Dax Desai.com

Devon Energy (DVN) – Oil & Gas Merger Play

Dax Desai — Mon, 14 Dec 2009 21:08:33 +0000

The Deal: ExxonMobil buys XTO

ExxonMobil buys XTO reaffirming that natural gas is at a low right now. What is the next big target? I say it is Devon Energy. Devon sold off their international assets and is a very good pure North American play. ExxonMobil is strong globally, but doesn’t have as much presence in the U.S. as Devon Energy.

Another potential acquirer could be CNOOC (China).

ExxonMobil agreed to buy XTO for $41 billion, a 25% premium over its recent stock price. XTO has rights to some 45 trillion cubic feet of gas including shale gas, tight gas, coal bed methane and shale oil.

The Trade: Devon Energy (DVN)

Devon sold off their international assets and is a very good pure North American play. ExxonMobil is strong globally, but doesn’t have as much presence in the U.S. as Devon Energy. With Devon’s recent dispositions of its international assets it fits in well with ExxonMobil.

Another potential acquirer could be CNOOC (China). CNOOC already works with Devon and could also make a play on this energy company.

I would buy the July 2010 Calls at $65 strike price for $8.40/option.

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Credit Crisis Visualized

Dax Desai — Mon, 23 Feb 2009 05:07:57 +0000

This is probably the best visual depiction of the credit crisis. Thanks to my brother Nirav for pointing me to this video.

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George Bush gets Attacked by Shoe

Dax Desai — Mon, 15 Dec 2008 19:32:16 +0000

Out on vaction for 3 weeks so I’ll be posting random things for the most part. May sneak in some trades, but only for a trading fix.

Reporter doesn’t like Bush’s presence in Iraq.

http://www.youtube.com/watch?v=NuyzA5dT5Kk

The act has significant cultural meaning and apparantly there are now rallys to free the reporter who through the shoes.

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Tuesday Links

Dax Desai — Wed, 10 Dec 2008 01:17:57 +0000

Today’s Linky Dinks

Geek Politics brings us Getting out of Debta & Building Wealth, a few snippets of Dave Ramsey’s financial book.

FR Credit Repairs tells you to Get Your Credit Report

Instigator Blog brings you 8 Tips for Successful Venture Capital Meetings

Reuter’s provides a good investing idea in clean tech with Cleantech stock implosion yields gems

If you’re doing well, you might want to size yourself up with your neighbors What It Takes to Be Rich—Where You Live

Stayed out of the market for the most part today. Was feeling wonky today, but did manage to make some quick money with my March $95 POT calls.

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5 Short Stock Picks for the Weak Economy

Dax Desai — Fri, 21 Nov 2008 04:12:37 +0000

If you’re not shorting in this market you’re probably not making money. My investments are 100% short. I could try to side-step the earnings bombs and make money go long, but the risk/reward is more favorable for shorting. I’ll continue to short until the market kicks my butt and tells me to turn the other cheek. My CNBC Million Dollar Challenge results are great because I’m short the market as a whole.

Million Dollar Challenge - 11/20/2008

The Short Candidates for Tomorrow

I’ll be watching the below stocks/ETF’s tomorrow for my shorting pleasure. Here they are for you to follow along.

Alcoa (AA)

Will be a big victim of lower consumer/industrial demand. It is headed in a downward spiral and should continue to follow its shorter term trendline tomorrow.

Alcoa (AA)

Citigroup (C)

Citigroup broke an important $5 level today. Institutions should start dumping this stock soon. Barring some sort of additional “free money” from the Feds this stock is going to tank.

AK Steel Holding Corp (AKS)

This is another metals/industrial play. Its getting thrown out and should revert back to its trend line and reach sub-$5 levels.

AK Steel Holding Corp (AKS)

UltraShort Consumer Services ProShares (SCC)

Another great way to play the weak economy is to play the weak consumer. The SCC is an ETF that aims to return twice the inverse daily performance of the Dow Jones U.S. Consumer Services Index. This index tracks consumer spending in various services and is an easier way to play the broader weakening of consumer spending.

UltraShort Consumer Services ProShares (SCC)

UltraShort S&P500 ProShares (SDS)

This one is a little tricky. After today’s trading I think it can still go down tomorrow, but there is a possibility the downward move may not materialize. In fact we may see a short-term bounce. I would keep this trade on the backburner, but this might be a good place to go long. When you buy SDS you are buying an ETF that aims to return twice the inverse of the S&P 500. By going long SDS you are in effect betting against the S&P 500 index.

UltraShort S&P 500 ProShares (SDS)

Follow My Trades

If you want to learn how to make money even when the market goes down follow my trades.

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Get up-to-date information on my trades and make some money.

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Million Dollar Portfolio Challenge is On!

Dax Desai — Thu, 20 Nov 2008 03:35:25 +0000

The Contest

The CNBC.com Million Dollar Portfolio Challenge is back. Trading started on November 17. The contest lasts ten weeks in duration with weekly winners. The top 10 portfolio holders return at the end of week 10 for a final two-week playoff round. The grand prize is half a million bucks with the runner up receiving $200,000 and the third place contestant getting $100,000. Weekly prizes are nice to like tickets to the 2009 MLB All Star Game & a trip to Caesar’s Palace Las Vegas. To register for the contest and click here.

My Rank

CNBC Million Dollar Challenge - daxdesai.com doing quite well

I’m doing very well for only being in the contest 1 day. My Challenge portfolio reflects my real world trades for today. I made 19% in real life as well.

Follow My Trades

If you want to learn how to make money even when the market goes down follow my trades.

Subscribe to my RSS Feed or

Follow Me on Twitter

Get up-to-date information on my trades and make some money.

Stock Pick for Tomorrow

Short Wells Fargo (WFC)

In shorting you reverse the buy low, sell high timeline. You sell high first (borrowing shares from your broker) then buy them back at a lower price (also called covering your short).

Another way to play it is to buy some WFC Puts. Puts are contracts that give you the right to sell a stock at a specific price by a certain date. See investopedia for a more detailed definition and examples.

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Election Watch / Victory Party – Dallas, TX @ Gilleys

Dax Desai — Tue, 11 Nov 2008 01:52:17 +0000

http://www.youtube.com/watch?v=JFJzJGs07iQ

With some goading I got my wife to go with me to an election watch party for Obama supporters at Gilley’s near downtown Dallas. Gilley’s is a large country resteraunt/bar that hosts many private parties/functions for large groups. I highly recommend the venue for business parties. If you’re in Dallas and throw a party be sure to send me an invite or send me a tweet on twitter. I’ve been to a couple of events at Gilley’s including the IHG Investor’s Conference party and I haven’t been disapointed. They even have a mechanical bull.

This was the first time I’ve been motivated enough to go to a watch party on election night. Usually I just watch it at home on TV and go to bed disapointed in the past 2 elections. This experience was a good one. Seeing the energy of the crowd regardless of affiliation is definitely invigorating to say the least.

There were plenty of TV’s at Gilley’s and of course the bar in case you need to celebrate or drown your sorrows should your candidate not win.

Below are a few pictures:

www.flickr.com

I should have worn a bigger shirt. I definitely need to hit the gym.

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Election Day Freebies

Dax Desai — Tue, 04 Nov 2008 18:00:46 +0000

Going out to vote gives you pride of being part of the Democratic process our forefathers envisioned.

Election day is about the people’s choice in choosing their government. This is America so it is also an opportunity for savvy companies to get some free promotion for their products. Some companies are offering freebies on election day to encourage people into their stores. Coincidentally many of these businesses are suffering poor sales. In any case they are getting free publicity from these “freebies.”

Most states have laws to prevent paid voting so no proof of voting is required for these offers:

•Coffee – Starbucks is giving out free 12-ounce drip coffees (valued at about $1.75 each)

•Doughnuts – Some 85 of Krispy Kreme’s 231 locations in the U.S. will hand out star-shaped, red-white-and-blue sprinkled doughnuts “while supplies last,” and will give out about 200,000 doughnuts valued at 99 cents each.

•Ice cream – Between 5 p.m. and 8 p.m. in each time zone, Ben & Jerry’s ice cream shops will hand out single-scoop ice cream cones (a $3.40 value).

Personally I’ll avoid any place giving out freebies. I hate lines and I won’t wait in line for a “free” .99 donut. The ice-cream may be a different story. )

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Blue Collar Economic Indicators

Dax Desai — Tue, 04 Nov 2008 03:04:49 +0000

I just came across these websites. I’d consider some of them to be blue-collar economic indicators:

A few observations of mine:

More people in the office brown-bagging lunch
More small tv’s on display in the stores
I know Christmas is far, but the stores seem very quiet
Job listings seem very sparse

Personally I think:

Mass layoffs are right around the corner.
We’re going to be pushing 8% unemployment, probably around 7.5% by mid ‘09.
Auto industry is just the start. We’ll see a cycle of industrial companies on the brink of bankruptcy.

My opinion is that we must to a degree let the market sort itself out. If it is a Saudi company foolishly investing in GM so be it. If it is a merger of 2 failing giants so be it. If it is a bankruptcy of an industry so be it. On a global scale we must adhere to comparative advantage. America’s best companies that are the world’s best are so because of a fundamental Darwinian premise – Survival of the Fittest.

And of course I can’t blog without putting in a few stock picks. Despite the drop in oil recently, I’m going long in oil. In typical fair I am going leveraged going long via DBO.

Be sure to vote tomorrow!

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Black Thursday Trading Advice

Dax Desai — Thu, 16 Oct 2008 06:49:12 +0000

I’m running on fumes due to a week of flying cross-country for business, but I thought I’d leave this trade for you readers.

Short the XLY this morning. This is the Select Consumer Discretionary Spider ETF which aims to track consumer discretionary stocks. Discretionary spending should fall as the state of the economy goes from bad to worse and the corresponding public confidence declines further.

You can follow this recommended strategy by either:

Selling the XLY ETF short
Buy Put options against the XLY or
Buy the Proshares Ultrashort Consumer Services (SCC) ETF which aims to track 2x the inverse of the XLY.

You should see a big downward movement in the XLY and corresponding up trend in the SCC this morning.

Happy trading and good luck

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