Purchased DDD. Again.

I purchased 61 shares of 3D Systems Corporation (NYSE:DDD).  This is the fourth time I've purchased this stock since I started tracking this portfolio in September 2011.

Historically I have purchased DDD after it's hit a significant high price and then retreated a bit.  I then have sold when it has hit that price again.

In the case of this particular equity I do find myself wondering if I should have just held onto my shares.  I mean, I purchased 100 shares at $15.50 each back in 2011 and since then the stock has done a 3:2 split and then climbed above $96 a share.  It would have been nice to sell 150 shares for $96, grossing $14,400 from an investment of $1,550.

But that's the benefit of hindsight.  There's a lot to be said for taking the profit when you're not sure what's going to happen next.

Well, I purchased my latest round of shares at $77.90 and I plan to sell them at the aforementioned price of $96.  I'll tell you how it works out.

Big Changes

I bought a couple of stocks today, so of course I must update ye olde blogge.  First, though, some housekeeping.

Normally, in order to buy something I've got to sell something.  This week, though, I decided to move some funds from my TD Ameritrade Amerivest rollover IRA to the self-directed rollover IRA that is the subject of this blog.  In so doing I have necessitated the closing of one chapter and the opening of another.

First, let's close the books on how I've done, previously.

I started my self-directed IRA with $12,460 and made my first equity purchase therein on 16 September 2011.  Until today no additional funds were added. All of my trades have, eventually, been noted here.  The upshot is that at the close of business yesterday - 29 January 2014 - I had accumulated in cash and equities a total of $29,120.61.  I owned 8 equities, and the fees associated with turning them into cash would have totaled $79.92 ($9.99 x 8), so let's say that I really had accumulated $29,040 and change.  As best I can determine, I seem to have achieved an average annualized increase of around 40%.  Not too shabby.

Now that I've injected new cash, though, then I need to start a new chapter with a new initial amount.

I have added $17,500 to my current account total of $29,120.61.  That brings my new "initial" investment to $46,620.61.

I've not decided how I'm going to invest all of the new $17,500, but I have made a couple of purchases.

Today I bought 10 shares of shares of Apple Inc. (NASDAQ:AAPL) at $500.02 per share.  Apple just released a quarterly report in which the company beat expectations overall, but sold fewer iPhones than expected.  The market, in typical fashion, freaked out and sold Apple shares at a discount.  Apple has lost nearly 10% of its share price in the last few days.

Apple's historic share-price high was $700 back in 2012.  With that in mind, I've been very tempted to buy at its recent price of around $550.  Now that it's gone down to $500 then it's too good an opportunity to pass.

For now I've placed a sell order at $700 a share.  I'll probably sell at a lower price, but I doubt I'll sell Aple for less than $550 a share.  Mostly I'm just waiting for the market to regain its senses.

Another equity being mistreateda by the market just now is Krispy Kreme Doughnuts (NYSE:KKD). KKD released an excellent quarterly report back in December, and the market decided to sell.  KKD hit a 52-week high of 26.63 back in November.  Since then it's lost about 35% of its share price.

I purchased 245 shares of KKD today at $17.685 per share.  I've placed a sell order for $26.50 a share.  I'm guessing that KKD will re-attain its high at some point in the coming year, and when it does I stand to make a 50% profit.

I'll be making more investments in the next few days, and I'll keep you informed as I do.

Purchased Zillow

I bought some shares in Zillow Inc (NASDAQ:Z) today.  I may end up regretting it.  We'll see.

Zillow helped me find a new house last Spring.  I've been very impressed with the site, and I find myself looking at it on occasion, still, even though I am not at all in the market for real estate at this time.  I used to prefer realtor.com, but Zillow has made a convert of me.

Real Estate is a seasonal business.  It's slow in the winter and active during the other seasons, especially spring and summer.

Here's a two-year graph for Zillow.

 

As you can see, each of the last 2 years Zillow has generally climbed until the Fall, at which time it declines a bit.  In 2012 it declined from a high of $46.17 on 20 September to $23.36 on 15 November.  That's nearly a 50% decline, but it made up for that decline very nicely the following year.  In 2013 it hit a high of $103 in early September, but it declined to $71.28 by 4 December.  Since then it's started to climb again.

I told friends and family in December that I expected Zillow to climb back up to $100 a share, but I didn't buy at the time.  I've been alternately kicking myself and patting myself on the back since then.  A week ago, on 16 January, it hit an intra-day high of $92.50 a share and I engaged in much self-flagellation.

That said, it's not consistently making money.  Have a look at this chart from ycharts.com:

 

This is a chart showing quarterly net income.  It goes back to March of 2010.  As you can see, Zillow was making money for all of 2012, but it took a BIG dip in 2013.  That's worrisome, and it's especially worrisome that the quarter ending on 30 June was so unprofitable.  One would think that for the real estate biz the Spring quarter would be a happening time.

Looking at statements from that time, it looks like Zillow spent more on sales and marketing than they were able to offset with revenue.  Again, worrisome.

Zillow has millions on hand in cash, though, and they have no debt to speak of.

I like the product.  I think that this market is cyclical and that 2014 will be a good year for real estate.  The stock was on the decline today and I was sitting on some cash.  I took the plunge.

I purchased 24 shares of Zillow for $83.25 each.  With fees that's $2,007.99.  As long as the stock goes back up to$84.09 then I'll break even.  I've already got my sell order in for $100 a share, though.

I don't plan to hang onto this stock forever, but I should have it for a few months.  If history is anything to go by, though, then I should sell it no later than September.

Sold GameStop

I sold my shares in GameStop Corp. (NYSE:GME) today at $38.76 a share.  I could have gotten a better price later in the day, as it turns out.  It went up to $39.38 at some point.  For that matter, I do think that GME will go to at least $40 a share in the near future.

I decided I had an opportunity to buy something else, though, so the decision to sell when I did was really based on the low price of the stock I wanted to buy.  It was also based on the fact that I don't want to sell any of my other stocks at this time.

I bought some shares in The E.W. Scripps Company (NYSE:SSP).  I've been watching this one for a while, and told myself I would buy if it ever again wandered down to $18 a share.  Well, that happened today, so I pulled the trigger.

The reason SSP declined today may be this Moody's column.  It posits that there will be less political TV ad revenue than there was in 2012, which stands to reason, as 2014 is a year of mid-term elections instead of a Presidential election year.

What the column doesn't say is that there will still be PLENTY of political TV ad revenue this year.  Ever since Citizen's United there's more ad revenue than there used to be.  And certain politicians are bigger targets than others.

Specifically, John Boehner is on the outs with the Tea Party.  They're actively seeking a primary challenger to try to unseat Boehner.  If that happens then there will be plenty of ad revenue in the Cincinnati market.

There is only one TV station in the Cincinnati market that's owned by a publicly traded company, and it's owned by SSP.

The notion that I could reap some personal gains from this year's mid-term elections and primaries really appeals.

I purchased 135 shares of SSP at $18.12 per share.  I could have gotten them for an even $18 later in the day, but there you go.

Also, I could have purchased more than 135 shares of SSP with the proceeds from the sale of my GME shares, but I decided to divide the eggs from that particular basket.   I'm keeping a little bit of money in cash for now.  I'll probably invest in something else soon.

I'll do various addenda to this post, later.  I'll get specific about how much I profited from briefly owning GME. 

For now, though, I just wanted to disclose my activity.  I try to update this blog whenever I sell or buy.  As of now, it's updated.

UPDATE 1:  What kind of profit did I make on GME?

I purchased 115 shares of GME at $36.21 on 14 January.  Add a $9.99 transaction fee and that's a total of $4,174.14 spent to buy it.

I sold my 115 shares of GME at $38.76 on 22 January.  Subtract a $9.99 transaction fee and that's a total of $4,447.33 in proceeds.

It's a net gain of $273.19 for 8 days of investment.  When I do the math and account for all the fees, it's 6.5% in pure profit  It's also the shortest amount of time I've ever held on to a stock.

UPDATE 2:  The lists of what I own and what I have owned previously have been updated.

Gamestop

In my column Sunday night I revealed that I had some cash in my IRA that was waiting for the right investment to come along.  I had placed an order for Verizon Communications Inc.(NYSE:VZ) at $46.53 a share, with the expectation that VZ was not likely to go that low.  It was a placeholder order, really.

Yesterday VZ very nearly went that low.  It was down to $46.58 at some point.

However, another opportunity arose.  Or descended, perhaps. 

GameStop Corp. (NYSE:GME) is a stock that I had been looking at a year or so ago.  Its financials are healthy.  It's making money.  I know who they are and what they do.  I've bought gift-cards for nephews from Gamestop, and when I needed a different cable to attach the Wii to my new flat-screen I was able to get a used cable from Gamestop for a fraction of what it would have cost me at Best Buy.

I remember staring at GME shares in late 2012 and wondering why the stock was priced under $30, especially when it was paying a $0.25 dividend every quarter.  It was on my list of equities to buy if I had any cash on hand.  Back then I had my money tied up in equities I wasn't prepared to sell, or other opportunities came along that seemed, at the time, better than GME.

Then GME went on a tear in 2013, eventually topping out at over $57 a share in November - just 2 months ago.  Using 20/20 hindsight I wrote GME off as another opportunity missed.

Over the last couple of months the stock has come down a bit, and has fluctuated between $45 and $50 per share.  It hadn't come down far enough to really interest me, though.  Until yesterday.

Yesterday GME took a roughly 20% dive from its Monday close of $45.31 down to a Tuesday intra-day low of $36.10 per share.

Why?  Software sales are down.  This is a long-term concern.  The newest generation of gaming consoles allow gamers to download software directly from the manufacturer to the machine, meaning fewer software sales for GME.  It's a disruption for GME's business model.

GME is a disruptive business itself, though.  Used / resale is an adaptation to the market, and I suspect GME will adapt further as necessary.

Also, the used / resale space may not be sexy and may not be ultra-profitable, but it's still adequately profitable for now.  New bookstores may be dying, but used bookstores can make a living.  The same goes for used music stores.

Furthermore, GME sells hardware, and hardware sales this holiday season were up.  They sold a lot of next generation consoles - consoles that are ultimately trying to put brick-and-mortar stores out of business, true.  But GME is doing well selling the consoles and the accessories.

There is some legitimate concern about GME's ability to remain a going concern in the long run, and for that reason I don't plan to hold onto this stock forever.  I do think, however, that concern about long-term viability was already priced in, and that's what had brought GME stock back down to $45 a share.

I decided to buy.  And I had the cash.  So I did.

I purchased 115 shares of GME at $36.21 each.  It costs me $9.99 to buy and $9.99 to sell, so whenever I sell GME then I need to make at least $19.98 in profit in order to break even.  That makes $36.39 the break-even point for my 115 shares of GME.  Of course, if I still have the stock in March and it pays $0.275 per share in dividends then my break-even point goes down to $36.12 or so.

Regardless, for now my sell order is in for $45 a share.  I think the market has over-reacted on this one, and that there will be a bounce-back.

Of course, I could be wrong.  Welcome to the excitement of investing.

Sold CLCT

My previous post included the following quote:

I seldom have money in my investment accounts that's not already at work.

Well, for once, this is not the case.  Friday morning one of my stocks sold, albeit on auto-pilot.

When I purchased Collectors Universe, Inc.(NASDAQ:CLCT) a couple of months ago I put in a sell order for $18.15 a share, almost immediately.  I had purchased 230 shares at $15.921 each.  A sell order for $18.15 was, shall we say, optimistic.

I can't remember exactly how I arrived at that figure.  CLCT hadn't been above $18 since early 2005.  I had no inkling as to when or if it would go that high again.  I seem to remember picking a number that would be a good sell price PLUS include all the dividends it would pay in either a quarter or two.  If it didn't go above $18.15 then I would make dividend money for a while.  If it did go that high, though, then I would probably be just as happy to sell it as keep it.

Well, I got lucky again.  During the day on Friday CLCT went from $17.96 to $18.75 and then finished the day back down slightly at $17.92 a share.  TD Ameritrade sold it for me at $18.20, actually.  

My profit was nearly 13.75%  after all was said and done, and it was an investment that lasted just under 2 months.  Let me just say:  I feel pretty good about making a profit of nearly 14% in two months.

I thought very seriously about NOT placing that sell order a couple of months ago.  CLCT pays awesome dividends and can actually afford to do so.  If I hadn't placed that sell order then I would surely would have made the same profit, but if I had only profited through dividends then it would have taken 10 times as long.

Anyway, enough gloating.  The point is that for once I actually sold a stock without knowing how I'm going to turn around and invest the money from the sale.  This is unusual.

For now I've placed an order for some shares of Verizon Communications Inc.(NYSE:VZ), but it will only go through if VZ goes below $46.53 a share.  I don't think that's likely to happen, but in case it does, the order is in.  Really I expect that order to sit there, unfulfilled, until another opportunity presents itself to me.

If CLCT goes below $16.25 then I'll probably invest in it again.  I suspect I'll make more money from its price fluctuations, quarter-to quarter, than I would from its dividends.  This is a new strategy for me, and it deserves its own post.  I'll try to find the time to write it up properly.  But not right now.