From The Office Of The Kenyan Government Spokesman

Mr Alfred Mutua (He'd rather you called him Dr.), has posted the following in Mashada.

1. The police commissioner has not resigned. He has just gone on short vacation due to the hectic work schedule he has had during the electioneering period.
2. The chief of General Staff has not resigned. He just taken a few days off.
3. None of the ODM members has been arrested.
4. The government media ban on live media coverage is still in place. Disregard the Media Council's utterances. It is the government that makes security decisions, NOT the media council.
5. The Mashada adminstrators must forthwith delete immediately, all posts that incite violence or disrespect any group of Kenyans. Failure to adhere to this will be met with the full force of the law and we will be forced to lock down the site.
6. That Mashada adminstrators henceforth start recording the IP Numbers of all users posting in Mashada and hand over the same to the government when the request is made.

Now you know why there is no news coming from Kenyan Media Houses from the 29th of December.

Pray tell, how can the Commissioner of Police and the Head of the Armed Forces take time away from their duties when the country is facing one of it's worst political crisis?

PS. Could someone in Nairobi teach Dr. Alfred Mutua how to spell administrator. It is not adminstrators.

Cry, My Beloved Country

~Dream Deferred~

What happens to a dream deferred?

Does it dry up
like a raisin in the sun?

Or fester like a sore
and then run?

Does it stink like rotten meat?
Or crust and sugar over
like a syrupy sweet?

Maybe it just sags
like a heavy load

Or does it just explode?

James Langston Hughes (1902-1967)

Kivuitu Press Conference

Wow! Kivuitu needs to more serious. This is not the time for casual talk and telling jokes. The country is on the verge of civil unrest!

There is no sleeping until the last vote is tallied. No matter who wins, Kenyans need to relax. Even if Kibaki recaptures, all is not lost. No need for Kenyans to kill each other.

God bless Kenya.

Mwai Kibaki Slapped Out Of State House

He he he. 2007 couldn't have ended better. I'm so happy. Nay, jubilant. Kibaki took Kenyans for a ride, a long ride

. And the jokers we elected to represent us in parliament got what they deserved.

I don't blog politics but there is no way I'm going to let this pass. Kenyans have done us proud once again. The failure of the ninth parliament, the constitutional fiasco and the never ending corruption in the face of wide spread poverty across the country.

Kazi iendelee. My foot! What kazi? We have poor road networks, free education in crumbling and dilapidated schools, high inflation, endemic corruption, and on and on.

My prayer is that Raila will choose his team wisely. With a parliamentary majority there will be no need to compromise with thieving leaders. What's more, there will be no more tribal chieftains to hold him at ransom.

With that, I would like to congratulate Raila Odinga and pledge my allegiance to the new president of the Republic of Kenya.

Happy new year to all Kenyans.

God bless Kenya.

How To Buy A Plasma TV, Cheaply

My quest to buy a wide screen television turned out to something that I had not anticipated. After checking out the various flat panel televisions I settled for a plasma, even though there are not as many plasma models as there are LCD's. With a budget of $2,000, I choose to buy the 50" Panasonic HDTV as it was within my price range.

My first step before buying the TV was to ensure that my store credit limit was enough to cover for the purchase. With my Circuit City store-card, my limit is $3,800 as opposed to the $1,900 limit that I have with Best Buy. For that reason I decided to increase my Best Buy Credit limit so that I could have a choice of buying the plasma in either of the stores.

Being a Best Buy fanatic, I decided to get the TV at Best Buy instead of Circuit City. Lo and behold, when I got to my local Best Buy store, the TV was going for $1,900 instead of the $1,800 that they had advertised online. The store associate explained to me that the $100 difference was because the online price does not come with a 3 year no-interest financing plan. Reluctantly, I paid $2,014.54 for the TV on the 3 year no-interest plan. Not wanting to take the TV with me, I arranged that I collect the TV later.

When I got home, I decided to check out the same TV on Circuit City's website. Unlike Best Buy, they were offering the same model at $1800 with 3 year no finance plan if purchased online. In addition, they were offering a 10% discount for in store pick-up. For $1,740.68 I bought the same plasma TV online as compared to the $2,041 that I had paid at Best Buy. A cool $300 difference and with the 3 year no-finance plan for my troubles.

This was a no-brainer. All that was required of me was to go to Best Buy and cancel my order. Instead, I went into the Best Buy store to see if they could match Circuit City's price. Like most retail stores, Best Buy offers a price match guarantee for their products if you can find it cheaper elsewhere. In addition to this, if you bring with you a receipt they will not only match the price but also an additional 10% of that difference.

Within minutes of handing the Best Buy customer service associate my receipt, I walked out of the store with my purchase for $1,710 for the same TV that I had paid for $2,041 in a span of less than 24 hours. For the $332price difference, I still got to keep the 3 year no-interest financing plan. So now I'll be paying less than $50 per month over the course of the next 3 years while we enjoy the purchase.

What is remaining now is to buy a larger TV stand wall mount to accommodate my purchase and all the paraphernalia that is required to connect the TV onto my cable box/DVD recorder. I have no plans of upgrading my cable service to HDTV, until after my contract expires early next year and I switch to a different provider. Even then, I might still not take up the HDTV service as it's an additional $15 on top of the regular cable price.

My plan is to keep the TV upgrade under the $2,000 limit and the way it's going I'm still below budget. I am yet to cancel my online purchase at Circuit City.

PS. I just realized that the Best Buy CS associate erred in the price match and I will have this rectified when I go back to the store. Oh well, I now 'have' $287 to spend on the add-ons. Sigh.

PSS. Two days to the Christmas break and there's hardly anyone at work. During my trip to the strip mall, I saw a number of colleagues who are NOT on vacation. Makes me wonder why I came to work today. At least I get to finish up on my project in preparation for a new one next year.

Here's to wishing my blog readers a Merry Christmas and a Blessed 2008.

Done it update:

Plasma TV = $1,710, Mount = $246; Total Spent = $1,956. Extra's: Borrowed neghbors pick-up to carry the TV. Spent almost 3 hours setting up and mounting the TV.

Which Way For Ethanoil?

The last two weeks have seen ethanol stocks claw back their YTD losses with some of the small cap players almost doubling in share price. Why the appreciation? What has changed in the last one month to warrant such gains?

For one, oil prices have eased from the $100 per barrel levels. Oil is an input used in ethanol production and a substitute of ethanol. Lower oil price is therefore a two edged sword that cuts both ways when it comes to ethanol production. In the grand scheme, cheaper oil reduces the demand for ethanol.

So if it's not oil, what is the reason for the positive stock price movements?

Look no further than to Capitol Hill. Today president Bush signed into law a new Energy bill that increased the ethanol mandates to 36 million gallons per year by 2022. The Energy Independence and Security Act of 2007 requires that 21 billion gallons of the ethanol must come from sources other than corn, such as wood chips or switch grass.

In addition to the House of Representative's Energy bill, the Senate this week passed the Farm, Nutrition, and Bio-energy Act of 2007. Like the 2007 Energy bill that seeks to address America's dependence on foreign oil by boosting fuel efficiency standards in automobiles, the Farm bill seeks to set higher standards for the use of renewable fuels. Specifically, the farm Bill calls for;

• the feasibility study for an ethanol pipeline.
• the renewal of the Biobased products program.
• Increased research funding for alternative feedstocks.
• the creation of a Biomass Inventory Report and a Biomass Energy Reserve.
• the extension of loan guarantees for biorefineries.

Like the 2006 State of the Union address that led to a run in the ethanol stocks, a similar trend seems to be playing out. Although the two bills mean well in the long run for ethanol producers , the current ethanol margins are decreasing due to over-supply of ethanol. As it is, ethanol producers are losing money and with the increased production called for by the two bills, things the situation is bound to get worse. Until the time when the demand for ethanol matches the supply or cellulosic ethanol production is commercialized, ethanol producers will continue to be in the red. For this reason, the US department of energy is supporting 6 cellulosic ethanol pilot plants with up to $385 million over 4 years in a bid to make cellulosic ethanol cost-competitive with gasoline by 2012.

There is no way the two bills will cause a turn-around for ethanol producers in the next few quarters. It will be years before we see changes in the fundamentals and strictly speaking, I'd rather the use of ethanol be driven by free market forces instead of the government. Big government's interest is driven by politics and is not aligned to the energy market needs.

In the interim, ethanol stocks are screaming to be sold short as the appreciation is based on political hype. Of all the ethanol producers, Pacific Ethanol offers the lowest risk as it has appreciated the most. Although it is the most volatile ethanol stock, traders who can stomach wide swings will be rewarded for betting against the stock.

Buying A Wide Screen Television

The first time I ever owned a TV was when I was a sophomore in college. I remember going with my friend to buy the 14" Sony Triniton color TV (Yeah, they used to sell black and white sets back then) who helped me transport the TV by public transport to college. That TV lasted me through college and then some. When I went back to grad school, I gave out my 14" telly and bought a 21" one. My second TV saw me through college and into my working career. Because it was not a flat screen TV, I replaced it earlier than I had anticipated with a 20" flat screen TV.

Unlike the average US household that has 3 television sets, I've never had the urgency of having more than one TV or a big one for that matter. Not being a TV junkie and having being relegated to the bottom of the rung when it come's to watching TV, I've resorted to watching News on the web. Thanks to the internet, long gone are the days when I have to wait for News to come at the top of the hour. Instead, I'll just watch News online at my own leisure and timing.

Despite all these, I've finally decided that it's time to upgrade the family TV from the 20" set to something more substantial. I've had a glimpse at the TV sets in the shops and although the prices are still steep, it would do no harm to get the family a wide screen for Christmas.

The first step in buying the TV is setting a budget. My intention is to buy a TV that will see the kids through high school and into college. After this purchase, I don't intend on buying another TV until it dies or the technology is obsolete. With Best Buy running a 2 years no interest financing on TV purchases greater than $999, I've set my budget at $2,000 including the tax payments. Thank God the US is no longer a British colony cause the Brits have to fork out £135.50 (per year!) for a TV licence in the name of supporting BBC's ad free broadcasts. Over the life of the TV, you end up paying more for the licence than for the television.

Now that I've defined my upper spending limit , the next step is on deciding on what type of wide screen to buy. At the $2,000 price range, my options are getting a plasma, LCD or rear projection TV. Although I could get more TV for my money if I were to go for the projection TV, I've ruled it out because it is bulky and the bulb needs to be replaced periodically.

That leaves me with the option of getting either a plasma or LCD TV.

From the reviews that I've read, both the LCD and plasma TV's have comparable qualities although there are three times as many LCD models as there are plasma's. Of the major manufacturers, only LG, Samsung, Phillips and Panasonic offer both LCD and plasma models. Sony, Sharp and Toshiba mainly offer LCD televisions, while Pioneer and Hitachi offer plasma televisions. As such, it is hard to make price comparisons against the different competing brands.

I'm yet to decide on whether to go for plasma or LCD television though I have a greater choice should I settle for a LCD TV. As for the size, it would have to be greater than 40" though I would like it to be at least 50". As much as LCD TVs last longer than plasma models, I'm not too concerned because on average we don't watch TV for more than 3 hours a day and thus a plasma TV can last for more than 15 years at that rate.

I have until the day before Christmas day to decide on my purchase though I'm leaning towards getting a plasma TV. After which I'll pass on the 20" to my kids and fight it out with the missus for the remote control.

Fat Thumb Trading Comes To Nairobi Stock Exchange

There is nothing more costly for a stock broker than executing a wrong trade on the exchange floor. Thanks to electronic trading, buying and selling of shares can now be carried out in a fraction of the time it used to take such transactions on the trading floor. And herein lies the problem.

The fast trading speeds in the fast paced trading environment coupled with the pressures of stock trading has caused many a traders to err in their executions. With the Nairobi Stock Exchange's move to electronic trading, it is just a matter of time before the curse of the fat thumbed trader rears it's ugly head in Nairobi. Despite the rigorous controls that are in place to mitigate erroneous trading transactions, there is no known system that can fully protect dealers from trading too much or too high a price for a given stock.

Here are the top 10 most expensive, most embarrassing and most ludicrous fat finger trades compiled by Financial News Online.

1) £80 billion Swiss order leaves UBS red-faced (January 1999)
A careless UBS equity specialist executed the world’s single biggest share trade when he bought and sold nearly Swiss fr190 billion (£80 billion) of stock in Swiss pharmaceuticals company Roche in two minutes. The group’s market capitalization was only Swiss fr130 billion.

The trader entered a sell order for 10 million shares on the Swiss Exchange, despite there being only seven million shares in issue. The order sat on the order book for nearly two minutes before he realized his mistake, when he entered a buy order to execute the trade. The commission on the trade would have been worth £160 million.

2) A bad workman blames his keyboard (October 1998)
An incident that involved Salomon Brothers selling 10,000 futures contracts on French derivatives exchange Matif and losing several million dollars drove it to demand an independent audit to investigate faulty hardware or software. The audit revealed the error had been caused by a trader leaning his elbow on his keyboard’s F12 button, the “instant sell” key. This meant Salomon had entered an order for 14,500 contracts in the 10-year French government bond, of which 10,000 were met by counterparties. Salomon was thought to be considering action against its software suppliers, GL, for not supplying an up-to-date version of its software.

3) The LSE’s biggest order (February 2001)
The LSE had to cancel its biggest trade in history after a clumsy trader placed an order for £8.1 billion (€11.8 billion) worth of shares in Autonomy. It represented nearly four times the share capital of the UK software company. One source said: “You can bet the LSE is going to drop like a few tons of bricks on one poor firm.” The order was described by an LSE source as “clearly an inputting error” and was cancelled almost as soon as it hit the order book once the LSE’s systems automatically spotted the anomaly.

4) Trainee costs Mizuho $224 million (December 2005)
Japan’s Mizuho Securities was left looking sheepish after a 20-year-old trainee, who had been with the bank for two weeks, started inputting trades and ordered 610,000 shares in J:Com, a Japanese telecommunications outsourcer, at ¥1 each. The order should have been for one share at ¥610,000. Mizuho made four unsuccessful attempts to cancel the trade on the Tokyo Stock Exchange. The mistaken order represented 41 times J:Com’s outstanding stock, caused a 2% slump in the Japanese market and the bank lost $224 million. Some of the banks involved agreed to return the erroneous capital but several kept the money.

5) A schoolboy error (September 1997)
LSE staff were puzzled when a firm entered three buy orders within an hour for 989,529 shares Zeneca shares. The orders were worth a combined £21 million, or three times normal market size at the time. When the LSE queried the order, it was discovered the trader had entered Zeneca’s Sedol number, the six-figure code used by the exchange to identify stocks, instead of the volume. Assuming the trader had intended to buy Zeneca at its normal market size, his error would have cost £60 million.

6) Lehman Brothers fingered (May 2001)
A Lehman Brothers dealer in London wiped £30 billion (€44 billion) off the FTSE 100 in 2001 when he ordered sales of shares in blue-chip companies, such as BP and AstraZeneca, that were 100 times larger than intended. He keyed in £300 million instead of £3 million for a trade, causing a 120-point drop in the index and a £20,000 fine for Lehman Brothers.

7) Oops! Citigroup did it again (January 2006)
Citigroup was investigated by the UK Financial Services Authority for the second time in 18 months after a trader at Nikko Citigroup intended to buy two shares in Nippon Paper at ¥502,000. Instead he input an order for 2,000 shares. Nikko Citigroup’s compliance division mistakenly approved the trade, thinking the shares were worth ¥500. This took place soon after Citigroup lost its private banking license in Japan after regulators found the bank had failed to prevent money laundering. Charles Prince, chief executive, flew to Japan to apologize for the bank’s wrongdoing.

8) Bear sends markets plunging (October 2002)
A trader at US bank Bear Stearns was blamed for a 100-point fall in the Dow Jones Industrial Average after he entered a $4 billion sell order instead of a $4 million order. More than $600 million of stock changed hands before the mistake was detected and was blamed for much of the day’s 183-point slump in the index, according to sources. Bankers said: “You can put in one extra zero by accident but to put in three extra zeros is three fat fingers and that’s pretty stupid.”

9) Heads up at Bank of America (September 2006)
Not so much wrong-fingered as wrong-balled. A Bank of America trader’s keyboard was set up to execute an order when the senior trader gave the signal – he just had to press enter. However, he failed to notice an errant rugby ball thrown in his direction, which landed on his keyboard and executed the $50 million trade ahead of schedule. The ball thrower, a graduate trainee, was given a severe reprimand but no further action was taken. Another trader said: “Rugby balls are a regular danger on any trading floor so the victim trader ought to have hedged against this possibility.”

10) UBS Warburg is made to look sheepish (December 2001)
A UBS Warburg trader selling 16 shares in Japanese advertising giant Dentsu at ¥600,000 (€3,900) each sold 610,000 at ¥6, hours before UBS Warburg was set to lead Dentsu’s float, one of the year’s biggest initial public offerings. The order was cancelled but not before 64,915 shares, almost half of the 135,000 shares in the Tokyo listing, had been sold. The price of Dentsu shares, which had been bid up to ¥600,000 before the market opened, fell to ¥405,000. UBS Warburg kept its book running position but lost up to $100 million when it was forced to buy the shares it sold.

Ugali @ 36,000 Feet Above Sea Level

The last thing I would expect to eat in an US airline is definitely ugali. Oh well, add githeri to that list. So you can imagine my surprise when I tasted some ugali-like flavour in the barbecue chicken entree that I had chosen to eat for dinner during an international flight. On the Business class menu it read 'Chicken flavoured by a barbecue marinade and whipped potatoes with chives and creamed corn'.

When you are paying close to $5,000 for a plane ticket you expect the food to be top notch and as such I didn't put much thought to my order. When I read creamed corn on the menu, I thought it would be sweet corn rather than milled corn flour. A quick check in Wikipedia reveals that it is actually a Midwestern cuisine. In it, sugar and starch may be added and in homemade version some variety of the milk, perhaps even cream. To the rural Midwesterners it is creamed corn, but to me this is basically ugali.

That said, I think Kenya Airways could get away with serving their Premier class passengers with ugali. I can't remember where I sampled it, but they could chop up the ugali into cubes and glaze them with melted butter. Thinking of it, we did this with left over ugali when I was young. We'd eat the cold ugali with afternoon tea when we got back from school.

Coming To A Cell Phone Near You

On the 24th of January next year, the FCC will open up the auction of the 700 mHz spectrum currently in use for the transmission of analog television signals. Come 2009 when TV broadcasters switch to digital transmissions, the 1,079 spectrum licences will become available for use by wireless carriers. The said auction has attracted a lot of attention owing to their potential to support a US-wide wireless broadband network. It is expected that the 700 mHz spectrum will change the way we use cell phones and accelerate the convergence of mass media and communication in a mobile device. Unlike previous spectrum auctions, the FCC has stipulated that the majority of the spectrum will be operated under the open-access rule. The rules stipulates that the wireless networks be accessible to any device and application.

Unlike the current wireless plans whereby consumers are restricted by the type of cell phone and applications that can be supported by their wireless providers, consumers will have a greater say as which hardware and/or software that they want. The new system will akin to the way consumers can choose any brand of computer and load it with softwares of their liking without having to worry about their Internet Service Provider. In addition, mobile phone users will be free to choose services from third party vendors not currently supported by their carriers.

These radical changes have brought a flurry of activities amongst the technological giants in a bid to position themselves to capture the hearts and wallets of the more than 160 million cell phone users in the US. Even before the bidding wars for the 700 mHz spectrum, the battle for consumers has already began in earnest.

First of the blocks, was Google's announcement to support the development of a software stack for mobile phones that includes an operating system, middleware and key applications. The Android platform, named after Android Inc that Google acquired in August this year, is intended to create a complete, open, and free mobile platform.

Not wanting to be left behind, Verizon Wireless has also announced plans to open up it's network next year and will allow wireless devices, software and applications not offered by the company. This is despite the fact that Verizon is suing the FCC for the open-access stipulations of the 700 MHz spectrum auction.

While technological companies are busy squaring it and before the open access networks come into play, there could never be a better time for investors to position themselves in readiness for the paradigm shift that will forever change the way mobile phones are used in the US.

The first name that comes to mind is Microsoft Corporation. The personal computer and business software vendor stands to gain the most owing to their high penetration in the software business. For consumers already accustomed to their products, Microsoft applications are the natural choice for the next generation Smart-phone users. With Windows Mobile already in the market place, I expect Microsoft to form an alliance to counter Google's Open Handset Alliance if they are to maintain their lead in the software arena. Unlike Google, their core expertise is in softwares and operating systems and therefore this is one battle they can win. However, the big question is how Microsoft intends to capture the social networking and multi-media software segments.

The hardware battle will be between Nokia and Apple. With both manufacturers using their proprietary operating systems, it remains to be seen how they will fare against the Open Handset Alliance and Microsoft's efforts. Apple's wow factor will definitely be a tall order for Nokia which runs some of Microsoft's applications on a few of it's cell phones. And should Google decide against building their own handsets, there is a likelihood that Apple will team up with Google against Microsoft and Nokia.

On the network front, the competition for cell phone users will be a battle between the two largest wireless carriers. With both ATT and Verizon positioning themselves as media companies in addition to providing telecommunication solutions, its going to be hard for either company to emerge as a clear winner. With Vodafone behind Verizon Wireless, you cannot ignore Verizon's reach beyond the US boundaries as the rest of the world continues to open up.

As Wall Street focuses on the technological giants, I believe investors who have their eyes on other over-looked small to mid-cap technology companies will benefit greatly as consumers will have additional choices outside these major companies.

One such company that stands to benefit from the opening up of the networks is Openwave Systems Inc. The software and programing company is an independent provider of applications and services for the communication and media industries. Their products include multimedia messaging software, cell phone software and a host of other wireless tools. Unfortunately, save for the fiscal year ending 2006, the company has largely been unprofitable. Interestingly, the company which sells it's products through direct sales and third party alliances such as HP and Siemens, also supports an open developer network similar to the one run by Google.

Should Openwave Systems efforts bear fruit with the opening up of the cell phone industry, they stand to turn profitable should they capture a portion of the sofware market. As it stands, they are slowly gaining acceptance with the wireless carriers and cell phone manufacturers utilizing some of their products.

Openwave Systems' attempt to find a suitable partner earlier in the year have been a cropper though Microsoft recently acquired one of their subsidiary for $46 million. This amount is a far cry from the $121 million that Openwave paid in 2005 for Musiwave, a mobile phone music services provider. To add on to their woes, the company is currently trading at a 52-week low price and has a hold rating from 18 out of the 19 analysts who cover it.

My plan is to wait until Openwave System horizon has cleared up and to continue digging out for more information and names in research reports with the hope of finding a winner. Openwave remains a speculative play with the possibility of a high reward for investors willing to bet on their platform.

What Next For Medarex?

On Monday evening, Medarex announced the results of one of the three completed clinical trials being carried out on one of their promising Phase III candidate. Ipilimumab, an oncology monoclonal antibody molecule, currently being developed in partnership with Bristol-Meyers-Squibb "failed to achieve complete or partial shrinkage of tumors in at least 10 percent of the trial's 155 patients with melanoma".

As expected, the market punished Medarex with the stock price falling almost 20% in after-hours trading. Come Tuesday morning, the company held a conference call to discuss the top-line results from the completed clinical trials. Unfortunately the pre-market conference call did little to stem the fall-out from the disappointing clinical read-out.

The statement released by Medarex on Monday evening contains little information regarding the unexpected radiological results and it is expected that the data from the 3 clinical trials will be presented at the 2008 American Society of Clinical Oncology conference. A quick look at the US government clinical trials portal reveals very little about the pivotal clinical trials in patients with advanced metastatic melanoma. Other than Mederex own admission that they did not achieve the primary end-point it's difficult to determine if their planned Ipilimumab regulatory submission will be successful. However, it is important to note that similar clinical trials of monoclonal antibody therapies have also failed to achieve tumor shrinkage as was the case with Ipilimumab. On the other hand, some of these studies are known to have increased the survival benefit of patients enrolled in such studies. In light of these findings, there is the possibility that the FDA may give a favorable response to Ipilimumab application for advanced metastatic melanoma.

While I am yet to listen to this morning's conference call, I am comforted by the fact that as of today, the majority of Medarex's 34 candidates in clinical development are in partnership with other pharmaceutical companies. Out of which, 7 of the candidates are in Phase III development for oncology and inflammatory indications including Ipilimumab which is being fast tracked for patients with metastaticmelanoma. With such a rich late-stage pipeline and the expected low attrition rate of their biological candidates, it is only a matter of time before Medarex turns profitable or is bought out.

With the stock trading at a 52-week low, I am tempted to load up though there is the added risk of the disappointing clinical trial results failing to overcome the regulatory hurdle next year. For that reason, I'll wait until after I have listened to the pre-recorded conference call or read the transcript before making my next move.

Tax Loss Selling

With the year coming to a close, we have now entered the final stretch of 2007. As usual, a lot of investors will be taking a hard look at their holdings with a view to leveraging their taxes. As with most year-end's, investors holding stocks that have lost value usually off-load their losses with a view to deducting their loss when they file taxes next year.

In order to manipulate the system, there are various trading techniques that are employed when carrying out tax loss selling. The most widely used technique involves selling a stock at a loss then buying it again at a price close to the sale price but still much lower than the previous buying price. This technique is common especially if an investor still believes in a stock though it has declined in price since he first bought it. This technique is normally carried out in November in order for the buy the stock before the end of the year and after the 30 days from the selling date.

However, between the time of selling the stock and buying it again after 30 days, the price of the stock could appreciate again. It is for this reason that I prefer a different kind of technique that involves the selling of a stock and buying a competitor in the same sector that has also declined in value. Because as much as 50% of the stock price movement is sector related, it is possible to leverage this correlation when it comes to tax loss selling.

For example, say if one had bought Pacific Ethanol for $15.50 per share on the 16th of January this year. Come the last week of November and the stock is languishing below $5 having lost 60% of its value. Rather than quiting altogether from the ethanol sector, it is possible to cut your short term losses by selling the stock and buying another battered stock in the same sector. In this case, one could buy a MGP Ingredients which is better positioned to benefit from ethanol as it also produces food grade ethanol in addition to industrial ethanol that is used for fuel.

If you have funds in your money market account, you can carry out both transactions on the same day. Don't attempt to sell a stock and buy another one before settlement of your sale if you do not have sufficient funds to buy a stock unless the transaction is being carried out in a full service broker. Settlement period is usually 3 days after the sale during which the shares are exchanged of payment and the funds are posted into your account. Should you attempt to do so online with a discount broker, they may result in liquidation of your account a penalty as one of my friends found out the hard way.

However you may choose to deal with stock losses, the last thing you want to do to donate your declining shares to a charity as you will not be able to claim a tax loss. Instead, you could sell the stock and just donate the money to the charity. In essence, you will get two tax deductions from the move. One for the stock loss and the other for the charitable contribution.

Going into the final lap, I have no intentions of carrying out any transactions be it buying stocks. Instead, I'll continue to sit out from the market but should there be a major rally in reaction to the FOMC slashing rates on the 11th of this month, I may take advantage of the rally to dispose some shares.

Christmas, Lights, Action!

Christmas season is finally upon us. And if you missed the memo, you definitely won't miss the accompanying decorations that come with the festive season.

Growing up in Kenya, one of the hallmarks of Christmas was the Christmas tree. During this time we would look for a young cypress tree, cut it down and set it up with decorations in the living room. Decorations would include Christmas cards, cotton wool to represent the snow, ornaments, garlands and the famed Christmas lights. In addition, to decorating the Christmas tree we would decorate the living room with shiny garlands and ornaments to capture the festivity mood of the season.

That was then, and not much has changed back in the way people celebrate the occasion in our motherland. Over here in the US, its a totally different ball game. Come Christmas time and nothing is spared as far as decorations are concerned. It's not just enough to decorate the living room and the Christmas tree. If anything, Christmas decorations provides a chance for households to out-decorate their neighbours. For that reason, outdoor decorations is big business in American suburbs.

Just walk into the seasonal section of Walmart, Home Depot or Lowe's and you'll be confronted by shelves of outdoor decorations. Ranging from inflatable Christmas characters, lighting's, ornaments, sculptures, nativity sets and wreaths. All designed for out-door use. Come the weekend after Thanksgiving day and the whole neighborhood is pre-occupied with setting their Christmas decorations.

Some households go to lengths of hiring professional to create the best Christmas decorations. Usually, the bigger the McMansion the more grandiose the outdoor Christmas decorations. Driving through some neighborhoods evokes the feeling of driving through a Christmas fantasy land as some households spend way more than the $94 that the average household will spend on Christmas decorations. It would not surprise me if some households spend up to $5,000 as they hire professionals to do it. Such houses are usually decorated from the rooftops to their flower gardens to the trees in their yards and also the fencing, if any. It's no secret that some people over do it because there have been cases where neighbors have been known to protest because of the high vehicular traffic created by people coming to view the over decorated houses. Some of this cases sometimes end up in the media and you may get to see such houses in the news.

For kids, this is a very exciting time for them as they are usually fascinated with such displays of Christmas lighting and they really enjoy it when they get to decorate their houses. While as a parent I would like to moderate such decorations, my kids would like the opposite. During every trip to the stores they are keen to pinpoint on the decorations that we should buy to add onto what we have put up.

In addition to decorating the homes, a lot of businesses, work places, churches, schools and shopping centers have also taken to decorating their exteriors. The decorations are usually limited to Christmas lights unlike the neighborhoods. As such you can imagine how it looks at night when one is driving around. It's almost like we could do away with the street lights as there is already enough lighting being provided by the decorations.

In some public parks, they create what is referred to as a Christmas magical land or kingdom. With these parks, all the trees are decorated and they set it up such that you can drive your car through the various lighting displays or take a horse driven wagon ride in some instances. Visitors are usually charged per car load to drive through the park and there may be places where one can come out of their car and walk around. However, most people don't venture out of the warmth of their cars because of the freezing temperatures.

With three weeks to Christmas day, I'll enjoy the holiday cheer that comes with the festivities and help light up my neighborhood though I will moderate on the decorations. None of my neighbors have shown signs of going overboard and I hope it remains that way to keep the peace in the sub-division.

It's Time To Justify My Pay-Check

It’s that time of the year when the corporate world is pre-occupied with the end of year performance reviews. The exercise usually involves setting of goals at the beginning of the year and is finalized at the end of the year with the reviewing of one’s performance. In between there could be mid-year reviews or goals updating depending with the organization.

For many people, this can be a stressful experience as you are not only measured against the goals you set but also against your peers in the organization. I’d like to think of myself as a veteran owing to the many number of years that I’ve gone through the process. When I was first employed, the whole process used to be done in a Word document but over the years the process has shifted to internet based performance evaluations. This system makes it easier to compute the individual's allocations and the weightings, and also allows for an easier calibration and comparison against other colleagues.

For some reason that I am yet to understand, every single time that I’ve done my performance review I always break out into a cold sweat. I guess the anxiety of finding out the feedback from my fellow workmates and also my boss’ rating takes me over the edge. As relaxing or informal as the process may be, midway through the review I get a stream of sweat dripping down my arms. It’s unlike the usual sweating due to hot weather or exercise because the sweating lasts less than a minute.

As important as the whole performance review process may be, you’d be surprised that not all firms participate in such a program. For instance, I have two friends in Kenya who run their own businesses. In both instances, they are partners in their firm's. Come the beginning of the year and its business as usual for them. Everyone including the owners report to work and get on with their schedules. It shocked me that anyone could run a business without the formal alignment of the business goals and the output from the employees. What’s more, there is no measure of success other than revenues received from their customers. And in both cases, I did find out that it is common for the co-owners to perform their duties in divergence. As such the whole organization is an amorphous entity that takes different forms depending on changing priorities of their work. As if that was not enough, they did not have any documented and agreed upon long term goals or planning.

You’d be surprised how shocked my friends were when I told them that even as an individual, I am supposed to have long-term goals at my place of work in addition to my annual goals. Not only do companies measure the technical/sales/project work but also an employee's behaviors. The reason for doing so is because your behavioral aspects have a direct impact on the work that you do and the colleagues that you interact with. As such, I have to display leadership, teamwork, inclusiveness, integrity, innovation, quality, customer focus, respect and a host of other qualities that support the values and mission of my employer.

If you ask me, performance reviews should be a must in every firm and especially those that have more than three employees because they ensure that all the employees are working towards a common goal. Starting with the leaders, the exercise should be cascaded downwards such that employees, who are the foot soldiers, are hearing and acting on the same orders message.

I’m not sure if my friends will do anything to adopt performance reviews in their firms because they seemed confused about the whole exercise as they had never been through one before. As overwhelming as the process may be, there is no way I could run my own business without carrying out performance reviews for my employees. While there is a lot of politics when it comes to carrying out performance reviews, you can’t ignore the fact that it promotes transparency and accountability at the work place. Come next year, promotions and pay rises will be tied to this year's performance review.

The good thing is a lot of companies in Kenya are embracing such corporate practices and this has created a demand for Kenyans who have worked overseas. With the corporate business experience in addition to the technical expertise, such employees bring a with them a rich experience. It's no wonder that some firms are keen to hire overseas job seekers with least one year's experience abroad.

My moment of Zen; A snapshot from from my end of year performance review. Not only can I do a spelling check but also a language check.

Two words got picked up from my self-review. 'Black' in reference to the title of an event that I participated in and 'Senior' in reference to the title of Senior Director. Political correctness (PC), cover your ass (CYA) or both?

Related post; Evolution of the performance review process by Maina of Kenya Capital Investment of Group blog.

Hustling For A Domain Name

The explosion of the worldwide web and the accompanying improvements in technology and communications have brought a lot of changes in the way firms carry out their affairs. Instead of the traditional brick and mortar outlets, businesses are now turning to clicks and bytes in a bid to survive in the digital revolution. Just like in the past where businesses fought to get hold of the best real estate locations, the competition seems to have shifted on to the internet domain listings. This competition has turned out to be very fierce as there is not an infinite number of catchy domain names.

It was because of this realization that I decided to register a domain name 4 years ago with the hope of using it should I open up my own business. As expected, the domain name that I had in mind had already been snapped up but luckily my second choice was available. Rather than hope that the name will not be taken up should I need one, I decided to register the domain name and I have been holding onto it since.

Like myself, thousands upon thousands of business name domains are being held for the same reasons as mine or with the intention of being sold just like prime real estate. As it turns out, the second most expensive domain ever sold was business.com, which was sold for a tidy sum of $8 million. In case you are wondering about the most expensive domain name sold, look no further than to the world's oldest profession.

With more than 108 million and growing domain names out there, there has never been a greater need for businesses to differentiate and brand themselves in order to stand out. For these reasons, it's no wonder that some of the world's most successful business have very unique domains. A prime example is REMAX, one of the biggest real estate company in America, which owns the website realtor.com. Other prominent internet domain names include auction powerhouse ebay.com and and Apple Inc's itunes.com music store.

As such it has turned out to be that the difference between success and failure for many businesses can lie in the choice of a domain name. With businesses seeking to compete for customers in the global marketplace, a good domain name can catapult a business straight to the customers and to the forefront of the competition.

This past month, I fast forwarded some of my plans to venture into business. With already one domain name registered, I decided against using it because of the different nature of the business that I want to operate. Armed with a business name, I started the search for a domain name. Like in the first instance, almost every name that I thought of had been taken up and parked by their owners. In fact, none of the websites were operational. I tried almost every combination of words and names that I could think of. A few of the domain names that I came up with were not registered but they didn't seem to have the umph that I wanted and they sounded lame. One week later and almost one hundred domain names scribbled in my scrap book, I finally found a domain name that I liked. The best part is that it is better than what I had originally thought of. Thanks to the people who taken upon themselves to park domain names, I now have a better domain name than I had wanted.

My search for domain names led me to domain names auctions whereby other registered domain owners are trying to sell their domains. It's not surprising that there are some Kenyan domain names being auctioned. It's not possible to tell if they are being auctioned by Kenyans as they are privately registered but just looking at the names makes me think that they may not belong to Kenyans as they are generic names. Though it does not surprise me that none of the domain names have attracted a single bid.

And for the price they are fetching, I would think it is better to get a dot-ke identity especially if the business is targeting Kenyans. While the dot-com arena may have matured, I understand that there are approximately 10,000 dot-ke registrations in comparison to the 30 million plus dot-com registrations. The downside is that it will cost you twice as much to get a Kenyan domain registration than if you registered a dot-net or dot-com equivalent. If only you can find one. The good thing is that the dot-ke registry fees have come down and it now costs approximately $30 for a two year listing. However, some Kenyan ISPs who have taken up to re-selling domains may charge less for the domain name registration in return for providing other web-related products such as web development and hosting services.

I will continue holding onto the dot-com domain that I registered 4 years ago until when I determine whether to go into business or remain in employment. Should I give up on my plans I will try to auction it or pass it on to a friend rather than just let go of it. I consider the $15 that I pay every year for private registration as a small price to pay compared to looking for a domain name in the future.

Business byte; As of last year, Google Inc owned no less than 520 domain names. This number comes from the companies Google has acquired and a host of other names that it holds in order to protect it's online brand from cyber squatters and others seeking to capitalize on Google's online clout to run their businesses.