All About the Daily Dose of Optimism

The Daily Dose of Optimism (aka, "DDO") is a blog for investors. Written by Ed, a 20-something NYC based finance professional, the DDO is designed to be enlightening for professionals, but written such that it is accessible for non-professionals as well.

Since great investors generally have a voracious interest for useful information on just about any subject, the DDO will frequently take liberties to stray from its core focus on business and investing topics. - Ed

Highlights: Stock Content

TheStreet.com (TSCM), Part 1: A great look at TheStreet.com's prospects at the time of my sale at ~$7 / share. Of course, the stock promptly rose to $12, but the points in here are valid.
TheStreet.com (TSCM), Part 2: More on TSCM. Needed more confidence in my analysis.
Chipole (CMG) - "Starbucks Does Burritos...": Chipotle is what burritos would be like if Starbucks sold them. We'll add to this the realistic possibility that burritos become the next hamburger.
Clear Channel Outdoors (CCO): Learning to Appreciate Billboards: Pre-IPO analysis of Clear Channel Outdoors and how great billboards are in the Tivo age.

Highlights: Commodities Content

A Brief Primer on Commodity Futures: I wanted to share some of the research I have been reading to learn more about investing in commodity futures. This post is based on the Yale University Study "Facts and Fantasies about Commodity Futures", by G. Gorton (U Penn), G. Rouwenhorst (Yale), and is a mix of direct and unmarked quotes, alongside edits and original content. This study is mentioned by most people seeking to explain why we should care about commodities as an investment class. Certainly, the study authors could not have picked a better time for their research, published in June 2004.
Copper Prices, Warehouse Stocks and Currencies: For those of you reading (or writing) that copper is in a "bubble" simply because the price is up dramatically, I thought I would share this graph with you showing the relation between the spot price of copper and the warehouse stocks (aka inventory) of copper at the COMEX since 1974.
Commodity Futures Forward Curves: I'm happy to report that I have now found a number of great websites that provide extensive free news and pricing for commodity futures and options, but one of the things I've had a hard time finding was any information on the term structure of commodity futures contracts. Hence, I went ahead and created something for my own purposes so I could see how the prices of various futures contract maturities were changing over time.
Mnemonic for Remembering Commodity Expiration Months: Trying to remember the letters for the expiration month of commodity futures? Try this:
Value of Metal in US Coins: You will soon know how old you are when you tell your kids about buying anything with pennies, nickels, quarters, or dimes, and they ask you what the hell a penny, nickel, quarter or dime is, as that type of money won't exist anymore. Then, you will remember that metallic currencies were phased out around 2015 when the price of the metals used to make those coins was prohibitively expensive, and you will kick yourself for being old.

Highlights: Other Topics

Why aren't more major-league investors blogging?: Here's a question you've probably wondered: why aren't more major-league investors out there blogging? I'm talking about guys who successfully manage serious money, not just another wannabe (like yours truly).
Why I Love "Three Days of the Condor": Can you name another action movie where the hero's special power is reading? Imagine an alternate universe, where Spiderman was instead bitten by a librarian - and you'd get Robert Redford in Three Days of the Condor.
2006 Resolutions: Any self respecting human being also has to make a few resolutions, even if they can't be kept. Here are my blog resolutions for the year 2006.
2006 Predictions: At the beginning of 2006, I made a few predicitions - by no means comprehensive - about how the year 2006 might play out.
Jim Rogers vs. HBS MBA Student: Here's the full text of a classic email chain between Jim Rogers and Dmitri Alimov, a former HBS MBA student (from 2003). The subject at hand? The prospects, real or imagined, of Russia.
Thoughts on Real Estate Startups Inspired by Zillow.com: What I think frustrates everyone about real estate is simple: We gain comfort buying (and selling) in markets with experience. I am comfortable purchasing a round-trip ticket across the US because I have done it about 30 times in the past few years. I know when I'm getting a deal, when I'm getting hosed - and I always know why (usually, because I waited to buy). ...
Business Journalists Don't Understand their Audience: The average reader of the business press is also trying to do a hundred other things in their day. This isn't that hard to figure out - yet why do journalists persist on filling articles with up to 50% more words than are required to convey relevant information?
"America's Addiction to Oil" is Nonsense. Conservation is Not.: The unfortunate meme, "America's Addiction to Oil" is misapplied victimology that is completely inappropriate as an official position towards energy consumption and needs to be dropped.

Why I Started the DDO

In order to pursue a career in investing, I needed to accelerate my learning about companies and markets.
I grew frustrated with simply reading everything I could, and feeling like I wasn't retaining enough, I sensed that writing would help me learn by improving my retention.
I've always liked writing.
I've now confirmed that in addition to helping me retain information, writing also forces me to think more deeply, thus developing ideas on business, investing and other topics.
I've got a lot to say, and not as many good venues to say it in.
To improve the quality of my relationships, as I now do less in-person ranting.

About the DDO Mascot

The photo on this lens is of Arturo Di Modica riding the Wall Street bull. Di Modica was the sculptor of this famous statue now located on the Bowling Green by Wall Street in lower Manhattan.

Di Modica was inspired to create the bull after the "Black Monday" crash (Oct 19, 1987), the largest 24-hour decline in recorded stock market history (DJIA fell 22.6%). Interviewed by the WSJ regarding his reasons for making the statue, Di Modica said: "I saw people who had lost everything and I didn't like that, so I worked to create something beautiful for young Americans."

He sold part of his family farm in Sicily to finance the project. The bull was made from 23 pieces of bronze and stainless-steel in a Manhattan loft, and weighs ~7,000 pounds. Di Modica set the bull outside the NYSE in the middle of the night (Dec 16, 1989), calling it a symbol of the "strength and power of the American people." Note that doing so would be impossible today due to heavy security outside the exchange - the street is blocked to traffic.

Di Modica did not get a permit for the bull beforehand, and police soon took it away. A few days later (Dec 20, 1989), the statue found a home a few blocks away, at Bowling Green Park. "It was just too good to lose," said Henry Stern, who was commissioner of the city's Department of Parks and Recreation at the time.

Top Ten Reasons the DDO Blog is Anonymous

10. This is the closest I've ever been to being a "Man of Mystery".
9. I'm afraid of being attacked by a journalist for my criticism of their profession.
8. I get enough grief from colleagues at the water cooler as it is.
7. It's not really anonymous. My name is Arturo Di Modica.
6. I figure anonymity will limit my readership; see #2.
5. If you knew this was really Michael Steinhardt's blog, you'd tell everybody and spoil it.
4. Would prefer not to be a target of the FBI or CIA if I can help it.
3. Keeps me from getting mobbed by fans at Starbucks.
2. If I didn't labor in obscurity, I wouldn't be angry, and my work wouldn't be half as interesting.
1. If you knew I was really a high school student, you'd probably stop reading it.