Speculative Alpha

Site Launch Scheduled for June 5, 2006

The time will soon arrive!  Our highly anticipated launch date is scheduled for June the 5th.  We are super excited about the site and are anxious to get the business rolling.  For those new to this blog, SpeculativeAlpha.com will be an internet-based trading advisory service that will offer Trading Email Alerts, Weekly Newsletters, Model Portfolios, Access to our Proporietary Stock Reports, Exclusive Interviews with Hedge Fund Managers/Traders and also the ability to Chat and Email our Traders during market hours (along with Intra-Day Blogging).  Our communication system will be supported by Skype.

Over the course of the next 6 months we are going to focus on adding applications that will involve the ability to discuss the market in realtime with traders, managers, and other subscribers/investors.  We are seeking to embrace Web 2.0 as we know it...

Another great aspect to our website will be the online trading tutorials where one will able to learn more about investing and trading without having to spend money on expensive education services that are neither practical nor useful.  In the end, our goal is to create a space where individual investors and market junkies can get together to share ideas and also follow along with our expert commentators.  Stop wasting your money on websites that tout "stock tips and rumors" but rather a site that gives you a clear vision on the market and how to increase your return over time.  (By the way, our entire education section is free!!)

If you are interested in reviewing the site as it is today (before launch) please send me an email at agustin@speculativealpha.com.  We'd love to get your feedback.   Please keep in mind that we will be editing text and refining layout in the interim.  We still need to preload the site with the tutorials as well.

On another note (and a very important one), we have added a new person to our team.  His name is Darren Hsieh and he is currently a PhD student at Stanford.  He will assist us with Business Strategy and Development.  We are excited about bringing him aboard and are anxious for him to take on our monster projects.  To learn more about the other members of our team click here.

Site Update..

At this point I am working on text as the navigation and layout of the site seem to be in order.  I am also looking at securing a few partnerships with other internet mediums.  One of which is Skype.com which might be the communication platform that we use to chat, podcast, and talk with our subscribers.  Sorry that this is short but I need to get back to work...Any questions, please email me at agustin@speculativealpha.com.  Thank you and Good night!!!

About Us

Well it has been some time since my last entry but I want to take this opportunity to introduce part of our team.  These people have recently accepted an offer: 

Brent Daniel - Graduated from Duke University in Durham, NC with a Bachelor of Science in Biomedical/Electrical Engineering and Computer Engineering.  After graduating from Duke, Mr. Daniel was a Proprietary Equity/Index Options Market Maker for Group One Ltd. in Philadelphia, PA for almost four years.  While at Group One, he utilized short and long term strategies that involved analysis of market volatility, direction, and arbitrage to capture profits in equity and index options.   After his time at Group One, Mr. Daniel decided to attend the University of Texas at Austin McCombs Business School.  He recently graduated with an MBA in Finance.  Mr. Daniel will be our US Equities Strategist.   

Michael Cashman - Graduated from Georgetown University in Washington, DC.  Mr. Cashman was awarded a Bachelor of Science in Business Administration with a double major in Management and Finance.  He also has a minor in Government.  He is licensed with the NASD Series 7 and Series 66.  Later this year, Michael will be accepting a position as an Analyst with Deutsche Bank in Private Wealth Management in New York, NY.  With SpeculativeAlpha, Mr. Cashman will be our US Equities Commentator.

Jacob Pashelinsky - Is currently an Economics student at Stanford University in Stanford, California.  His area of concentration is in the area of Macroeconomics and Econometrics.  Mr. Pashelinsky is currently working on his honor thesis that will analyze the increasing effects of developing countries on world oil demand and pricing.  With our company, his responsibilities will include the analysis of global macro conditions and key economic indicators.  With SpeculativeAlpha, Mr. Pashelinsky will be our Global Economics Commentator.         

Well this is a snapshot of our "All-Star" team thus far.  I am very happy that these very talented and intelligent individuals have decided to join our team.  A big Welcome to them!

I am currently working on the addition of a few other team members...I should have their names and bios out very soon as well. 

Our Name Means What?

I have had a few people ask me what our name (Speculative Alpha) means?  Here's the answer:

To "Speculate" is another word for "invest".....

And "Alpha" implies (as a verb) to "outperform the broader market"...

Hence, the word speculativealpha.com...

(Snapshot of our homepage - click the thumbnail to see a larger image of the homepage)

Job Offers Are Out!!!

I am pleased to announce that I have selected the speculativealpha.com team.  I have had the honor to meet many smart and exciting people from the best schools in America (Stanford, NYU, UCLA, Notre Dame, SMU, Air Force Academy, Georgetown, Texas, Berkley, Michigan and Northwestern).  After countless hours of interviews, I have come up with my first group and am in the process of sending out the first round of offer letters.  I will introduce each member on this blog as soon as they accept the terms.  So stay tuned.....

Updated Home Page Flash Ad...

Here is an updated look at the flash ad banner...check it out...http://avine.com/agcap/ag_index4.html.  BTW you may find text errors and misspelled words.  Please disregard. 

The Future Partly Unveiled...

Well as some of you may already know...I am currently building an internet business focusing on stock research and education.  The site (speculativealpha.com) will include interactive educational lessons (by far the best on the web to include audio/visual instruction in subjects such as equities, options, portfolio strategy, etc...), an online trading desk, auto-trading capabilites with internet trading platforms such as optionsxpress.com, and a host of other value added services. 

I am near completion of assembling a team that will work with me in analysis and editorial commentary.  Here is a "snapshot" of the homepage...Take a glance at the homepage by clicking on the thumbnail image...

Please note the text is just "dummy text" as we continue to work on layout schemes and colors.  Also, the horizontal image of the two guys will actually be a flash ad describing the benefits of our site..To see a part sample of the flash ad in action, check it out:

http://avine.com/agcap/ag_index2.html

So there it goes...I will begin to give frequent updates regarding the site and the developement as we move forward. 

The Case for Goldman

The brokerage stocks have had a nice run as of late due in large part to the tremedous deal flow that has worked its way into the capital markets. Generally speaking I am rather bullish on all the brokerage stocks but I do have one favorite in particular: Goldman Sachs (GS).  A quick look at the side-by-side comps will show a undervaluation that has taken place.  In the analysis below I have compared Goldman's numbers to its largest competitors (Lehman Bros, Merrill, Morgan Stanley, Schwab) by using my favorite six metrics. (click on picture for an enhanced image)

 

I like Goldman at this level.  They have spent more than $7 billion in repurchasing stock in FY05 and sports an ROE greater than 20%.  Always atop the League Tables and with net revenues increasing +20% on a year-to-year basis, the outlook appears to be favorable.  My research suggests that based on current earnings multiples, I expect GS trading higher than $150 per share within the next 12 months.  At $150 I think gets a bit closer to being fairly valued.

Consumer Tapped Out for '06?

As I research investment themes for next year, I quickly find myself surrounded by tons of fundamental and economic data some of which can be disturbing.  Of all the econ data that I run across, the one piece that reallys catchs my eye is Federal Reserve's Household Debt Service Payments as a % of Diposable Personal Income.  I checked the data going back to the early 80's and noticed the enormous boom...

Interesting data is it not?  I am of the opinion that at some point the consumer will have to pony up the cash to pay down this debt.  The increasing interest rates will force the consumer to do just that...as a result, I would play consumer services stocks very carefully over the next 12 months.  My initial consideration is to set an underweight status on the entire sector.

My Top Picks for 2005

Over the past year, my recommendations have produced stellar results.  In fact, my portfolios have outperformed the major averages thanks in large part to a surge in oil, tech, and international equities.  Here are just a handful of my winners for 2005:

• Google (GOOG) +45%
• Halliburton (HAL) +50%
• Goldman Sachs (GS) +21%
• Ultrapetroleum (UPL) +42%
• iShares Latin America (ILF) +31%
• Petrochina (PTR) +28%
• Chesapeake Energy (CHK) +60%
• Norfolk Southern (NSC) +22%

Generally speaking most of the stocks have seen their best days however a few still have some fuel in them.  I will outline those ideas in one of my next entries.