Tuesday, August 30
Chat Transcript: The Future of the Newspaper Industry
Thanks to the chatters who participated last night. We didn't really spend much time talking about newspapers, but we did admire Sam, the World's Ugliest Dog, and quickly review a couple of day trades. Here's the complete transcript:
Posted on August 30, 2005 at 8:00, GMT
| karin | good evening |
| 6thworld | hi CM and karin |
| karin | I finally made it again |
| karin | the change from Sunday to Monday |
| 6thworld | yeah Mondays can be tough for me |
| 6thworld | but I'm not retired like CM |
| CMaoxian | seems most people prefer Monday to Sunday though |
| 6thworld | ah I guess I'm a contrarian |
| karin | its okay once I got it in my routine |
| 6thworld | in that long term investor space |
| CMaoxian | hi chud |
| 6thworld | heya chud |
| chud | hola all |
| CMaoxian | hi sally |
| 6thworld | hi sally |
| sallyn | como estas |
| sallyn | hi all |
| karin | hi sallyn |
| CMaoxian | can anyone give me a one line report on katrina, i haven't been following it closely |
| Eyal | hi guys |
| 6thworld | heya eyal |
| CMaoxian | hi eyal |
| Eyal | hi 6th, how u doin |
| 6thworld | i'm good Eyal and you |
| karin | wasn't that bad |
| karin | people wise |
| Eyal | doing fine here |
| Eyal | Katrina down to 1 |
| 6thworld | structurally that hurricane destroyed New Orleans |
| 6thworld | i'm surprised that the levees held |
| karin | 2 rigs are floating in the gulf |
| sallyn | glad it didn't hit texas |
| karin | me2 |
| 6thworld | one rig hit a bridge underpass |
| karin | you are from texas? |
| 6thworld | it floated inland |
| sallyn | ya, houston. how bout you? |
| karin | me2 |
| karin | :) |
| karin | off westheimer |
| karin | between dairy ashfort and hwy 6 |
| CMaoxian | i thought New Orleans was going to be under 25 ft of water... maybe the cable news people hyped it a bit (imagine that) |
| scoot | hi guys |
| CMaoxian | hey scoot |
| Eyal | hi scoot |
| CMaoxian | do any of you guys subscribe to the WSJ (online or offline) or NYTimes or Washington Post? |
| 6thworld | no, it costs money |
| karin | online |
| 6thworld | i had to pay $$ to pull an archive of NYT once |
| CMaoxian | you pay $99 for wsj.com, karin? |
| karin | no |
| scoot | nope |
| Eyal | I had an online WSJ for a couple of trial weeks, cancelled |
| 6thworld | if i can use bugmenot.com then i will |
| scoot | yeah i get wsj free a couple weeks per year too |
| 6thworld | i see where CM is going with this :) |
| karin | I get my copy at the gym early in the morning |
| karin | nobody bothers to read it there |
| karin | so i take it home |
| CMaoxian | i think WSJ.com now has 744,000 subscribers, but i'm not sure how many of those are people who already subscribe to the print edition |
| scoot | we're all cheap? |
| sallyn | bugmenot is an interesting site. thanks. |
| CMaoxian | well, i don't subscribe to WSJ.com either |
| 6thworld | yeah locking up your content isnt a smart thing to do |
| Eyal | do you subscribe to any online news content? |
| CMaoxian | no eyal |
| Eyal | so ur sentiment is done with a free aggregator of some sort? |
| Eyal | lol |
| CMaoxian | no eyal, i use something that will remain undisclosed ;-) |
| Eyal | bugger.. ;-) |
| 6thworld | Eyal: give it time you can figure it out |
| Eyal | I'm sure I will.. ;-) |
| 6thworld | it probably has to do with the sales of pork rinds |
| sallyn | what about ibd? |
| CMaoxian | IBD is garbage -- it's written for people who find the USA Today challenging |
| sallyn | whoops |
| Eyal | u don't like the doctor cartoon? :) |
| CMaoxian | several years ago when the WSJ decided to lock up the online content they must have done a study |
| CMaoxian | that said it wasn't wise to go the free route |
| CMaoxian | in hindsight, i think it's obvious that they shouldn't have gone the subscriber route |
| 6thworld | CM: yeah but then blogs hit |
| CMaoxian | right 6th, the blog thing is a new phenomenon |
| Eyal | I don't think wsj.com is up against blogs |
| CMaoxian | anyway, here's the DJ chart |
| CMaoxian |  |
| 6thworld | i thought it was cool but I'm a narcissist |
| Eyal | ppl consume financial news off finance.yahoo.com and marketwatch etc. |
| 6thworld | when did blogs hit? 2003? |
| Eyal | linear regression? |
| CMaoxian | yes eyal, and no more fancy talk |
| Eyal | oops sorry.. no more than 5 letters then |
| 6thworld | so the WSJ downward move was part to blame on the dot com pop? |
| CMaoxian | yes 6th, the advertising bubble burst, no more sock puppets |
| CMaoxian | anyway, they're starting a Saturday edition which i think is dumb, what do you guys think? |
| 6thworld | IMHO they dont get it |
| chud | if the rumor of the gratuitous cute chick pic in the Sat. edition is true, i'm all for it. |
| chud | do you have a chart of their subscriptions? |
| CMaoxian | no chud, i don't have a chart of that... online subs hit 700,000 and then went flat until they bought MKTW and started cross-selling like crazy |
| CMaoxian | their daily print circulation is around 1.8 million |
| CMaoxian | they also bought MKTW for over half billion dollars which may not have been dumb but they surely overpaid for it |
| Eyal | I don't see how that is going to change anything |
| 6thworld | people like us are the readers of tomorrow and personally I'm fed up with the MSM |
| scoot | a waste of paper |
| 6thworld | pack of lies and sensationalistic crap they give us |
| Eyal | (I was going to say something about premise and held back ;-) ) |
| CMaoxian | but of course there's only one Wall Street Journal, they're basically a monopoly |
| CMaoxian | the same could be said of the NYTimes |
| CMaoxian | and maybe the WashPost to some extent |
| karin | I love reading the NYTimes on Sundays |
| karin | for hours |
| CMaoxian | i refuse to go to the marketwatch site because i get hit with pop-ups and pop-unders and a blizzard of ads and it's a pain to ad-block them all so i just refuse to go |
| CMaoxian | yes karin, and you live in Texas ;-) |
| karin | well |
| karin | my vice |
| karin | shoot me |
| Eyal | I don't read any newspaper, I get enough information overdose as it is. |
| CMaoxian | the NYTimes bought About.com for $410 million recently |
| chud | sounds pricey |
| CMaoxian | yes chud, again, a ridiculous price paid |
| CMaoxian | when was the last time you visited About.com? |
| CMaoxian | it's like these old media guys are panicking and paying stupid prices to get more online "presence" |
| 6thworld | every once in while i get googled to it |
| Eyal | CM: use greasemonkey, I block all iFrames automatically and anything that has a title of Advertisement, Sponsored Link etc. |
| 6thworld | its about the content |
| karin | my eyes are too crossed by Sunday to watch anything on the computer |
| CMaoxian | how do you click my ads then, eyal? ;-) |
| scoot | haha busted! |
| Eyal | I have a special exclusion for ur site, no joke. I even block my own lol |
| 6thworld | people in our generation are more, whats the word, cynical? skeptical? |
| CMaoxian | yes 6th, both i think |
| CMaoxian | one thing about the MKTW purchase was that there was a bidding war among DJ NYT and VIA for it and of course DJ is suffering from "Winner's Curse" |
| chud | i've never been to MKTW |
| CMaoxian | don't bother, chud |
| CMaoxian | i read herbie greenberg, but only via RSS (the guy should have his own blog) |
| karin | hmmm |
| karin | you do? |
| CMaoxian | NYTimes chart |
| CMaoxian |  |
| chud | these media sites must hate RSS |
| Eyal | top result for herbie greenberg on goog |
| CMaoxian | yes, being able to RSS an individual writer's work is the nail in the coffin |
| 6thworld | good for the writer |
| CMaoxian | only if he can embed ads in the feed, 6th |
| 6thworld | bad for the distributer |
| chud | I read several newspapers via RSS and never see their online ads |
| scoot | that chart is a classic |
| CMaoxian | yes scoot, instead of popping up and out it popped down |
| CMaoxian | i asked google if i could embed ads and they said the minute you stop using Notepad to write your Atom tags, we'll let you |
| 6thworld | try wordpress |
| 6thworld | it's free |
| CMaoxian | yes 6th, i will eventually |
| CMaoxian | hey ks |
| chud | embedding ads is evil |
| chud | just make the intro interesting enough that people will click |
| CMaoxian | i read Brad Feld's feed and he has ads and they don't bother me |
| ks | hey |
| CMaoxian | i can live with text ads, but you put some kind of flash animation in there and i'll unsubscribe in a blink |
| chud | or if they start trying to pass ads off as content |
| CMaoxian | yes chud, like Forbes inserting ads directly into the body of the text, that's inexcusable |
| chud | i concur |
| 6thworld | yea |
| CMaoxian | that run-up in DJ's price of late has to do with rumors that the Bancrofts want to sell |
| ks | lot of talk that buffett will buy dj |
| CMaoxian | I'm not sure how thrilled Buffett is with the newspaper business now |
| ks | lots of fcf |
| chud | buffett ain't thrilled with that head and shoulders i heard |
| CMaoxian | yes ks, but crummy prospects |
| 6thworld | fcf? |
| CMaoxian | Free Cash Flow |
| CMaoxian | here's what Buffett recently said |
| 6thworld | ohh |
| CMaoxian | "The economics of newspapers are very, very close to certain to deteriorate over the next 10-20 years. I see nothing that will turn around the erosion from both the circulation and advertising standpoints." |
| CMaoxian | it's a different world from when Buffett bought his stake in WPO in 1974 |
| CMaoxian | here's the WPO chart |
| CMaoxian |  |
| CMaoxian | they recently missed earnings, that's why that last bar looks so ugly |
| CMaoxian | WaPo has a daily circulation of about 730,000 |
| CMaoxian | NYT has daily circ around 1.1 million |
| CMaoxian | hi ajm |
| ajm | hello |
| chud | why has WPO outperformed NYT so the last 5 yrs? |
| CMaoxian | they own a bunch of TV stations and cable systems, chud |
| CMaoxian | they also own Kaplan, which is a good biz |
| ajm | Did I miss a lot? |
| CMaoxian | no ajm |
| ks | I live in the DC area, and WaPo also distributes a free mini newspaper every morning to people at the subway and they have stands that give these free newspapers right next to the pay newspaper. |
| CMaoxian | since when have they been doing this, ks? |
| ks | I moved here only month ago, not sure how long. But it is a daily thing filled with ads and condensed news. They have a lot of blog stuff in there too |
| chud | do the mini papers give the first paragraphs of the main paper's stories? |
| CMaoxian | sounds like they're trying to figure out how to catch the youngsters, ks |
| ks | no chud mostly just AP feeds |
| ks | It is a nice paper, easy to parse through |
| CMaoxian | so i guess the verdict is that none of us read newspapers or plan to start so we're not too excited about these stocks |
| 6thworld | yep |
| CMaoxian | it's a slightly different story for smaller, local newspaper companies, but still, this industry kind of stinks |
| scoot | i read the local paper |
| 6thworld | i read my local town paper |
| 6thworld | so i know which bear has been eating my trash |
| Eyal | it's also different in countries other than the US |
| Eyal | in the UK as you know CM newspapers are quite popular |
| CMaoxian | true, eyal, there were 16 daily national newspapers as i recall |
| chud | are magazines dead also? |
| CMaoxian | i think so, chud |
| karin | I love to relax with my magazines |
| karin | nothing too heavy |
| scoot | i read a bunch of magazines |
| CMaoxian | which ones, scoot? |
| chud | i read magazines but only at the bookstore. never buy em. |
| karin | me2 |
| 6thworld | garden gate? |
| weezee | we read blogs now |
| CMaoxian | maybe it's a male-female divide on the magazine front |
| karin | me2 |
| scoot | atlantic new yorker wired kiplingers anything else laying around |
| 6thworld | i read a lotta magazines |
| CMaoxian | do you subscribe to any of them? |
| 6thworld | SFO (free), garden gate, Discover |
| karin | I subscribe |
| 6thworld | yeah i do |
| scoot | yeah |
| karin | when the deal is right |
| weezee | trader monthly |
| karin | active trader |
| 6thworld | but i hate all that crap card stuff in between the pages |
| CMaoxian | just give it a shake before you read it |
| scoot | half shake out, half you have to rip |
| CMaoxian | I used to subscribe to the Federal Reserve Bulletin, that one got me hot and bothered |
| CMaoxian | anyone have any day trades of note that we can review? |
| Eyal | I have a few, nothing of note though :) |
| chud | PNRA 8/23 |
| Eyal | today's: smtx, isle, cpst |
| 6thworld | i haven't traded in 6 months |
| CMaoxian | good for you, 6th |
| scoot | NVAX could have been a dummy trade |
| weezee | do you trade currencies CM? |
| CMaoxian | only against my better judgment, weez |
| CMaoxian | let me grab the PNRA data |
| CMaoxian | hi rsz |
| rsz | Hello :) |
| rsz | sorry im late :D |
| CMaoxian | you didn't miss anything ;-) |
| rsz | lol |
| rsz | i liked that ugliest dog entry |
| rsz | that dog was mean looking :) |
| CMaoxian | Sam the Man? |
| rsz | lol that dog would be great for advertisers |
| CMaoxian | let's enjoy Sam until i get this damn software to work |
| CMaoxian |  |
| Eyal | I saw him on tv the other day, nasty looking creature |
| rsz | im looking through the blog, and i realize that dog entry was from like a few weeks ago |
| rsz | YES that one |
| karin | lovely pet |
| Eyal | reminded of a certain pomeranian that shared my apartment for a while |
| CMaoxian | reminded me of some former girlfriends |
| chud | looks like something out of Pet Semetary |
| karin | oh my |
| rsz | eww |
| karin | your taste! |
| scoot | yeesh |
| Eyal | no wonder u run all the way to china ;-) |
| rsz | i would use that picture in a superbowl ad |
| rsz | it is worth that much |
| sallyn | is that dog for real or photoshopped |
| CMaoxian | he's 100% for real, sally |
| rsz | ahah, "darth sam" |
| Eyal | he is sally, on tv he looks even worse |
| ajm | Above participants list there is something written in Chinese? What does it say? |
| CMaoxian | it says MaoXian |
| ajm | CM left to right? |
| CMaoxian | yes ajm |
| Eyal | hey are u really fluent? |
| CMaoxian | shi de |
| Eyal | bu cuo.. |
| CMaoxian | finally i got it to work no thanks to bill gates |
| CMaoxian | ok let's talk through chud's trade and call it a night |
| Eyal | or afternoon |
| CMaoxian |  |
| CMaoxian | chud, why did PNRA catch your eye, where did you enter exit stop etc? |
| chud | scanner picked it up after that first bar. |
| Eyal | what do u scan for chud? |
| chud | i entered above the 3rd bar, though you can see it gave several better entries around 11 |
| Eyal | looks thin for a dummy play |
| chud | Eyal: usually just %gainers,losers,trade rate |
| rsz | which software platform do you guys use? |
| Eyal | chid did u trade it today or last tuesday? |
| chud | last Tues. |
| Eyal | oh right |
| chud | did almost 2Mil shares volume that day. |
| CMaoxian | looks unusual enough to me, eyal |
| Eyal | yeah I missed his 23/08 note |
| ajm | CM any scanning methodology you might recommend for ETF's? |
| CMaoxian | i just look at what's active and liquid, ajm |
| ks | cm, did that tol holy grail trade get stopped out? Greenspan killed the homebuilders |
| CMaoxian | yes, ks |
| chud | that 3rd bar gave 70cents of risk. sorta high, but still about 1% |
| Eyal | so a big gainer that PNRA? |
| scoot | nice trade chud |
| chud | thanks scoot. win some lose some. |
| CMaoxian | yeah it looks like 2:1 Rwd/Risk at end of day |
| chud | yea not great |
| CMaoxian | as you note entering above the 11AM bar woulda been sweet cuz your initial risk would have been less than half |
| CMaoxian | did you move the stop up at any point? |
| 6thworld | ok folks |
| 6thworld | have a good night, happy trading |
| sallyn | cm, any particular play is better than others, ie.. earnings, upgrades, no news, sympathy moves. |
| sallyn | cm, do you looks to see why it is unusually active? earnings, upgrades, etc.. |
| CMaoxian | no sally, i rarely know why it's moving, just *that* it's moving |
| chud | i sold half and moved the stop to b/e at about 2:30 |
| chud | when i was up 2:1 |
| karin | do we have a chat next Monday? labor day |
| CMaoxian | i dunno, karin, should i change the date for that one? |
| karin | its okay with me |
| 6thworld | naw i can do labor day |
| karin | not doing anything special |
| Eyal | nice one chud |
| karin | check out CMS |
| chud | i've been skittish lately with all the market ups/downs |
| CMaoxian | i was thinking if you were feeling that way about it then you could have moved the protective stop to below that 11 AM swing |
| rsz | if a 'dummy' trader using this style found a setup that was better than the one he was holding later in the day does he close his current position if it was profitable currently? |
| chud | would anybody have closed this trade at the top? it sold off a bit in the last bar. |
| CMaoxian | depends on how much buying power you have, rsz |
| CMaoxian | and whether you can watch more than one thing at a time |
| rsz | oh, assuming his BP was maxed |
| CMaoxian | dunno rsz, it's a judgment call |
| chud | i see some unusual suspects go to sleep mid day and then wake up later. i'd be hesitant to close one before a stopout. |
| Eyal | cm when u watch it what are u watching for? |
| Eyal | I mean after u entered |
| CMaoxian | i watch whether or not it's going in the direction it's supposed to ;-) |
| CMaoxian | i don't like to see it go flat and dead, eyal |
| Eyal | and u would scratch it then? |
| CMaoxian | especially in relation to the broad market |
| Eyal | flat and dead chart wise or trades? |
| CMaoxian | no, i'd just get worried, eyal, start losing hair |
| CMaoxian | both eyal |
| CMaoxian | they usually go hand in hand | Eyal | right |
| scoot | thanks cm. see you next week. |
| CMaoxian | see ya scoot |
| ajm | gn everybody. |
| karin | saying good night everybody |
| karin | I'll stop by next Monday night |
| CMaoxian | ok, anyone have any parting thoughts, questions, etc? |
| chud | chairman, would you have taken the PNRA trade or too much movement in the first 2 bars for you? |
| CMaoxian | i claim that i would take all winning trades, chud |
| chud | i was afraid of that |
| CMaoxian | seriously though, it would depend on the tone of things |
| ks | any opinions on gold here |
| Eyal | if u have time have a look at SMTX, CPST and ISLE.. of today |
| Eyal | I'm still doing some things wrong |
| chud | i was a bit worried that it was used up after those first 2 bars after your comments last week |
| chud | Eyal: did you short ISLE? |
| Eyal | yes |
| CMaoxian | yeah, it's impossible to say, chud, you just have to take a chance |
| chud | ok |
| sallyn | ok, nite all. |
| chud | market tone started moving positive early in the morn. i woulda stayed away from shorts hopefully. |
| Eyal | I focused on long (hence the other two) but I like to have one short in the market as well |
| Eyal | I have a higher winning ratio with shorts (a bit above 50%) |
| chud | yea. i split em up both ways often also |
| CMaoxian | i try to play one side of the market only |
| chud | where'd you enter ISLE |
| Eyal | I don't have charts with me here, look for dummy play after 10:30 |
| CMaoxian | ISLE looks a tad thin to me |
| CMaoxian |  |
| CMaoxian | i see where you entered and where you got stopped out |
| Eyal | ok :) |
| CMaoxian | did you stop above the entry bar or above the swing? |
| Eyal | swing |
| CMaoxian | how much was the initial risk? |
| CMaoxian | it looks like the bar that got you in broke hard |
| Eyal | don't have my charts.. wasn't unusual in any way |
| Eyal | I actually moved my stop at one point |
| Eyal | so not a full R loss |
| Eyal | I think I got out around 23.20 or so |
| Eyal | with some slippage obviously |
| CMaoxian | it looks a little thin to me, the kind of thing you can get whipped around in |
| Eyal | right |
| CMaoxian | 23.20 would be tightening the initial stop quite a bit |
| Eyal | yeah cos overall things were looking up |
| chud | would that first strong up bar scare you from this as a short play at all chairman? |
| chud | assuming you were looking short for the day |
| Eyal | yes, I see |
| CMaoxian | not necessarily chud, but i don't think this baby qualified on the activity front, remember i need to see tons of trading activity |
| CMaoxian | this was quickly trading less than 50K shares per 15 min bar |
| Eyal | what would u be looking for per bar? roughly.. |
| CMaoxian | well it declines after the first half hour, but i like to see hundreds of trades per minute |
| CMaoxian | what that translates to in volume is hard to say |
| chud | i wish more data providers gave trades in addition to vol. |
| Eyal | even after 11? |
| CMaoxian | no, it gets smaller through the day, i just need to see the pace remain relatively high |
| Eyal | ok. thanks |
| CMaoxian | eSignal doesn't give trade count? |
| Eyal | it doesn't |
| chud | i don't think so. i asked TM; he said not that he knows of. |
| CMaoxian | interesting |
| Eyal | it didn't have it earlier this year |
| chud | IB has a scan for top trade rate that i like |
| Eyal | interestingly IB has it in TWS |
| Eyal | yep |
| chud | but they don't provide it per stock |
| CMaoxian | i never noticed, where is it? |
| chud | in their market scanner |
| Eyal | in its hotlists or something like that |
| Eyal | where it shows % gainers/losers etc. |
| Eyal | I just found it last week |
| CMaoxian | huh, i'll have to look sometime, thx |
| chud | ISLE had a spread of 10 cents at times. i think that woulda kept me away. |
| Eyal | I didn't see this sort of spread when I was watching it.. |
| CMaoxian | what was the spread in PNRA? |
| chud | my data for last week has been consolidated to 1min bars so i dont have it. but under 3 cents or i wouldnt have traded it. |
| CMaoxian | ok thx chud |
| Eyal | but point taken.. will keep another (10000th) eye on it |
| CMaoxian | what i do eyal is keep a T&S window open the full length of one screen |
| Eyal | to get a feel for prints? |
| CMaoxian | that way i can always keep an eye on pace without having to "think" about it |
| Eyal | I see |
| CMaoxian | i'm not looking at the numbers so much as the scroll |
| chud | yep, ISLE's spread moved around a lot but was 10 cents at 11:00 |
| chud | you ever look at level 2 chairman? |
| CMaoxian | no, chud |
| CMaoxian | many people are incredulous when i say that |
| CMaoxian | i just found myself getting distracted by it, but i'm an old fogey |
| chud | you think it could help on making a few cents on the exits? |
| chud | i've been considering subscribing but $20 man. i'm cheap. |
| chud | i've never seen level 2 |
| CMaoxian | maybe chud, but is it worth it? |
| chud | that's what i'm asking |
| CMaoxian | try it out, see if you like it or if it helps you, open your wallet |
| Eyal | chud, u can try it out for a month and always remove it if u don't find it adds anything |
| chud | if it helped with one exit i guess it'd be worth it. |
| chud | yea i should. been reading a scalping book and got interested |
| Eyal | which one? |
| chud | Tape Reading Techniques by Vad Graifer |
| Eyal | will have a look |
| chud | he thinks level 2 is essential for reading the tape |
| CMaoxian | it all depends on what you're doing |
| chud | i just thought in dummy trading may help on the exits |
| CMaoxian | ok guys, thanks for coming by |
| chud | i will look into it and report back |
| Eyal | thanks CM |
| chud | thanks chairman. |
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