New portfolio on Stockpickr

I started a new portfolio on Stockpickr.com: Tech Have Beens. It's a list of companies which were great tech companies in the past. They still can make you money. Most of them probably will make you money. But don't expect the same return you get from Apple or Google.

Full disclosure: at the time of publication author didn't have any positions in stocks mentioned in this portfolio. Author has long positions in Apple and Google. Positions can change at any time.

2008: No Predictions And No Resolutions

Everybody is making predictions for 2008. Almost everybody making resolutions.

My take: no resolutions. If I want and can do it, I will. Otherwise, it doesn't worth it. No predictions. I'll play 2008 by ear.

Red Hat: getting ready to get rid of

Red Hat (RHT) reported a decent quarter. Stock is up today. Waiting some time to find out the trend, then probably selling it. It's a good company, has a decent business model, top notch product. Why I am selling? Because there is a better product on market: Ubuntu.

Full disclosure: At the moment of publication, author had long position in RHT, although positions may change at any time.

Disclaimer: This article is not intended as investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

Fiat money, gold and free market

There is a lot of noise lately about return to Gold Standard. There is even a presidential candidate, Huckabee, who has is as a part of his program. Proponents are saying that Gold Standard is better for free market than fiat money (i.e. all currencies today). That's totally wrong!
Gold Standard was a creation of governments, not a free market initiative. It was created in the second half of 19th century. Before that, most currencies were either based on silver or were bimetallic (sliver + gold) and were also set up by governments. If you want real free market money, just let anybody to create their own money. It actually was the case in US in the beginning of 19th century when a lot of banks issued bearer's notes. It's partially the case now, because there is no ban on creating your own money. Example: game Second Life, which has it's own currency convertible into US dollars. The only problem with private money is that it's not universal. Government created money is universal, mandated to be accepted as a legal tender. There is no ban in US on accepting something else as a tender, many shops near Canadian border accept loonies.
In short, if you don't like government money, create your own. Advertize it, promote it, make it accepted. Base it on gold, or silver, or rare shells and try to make people to use it. That's a free market approach.

Housing crisis and immigration

There is a solution for a current housing debacle: immigration. Legal: speed up Green Card process, temporary increase quotas for countries. It might add about 1 million immigrants, most of which want to buy a house. Of course, this is only some relief on the market, but every little bit of help is important now.

Complete solution needs, well, legalization of illegal immigrants. Total number is about 12 million, if you make usual assumtions (4 people per family, 60% families want and able to own a house), that's going to take about 2 million homes off the market.

Another politically impossible solution for economy...

China's bubble

There are two opinions:

1. China is in a bubble.

2. China is not in a bubble, economy is developing fast valuations are not very high.

My two cents: there is no way that one country, even as big as China, produces almost half of raw steel in the world and it's not a bubble.

Depression: great or not so great?

Interesting article from Paul Krugman here . Good explanation of current mortgage debacle in layman terms. Unfortunately, no quantification. OK, I see that if prices go down 20%, 13.7 million homeowners would have negative equity. How many of those will decide to walk away from mortgages? Mind, walking away might seem like a good financial decision, but you are ruining your credit score at the same time, which is a bad financial effect. And that makes all the difference. If there are 13.7 million foreclosures in couple of years, that's a Great Depression in the making. If there are 3 million, it's bad, but survivable. Current rate is close to 1.2 million for this year, not so awful yet.