Looking forward to 2006

Posted on January 3, 2006 , filed under Stocks | Print This Post

I hope everyone enjoyed the holiday season. 2005 closed on a sour note with my portfolio slightly down. I have high expectations for several of my positions in 2006. I expect TSM, Taiwan Semiconductor Manufacturing Company Limited and UMC, United Microelectronics Corporation to announce blowout post holiday numbers in early 2006. Utilization has reached nearly 100% for both companies and post holiday sales results confirm my predictions that demand for consumer electronics and computer hardware would be strong in late 2005.

Here is a quote taken from a ZDNET article that also includes a chart with a breakdown of the top product categories for the 2005 holiday shopping season.

As far as revenues, apparel/clothing was the top product category in holiday shopping season 2005. However, it was computer hardware and peripherals that has experienced the highest growth.

Computer hardware and peripherals grew a staggering 126%, while consumer electronics grew 109% compared to 2004 holiday sales results. TSM and UMC provide many of the microchips used in computer hardware, peripherals and consumer electronics. TSM is the worlds largest outsourced manufacturer of microchips. UMC is the worlds second largest outsourced manufacturer of microchips. Most electronics companies can’t afford to operate their own semiconductor foundries, so instead they turn to TSM and UMC for their microchip needs. ATYT, ATI Technologies, Inc., for example, has turned to TSM to manufacture the graphics core for the X1800 line of graphics card’s and the graphics core for the Microsoft XBOX 360. I believe TSM and UMC are both wise long term investments going into 2006.

I see a rally in gold above $550 happening in the first half of 2006. Gold is currently trading at $518.80.

I expect to see AUY, Yamana Gold, Inc. pass $7.50 and BGO, Bema Gold Corporation pass $3.50, if gold trades above $550.

I purchased 2000 shares of MBAY, MediaBay Inc. at $1.67 on November 30th, 2005. I sold 2000 shares of MBAY at $1.35 on December 29th, 2005. MBAY hit my stop set at $1.35.

My loss was $651.08 or 19.43%.

MBAY was a purely speculative play that didn’t work out. This is why I don’t normally invest in stocks like these. MediaBay Inc. failed in the short term to capitalize on positive news about the jump in traffic for www.soundsgood.com over it’s main competitor www.audible.com. The company also failed to properly time news about new partnerships to create the momentum needed for the stock to gain visibility among investors. My timeframe for MBAY to reach my target of over $2-$3, was 1-2 months. MBAY may rise in 2006, but I wont stay in the stock to find out.

At the moment I am updating from Hong Kong and I expect to return in mid to late January. When I return, I plan to add additional features to RawGreed.com, including a forum for discussions and an income tracker so readers know how much the site is making. The site income tracker should help increase my financial transparency on RawGreed.com.

*Disclaimer: Please view my portolio page for a full disclosure of the stocks I own.

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