Almost a year ago I was telling my family about this great idea I had for a new micro finance design. For anyone who doesn’t know, microfinance institutions are designed to provide credit and financial services for people in extreme poverty. The movement began with micro loans which gave small sums of capital to individuals in developing countries to start an income generating business. Because there are no ‘credit scores’ (or method for evaluating risk) for these regions, financial institutions had been unable to provide loans. However the revolution came by substituting social capital for financial capital to guarantee the loan. Specifically, loans are issued to individuals in groups who are then all obligated for the entire amount of the loan. Thus if I’m a loan recipient and my business fails or I just take the money and leave, then the rest of my group is obligated to pay the amount before they can receive any higher loans. Coupled with social marketing programs these institutions have blown up in the last decade. In some cases the limiting factor in expanding these programs is the capital. I purposed, to my family at least, that there should be a micro finance bank that had all the standard on the ground operations but generating loan capital by connecting the local recipient population with individuals in wealthy countries through the internet. There by a individual with a little money to invest could get online and loan the money directly to a business in the developing world. This helps solve the shortage of capital, but more importantly creates a feedback cycles where western consumers are financially encouraged for assisting people in poverty. For a long time the closest thing i could find was Kiva, which allows basically this idea except the critial part where investers earn a return. In Kiva’s model, the individual makes a loan and receives full repayment a year later, but without any interest (with the current trend in the dollar and inflation is actually a net loss of the investor).

Well my friend called me this weekend and told me he found my company, how sad. MicroPlace does exactly this idea and interests rates vary between 1-4%. The company is dedicated to expanding access of microfinance from the current 113 million people to 1 billion. The website is very clean, easy to use, and the best part is that its owned by ebay! Talk about aligning interests. I still think there would be a huge benefit in higher interest to lure people away from guaranteed return investments (government bonds). The logic goes further, why not an international bank that places the majority of its investments in microfinance loans, (diversified across countries sectors ect obviously). The bank can offer the standard services for its clients but vary its investment strategy. When bank patrons put money in their checking or savings accounts, that individual is passively provided poverty relief. While large banks already have some capital in micro finance banks the level of investment is dwarfed by say the investments in subprime mortgages. Here is a great article about the MicroPlace, their goals and experience. Right now there is approximately 22.4 billion invested globally in micro finance institutions. This works out to be about $200 invested per person served. If MicroPlace even comes close to the ten fold increase, ebay is in store for a billion dollar cash flow. Longterm, this seems like a pretty killer strategy that integrates the publicity of a major online retailer, easy of efficient online payment, and huge benefits of micro finance.

So this stock was (probably still is just they havn’t been shouting about it) on some peoples (saw it on Trading Goddess, Alpha, the Street, ect) hot lists. The fell short of estimates on their last report by 2 cents, and seeing as it had built up huge momentum investments the price tumbled. Their one year chart is not very impressive but they apparently have great management and their raw financials look pretty fucking hot. with a market cap of a bit more then 500 million they have $72 million in cash and zero debt. They have big growth goals and the capital to do it. I heard they are (or maybe have) renegotiated their chicken contracts and with a significantly larger size and more growth around the corner i would venture to say their position should be improved. BWLD has relatively more cash on hand, higher percent insider holdings, and higher levered free cash flow then CMG and PNRA. Here is their graph to date, notice it looks like the stock just bounced off a previous resistance point at $26 about the same time Dow bounced above 13,000. Next resistance should come around $35, if next week keeps up the recent strength then we could be there before we know it.

Basically just posting whatever now. lol, anyhow i’ve been doing some stock trading and wanted a place to post some stuff. there really just arn’t enough people who document themselves, even failure or worse mediocrity. I also re organized how the site is set up a bit. all my stock posts will be under the trading category and a category of their stock name, then someone could either look at my most recent posts by looking at the trading section, or all my posts on a specific stock by pickings its category. Nothing revolutionary, just thought i would put it out there.

So google bounced and check this out. On 11/12 i said I was looking at 620 to be the bottom based on the 50% retracement level. On the 19th goog did a little double bottom at 620 and is now trading at $693.00. check out the picture

This time using fibonacci projection lines we can look for the next buying opportunity. As of today google has already broken above the first projection line at $685. the 38.3% projection is at $720. If you are looking to buy, wait till the stock breaks just over 720 on its way up to the previous high of $750. If we get bad news or no rate cut the stock could be stalled at 720, thats why you wait for the confirmation.

Well today google gaped below 650 and kept going. Next stop is the 50% retracement line. If you look at the intraday chart 650 was a critical value, once the stock jumped below it around mid day it never recovered. The 50% retracement line is around 620 and this point showed some resistance on the way up also. We are coming up on key inflation data, while goog isn’t the most responsive to this information it is keeping investors in check so big moves will probably wait. I’m going to keep any eye on google settling at 620, if it moves past this point we’re probably looking at a stock in the high 500s. if there isn’t catastrophe in the numbers on the 14th then I’m going to look for goog to move back up.

Here is todays intraday google chart

Google’s stock has been vertical since mid august moving from a $500 stock to $740. This Thursday and Friday saw a sharp change as google sold off $70 to close the week at $663.97. This seems like retracement before a move up, call it profit taking or credit fears the next question is when to go long again. First, standard technical analysis will look for historic points of resistance or gaps to identify the bottom of a retracement. In this case there is almost no way to confirm these critical points because the stock price has blown past most of them. So we throw some Fibonacci retracement lines. Thursday night the stock gaped below the first critical level of 23.6% retracement but closed the week a little more then half way in between there and the 38.2% level. The 38.2% will be a good target for googles stock to rest. If you look to the graph as it moves up there is a small gap just above 650, which is close to our critical fibonacci number. Also my current neuroshell model gave a buy signal after the stock gaped down Thursday night (which i guess means the model isn’t very good, but its rough and not designed to pick day to day changes but trend changes) this is all making me feel pretty good about 650 being the turning place. Still to help give another confirmation I’ve included a graph from Sep. 06 through Jan. 07 where the Fibonacci retracement lines were drawn in to see their relevance. Notice they form strong critical points for valleys and peaks for the next 6 months.Anyways ill be looking to see what google does Monday morning. Its still google and it could very well open up $20 tomorrow and not look back so do your own DD.