I am not entering any trades today until I see which way the market goes. Economic numbers were as good as they can be this morning but the markets look dead.
Today was bonus day on Wall Street so there should be a little good feelings lift to the markets but nothing I would count on.
Housing affordability is at the lowest level since 1991 which was the beginning of a terrible 2 year run for the builders so let’s stay out of that for a while…
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BCRX may get yet another boost as human trials are approved for their avian flu drug. It is not a vaccine so don’t get too excited but, if there are real outbreaks, this thing could really be a very important drug.
The EU is threatening to fine MSFT $2M a day until they learn to play well with others – this has been going on since 2004 and the Europeans are a little fed up with the same monopolistic practices that the US Government seems to have lost interest in.
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As a salute to the free market system though, Linux is gaining ground with RHAT reporting 100% growth from last year with the operating system now being installed on about 20% of all servers, even more so on high-end systems.
Rather than buying RHAT (which is up 65% this year) I like NOVL, who are aggressively pursuing more Linux business and have been a steady grower for years. NOVL has a p/e of 10 vs. 96 for RHAT so any sign of growth from Novell will rocket the stock.
For some reason the Jan ’07 $10s are just $1.20 so I think I may just put some play money down on it and forget about it for a while.
That same dollar can buy you an actual share of Linux consulting firm VA Software (LNUX) which is a wonderful company that makes no money, ever. This company is the poster child for the .com crash having gone from $300 a share back in 2000 to about .50 in 2002.
Most investors wouldn’t touch this stock with a 10 foot pole and the last few day’s action on the stock should show you why but I have had some success trading its ranges ($1.35-$1.75). It is a hard stock to get in and out of with very thin trading. To say this company is not run for the investors is an understatement – this company is a Linux charity to promote the open source community and they just want to make enough money to be able to live in the valley and have all the latest, coolest hardware to play with.
So why do I like this company? The founders have been subsidizing themselves for years by selling stock but they are running out of shares and may finally have to face the reality that the company has to make some money. If they just charge their 1M users $10 a month, the company would triple it’s revenues and run over 50% profit margins. It might actually happen!
