Friday, March 31, 2006

The “Friendly” Road Wave…Or Is It?

You’ve done it before – when you merge into traffic and you give the driver behind you that quick friendly wave (raising your hand so it can be seen by the driver behind you) as a way of saying, “Thanks for letting me get in,” but is it always interpreted the right way? Or when people do it to you, do they mean it in a positive manner? I think the origin of the “road wave” (as it will be referred to throughout the rest of this piece) has a more dark and sinister meaning, one that if more people knew its true origins, the world would be a far worse place. In fact, the road wave can be traced back to the days of the early cave man, before there were even roads.

Back when early man was exploring his surroundings, there were often many dangers lurking in the wild, ready to spring at a moments notice upon an unsuspecting cave man. Early on, man learned that if they hunted in pairs, they would achieve better success rates (quite possibly the origins or the now common phrase that is spammed amongst MMORPS – “GROUP PLZ!”) than hunting alone. This was quickly surmised after several men would go out alone to forage for food alone…and mysteriously never returned… So one day, an intrepid caveman decided to pair up to increase his chances of survival. They were out hunting a bear, when suddenly, the tables turned and it was the bear that was hunting them. The intrepid cave man quickly realized that he didn’t have to outrun the bear – just outrun his partner. So, he quickly sped up and cut in front of him. And as the bear pounced upon the hapless caveman, the intrepid hunter raised his right hand and waved back to thank him for allowing him to escape certain doom. He didn’t stop running of course, oh no, because he did not want to be dessert for the bear. Instead he just kept running until he was safe back at his cave. What he didn’t see was the reaction the hapless caveman had to his wave – a reaction of anger, disgust, and hatred…which was quickly overcome by pain and agony.

Fast forward a couple million years and you have the modern car and today’s roads. With beltway gridlock and traffic jams up the wazoo, we seem to have reverted to that primal state and have become territorial in our cars when on the road. “This is my spot dang it, and no one is going to take it from me!” Maybe a majority of the people on the road today were the victims of “friend cuts” back in elementary school – where someone in front of them let their friend cut in front of them, and then immediately that friend let their friend who let them in cut back in front of them, thereby screwing the guy/girl behind them without having the original placeholder friend get the shaft – and are thus bitter at letting anyone get in front of them for the rest of their lives. Either way, they certainly don’t WANT you cutting in front of them when you are trying to get over a lane. And how do you know that your “road wave” isn’t going to be interpreted as something similar to (or worse than) giving them the bird? The fact is, most of the time when someone cuts in front of you and gives you the road wave, they are secretly saying “Ha Ha! SUCKER!”

So how do we tell when it’s ok to give the road wave? Well, usually when old ladies are waving you over in crowded traffic, it’s ok to change lanes…but watch out! Some of them are sneaky in their old age and might just be trying to lure you into their trap – the trap of a fender bender (Driver: “But officer, she was waving me to move over” Old Lady: “Cut the baloney sonny! That was my nervous twitch – I was swatting at the pixies in the car!”). Other times are when it’s a student driver. You can actually cut these ones close and squeeze into spots you normally shouldn’t fit, because it’s good to give our young drivers real-world experience while they’re under the stressful gaze of an instructor, and then calmly give them the road wave. Truckers are 50/50 – country truckers live by “the code” and will often let you in, but city truckers are rebels and renegades on a mission to prove how large their member is. At all costs, stay away from men in sports cars and girls in SUV’s – those are the ones you don’t want to mess with. So the next time you are on the road, make sure you tail gate the guy in front of you, allowing no possible chance for someone to cut in front of you and give you the road wave. Because who knows, the next time you see that wave, check your rear-view mirror. There might be a bear on your tail and you don’t know it.

Friday, March 10, 2006

This Blog is priced to sell! Explosive Growth!

So we ALL know that stock spam, in addition to pr0n spam ,are two of the biggest nuisances that one receives in their mailbox daily (if not hourly). But what evidence do we have of this nuisance? Well, fear not humble reader, for I have painstakingly taken the time to actually track the performance of some of these spam emails to gain empirical evidence of the utter garbage that is stock spam.

First a bit of background. How, or why did I decided to do this? Well, when your only job is to sift through the spam filter looking for good email (ham), you come across a LOT of email that just should have not been sent. Love notes, bank account info, passwords, pr0n pictures, etc. Keep in mind that this is a corporate network with business email address we are talking about, not a personal email account. So after seeing literally hundreds of emails a day for stock tips that are poised to explode, I figured, why not occupy a little of my time and keep a track of how these “monster” stocks actually perform.

Now, obviously, this is not a true scientific study, but with that being said, it does give a decent snapshot of how things work during the short time that I conducted this experiment. Each day, there was usually one giant offender that popped up repeatedly. They would send out about 200 or so emails lauding the values of this company. The next day, it would change to a different stock (or in the rare case, it was repeated). Upon arriving at work around 8:30-9ish, I recorded the opening price, and at the end of the day, recorded the high value and closing value.
To add extra test values, I took some of the less prolifically spammed stocks and added them in as well to see if they had better performance from being sent by a different spam provider.

Here’s the data:

So these microcaps are “theoretically” designed for people with lots of petty cash that can just dump money into these stocks and buy, 500-1000 at a time to hopefully make some sort of profit. But if you look at the average percent change, it comes out that you would be losing money just on the stock itself if you based your purchases on the spam emails. That doesn’t even factor in brokerage fees, and the ever so dreadful capital gains tax that is VERY high for short term holdings (which is taxed at your ordinary income rate, which varies from 10% to 35%).

Assume you made 50 bucks on the sale from one of these microcaps. You then have to pay the brokerage fees for the purchase and sale. Pretending you are using etrade, we are going to estimate the brokerage fees are 10 for purchase and 10 for sale. That’s 20 bucks there. Then you have to pay the tax (not now, but when it comes time to pay taxes yearly due on April 15th), which will be anywhere from $5 to $17.50. So at a minimum, you’ve paid 25 to earn your 50, and quite possibly you would have to pay 37.50. This is using a good scenario for just one. You would have to repeat the success each time to actually gain a decent profit. The possibility that you will actually make money on these spam stocks is rather low considering the average change for these stocks was negative -.06%. This just goes to reinforce the fact that the true experts say you can’t do market timing, and that anyone who says you can is selling something.

So what have we learned today class? Number one, microcap stocks are no place to be doing business. Number two, spam is a complete waste of space, and costs people more money than the good that it brings to a small few, and number three, I have WAY too much time on my hands at work. This concludes your daily lesson in stock spam…

Oh, and btw – I’ve got a great lead on this new stock that’s poised to quadruple its value next week…