How to kill your own business model...

http://articles.marketwatch.com/2012-08-28/markets/33439500_1_lexmark-market-for-inkjet-printers-inkjet-products

Lexmark announces that they are exiting the printer business..
“It’s symptomatic of an industry that’s under a lot of pressure,” De Silva said. “It’s sort of the culmination of [Lexmark’s] strategy, to exit inkjet altogether. People are printing and printing less, and not just in the consumer space.”

Let us take a look at this...Without any scientific study except for my family I will tell you why people print less.  Because ink cartridges are such a rip off.  My children would print all day long...Music and pictures.
Printing is fun.  Reading from pages is easier than reading from a computer. But our printer is only hooked up to one computer and only necessary work can be printed.  It has long been noted that printer companies practically give away the printers to sell the ink cartridges and now people hate paying $30.00 for a $5.00 ink cartridge.

It reminds me a merry-go-round at the mall near my home.  My children loved it, but a ride was $2.00 for about 2 minutes.  We are talking about $60.00/hour for fun and that is not cheap.  Usually the merry-go-round was mostly empty.  They would get 1 ride only and then we stopped going near the merry-go-round because it was so expensive.  Now if they lowered the price of the ride to $.50 cents, I would let the kids ride it 6 times and so would all the other parents who had some shopping to do.  The ride would be filled and I would happily let my children ride the merry-go-round until they were dizzy.
It is the old reverse capitalism model.  If business is slow, raise prices to make up for lost profits...

Just as I would let my children wall paper their rooms if ink did not cost so much.

August/Sept Option update

S and P 500  12.77%
Buy List 11.16%
Option List 8.88%

August Options: Options Exercised on (AFL,BDX,BBBY,LUK,PG)
September,  No Options sold...

We now own only 5 stocks in this account. Our cash position is $7,500,000.
and we have banked $833,000 in profits.

This August has been very strong.  We may just sit on this cash until we see a correction before the election.

ETF Hell part 2

Awhile back,  I wrote about my distrust of ETF's  Exchange traded funds.
I pointed out UVXY as an example.  At the time it was trading around $20.
It is now down to $4.97

On that point, I came across an article on ETF Deathwatch.



http://seekingalpha.com/article/804731-etf-deathwatch-august-2012-half-of-all-actively-managed-etfs-on-list

Blame it on bugs....

http://news.yahoo.com/knight-seeks-financing-440-million-trading-loss-124602408--finance.html

Knight Capital Group Inc.  lost $440 million in seconds yesterday after installing a new trading software.

("This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market," Knight said. "This software has been removed from the company's systems.")


It is hard to imagine something like this not being tested and implemented on a test systems before it is rolled out.

(On July 18, Knight reported second-quarter earnings of $3.3 million, down 81 percent from a year earlier after recording a $35.4 million pretax trading loss from the Facebook initial public offering. The company has not yet filed its second-quarter report with regulators.)


I am certain someone somewhere is trying to blame Facebook on bugs too.