you just knew they weren’t going to try and BS anyone about the quality inside. Well you know what they say, one mans junk is another man’s tres… Well one can always hope right.

So back on February 10th I picked some up at $31.45 and then watched it continue to sag. (What was the name of this thing again?) On March 2nd I tried again at $27.50. Trying to break bad habits these two investments amounted to a little under 20% of my account. Contrast that to a few years ago when a good feeling, I know I have a winner position would have been over 60% and the whole account leveraged. Oh the good old days.

The investment rationale was that the divvy was so crazy high even if a bunch of the bonds defaulted the divvy would still be 10% plus. All we had to do was avoid the whole capitalism system from going under.

So far JNK has paid out roughly 40 cents per share per month since then. April and May were a tad higher. Did I mention that JNK pays out monthly? (I like that part. Monthly cash; dollars and change that you can believe in.)

Old mindsets are hard to counter. I look at the chart since Feb. and all I see is: I could have jumped in and out here and here and here and there. But alas I haven’t, I sit and wait for the beginning of the month. Until the divvy story changes this chunk of my account will be long and slow with JNK.

Here’s to getting a grip with jumping in and out, fast money, trading and to keeping an eye on your EveryDay Money.

Friday, August 14, 2009

Back into the light

Is it safe to come out yet? Maybe I should begin with is it even safe to look yet? It certainly has been a long while since my last post. When the darkness comes and threatens the very foundation of capitalism I find it best to pull family close and hang on.

A brief recap: Couple of years ago had some CROX stock and a few others in an account that I thought was destined to be my early retirement. The gains were easy, fast, and large. The market cracked. I made one stupid mistake after another. The market broke. My bad trade decisions snowballed into insanity. Tried very hard to run the account to zero and almost succeeded. Ducked and covered for what has felt like decades. Found ETF religion. Am currently in the process of gluing the jagged and charred pieces of my account back together. Took a hesitant step back into the light. Finally back to writing.

Here’s to sunshine on your face, accounts that don’t read zero, and to keeping both eyes on your EveryDayMoney.