Friday, February 29, 2008

Introducing Two New Paper Pprtfolios

First, my apologies for the delay between new posts. This week featured 3 midterm exams, so I had to tend to the responsibilities of being a student.

I've created two new paper portfolios on - the StudentStocks Fund and the StudentStocks Commodities Account.

The Fund will feature short-, mid- and long-term plays on valuations and fundamentals. I'm assembling the portfolio as I write this, so when an initial makeup is structured, I'll post the components.

The commodities account is a trading account, as I try to exploit (gamble/guess) the movement of commodities. Right now, I own DUG (ultrashort oil and gas), and have shorted ConocoPhillips, KOL (Coal ETF), CNX (a coal producer), GDX (Gold Producers) and GLD (a gold ETF).

So i'm currently betting on a pop/deflation of the current energy bubble. As prices swing from high to low, I'll change sides of positions.

I plan to update performance from both accounts approximately weekly; hopefully, I'll produce some good, tradeable ideas for readers. is a free paper-trading site where you can earn real money. If you're interested in opening an account, email me!

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Tuesday, February 19, 2008

Doubling up on CROX; NTRI stock losing weight

Crocs released earnings after the bell, and even though estimates came in largely in-line, the stock tanked after hours. Margins were down (partially due to having to air-mail goods to retailers after the Mammoth sold out during the holiday season), but profits came in right around the street's consensus.

CROX reaffirmed the full-year forecast, which is for $2.70 EPS. After-hours, the stock was trading around $27.

CROX grew revenues 99% in Q407... and will continue to grow (at a slower pace) throughout 2008, especially as they release their clothing line.

It's unfathomable to buy such growth potential at a 10 P/E. When the earnings originally came out, I thought that these might have been the earnings that firmed investor confidence, as BWLD's were last week. That wasn't the case.

Once again, just like BWLD, I got in a little to early (in the mid-30s for CROX). I doubled my position today at $28. But investors are discounting another cheap growth stock too heavily, and CROX should take off soon.

Also, after the bell, Nutrisystem reported earnings and guidance that didn't please the street. The stock has lost about 70% of its value since the summer, when it traded around $70/share. It ended the after hours session at $18, after trading below $17 for a period of time.

The bad NTRI news? 2008's earnings look likely to decrease from 2007's numbers, and negative earnings growth certainly isn't a good thing. Nutrisystem blames this on difficult macroeconomic conditions, which is a convenient albeit reasonable excuse.

It should not be ignored that NTRI's lowered projections of $130 in earnings this year; based on the 35 million outstanding shares, that breaks down to nearly $4 per share. Considering NTRI is now an $18/stock, the P/E is like five.

The downward trend is certainly concerning, but short-term problems and fears about future expansion have punished NTRI too much. I'm going to look into some LEAPS for NTRI - maybe just January 09's, because with such a low multiple, I don't think NTRI can stay depressed for too long.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

Monday, February 18, 2008

A Slew of Stocks - Tech, Banks, Coal, and More.

Well, let's hope I don't, but last time I wrote about the prospects of a strong opening/daily performance, the market didn't perform positively.

However, once again, futures are up after a positive sessions in Europe (on Monday) and in Asia (on Tuesday).

I'm hoping for a couple pops on stocks I personally own; over the weekend, both Microsoft and Crocs received positive writeups in Barron's. (I own MSFT calls and CROX shares). Also, I'm long VIX puts and the VIX price has been falling as the market makes small (1%) positive moves. Also, in another post, someone reported that bank shares were up overseas; I'm hoping that bodes well for my CFC stock.

To substantiate this post with something other than personal investments most of you don't care about, I'll write about a bearish idea I have (and have executed in a paper account).

Coal stocks were sitting at 52-week highs before a downgrade by Goldman on Friday. On Wednesday, I discussed a potential trade in shorting coal with my father (who is a registered investment adviser). He discouraged the idea, so I didn't do anything immediately in any real-money account, but in my paper account at (more on that site later) I shorted both CNX (Consol Energy) and KOL (the new coal ETF).

My reasoning is thus: extraordinary circumstances have caused a temporary bubble in coal demand. Snowstorms in China and floods in Australia caused production to cease from many mines, and a combination of legitimate supply concerns and speculative fears drove the price of coal skyward.

There's one problem with coal getting this expensive this fast - there's so much of it in the ground. Unlike oil, which might have 50-100 years left, or natural gas, with a slightly longer timeframe, it's common knowledge that there are hundreds, if not thousands, of years of coal consumption left in the ground.

According to simple economic theory, what happens when the price of a good increases? Producer surplus increases, and producers become even more motivated to bring goods to market. As they record huge profits (as they may in the coming quarters), coal producers will surely ramp up production.

Then, when the snow melts, the waters retreat, and the coal dust settles, there will be more production capacity than there will be demand.

Big coal companies like CNX are trading at valuations of about 50-70x TTM earnings and 15x forward earnings (which take into account higher prices). But if prices fall (or even stabilize), these valuations will be unjustifiable. Look at big oil/gas companies - Exxon, Chevron, Conoco, Marathon, BP, and most others trade at multiples of less than 10.

So when the coal companies tanked Friday, I made nice 5% one-day returns on my newly-shorted shares. If only I would have done it with real money.

***Note: is a site I recently discovered. I have been using it for less than a month (so have not been eligible for payment), but here's how it works: you beat the S&P or write highly-recommended reviews, and you get paid. If anyone is interested in joining, just message me.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Thursday, February 14, 2008

Four in a Row?!

I'm knocking on wood, crossing my fingers, and picking four-leaf clovers as I write that title... I don't want to do anything to jinx an unbelievable four-day rally that it looks like we'll continue today.

The US markets look set to move after good earnings from here and abroad. Toyko markets moved up 3+%, the most since 2002, after Japan's economy grew much more than expected. The rest of Asia followed upward.

Europe is up more moderately, but that's fine with me... UBS reported a huge, terrible loss because of subprime writedowns. For them to report that and for the market to still be up.... I like that.

US futures are trending higher for all three major indexes. Comcast just released excellent earnings, and the NASDAQ should have some positive reaction after (so-called) good earnings from (BIDU) after the bell yesterday. (On a side note, I think that BIDU is a high-PE "pig" that needs to be slaughtered... but if it's gonna pull up my tech stocks today, i'll be ok with that.)

A nice move today will be very beneficial to my trading account here and my longer-term Ameritrade account... between the two accounts, I have February ATVI and SNDK calls that, as of yesterdays close, were about $.30 away from the strike price.... if the positive market momentum can push them above the strike prices in early trading, then I'll be able to break even (or maybe even sell profitably!) in trades I had written off as losses.

Looking forward, the MSFT options that I wrote a trade note about buying look like they'll work out well (still knocking on wood). MSFT closed a tad under $29 yesterday (the option's strike price) with an entire month left. As I stated before, as clarity increases concerning the Yahoo deal (and just as the market goes up), MSFT has a lot of ground to make up towards its high of $37. I also bought some $30 SNDK calls yesterday as the stock appears to be picking up some momentum.

So, if the market opens up big, I plan on profit taking on a few trades, just because I'm not sure about the sustainability of a weeklong rally. But the market is still dirt cheap, and if economic conditions continue to stabilize/improve, this could prove to be the beginning of the end of the best buying opportunity for years to come.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Tuesday, February 12, 2008

BWLD Blow-out Quarter

Well, the title was a little exaggerated to grab attention, but thankfully (and as I expected), BWLD reported a strong quarter that should rejuvenate investor confidence.

The street expected $.31, and BWLD came in at $.34, which was a 4 cent (13%) increase over last year's numbers (when the extra week of last year [yeah, they have funny accounting stuff]) is disregarded).

I'm long BWLD stock in my Ameritrade portfolio, and I was long calls until 3:45 pm. I sold them off because the IV was around 80; the March 25 calls were trading at $2 when the stock was at $23 and change.

After hours (and before the conference call), the stock is up over $26. I probably would have made a little more money if I had held my options, but the IV will drop tomorrow morning and they'll probably stay around flat. The stock isn't too heavily traded after hours, so if the call's contents are good we'll see much more volume (and maybe price movement) tomorrow morning.

I dollar-cost averaged all the way down from the mid-30s to the low 20s; I've been waiting for the stock to get back on track. Missing earnings (barely) last quarter derailed this value-growth play; now that the company has controlled cost, beaten estimates, and reported a great quarter (considering the tough economic environment), it's time for earnings expansion AND p/e expansion (BWLD, before the announcement, traded at a 17 forward p/e, which is below its 20+% growth rate).

I'm hoping for a good call, and a slow, steady return on my investment.

(Earnings press release here)

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

Recent Trades and BWLD

Here's a few quick thoughts for any regular readers (if there are any) to keep up with:

Yesterday, I did my first two options trades in a while.

I bought Microsoft March 29 calls (the stock was at $28.20). My thinking behind this is that the Microsoft-Yahoo marraige will begin to clear soon, and as uncertainty leaves the arena, MSFT shareholders will feel more secure. Plus, the stock only has to rally a couple points in over a month for it to be a profitable trade.

Second, I bought March 25 puts on the VIX (S&P 500 volatility). As the awful news is now mostly fully exposed (though there's some hidden stuff trickling out, recently AIG's writedown), the market will start to calm down. Most major banks have already written down most of what they'll have to. Also, earnings have been largely OK, and once that season passes, there probably won't be much for the market to freak out about . I'm hoping to unload this in a week or two.

Lastly, BWLD releases earnings today. I have no idea if they'll beat, meet or miss, but the stock will probably move big in one direction or the other. I'm long, so I obviously have faith in the company, but there's obviously some chance that investors may get blindsided by a bad report. However, I think they'll report in-line with estimates, and reaffirm future growth, which should hopefully help move the stock higher.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Friday, February 8, 2008

ATVI Followup; More Earnings Next Week

Well, Activision did report a truly outstanding quarter yesterday, firmed guidance for this quarter, and had lots of good forward-looking commentary during the call.

However, the stock didn't move much after hours last night. Interestingly, for having released earnings, very few shares traded after-market; with a daily volume of about 6 million, less than half a million shares traded after hours.

In the pre-market this morning, ATVI shares are changing hands closer to $27, which is good. Hopefully when the market opens, the shares will continue higher. It's nonsense that companies with excellent earnings and guidance like ATVI aren't being rewarded in this tough market.

Next week, I think I'm going to do something with Chiptole's earnings in the latter half of the week. I don't expect them to blow out numbers; however, the stock has fallen from $150 to $105 (while I was unfortunately on the sidelines, after predicting declines in multiple posts on this blog), so it's already coming down to earth. I'm hoping it bounces before earnings so that I can short. Another method may be selling-to-open some out-of-the-money calls; however, that's dangerous, because if they somehow blow away it could be disastrous. However, the implied volatility is through the roof, so options are fetching a premium now that will evaporate the morning after earnings.

Another stock I've lately been turned onto is MadCatz (MCZ). They are a tiny video-game accessory maker. I think that they're going to benefit from the great holiday quarter that every other video company has enjoyed; plus, they recently inked a long-term deal to produce all of the instruments for EA's Rock Band. The downside is that the stock is at 80 cents and volitile; a disappointment and the penny stock could plummet.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

Thursday, February 7, 2008

Buying ATVI into Earnings

I initiated a small position in ATVI a few weeks ago when the share price dropped below the price that Vivendi (the company buying ATVI) is offering - $27.50.

As the markets have pulled back a little over the past week, Activision has dipped again. As of this morning, it was a little under $26.

So, in anticipation of good earnings today, I bought some Activision calls. The February 27.5 calls were only at 30 cents/contract, so though the time frame is pretty short, I pulled the trigger.

I anticipate great earnings today; Activision led holiday sales on many systems with Call of Duty 4 and Guitar Hero 3. I believe that they'll beat (or at least not disappoint), people will remember that they'll be getting at least $27.50 for their shares in a few months, and the price will pop up a few dollars within the next few sessions.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Wednesday, February 6, 2008

I'm a broken record: Buy BWLD, Short CMG

I"ve posted these thoughts again and again, but as I wrote about it for TradeKing's new community, I decided I'd repost some thoughts here:

The differences in trading between BWLD and CMG over the past four months baffle me.

At the beginning of that period, BWLD traded with a forward P/E in the 20s, while CMG's was 55.

BWLD reported mildly disappointing earnings (though not disasterous - just a slight downward adjustment to forward guidence) and lost half of its value (it's up 20% off the bottom now). Chipotle was up immediately after its earnings (which weren't anything excellent), set a new record high, but is also down now, about 10% lower than its pre-earnings level (in October 2007).

Going into CMG's earnings (which are released next Thursday), I'd be short, or at least sit on the sidelines. They still have a forward P/E of 40, which is clearly pricing in exceptional growth. Though they really haven't failed to disappoint yet, I think a rising cost of raw materials and pressure on the consumer may cause them to guide downward, or at least be cautious. In a high-flying stock, that can mean share price implosion - look at VMWare just a few weeks ago.

I'm long BWLD (shares and March $25 calls [purchased when the stock was at $22]), as I think that they should make a great recovery. Their forward P/E is 18, which is very cheap for a company growing at 20% annually. YUM and MCD have forward P/Es of 16 and 15 (respectively), so for a small, growing company like BWLD, 18 is dirt-cheap.

In two weeks, CMG may be at $100. In a year, BWLD may be back at $35.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

Tuesday, February 5, 2008

Google Longs got Lucky

The mighty Google has now fallen about 30% from its November high; the last time shares trade below $500 was a full six months ago. The most recent 10% of that decline has occurred in the past week, as the bombs keep dropping on Google. These losses certainly are nothing to sneeze at (and I sympathize for investors who bought in at $730 on the heels of a Cramer recommendation), but the losses really should be even more significant.

Let's look at the news that's dropped in the past week. First, when Google reported its earnings, they missed both top-line and bottom-line estimates (though, admittedly, I think big movements after a 1% disappointment [which is how much Google missed buy on the EPS] are illogical). However, when a stock is priced for near-perfection (as Google certainly was a $750, and to some degree, still was/is), the most minor disappointment can be devastating. (Usually, Google beats and raises estimates.) So after the earnings miss, the stock did drop about 8% after-hours, but even that was relatively minor compared to recent collapses like Apple and VMWare after their disappointments.

Then, the bad news kept coming. After the earnings disappointment, Jefferies & Company downgraded the stock (from buy to hold) and reduced their price target from $725 to $600 (All of this information taken from here, a AP press release found on Yahoo! Finance). "Meanwhile, Citi Investment Research analyst Mark S. Mahaney cut his Google price target to $650 from $775, while RBC Capital Markets analyst Jordan Rohan lowered his target to $675 from $725" (AP press release). One downgrade and two additional price-target drops should have kept Google falling.

Lastly, the news about the Yahoo/Microsoft merger should have been the proverbial straw that broke the search engine's back. If the deal goes through, Google will finally have a serious competitor. With Yahoo having the largest pool of email users and Microsoft providing most of the world with operating system and office software, the companies' strengths should compliment each other well. Google has been trying to break into these areas with Google Apps, Docs, and Spreadsheets, but has failed to displace any significant amount of Microsoft users.

Maybe Yahoo's board or shareholders will reject the offer, or some suitor (many analysts have speculated Newscorp could be one) may come along and bid higher. However, if Microsoft's offer is approved, I don't see antitrust courts blocking the merger. Google controls over 65% of the domestic search market, and leads throughout most of the rest of the world too. Though the vertical integration (operating system -> office suite software -> browser -> search engine) may be scrutinized, I don't think Google's lobbyists (yes, they have lobbyists) will successfully prevent a merger.

So back to my original point - Google has lost $50 in share value since the earnings news dropped. Many Google longs now flaunt Google as a "deep-value" now that it's at $500. But considering the deluge of bad news that's been released in the past week, I wouldn't be surprised if GOOG was currently $100 cheaper.

Don't get me wrong; Google is one of the most incredible, breakthrough-creating companies of the past decade (and will lead the way in the future). But as it becomes mature, it's valuation is looking too rich. Intel and Cisco trade at 13 times forward earnings, while Google is still at over 20 (and one could easily argue that those estimates may not be met). As Google enjoys its domain as a large company, it may have to start trading like one too.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Monday, February 4, 2008

Abercrombie: Range Bound

If you've watched CNBC for any lengthy period of time, you've probably seen a commercial for "Channeling Stocks" (or something similar-sounding) that promotes the trading of predictable, range-bound stocks.

I do not subscribe to or endorse such a service, but I've been successfully trading a "channel" stock myself - Abercrombie and Fitch (ANF).

Below is a chart of the last year and a half of trading; it's blatantly clear that Abercrombie is now range-bound.For a year and a half, ANF has bounced between about $72 and $82. Starting with the dip in December 2006, there have been five rise-and-falls.

I love ANF's long-term prospects (and do plan to own them for the long run), but with a stock like this, buying and holding through the rise and falls is poor management of one's portfolio. If you bought in at $67 in Dec '06 and held until now, you would have made 20% - congratulations. However, if you would have bought each time it came close to the 30 line on the RSI (top indicator) and sold every time it got close to the top, you would have executed 5 trades that each would have generated more than 10% of gain. Lets run some math quickly:

Say you're investing $1000. In 2006 you could have purchased 15 shares, which you could have sold Friday for $1200. However, if you traded more often....

  • Buy 15 shares in 12-06, sell in 02-07 when it crossed the 70line on the RSI. 15 shares sold at 80 then = $1200.
  • Buy in around $72 in March when it touches the oversold barrier, and get 16 shares (with $50 left over). Sell in late April when it touches the overbought barrier around $80 (conservative price) and net $1280, plus the $50 on the sidelines.
  • Buy back in late June around $72, buying 18 shares (and having about $30 left over). Here, you could have stocked up more later (now seeing how this strategy works) at an even lower price later. Once again, even if you conservatively sold at $80 (not at $82 or $85, which the stock did hit), you'd net $1440, with $1470 total in the fictional account now.
  • Buy again at $72 in November, getting 20 shares and having $30 left over. Sell again at $80, a month later, and bring in $1600.
  • The latest buying opportunity was the start of this year, when it was below 70 as it touched the oversold line. With the $1630, 23 shares could have been bought. Though it's still not oversold, if you sold at $80 on Friday, you would have cashed out with $1840.

If you had bought and sold, you would have ended up with an 80+% return. Buying and holding produced a laughable 20% gain. (Sarcasm - but the point is, look how much better you could have done.)

All of my entry and exit points in the example above were a few dollars too conservative, because it is unrealistic to expect one to buy and sell at the absolute lows and peaks. (If you're using a discount broker like TradeKing, commissions are only $5 each way and pretty much neglitable, as long as you're trading at least $500 of stock each time [and I took that into account when I rounded with each example trade]). But I have successfully executed this trade three times now, because it has been so predictable. One can confidently use the $72/$82 range, or simply trade with the RSI. Each time I've done this trade, I've sold the position with a stop-limit that I place at $78 when the stock goes above $80, $80 when the stock goes to $82, and $82 when the stock is above $83. It hasn't failed yet.

But I do only close the positions through stop-limit because I expect ANF to break out of the upward limit of the range one day. Abercrombie is a sold company, and the stock was especially resilient when most retailers (and most stocks) were crumbling over the past six months. Abercrombie is expected to continue to grow at 15% over the next 5 years, and it's only trading at 14 times next year's earnings (both stats according to Yahoo! Finance).

I'm not sure that now is the time that ANF will make it to $90 or $100 (because of recessionary fears, consumer constraints, and generally-bad sentiment), but who knows. Maybe consumers will decide to go buy a $50 polo shirt with their rebate checks. Also, lots of market cheerleaders (most notably, recently, Jim Cramer) have been going gaga for retailers as they have rallied recently. The stock is now at $82 and barely above 50 on the RSI, so based on momentum, it doesn't look like it will pull back yet. I'd like to see the price moderate a little in the next week, so it can make a push past $85 without bursting through the overbought barrier.

The moral of the story? With a good company like Abercrombie, buying and holding will create good returns, but buying and selling at predictable points can generate exceptional gains.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Friday, February 1, 2008

Ebay and - From a Merchant's Perspective

As none of you (probably) know, along with writing this blog, managing my portfolio, and attending college, I also founded, own, and operate a small ski wax company, Whacks Wax.

(I founded Whacks Wax in 2004 as a sort of science project. But the wax worked well, so since then, I've been selling the stuff commercially, having now sold to customers in over 20 countries.)

I owe the existence of my little company to the internet, and for most of the company's existence, exclusively eBay. I set up a website to provide background information, but until this winter, virtually all of WW's sales (90+%) came through eBay. I loved and appreciated eBay; a magical marketplace existed where an unheard-of company could peddle their products for a tiny fee. I didn't have to borrow money to advertise - my item could be seen by many interested customers for virtually no cost to the company.

I'm still very content with eBay (though not a fan of the new fees - but more on that later). This winter marked a big divergence from WW's exclusively-eBay model of the past. By some stroke of SEO (Search Engine Optimization) genius or dumb luck, I managed to push my website into the top-ten results for ski and snowboard wax queries on Yahoo!. The influx of organic traffic created many more off-eBay purchases than in the past.

Also, this winter, I enrolled in a little-known program offered by called "Fulfillment." Fulfillment is a wonderful thing for tiny e-entrepreneurs like myself. Here's how it works:

With Fulfillment, the merchant prints out scannable labels and affixes them to his products. He then ships products to an warehouse (my warehouse is in Lexington, Kentucky, which is excellent because the area also has huge shipping hubs). Amazon scans the items as they enter the warehouse, and then store them right next to Amazon's own merchandise. Then, when someone purchases a piece of wax through my website, I simply provide with that customer's information, and they'll ship it out of their warehouse, usually the same day. (Also, a participating merchant can choose to sell their product through's website; my listing can be seen here.)

I actually decided to sign up in October because it was free through the end of the year, but now, all of that supply-chain streamlining will come at a price; Amazon charges:

  • A flat fee per month for participation in the program
  • A processing fee for each transaction
  • A storage fee based on average square footage per month
(The above information is accurate to my best knowledge; maybe I'll be blindsided with some fee I don't know about this month.)

I have had almost 20% of my purchases come through, so it's certainly a powerful marketplace, even ignoring the Fulfillment service. Coupled with the organic traffic, eBay has become less important to me. That's a bad thing for them, especially as they hiked fees (in a way that hurts consistent sellers like myself most).

Here's a realistic example (based on my company) of how the higher fees will crush big sellers:

Current listing fees for a fixed-price listing of $199.99 of product: $2.40
20 $6 pieces of wax sell - $6 x 5.25%= .30c/each, = $6 total

Total fees for listing = about $8.40

New fee structure:

New listing fee = $2.00 (oh boy, huge savings!)
current final value fee = .50c/each, $10 total

Total under new structure = $12

That's about 30% more for sellers of small items like myself. Ok, so a snowboard wax company isn't crucial to eBay's business, but the sellers of CDs, DVDs, iPod cases, video games, and all other knickknacks under $25 are. (Above $25, the fees don't change significantly.)

Considering Fulfillment, Amazon's excellent, easy-to-use supply chain, coupled with fees at eBay that will squeeze profit margins, eBay is dangerously close to completely alienating high-volume small-item sellers that are crucial to its success.

eBay, as a corporation, has one great thing going for it: PayPal. There's still no serious competitor, and more traditional merchants (airlines, hotels, etc.) are accepting it. Also, I read an article about six months ago that more immigrants are sending remittances through PayPal - its instant and easy.

Revenue from items sold through Amazon's site is accumulated in an account and then transfered into a linked bank account. Since Amazon is a household name, they have no need for the trust, security, and ease of PayPal that has made it successful with other merchants.

So, logically, I think Amazon is making advances while eBay may be making a huge mistake. But when it comes to investing, eBay sports a 15 forward P/E while Amazon's ratio is still bloated at 35. But as Amazon expands overseas and steals domestic business, eBay may be forced to reevaluate its structure if it wants to remain a premier internet marketplace.

P.S. If you ski or snowboard, give Whacks Wax a try.

"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

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