The Proficient Investor

I just have a few things to say about the following video:

http://link.brightcove.com/services/link/bcpid1155328549/
bclid1137812485/bctid1352499644

First of all, I think it’s great that more movie studios are getting on board and understanding that delivering media over the internet is where things are going in the future. I also think it’s great that customers have a choice on where they want to get their media.

What I completely disagree with is that the Netflix(NFLX) business model no longer works. In the video they say that since Apple(AAPL) is offering so many downloadable movies to rent, why would you need a netflix subscription. Since you can rent a movie for 30 days for $3 you don’t need a subscription? That’s such an arrogant stance to take on this whole thing. Let’s do some math.

Using Apple’s iTunes to rent movies, I can rent 6 movies for a month for $18 (the equivalent that I pay for a Netflix subscription). Now with Netflix, there is no limit to how many movies I can rent in a given month, but I can only have 3 out at a time. Well, I can watch about 9 movies in a week. If I did that for 4 weeks that’s 36 movies I get for $18 vs. 6 from iTunes. Still think iTunes is the better deal because occasionally you don’t return some movies for a few days, maybe you have 3 movies for 2 weeks. I still get 6 movies for the same price. On top of that I can watch up to 18 hours of content online from Netflix included in my subscription.

What I see here is a lack of investigation and understanding of consumer wants and needs.

I use iTunes for music, podcasts and some video content, but I have yet to purchase a movie because frankly, they just don’t play on my desktop. Part of the reason is Apple doesn’t really care about how their products run on anything other than Apple computers. iTunes videos are choppy on my system and if you try to run them full screen, the whole app freezes. Even after upgrading video cards and memory and a new processor this is still the case. Their software just isn’t very good on a windows platform.

Netflix on the other hand, runs perfectly. I’ve never had an online Netflix movie crash or lock up. So in my opinion, this battle isn’t decided yet. Apple may have some of the big studios on board but I’m going to stick with what works for me.

No position in Netflix, but I do have some Apple shares.

Bluefly (NASDAQ: BFLY) is in dire straits.  For the past few months they have failed to meet continued listing guidelines for NASDAQ which means they are in danger of being delisted and relegated to the OTC boards.  However, this hasn’t stopped speculators (like myself) from trading the stock.

This 6 month chart illustrates pretty well the issue.  Volume has all but vanished from this stock and that creates huge upside and downside moves.  The 3 month moving average is 59k shares but over the past few days as little as 3,000 shares a day have traded.  When someone like me then buys 2,000 shares it pops the stock up…then the shorts come in and hammer it back down a few notches.  It’s not an easy trade but I also don’t trade on margin on this particular account so unfortunately I can’t short.

When faced with this kind of choice I try to buy on a dip and a couple days later watch for the pop and unload.  It’s a way to make a few bucks trading around a core position.  In this case, around .90 cents.  Buy it around .85 and sell it around .93 and you can make a couple hundred a trade.

I’m not saying to go out and do this, as with any investing there are inherent risks, but if you can take the pain short term it’s a great way to make quick cash.

I sold my paltry 8 shares in Apple today at $191 netting a gain of $28. I decided I would sell into this strength and free up the cash to invest elsewhere. Of course I could hold it long, hoping it would get to $200 but even though I think this holiday season is going to be good for Apple, the stock just can’t seem to find stable ground. Sure it’s climbing now but it dropped to $160 shortly after I bought in on my position.

It’s possible the stock will again come down at which point I will examine the trade again.

I tried to buy another 1000 shares of Bluefly (NASDAQ:BFLY) but couldn’t get the order filled on such low volume. I’m expecting the stock to break the $1.00 barrier this month. Last year on the 14th the stock closed at $1.64 but it has yet to show that kind of momentum.

Infospace (NASDAQ:INSP) is performing well after announcing the special $9 dividend and closed today at $18.91 down $.37 cents.

I’m currently up $10 on EMC as well, which I fully expect to go to $22 or $23 by the end of the year.

Get rich and stay rich is the goal, according to Jim Cramer. In his new book which is out today, he continues spreading his philosophy on trading in the stock market and teaching the little guy how to be a success.

Much of what I have learned about the market and about picking solid performing stocks I gleaned from Jim Cramer’s books. Even his Confessions of a Street Addict book has insights into the market you might otherwise be unaware of. I haven’t read or purchased the latest book and I am about halfway through his last book, Jim Cramer’s Mad Money: Watch TV, Get Rich which focuses more on techniques he uses in his Mad Money television program.

However, this new book looks interesting and I look forward to reading it. You can buy it now from Amazon.com.