Omakase

Monday, February 13, 2006

The Jane Galt Tax Plan

Thoughts on tax refrom from a great blog - JaneGalt.net. Jane is sharp, witty, and a dreamer, as you can see here, here ideas have a likelihood of being adopted of less than zero.

That doesn't stop her articles from being incredibly insightful. For example, why do we continue to have a separate 7.5% FICA tax "devoted" to social security, when there social security is just a bookkeeping entry - there are no assets behind it. (In effect, why not dump the FICA tax and just raise income taxes a comensurate amount?

Jane is always worth a read.
Asymmetrical Information: The Jane Galt Tax Plan

Sunday, February 12, 2006

Internet Outsider

Internet OutsiderI'm really sirprised to be doing this, but I highly recommend Henry Blodgett's blog, "internet outsider"

It's a pretty good analysis of recent Net investing events. What caught my eye is the cogent Google bear points, though there's much more to the site than that.

Wednesday, February 08, 2006

Five Cheap Companies that Create Value: Financial News - Yahoo! Finance

Another plug for JNJ, which I bought yesterday @ $57. (Happily, it's already up >$1.)

I also went and bought 2x Jan08 JNJ LEAPS @ $60, at a cost of $6.10 (-WJNAL).

Basically, I'm betting that JNJ will appreciate at greater than 6.6% per year for the next 2 years. If so, I win big. For instance, if JNJ hits the $76 target mentioned in my previous post, I'd nail a 167% return (vs. 33% for a regular long position (plus dividends.))

However, because LEAPs (and all options) are really just volatility plays, I'm also thinking about using this LEAP purchase to profit from the short term upward run for JNJ that I know if gonna happen sometime this year. If that's the case, I can sell the LEAP for a gain. Already since buying this morning, the JNJ LEAP has appreciated by 5% because of the ~2.5% rise in the price of JNJ.

Five Cheap Companies that Create Value: Financial News - Yahoo! Finance

Monday, February 06, 2006

Morningstar.com - Buy J&J and Avoid the Winner's Curse

Pretty convincing argument that JNJ is unervalued and an attractive investment. I've been DRiPing JNJ for about 4 years, so I'm real familiar with the numbers behind this (but needed the article to point this out to me :( )

Tough choice, though, trying to decide whether this is a buy and hold or buy and sell after a nice run. I suspect that the Guidant situation will be on everyone's mind and supress JNJ stock until Boston Scientific finally closes the Guidant deal (since JNJ could still legally make another bid.) This would suggest perhaps another 6 months - perhaps with a slight upward drift, but really a whole year necessary for full appreciation.

I'm going to buy tomorrow for my IRA - meaning that I won't be bothered by the tax implications of selling before holding the stock a full year.
Morningstar.com - Buy J&J and Avoid the Winner's Curse

The Giant Genome Fizzle - Forbes.com

This article presents what few in the biotech industry want to admit, and what few realize is incredibly impactful.

It turns out, that correlating a gene and a function (such as a role in a disease) is an incredbly imprecise science. (Or, perhaps, scientists behind breaking research can be sloppy, but that's another issue.)

All of those stories that say "Gene responsible for disease X is identified. We're closer than ever to a cure," are probably wrong, as few of these discoveries are standing up to scrutiny.

Now here's where it gets interesting:
There are thousands of applied and granted patents for specific genes and their functions. Some companies - like Incyte - are pretty much valued based on their gene IP.

There's been a long debate about whether genes should even be patentable (my opinion is that they shouldn't be), so taking these 2 points together says that many gene patent claims are dubious.

This is probably a great development for the biotech industry, except for the fact that several billion dollars were raised in 2000-01 to fund gene land grabs. So, some investors were creamed on fundamentally shabby business plans, but at least we've got the equipment and lab space to thank them for!

The Giant Genome Fizzle - Forbes.com

With my new friends on the Great Wall of China

With my new friends on the Great Wall of China
Click to go to my online photography

World sun clock

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Uncommon Man's Creed

"I do not choose to be a common man. It is my right to be uncommon -- if I can. I seek opportunity -- not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I wish to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole, I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence, nor my dignity for a handout. I will never cower before any master, nor bend to any threat. It is my heritage to stand erect, proud, and unafraid, to think and act for myself, to enjoy the benefit of my creations, and to face the world boldly and say, "this I have done." All this is what it means to be an American." -- Anonymous