Networth Update

An interesting transition month has come and gone, and its time to update my networth again. This month was an exceptional month in terms of my finances, since I collected a vacation pay out from one place and then a sign-on from another.

Besides the extra income, my expenses this month has been surprising in check (minus the obvious fund I set aside for buying new furniture for the place).

So, compared to last month's networth update, I have seen a 0.96% increase in my networth, or about $9,600.

Obviously, every month is not going to be like this. However, I am steadily progressing toward my goal, and I predict I'm about 8 months away from the break even point, where my liabilities will equal my assets.

Go Go Fed

The Fed announced a 25bps rate cut today, which is great news, and the market was definitely looking for it. But, interestingly, the market in the 5 minutes after the Fed's announcement tanked. Why?

Hidden in its announcement was the indication that the Fed would most likely not cut rates in the near future, citing concerns with inflation (look at the high price of gas) and the overall stability of the economy.

So what are the plays for the rest of the week? Well, if you got a nice bump today, my suggestion is to sell 50% of your winning positions to lock in your profits, and then maybe wait until Friday to completely unwind. The market tends to take profits after these bumps, and you should do the same.

However, there is one stock I was buying today, CVS. They are announcing earnings tomorrow, and I would have posted this pick earlier, but I had completely forgotten about their earnings release date. But with the consumer goods report today being so good, its a great indication that CVS's earnings will also be amazing.

Still waiting...

The Nasdaq did okay today, but really, it's still waiting for the Fed to tell the market "Rate cut!" There's very little change for a 50bps cut, but that would be amazing.

My portfolio right now is doing okay, since the Nasdaq has been up, but my bet on Amazon has yet to pan out. My attempt to catch a market inefficiency is butting heads against another classic market issue, no matter how wrong the market is, if the market wants to go there, you can't fight it.

So far, my Amazon options have lost 50% of its value, which is about $1,300. Hopefully the Fed's rate cut will help boost the stock some, at least enough for me to recover what I put in.

Here Fed, Fed, Fed...

Show me that rate cut!!

The markets are up a bit, but now the market has completely priced in a 25bps cut, which is what worries me. Once the market believes one way, and what is expected doesn't happen, there will be a HUGE drop. Conversely, if it does happen, the market will move a little bit.

This is a simple situation where the risk is high and the reward is low; a situation that is completely out of whack.

I am hoping for the best, but bracing for the worst tomorrow.

PS - End of the month is coming, and this month should see my networth move quite significantly, thanks to vacation time buyout from the old company, and sign-on bonus at the new company.

Market Outlook for the Week

The Fed meets Tuesday, and most of the market is awaiting a rate cut decision. Most believe a 25bps cut, although 50bps isn't completely out of the question. It's probably going to be the biggest factor affecting the markets this week.

On the one hand, with rising gasoline costs and the fear of inflation, the Fed may decide to keep rates where they are, on the other hand, and what most believe, the Fed needs to stimulate the market and the economy by loosening the credit markets, and a rate cut is exactly what it needs.